May 15, 2015

Home Inspections: Issues involving paint.

Filed under: Property Inspection — Chuck @ 9:45 am

If you are having a home inspection done to assist you with buying a home, or to help provide expert insight as you prepare to put your home on the market, the issue of painted surfaces may come up in the report.

Every home, even if it is a brick home, has painted surfaces that need to be painted not just so that they look nice, but more importantly so that they function properly. Paint seals and protects a home, so home inspectors will evaluate painted surfaces and then include their observations in the inspection report.

Kinds of Issues That May Arise
Paint may seem minor, especially compared to major components of your home like the electrical wiring, plumbing, foundation, or roof. But if you think of it like the skin of the house, and realize that on our own bodies our skin is actually the largest organ, it is easy to understand why paint is so important. In many ways it is first line of defense.

• Issues related to paint that an inspector may highlight in the report include, for example, paint that is curling and peeling away from a wall or other surface. That may mean that the old, existing paint should be scraped away and replaced with a new fresh layer of paint.

• But peeling can also occur because underlying layers of paint that were applied a long time ago are incompatible with the top layer. If you paint with latex paint over oil paint, for example, or try to apply a new coat of paint without properly prepping the underlying surface, that can cause the new layer to separate from the layer beneath it. In that case it’s necessary to scrape back enough layers to remove the problem and then start over with a new paint job that will hold properly and do its job.

• Another reason paint may peel is if there is paint underneath that contains toxic lead. Many older homes have lead-based paint on them, and to ensure your safety that needs to be carefully removed. That’s particularly true if you have children who are, unfortunately, often most affected by lead paint poisoning.

• There may also be bare or partially bare surfaces – like wood siding, for instance, that need to be repainted in order to keep moisture from damaging them or attracting pests like termites.

• Sometimes bathrooms are painted with a type of paint that does not hold up well against constant humidity and moisture, too, and that may mean that they need to be repainted correctly. Otherwise showering, for example, could create moisture than over time will deteriorate the walls and ceiling in those rooms – creating a much bigger problem.

What to Do Next
Regardless of what the paint-related issue may be that an inspector notices or suspects, it will be written up in the report with a thorough explanation. Depending on the report format your inspector uses, it may also show photos to help you understand what the inspector saw. Study the report carefully and then if you still have questions, consult the inspector.

Then you will want to have a qualified painting contractor do a more in-depth evaluation to identify any real problems. If lead paint is suspected, you’ll also want to have an environmental inspector – a home inspector who specializes in environmental issues – look at the problem areas. That expert can do tests to confirm whether or not the paint in question does actually contain lead.

Once you have a complete understanding of the situation, get bids from 2-3 qualified contractors who can fix the problem, repaint the home, or do whatever is required to remedy the issue.

Negotiating Repair Costs
If the inspection is related to a sales transaction in progress, the seller can do the repairs and pay for them before closing. Or the buyer and seller can just negotiate and perhaps let the buyer do the repairs after closing, in exchange for receiving a cash repair allowance or a discount on the sales price. Of course if the problem is serious enough and the seller refuses to do anything about it, the buyer may decide to walk away from the sale and hunt for a house elsewhere. But usually the Realtors involved can help negotiate a solution that is agreeable to everyone and does not delay or threaten the closing.

Real Estate Tips: Educate clients about comps and appraisals.

Filed under: Real Estate — Chuck @ 9:42 am

Spring is traditionally the busiest buying and selling season in the real estate business, and as a real agent you’ll likely be generating lots of comparable data on homes. You’ll also be trying to educate clients about how to interpret that information to price your listings wisely. Otherwise it can be tough to convince homeowners to set their price accurately, based on the current market, and that just makes your job as their listing agent harder.

Meanwhile as real estate transaction happen, you’ll be making appointments with appraisers for mortgage companies. Your clients will likely have questions about how all that works, or concerns that they want a fair appraisal that takes all of the value of their home into consideration.

To get ahead of this process of leading your clients along their learning curve, a clear explanation of “comps” and appraisals is a great tool for you and a handy resource for them. So here is an overview that you can share with your clients to save yourself time and effort and keep them fully educated every step of the way.

A Primer on Appraisals and “Comps”
Home appraisals help to determine the value of a property, and “comps” – which stands for comparables – use available data to compare one property to a similar property for the purpose of understanding a home’s market value.

The Appraisal Process
Appraisers use several factors to arrive at their estimate of value. There are also many different types of appraisals. Each will have its own criteria for finding out the value of the property, but the most common appraisal in the residential real estate market is the kind ordered by a lender. That type of appraisal assesses value using contributing factors such as the location of the home, the amount of livable square footage, and the condition of the property. Armed with a professional appraisal, the mortgage lender can then figure out how much to loan on the home without incurring unacceptable levels of risk. The appraisal is important to the lender because the home will be that lender’s collateral. If the buyer defaults, the lender can then foreclose on the home and sell it to recoup the money owed to them. For that reason the lender wants it accurately appraised so that they know their collateral is valuable enough to match the amount of money they are putting at risk when they lend it out to a buyer.

Measurements of Homes
The most basic step in doing an appraisal is to measure the home. There are many ways to measure a home, and each method can result in a different calculation. Some people measure the outside of the home, for instance, but if you measure the inside you’ll wind up with less square footage because the thickness of the walls is not included. Meanwhile tax appraisers will often base their measurements on the livable space in the home – which excludes such things as basements, except sometimes when they have a distinct separate entrance and are heated and trimmed-out. Your appraiser will use an appropriate system to figure out the square footage of your home, and that will be the same basic standard of measurement used by other mortgage company appraisers as they do the same work to other homes that are for sale or have recently sold in your neighborhood.

Condo Distinctions
Condos are a little bit different, however, because while you may own your particular unit, there are many parts of the condo development that are owned in common with others who live there. An individual may own the inside living space in their condo, for instance, but they don’t own the entire roof or the parking lot and community storage or recreational spaces. In that case the appraiser may give you a partial credit for those shared amenities, though, to add value to your condo. Although appraisals are not a cut and dry science, the appraiser will do the best job possible of arriving at an objective valuation that is fair to the condo owner or buyer.

Comparables
Amenities do play a major role when comparing the value of two somewhat similar homes, however, and when an appraiser is calculating “comps” they will strive to find a few homes that share as many similarities as possible. When they can find a lot of similarity between two homes – including location, size, and features – then it is easier to arrive at accurate “apples-to-apples” comparisons.
Another way to approach comps and their pricing is to see what buyers are willing to pay for a given property in a particular location, with certain amenities. Since the market is constantly changing, it is important for comps to be as up-to-date as possible. A home that is on the market this year, for instance, will likely command higher prices than a home just like it did during the worst part of the housing market recession. That’s why appraisers try to look at sales during the latest 90-day period. If they cannot find enough data, then they can go back farther and look at property sales six months ago or older.

Special Challenges
It is difficult to get an accurate appraisal unless you have two homes that are quite similar. If both of the ones you are comparing are the same size, for instance, that doesn’t automatically mean they are valid comps. One might have been built last year, for instance, while another could be 80 years old, with old-fashioned features like outdated plumbing and wiring. So in that case the appraiser will definitely take that into consideration and add or deduct value as is appropriate to arrive at a fair market value. The same goes for differences like homes that are alike except one is on a corner lot or cul-de-sac, or when homes are similar but one is on a golf course while the other is next to a busy shopping mall. But the appraiser have training and skills to resolve all of these types of challenges – and will do so in a way that can be supported with valid evidence and statistical data.

Sales Data
When looking at comparable sales in order to figure out how much to list your home for, or how much to pay for a home, be sure to keep all of these variables in mind. Ask your Realtor to give you data that shows the original listing price for homes, as well as the final price. That will reveal whether or not there was a price change along the way. You should also look at the time on the market of each listing. Homes that sell fast, for example, may have sold quickly because they were priced too low. Or they may have sold fast because they had exceptional interest and unique buyer demand. If you can also find out the actual closing price, that will help you figure out whether the agreed sales price changed because the seller made concessions, for example, before the transaction was finalized.

Tax Appraisal Discrepancies
It is also important to note that tax appraisals may not always be in synch with market value appraisals. What a home is selling for right now, for instance, may not be reflected in the value that a tax appraiser came up with when that appraisal was done. That’s because the taxing authorities don’t do frequent appraisals. Sometimes five or 10 years will pass before a new tax appraisal is done. As you know, a lot can happen with real estate prices in that amount of time. So a market appraisal, like the ones ordered by mortgage companies, will almost always give you a more realistic gauge of current home value.

Homeowner Tips: Spring time beautification

Filed under: Home Owner Tips — Chuck @ 9:41 am

With spring here, homeowners can now shift their focus to more cheerful chores, like planting flowers and gardens and getting ready for outdoor grilling season after a long winter. Those who are thinking of selling their homes can also raise the profile of their homes in positive ways that can translate into faster sales at higher prices, by increasing their curb appeal. Either way, whether you are marketing your home or just looking forward to enjoying it with friends and family, it helps to have a few expert tips on how to make it shine – with the least amount of labor and money.

Add Color & Contrast
Adding color and contrast can make the look of your home really “pop” in an attractive way. You can accomplish this by painting window trim with a bright new coat of white paint, for instance, while giving exterior shutters and doors a handsome dark color.

The same goes for flower beds. Select some pretty pastel-colored flowers, but contrast them against a healthy bed of dark brown mulch. The mulch will dress up your landscape while it also helps to keep plants protected and retain moisture after you water or it rains.

Update Weary-Looking Garage Doors
One area that homeowners often overlook is the garage door. If you have a big garage attached to your home, though, it could count for as much as 25% of your entire curb appeal. When people see the front of your home, make sure that the large rectangular section occupied by your garage door also adds to the good looks of your home instead of detracting from them.
You may just need to but a fresh coat or two of paint or stain to bring the garage door back to life. But if it is starting to warp or deteriorate, go ahead and invest in a replacement. Not only is that important for visual curb appeal, but you want a solid, well-functioning door for safety and overall home maintenance. Otherwise a door that is no longer working properly may lead to flooding underneath it if there is a hard rain, or be an invitation to thieves to use it to gain entrance to your home while you’re away.

Decks and Walkways
Another area to pay close attention to for both beautification as well as safety is decks and walkways. If a walkway has broken steps or stones that are not level that not only looks bad but can be a tripping and falling hazard. Similarly, decks that are not properly repaired may be a risk for splinters underfoot, tripping hazards underfoot, or for loose and unsafe railings.
Keep your deck painted or stained to keep it from deteriorating, and make sure than all the bolts and fasteners are in good shape with no rust or corrosion. If the floor of the deck has boards that need to be replaced, do it – otherwise someone could be injured – and the same goes for rails, steps, and banisters.

The Roof and Gutter System
Finally, use a pair of binoculars to visually inspect your roof for any signs of wear and tear or loose shingles and curled, out-of-position flashing. Also check to be sure that the gutters are in good shape and aren’t clogged with debris or sagging.

You should also check to make sure your chimney is stout and solid, if you have one, looking for telltale signs of trouble such as mortar joints between bricks that are eroded or have gaps. You may need to call in a pro – such as a contractor or home inspector – to assist with this kind evaluation. But doing so every year or two can be a good idea to help ensure the longevity of your roof and the safety of your chimney and gutter system.