Springtime Maintenance

As April showers make way for May flowers, it’s time to start tackling annual upkeep to keep your home in prime condition.

You can start by grabbing a pad and pencil, and walking around your house to note all the miscellaneous maintenance needed in the coming months: the board in your deck that’s begun to lift out of place (the toe-stubber), gutters that need cleaning, debris on the roof that needs removing, a tree with roots encroaching on your home’s foundation, and anything else that grabs your attention.

Sadly, I just had to remove an oak tree that was growing up through my deck. The tree died, so it was a fire hazard, a visual blight, and its branches could’ve dropped on unsuspecting family members at any time. While it can be expensive to take care of some maintenance, the cost of not doing so can be far more costly.

As you walk around, be sure to check the eaves for birds’ nests or hornets’ nests. To eliminate hornets’ nests, there’s a nifty product on the market with a directional nozzle that allows you to spray a nest from 20 feet away—giving you an excellent head start before a swarm of angry buzzing comes your way.

If you have a wood-burning stove, spring is the perfect time to buy wood. Buying it now gives the wood all summer to dry out, and plenty of time for your teenagers to stack it. Do not stack the wood against the house—that’s a recipe for a termite or powder post beetle disaster.

Many of us don’t think about termites or other pests after we purchase our homes unless we see clear evidence of their work. However, pests do a lot of damage before you know they’re there. Each spring, you should put on your overalls and grubby shoes and crawl under your house to look for anything out of the ordinary—moisture, a loose or broken heating/air conditioning duct, and any evidence of pests.

I once had to crawl under a house to re-route a dryer vent. The space was so tight I had to slide on my back, pulling myself along using the joists. As I pulled myself deep into the space, I came nose-to-nose with a black widow nest teeming with baby spiders. It’s amazing how quickly you can move in a tight space with proper motivation. Hopefully your crawl space experience will be less exciting than mine.

As you inspect your crawl space, pay special attention to moisture, either standing water or damp earth, because hot weather will cause that moisture to evaporate and condense on the subfloor, which can lead to dry rot and termite infestations, according to Matt Miller of Mendo-Lake Termite. If you find termite mud tubes (Google this if you don’t know what they look like), black widow spiders, or other unwelcome creepy crawlies, my advice is to call Matt Miller immediately.

The solution to moisture under the house is almost always more ventilation. It may not solve the problem completely, but it will help. Matt says, “I’ve never seen a house with too much ventilation in the crawl space.” Just make sure you cover the vents with screens to keep out the unfriendlies: raccoons, squirrels, skunks, and the neighbor’s cat.

Once your crawl space under the house has been attended to, head up to the attic to make sure nothing is amiss there—no leaks causing fungus or dry rot, and no critters. If you don’t have an attic fan, consider getting one. In Ukiah, attics can get up to 160 degrees, taking years off the life of your roof and wasting electricity because your air conditioner is working harder than it has to.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

Hope for the Best, Prepare for the Worst — Prevent Wildfire Damage

With summer right around the corner, now is a good time to prepare your property for the threat of wildfires. Most fires start small. If you are ready, you may be able to stop a fire from spreading. Be sure you know where the closest fire hydrant is, as well as your garden hoses and hose bibs. If you have a well that produces at least two gallons per minute, consider filling a 2000-gallon storage tank so it’s ready if you need it.

Clear flammable brush 100 feet from your home and trim trees 10 feet off the ground. Make sure tree limbs do not hang over your roof and clear any debris off your roof. If you have aboveground utilities in your neighborhood, keep an eye on electrical lines that go through trees—make sure there’s plenty of clearance. A good tip from the University of California Agriculture and Natural Resources Department is to locate woodpiles and other fuel sources at least 30 feet from all structures and maintain a 10-foot clear area around them.

Unfortunately, even with all this preparation, your home can go up in flames. Just ask the families who returned to find ash where their houses used to be in Lake County in recent years. For insurance purposes, you should create a photo or video log of all your possessions. While tedious, it’ll be time well spent if you need an insurance company to pay a claim.

It’s important to know what your homeowners insurance covers, especially in light of a new clause included in some policies, called the brush warranty. The brush warranty says your insurance company won’t cover your home for wildfire damage if your home is within 100 or 200 feet (depending on policy) of brush vegetation, even if the brush is on someone else’s property. With the Valley Fire in 2015 and the Clayton Fire in 2016, insurance companies are doing their best to reduce the risk of huge payouts. If your policy is up for renewal, be sure to read the whole thing before signing it. As I’ve said before, “The big print giveth and the small print taketh away.”

Most renters hear the term “homeowners insurance” and assume it isn’t for them. They’re wrong. While they may not own the structure they’re living in, they have a home where everything except the structure can be covered by a homeowners policy. Much to some people’s surprise, homeowners insurance can cover everything from fire damage to the mailman slipping on your driveway.

When it comes time to buy insurance, I strongly urge you to go with a local agent who can walk you through the various options. When you buy an online policy, no one explains the details. The “deal” you think you’re getting may include a 200-foot brush warranty, for example. As I said, insurance companies are taking a hard look at rural Northern California. Certain areas in Mendocino County have “brush hazard scores” above 80 (on a 100-point scale). Anyone with property with a score in the mid-80s or higher is going to have a hard time finding affordable insurance.

While homeowners insurance is helpful after a disaster, it’s best to be prepared, because some items cannot be replaced. In addition to food, water, and medications for you and your pets, you’ll need clothing and, depending on the situation, you may need your own shelter for a while. You may also need fuel for your vehicle.

If you have time to pack more than the essentials, I recommend grabbing the irreplaceables: photo albums, family heirlooms and keepsakes, important documents, and if you can, your computer. For more information about disaster preparedness, go to www.ready.gov.  They have a wildfire safety toolkit, as well as many other resources.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

All Properties are Sold “As-Is” Unless You’re Paying Attention – Part II

As I said last week, when you buy a property in California, you’re buying it “as-is” unless you negotiate an agreement pertaining to a specific item. Without that special agreement, you’re accepting the property in its current condition.

This is why it’s worth investing in several inspections. Once you’ve had the inspections pertaining to structures, land, and features (reviewed in last week’s column), it’s time to get the inspections pertaining to ownership, property definition, and natural hazards.

Title insurance takes care of ownership and property definition issues. Without title insurance, you cannot be sure that your claim on the property has priority over someone else’s. With title insurance you’re really paying for the research—which is why I’m including it with other inspections. With most insurance, your premium is based problems happening in the future. With title insurance, you’re paying to see if a problem has already occurred.

In addition, title insurance provides a legal definition of the property, including its shape and location. I know this sounds crazy, but people have actually purchased the wrong property before. I know a contractor who built a house to sell on the lot he thought was his. Sadly, it wasn’t. (Surveys aren’t included with the title insurance, so if you want precise location measurements, talk to your Realtor about hiring a surveyor.)

Long story short, you definitely want title insurance so you can be sure of what you’re buying, and so you don’t buy a property only to discover there are back taxes or recorded liens which weren’t paid; or worse yet, that the deed you were given was not signed by the true owner of the property and therefore worthless to you.

Moving on to natural hazard disclosures (NHDs), the inspection for NHDs includes a review of public records to see whether your property is in a flood zone, on an earthquake fault line, near an old dump site, or any number of other hazards. Depending on the findings and your intended use of the property, you may decide to do an environmental inspection.

A Phase I environmental inspection is a public records search for suspected contamination: did there used to be a gas station at this location? A Phase II environmental inspection is an on-site inspection to see whether any concerns from Phase I appear grounded in fact. A Phase III environmental inspection basically requires the world to come to a screeching halt. You dig big holes to remove toxic material. It’s called “remediation.” It’s not fun, it’s not cheap, and it’s not quick, but hopefully it will make the property usable.

As important as inspections are, they are no replacement for walking the property yourself. And, regardless of what the inspections uncover, the seller and Realtors involved in the transaction must disclose anything they know (or should reasonably be expected to know) about the property.

Any inspection is limited to what can be seen without destructive testing. In other words, if an inspector has to cut a hole in the wall to see a problem, that problem won’t be included in the findings.

Remember, it’s always better to check things before you close escrow, when fixing the problem may be a joint effort of the buyer and seller, rather than afterwards when the responsibility is yours alone.

As an aside, property boundaries are based on surveyors’ monument points. In Mendocino County, we use the Mt. Diablo base meridian to the south and a landmark in Humboldt County to the north. Surveyors have put “pins” in the ground between those two landmarks to precisely identify distances from those landmarks so people can more easily determine boundary lines. This works well unless someone makes a mistake, which they did years ago. A surveyor’s point near Boonville Road has caused many of those properties to be misidentified by about three feet.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

What’s the Difference Between a Comparative Market Analysis and an Appraisal?

Before you buy or sell a house, it’s important to know its market value. As a buyer, you want to pay as little as possible, while still putting in a winning offer. As a seller, you want to maximize the sales price. So how do these two parties ever come to an agreement? Through the use of comparative market analyses (CMAs) and appraisals.

If you’re a seller, you will invariably ask the question, “What’s my house worth?” To which your Realtor should reply, “Let’s look at the CMA I’ve done for your property.” Realtors depend on a database of properties for their market research. The database includes properties of all descriptions that have recently been put up for sale and either sold, remained on the market, or been removed from the market without selling. Your Realtor uses that database to search for properties similar to yours in terms of age, condition, size, style, and location.

In preparing a CMA, your Realtor will review properties that sold, and see how long they were on the market; properties that still haven’t sold, but have remained on the market and may have had price reductions; and properties that never sold and eventually were pulled off the market. Each of these situations provides valuable information about how your property fits into the housing market. The houses that remain on the market are the most interesting to your Realtor, since those are the properties with which your house will compete for the ready, willing, and able buyers. Realtors create CMAs as one of the many services they provide to clients, or even as a way to demonstrate their value to prospective clients. There’s no specific fee for a CMA.

An appraisal, on the other hand, includes similar data but is usually done by a certified or licensed appraiser with hundreds of hours of training and expertise, and most importantly, with no financial stake in the transaction at hand. Lenders depend on this expertise and objectivity to determine the fair market value of a property upon which they make lending decisions. An appraisal is the highest price at which a property is likely to be sold from a willing seller to a willing buyer who both have all the material facts. The cost of an appraisal varies widely from a few hundred dollars to a few thousand dollars (or even tens of thousands of dollars).

Depending on the type of loan and type of property, a lender usually chooses to loan between 50 percent and 100 percent of the appraised value. If you are buying raw land, you can expect closer to 50 percent. If you are buying a commercial property with the first deed of trust, you can expect about 60 percent. If you are buying an owner-occupied, single-family house, you can expect between 75 and 100 percent.

Lenders are not the only ones to use the appraised value. Buyers can use it to negotiate the sales price. In fact, I have a Realtor in my office right now involved in a transaction where the property value is highly subject to opinion. We have sent the seller a letter of intent noting that the buyer is willing to enter into a purchase agreement for whatever the appraised value turns out to be. This particular property will be extremely difficult to appraise and the appraisal will therefore probably cost tens of thousands of dollars. However, with a buyer ready to commit to purchasing the property, the seller may decide the cost of the appraisal is worthwhile.

Neither CMAs nor appraisals are based on exact science. They are both opinions of value, albeit from well-educated sources. Usually, the final sales price falls within 3-5 percent of the appraised value. Now and then a unique property breaks that rule.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

What NOT To Do When Putting Your House on the Market

I’ve written several columns reviewing what to do when you decide to sell your house, but it occurred to me that I might not have shared what NOT to do. Here are four recommendations to help you avoid expensive mistakes.

  1. Don’t Over-improve

As you contemplate putting your house on the market, think carefully before you take on major renovations. Some improvements are cost-effective and will yield a decent return (you’ll be able to increase the sale price to cover your construction costs and hopefully make a profit); others will not. Be mindful of what potential buyers would be willing to pay for if the house belonged to them. Let that guide your decisions about which improvements to undertake. You should complete needed repairs—if something’s broken, fix it. Go ahead and take care of deferred maintenance—if you need a new roof, now’s a good time. Definitely address pest and/or fungus problems—if you don’t take care of the termites, the new owner will have to.

A mistake I sometimes see occurs when a seller renovates to the point where his or her house no longer fits with its surroundings. In a neighborhood of 2000 square foot homes, don’t add 1500 square feet to make yours a 3500 square foot monstrosity. People looking for big homes want to live in neighborhoods where everyone has big homes. Would your house be as valuable if it were moved to an inner city neighborhood full of housing projects? Nope. While that’s a more dramatic example, the same principle applies to overbuilding in a middle class neighborhood.

Another mistake I see is the choice to convert a garage into a family room. Most Realtors will tell you, the increased value from the additional square footage in the new family room is almost exactly offset by the loss of the garage. It’s a wash. And when you add in the cost of the renovation, it’s a loser.

  1. Don’t Over-decorate

Décor is a personal thing, and it’s highly unlikely that you and the future owner of your property will agree on every style choice. (Most of us can’t even agree with our spouses on paint color.) So when it comes to the décor of a house you plan to sell, neutrals are best. While you may love your daughter’s pink walls and the green shag carpet that looks like the grassy meadow from a storybook, the prospective buyer with three sons is unlikely to be thrilled with these choices. Less is more. If you want to add a splash of color, buy fresh flowers and put them in vases around the house.

 

  1. Don’t Hang Around

Whether your Realtor is hosting an open house or bringing an interested buyer for a tour, your job is to be somewhere else (and take Fido with you). I know it’s tempting to stick around and answer questions about your house and the neighborhood. After all, who knows this information better than you? But trust me, you should leave and let your Realtor do their job. Buyers rarely feel comfortable expressing concerns about the house with the owner present. Instead, they will keep quiet and simply move on to the next house.

 

  1. Don’t Take Things Personally

When your Realtor relays questions from potential buyers, try to keep your emotions in check. When buyers ask for a credit so they can redecorate the princess room you spent years perfecting, try not to be offended. When they come in at a price that seems ridiculously low, recognize that they are simply doing their job: trying to get the lowest price possible. You have three potential responses to an offer: accept it, counter it, or reject it. An outright rejection is foolish. Counter the parts of the offer you don’t like and see where it goes from there.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.