Real Estate in Steamboat

The all-important 10-year T-note is crawling toward 5.25 percent, the level of the Fed hike due next Thursday. Mortgages are following in slow motion, although 30-year rates are still below 7 percent.

There were no economic data of note. Bonds generally followed stocks, as they have for weeks. When stocks fell apart two weeks ago, bonds assumed that the crater marked the long-awaited economic slowdown, a Fed stop and perhaps a retreat. As global equity markets have rebounded since, bonds have priced an indefinitely deferred slowdown. A 5.5 percent Fed in August seems a sure thing, and more forecasters (Barclays and J.P. Morgan) have projected a 6 percent Fed by year-end.

That 6 percent forecast is also a forecast of a hard landing. The last two episodes at a 6 percent Fed (’95 and ’00) resulted in abrupt slowdowns and Fed rate cuts. The only other historical analysis that seems to apply now: the slowdown at the end of every cycle in modern times came as a surprise to everyone, including the Fed.

The leading uncertainty in this cycle is the housing market. The first stories shouting, “Housing Bubble To Tank Economy,” are now almost a year old. It may be that the economy is already entering a substantial slowdown, but masked by lagged response to Fed tightening and housing’s immense turning radius. It may also be that a five-something Fed isn’t tight enough to hurt, and that slower housing isn’t enough, either.

The secondary uncertainties: business conditions (earnings!) seem strong enough to rule out a recession; nobody really knows how close to the edge consumers are (energy and debt costs versus household adaptability); and nobody knows (or even pretends to know) how vulnerable the global trading and debt recycling machine is to a sudden slowdown here.

A whole pound full of dogs should have barked this week, but didn’t.

News that North Korea will launch a U.S.-range missile should have guaranteed a scaredy-cat rally to bonds. Didn’t. The follow-on report that the United States would try to shoot down the missile and had begun war games in the Pacific…that didn’t, either.

Then came news that Iran had modified its didn’t-say-no response to the U.S.-Europe-Russia-China proposal on suspending nuclear enrichment. Iran still didn’t say no, but said it wouldn’t say anything until August. Said it had to study the proposal. Drove Dubya nuts in public in Europe; anybody can see that Iran will be enriching while studying; and Russia and China may not be as aboard as advertised. The combination of annoyed Dubya and enriching Iran should have moved bonds and the oil market. Didn’t. Oil is so steady at $70 that it looks like a managed price (Saudi-managed…our good friends).

Yesterday, a senior minister in Japan said that its zero-interest policy would conclude this year. Caused not a ripple in the water, here or there. The Nikkei rallied, same-day.

Next to housing as cause of slowdown ahead, number two is supposed to be concerted tightening by central banks. Japan is draining cash, but is also still at zero; its 10-year bond at 1.87 percent is farther below our 10-year than it was two months ago, and the yen has weakened to 115/$ from 110. As all things are relative in currency, bond and central-bank land, the markets say that our Fed is pulling away from the Bank of Japan on the tough-and-tight chart. Same thing with the euro down to $1.25 from $1.29, and the German bund 1.15 percent under our 10-year from 1 percent. The People’s Bank of China nibbled its rate another half-percent upward, but the money supply is 19 percent higher than a year ago, investment up 30 percent, and bank loans up 80 percent.

It seems that authorities elsewhere are less eager for a slowdown than are prognosticators here who hunger for validation of their housing-bubble theory.

Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He can be reached at lbarnes@boulderwest.com.

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Copyright 2006 Lou Barnes

DEAR BOB: My husband and I, in our 70s, live in our home of 48 years. Our three children are in their 40s. Our will stipulates the house will go to the three siblings upon our death. However, since one unmarried daughter living at home has been on disability for the last 25 years, we wonder if that is a good idea? If her brother and sister want their financial share of the house, the disabled daughter would not have the money to buy their shares. Nor would she have a place to live. We want to show compassion and yet be fair. Our children are very kind, sincere and loving of each other. Wanting their share of the money would be based on need, not greed. What should we do? –Mary Jane T.

DEAR MARY JANE: That is a difficult situation with no right or wrong answer. If I were in your circumstance, I would probably leave the house to the special-needs daughter alone. Or, you could leave it to all three siblings equally but giving the daughter a life estate in the house as long as she lives in it.

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Either way, the disabled daughter will have a place to live. I presume the house is mortgage free so making mortgage payments is not an issue.

PROFITS ON NEW CUSTOM HOMES ARE NOT GUARANTEED

DEAR BOB: I have heard that some people can have a custom home constructed by a builder and after construction is complete wind up with 50 percent to 60 percent equity in their new homes. Is this true and how can I go about doing this? –Greg H.

DEAR GREG: That’s easy. Just hire a quality custom-home builder who charges low construction prices! If you already own a building lot, that gives you a head start.

There is no guaranteed way to turn a fast profit on new custom homes unless you can lock-in a low construction price and market values rise during the construction period.

HOW DOES A REVERSE MORTGAGE WORK?

DEAR BOB: Please explain how a reverse mortgage works. Who actually owns the home, the person buying out the mortgage or the homeowner? –David P.

DEAR DAVID: If all owners of a principal residence are 62 or older, and there is no or a small existing mortgage balance, the reverse mortgage lender pays the senior citizen homeowner either monthly lifetime income, a lump sum, and or a credit line (except in Texas). It’s the homeowner’s choice which alternative or combination is preferred.

The homeowner continues to own the home, subject to the reverse mortgage, which does not require any repayment until the homeowner sells the residence, moves out longer than 12 months, or dies.

Then the reverse mortgage “matures” and must be paid off, including principal and accrued interest. The remaining equity does to the homeowner or the heirs. More details are in my special report, “The Whole Truth About Reverse Mortgages for Senior Citizen Homeowners,” available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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Copyright 2006 Inman News

Question: My tenants pay their rent late almost every month but do not include the late fees as required under their lease. I regularly contact them in writing asking for late fees and insisting that they pay on time. They respond and acknowledge that they owe the late fees but they always have some excuse and tell me they will have to pay them later. I contacted a local governmental agency that I was referred to and they advised me that while the late charges I am seeking were very reasonable, I should be glad the tenants even pay the rent and not to pursue the late fees. This office seems to be biased towards the interest of renters and doesn’t seem to provide reasonable advice. I have not taken legal action to collect the late fees but continue to keep a running balance of the accumulated late fees on a ledger that I send to the tenant. The tenants just informed me that they will be vacating in two months. I would like your advice if you think that I can deduct the late fees that were never paid to me from the tenants’ security deposit when they move.

Property manager Griswold replies:

Yes, you should deduct the accumulated late fees from the security deposit, as the lease allows for a late charge and the tenant has acknowledged that they have paid the rent late. Unfortunately, your tenant has been using you as a source of short-term loans and I often see landlords that inadvertently find themselves in the lending business in addition to providing shelter.

Of course, you could pursue another strategy, which is to take the next rent payment and first apply it to all unpaid late charges and then any balance towards the rent. You will then have an unpaid rent balance and you should legally serve the tenant with the appropriate “Pay Rent or Quit” notice for the unpaid rent. Remember that “Pay Rent or Quit” notices can only seek rent, not late fees or other charges. Rent collection, including how to deal with chronic late payers, is covered in my book, “Property Management for Dummies.” It is available at your favorite bookseller or online at www.Amazon.com; it is the top selling property management book and was named one of the “Top Ten Real Estate Books” by noted real estate columnist Robert Bruss.

Question: My wife and I moved out of our apartment in a 500-unit apartment complex at the end of September. Before we left, we scrubbed the apartment from top to bottom, leaving it cleaner than it was when we moved in. Nevertheless, management has refused to return our $125 cleaning deposit. I have made numerous calls about this to the manager but she won’t take my calls. What can I do to get my cleaning deposit back?

Property manager Griswold replies:

This is a very common question we receive from tenants and the situation can be very frustrating. I would encourage you to put your complaint in writing by sending a demand letter to the property manager along with a copy to the legal owner of the property. If the management will not voluntarily disclose the actual owner and the address, then you can usually find this information through the county recorder or local municipal government or tax collector. Outline your position and give them 10 days to return the balance of the security deposit or provide a written explanation backing up their justification for the charges. If you do not get a favorable response, then go see your favorite small claims judge.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of “Property Management for Dummies” and co-author of “Real Estate Investing for Dummies,” and San Diego attorneys Steven R. Kellman, director of the Tenant’s Legal Center, and Ted Smith, principal in a firm representing landlords.”

E-mail your questions to Rental Q&A at rgriswold.inman@retodayradio.com.

Questions should be brief and cannot be answered individually.

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Copyright 2006 Inman News

DEAR BOB: My parents divorced in 1995. The judge gave the house to my mom, but she had to either sell it or keep it and refinance the mortgage. She wanted to keep the house. But she couldn’t refinance because her debt-to-income ratio was too high. So my mother gave me a quitclaim deed, signing the house over to me, and I helped her refinance with a new mortgage. Now I want to get my name off the title and put my mother back as sole owner, as she desires. If I do that and my mother dies, am I responsible for the mortgage payments although I don’t hold title? What do I need to do to quitclaim the house title back to my mom? Do I need to go through a title company? –David P.

DEAR DAVID: If you are now on the title alone, you can sign a quitclaim deed to your mother. However, you will still remain liable to make sure the mortgage payments are made even when you don’t hold title to the property.

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When your mother dies, the title to the house then goes to whomever she names in her will or revocable living trust.

You don’t need to go through a title company to quitclaim your title to your mother. The deed must include a legal description of the property, usually with its parcel number, and your signature must be notarized so the deed can then be recorded to transfer title to your mother. For full details, please consult a local real estate attorney.

BE CAREFUL ABOUT HELPING ELDERLY NEIGHBOR

DEAR BOB: Our next-door neighbor, Charlie, is about 65 and retired. He is divorced and lives alone in his house. In 1995, he and his ex-wife bought the house for $220,000. Today, it is worth around $650,000. The ex-wife is asking that he now sell the house to pay off its $187,000 mortgage to get her name off the mortgage so she can receive her half of the profit. Charlie doesn’t want to sell the house and move. He is a wonderful man and neighbor. My wife and I trust him completely and are willing to use our liquid assets to help him stay in his house. We are thinking of buying the house from him for cash and then selling the house back to him. Or perhaps we can loan him the money to pay off the mortgage and buy out his wife’s share, with him getting a home equity line of credit (HELOC) to pay us back. Your thoughts please –Ashley S.

DEAR ASHLEY: If Charlie can qualify to get a HELOC for the amount needed to buy out his ex-wife and pay off the existing mortgage, let him do it on his own. No sense in you getting involved in a potentially messy situation.

If he can’t qualify for a new mortgage, perhaps you can buy the house and rent it back to Charlie. That would give you the rental property tax benefits and Charlie (and his ex-wife) can each claim their $250,000 principal residence sale tax exemption up to $500,000 total. For more details, you and Charlie should consult your tax advisers.

IS A TAX LIEN CERTIFICATE SEMINAR WORTH $2,495?

DEAR BOB: I recently attended a motivational real estate conference at a fancy hotel with a free lunch and a well-known ex-NFL quarterback as the special guest. The speaker claims investing in tax lien certificates will return a yield of 16 to 36 percent from counties across the U.S. The price for his seminar package is $4,285, but as a “nice guy” he offered it at a special discount price of just $2,495. I smelled a shark so I didn’t jump in the water. But many people bought the seminar. Are tax lien certificates really this lucrative? –Ken Y.

DEAR KEN: Congratulations for not spending the $2,495 for that tax lien course. Yes, tax lien certificates can be very profitable investments. However, you’ve got to know what you’re doing if you want to avoid losing money.

An excellent book (cost less than $25) you can read on this topic is “Profit by Investing in Tax Liens” by attorney Larry B. Loftis. It is available in stock or by special order at local bookstores, public libraries and www.Amazon.com.

The new special report, “Probate Property Profit Secrets Revealed,” by Robert Bruss is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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Copyright 2006 Inman News

Magda Benavides purchased her ground-floor condominium in 1994. Seven years later, mold was found in the exterior walls adjacent to her unit. Benavides’ physician advised her to move out.

She submitted a claim to her condominium owner’s insurance company, State Farm, which hired a civil engineer to investigate. State Farm later denied the claim because it was an excluded loss, which was not caused by an insured peril. The insurer pointed to its policy exclusion for mold.

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Benavides also filed a claim based on water intrusion damage from an upstairs unit. Water leaked into Benavides’ kitchen and living room during remodeling of the second-floor condo, which was promptly repaired by the neighbor.

The insured condo owner brought this lawsuit against State Farm for alleged negligent investigation of her insurance policy claims.

If you were the judge would you order State Farm to pay damages to Benavides for negligent investigation of her policy claims?

The judge said no!

The evidence showed the accidental water intrusion damage during remodeling of the upstairs condo unit was promptly repaired, the judge began. Therefore, neither State Farm nor the upstairs neighbor is liable to Benavides, he ruled.

As for Benavides’ mold damage claim, he continued, State Farm points to its policy exclusion for damage caused by mold, he explained. The evidence showed State Farm promptly hired a civil engineer to investigate the mold and, based on that report, denied policy coverage as an excluded cause of damage, the judge emphasized.

When there is no insurance policy coverage for the mold damage, there can be no liability by the insurer for negligent investigation of a policy claim, the judge ruled. Therefore, State Farm has no liability to the insured, Magda Benavides, he concluded.

Based on the 2006 California Court of Appeals decision in Benavides v. State Farm, 39 Cal.Rptr.3d 650.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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Copyright 2006 Inman News

Q: I read your column regularly even if the problem you discuss does not directly affect me. Your comments are always interesting.

I’m writing you to ask if you know if it is possible to waterproof a concrete slab?

My garage sits at the bottom of a long driveway. I am planning to tear it down (before it falls down) and build a combined garage, workshop and studio in its place. I’d like to be able to use the existing slab if at all possible.

Winter rains accumulate at the entrance to the carport that lies in front of the garage, and moisture seeps up through the slab in the garage, soaking anything that sits directly on it. Unless items are stored in plastic bins or placed on plastic, they become soaked.

A: There are concrete sealers on the market, but they won’t solve your problem.

Concrete sealers are used to inhibit surface staining of concrete. They do not prevent moisture underneath a slab from leaching to the surface. To prevent moisture from rising to the top, a vapor barrier of plastic is installed under the slab prior to pouring the concrete.

We’d be surprised if your slab has a vapor barrier. We would also be willing to bet that the soil on your property doesn’t drain well. The soil most likely contains a high volume of clay, which doesn’t allow the water to percolate and disperse.

The fact that your garage is located at the bottom of a sloped lot provides a catch basin for winter runoff. As the ground under the slab gets saturated with runoff, moisture leaches up through the concrete and makes a soggy mess of everything stored on the floor.

One solution is to remove the slab and start anew. Once the slab is broken up and removed, grade the site and install a vapor barrier of 6 millimeter plastic. Then install a 4-inch layer of gravel and pour the new slab over the gravel.

The vapor barrier will ensure that moisture does not leach up through the slab and the gravel will provide a porous yet solid base for the concrete.

If you don’t want to break up the existing slab, another solution is to install a French drain around the perimeter of the existing slab.

The purpose of a French drain is to channel water that would normally seep under the slab into drainage pipes and away from the garage. Although a true French drain contains no pipe (only gravel), we like the idea of using drainage pipe to channel the water.

To install a French drain the first step is to dig a 6-inch-wide by 18- to 24-inch-deep trench around the perimeter of the slab. Line the trench with heavy plastic. Then, fill the bottom of the trench with 2 to 3 inches of 3/4-inch gravel. Next, install 4-inch drainage pipe in the trench. Drainage pipe has holes on one side to accept water. Place the pipe with the holes pointing down.

Start at the highest point and make sure the pipe slopes at least a quarter-inch per foot so the water will drain. We also suggest that you install a riser with a plug, called a “cleanout,” at this point so that if the pipe becomes clogged you’ll be able to clear the blockage. Use “sweep” or “long bend” fittings at all turns to lessen the chance of restrictions.

For the cleanout, use a “sweep tee” to transition to both sections of the drain. This allows you to approach a blockage from either direction. At the top of the riser install a threaded plug for access to the line.

At the low point of the system connect a solid 4-inch pipe and extend it to a point where it can discharge onto the surface. This may be the gutter, or perhaps on the ground.

Once the drainage line is in place, cover it with filter fabric. This material, which is available at nurseries and home centers, allows water to enter the pipe while restricting entry of dirt from the gravel. Finally, fill the trench with 3/4-inch gravel. This sounds like a lot of work and it is, but not as much as demolishing the slab. It’s cheaper, too.

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Copyright 2006 Bill and Kevin Burnett

(This is Part 2 of a two-part series. See Part 1.)

MANZANILLO, Colima, Mexico — There’s a reason the most popular Mexican second-home areas are popular: They got a huge helping hand from the government.

Over the past 30 years, the national tourism agency, FONATUR, has created and actively promoted five Integrally Planned Resorts (IPRs) that have become the backbone of Mexico’s tourism industry. These resort destinations, which include Cancun, Ixtapa and Los Cabos, have proven themselves to be more successful than many of the country’s other destinations, garnering average hotel occupancy rates of approximately 65 percent and capturing approximately 55 percent of the country’s foreign revenue from tourism.

FONATUR now has plans for several new projects. The Costa Maya Integrally Planned Tourism Project (ITP) is moving forward on the jungled coast south of Cancun; the Nayarit IPR is underway north of Puerto Vallarta; and the Mar de Cortes Project is under study on the upper west coast of the mainland and along the east side of the Baja Peninsula.

Obviously, not every project has the benefit of years of FONATUR interest and dollars.

Bob Koens, a Santa Maria, Calif., native who moved to Minneapolis years ago to become an assistant basketball coach at the University of Minnesota, is heading up an investor group that is developing a new, 530-acre, $500-million project on the coast just north of town. Las Cascadas de Manzanillo (www.vivacascadas.com) is a five-star, gated community, featuring winding cobblestone streets, waterfalls and lagoons and a golf course with home sites averaging $145,000.

“Manzanillo is without a doubt a beautiful place,” says Koens. “The temperature is perfect and the beaches are spectacular. Even though you are able to find beaches and beautiful places all over the world, it is the people that really make Manzanillo a marvelous and special place one would not want to leave. The people are friendly and very welcoming.”

It was the people and weather that lured Koens’ in-laws and a number of other Minnesotans to Manzanillo, about 145 miles south of Puerto Vallarta, more than three decades ago. Many families would gather south of the border for special holiday vacations and became active in the community and with cultural events. Each time the families returned to the United States, more people would ask about the draw of the area and the possibility of buying property there.

In 2003, the Minnesota contingent considered building a series of condominiums adjacent to the Karmina Palace, a popular destination resort on the shores of the Pacific Ocean. While doing research on the waterfront parcel, a larger hillside property piece — an abandoned subdivision that the Mexican government had ordered to be liquidated — became available by private offering to approved investors. The group raised the capital from friends and bankers to buy the 530 acres. Koens’ popularity didn’t hurt — his long-standing relationships with city and state officials have the locals calling him “Ambassador Bob.”

Joe Schneider, chief operating officer, said the development group envisions three to five hotels and hundreds of housing units, including condominiums and single-family houses. Some of the homes, hotels, restaurants and shops will circle a natural lagoon that serves as the project’s signature amenity. The property’s rising elevations feature ocean views from virtually every vantage point.

Manzanillo, now larger than Puerto Vallarta with a population of 130,000, is also growing more popular on the commercial front. View homes appreciated approximately 30 percent from 2003-2005, and its port business has surpassed Veracruz, making Manzanillo the largest port in Mexico. Expansion is also underway to make the port even larger and deeper to accommodate bigger ships, heavier traffic and even more foreign and Mexican companies whose business interests center around cargo movement. Several cruise ship lines are now making Manzanillo one of their main stops.

“All of these snowbirds have been heading to Phoenix or Orlando, but some of these people can no longer afford Florida or are looking to something different,” Koens explained. “We are going to provide that in Manzanillo. After seeing the home prices skyrocket in Los Cabos, we are feeling very positive about our possibilities.”

Tom Kelly’s new book, “Cashing In on a Second Home in Mexico: How to Buy, Sell and Profit from Property South of the Border,” was written with Mitch Creekmore, senior vice president of Houston-based Stewart International. The book is available in retail stores, on Amazon.com and on www.tomkelly.com.

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Copyright 2006 Tom Kelly

DEAR BOB: I gave my tenant the required notice to move, confirmed with a receipt of notice. She agreed to move out. But the unit is now locked, no one is there, and her car is parked in the driveway. I phoned several times, but no reply. What options do I have? I already hired a contractor to update the unit, based on the tenant’s promise to move out on schedule –Paras R.

DEAR PARAS: Please consult a local real estate attorney whose specialty is evictions. I’m sure you have thought of the several possibilities such as the tenant moved out but left the car; abandoned the apartment and the car; passed away either in the apartment or elsewhere; is in the hospital or jail; is avoiding you because she refuses to move out; or wants to drag out the eviction procedure to obtain as much “free rent” from you as possible.

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All these situations have happened to me with my rentals. Ask the neighbors if they have seen your tenant or any activity at the rental. Then contact the local police to learn if they have any record of activity at the property or if they can trace your missing tenant. After that, follow your attorney’s advice to regain possession of your rental unit.

NO STEPPED-UP BASIS FOR GIFT PROPERTY

DEAR BOB: Several years ago, my mother gifted her house to me because she was moving into her new husband’s home in Florida. Now I want to sell that house. But my tax adviser says I am stuck with my mother’s very low cost basis of only $23,000 whereas the house is worth around $375,000 today. At the time of the gift the house was worth about $225,000. Will I have to pay tax on all that capital gain? –Alan P.

DEAR ALAN: Unless the property is your principal residence and you have owned and occupied it at least 24 of the 60 months before its sale so you can qualify for the $250,000 tax exemption of Internal Revenue Code 121 (up to $500,000 for a qualified married couple filing jointly), your capital gain will be taxable.

But the good news is the federal capital gain tax rate is currently only 15 percent. Your tax adviser is correct. The general rule for gifts is the donee takes over the donor’s basis for a property.

HOW TO TRANSFER TITLE TO PROPERTY

DEAR BOB: Last year my husband bought a house in his name on the title and mortgage. But I help him pay the mortgage payments and property taxes. What is the best way for him to transfer to my name 5 percent of the property? How much will it cost? My husband paid a 20 percent cash down payment –Patricia S.

DEAR PATRICIA: If you will only be receiving a 5 percent interest in the property, that means you will probably want to hold title as a tenant in common with your husband who will retain a 95 percent interest. Each of you needs valid written wills to pass your interests upon the death of either of you to whomever you each designate.

Your husband can convey a 5 percent interest in the house to you by a recorded quitclaim deed. The deed should include a legal description of the property, the percent interest transferred to you, the official parcel number, the method of holding title, and his notarized signature so the deed can be recorded. Please consult a local real estate attorney for full details.

The new Robert Bruss special report, “Probate Property Profit Secrets Revealed,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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Copyright 2006 Inman News

If you are a home seller, real estate agent or a homeowner who cares about how a home looks from the street, “Curb Appeal Idea Book” by Mary Ellen Polson will anticipate your questions and help you show a home at its best. 

“You only have one chance to make a first impression” is an overused but extremely true phrase when it comes to home sales, as the author thoroughly understands. However, while studying this unusual book, I couldn’t help notice Polson presents hundreds of beautiful color photos of houses but she fails to cast even one critical word.

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As I read this one-of-a-kind book, I was very impressed by the wide variety of the hundreds of color photos of many different types of homes. Where the author located all these unique houses to illustrate her topics is hard to understand.

Although the author and photographers went to great efforts to find houses that are excellent examples of the topics under discussion, it would have been very helpful if Polson added critical comments such as “This house’s curb appeal could be enhanced by adding a Japanese maple tree or planting evergreens to add warmth to the structure.”

One thing all the color photographs have in common is fresh paint on the houses. Everything, including the patio and front porch furniture, is in pristine, near-perfect condition to add to the home’s curb appeal.

But this very complete book isn’t just about adding attractive landscaping to enhance a home’s curb appeal. It is also about home components, such as roofing materials, windows and doors, which all add attractiveness.

There are a few before-and-after houses shown, but these were major makeover projects to enhance the attractiveness and usefulness of the homes. “Big bucks” were obviously spent to re-do the houses and their landscaping to transform the exteriors.

Some of the older homes photographed before and after are virtually impossible to recognize after their major upgrades, which greatly enhanced their curb appeal. It would have been helpful to readers to see photos of less intense and less expensive renovations.

Chapter topics include “Style on the Outside”; “Exterior Appearances”; “The Entry”; “The Approach”; and “Supporting Players: Fences, Walls, Gates, Driveways, and Garages.”

As the book’s title says, this is an “idea book” about enhancing a home’s curb appeal. It is structured so a homeowner can point to a photo and say, “That’s what I like.” But occasionally I looked at some photos and said “yuk!” On my scale of one to 10, this beautiful book rates a solid 10.

“Curb Appeal Idea Book,” by Mary Ellen Polson (Taunton Press, Newtown, CT), 2006, $19.95, 165 pages; Available in stock or by special order at local bookstores, public libraries, and www.Amazon.com.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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Copyright 2006 Inman News

Dear Barry,

When I purchased my home, I hired a home inspector, and only minor problems were found. But now I’m remodeling the interior, and the building department informs me that the addition and the attic conversion were not permitted. Before buying the home, I asked the previous owners and both agents about the legality of the addition and conversion, and everyone said that all of the building changes were permitted. Aren’t these people liable for false disclosure? –Nick

Dear Nick,

For the sake of discussion, let’s give the sellers and agents the benefit of the doubt and assume that they had no knowledge of the lack of building permits. A common situation, for example, would be that building alterations were the doings of a previous property owner and that no one was aware of the absence of permits. The current sellers and agents, then, would be guilty, at worst, of making false assumptions. If that were the case, their answer to your question regarding permits should have been, “I don’t know.” The sellers, then, might have been excused on the basis of not having understood the finer points of real estate disclosure. The agents, however, would be subject to higher disclosure standards, under which an uninformed disclosure of this kind would constitute professional negligence.

Qualified agents know better than to declare the existence of building permits without verifying them at the local building department. In fact, many agents have made it a standard practice to check for permits on every transaction, or to advise their buyers to do so.

Some home inspectors conduct permit searches as an added service for an additional fee, but this is not within the scope of a home inspection itself. However, prudent inspectors make it a practice to recommend to all buyers that they consult their local building department for a permit history of the subject property, prior to closing a purchase transaction.

As to the question of liability, much will depend upon what disclosures were made in writing, rather than verbally. For further advice in this regard, a real estate attorney should be consulted.

Dear Barry,

We signed a contract to purchase a new home and were told by the real estate agent that a home inspection is not necessary for new homes. Trusting this advice, we waived our right to have an inspection and now believe that we made a mistake. We now want a home inspection and wonder what we can do now that the contract is signed. –Kelly

Dear Kelly,

It is the height of professional irresponsibility for any real estate agent to advise a client against the option to have a home inspection. All new homes have defects. No exceptions. This has been emphasized in many past articles and is the subject of an entire chapter of my book, “The Consumer Advocate’s Guide to Home Inspection.” If you’ve changed your mind and now want an inspection, you may have to dig in your heels. Let the agent know that you insist. If necessary, consult a real estate attorney to clarify your rights in this regard.

To write to Barry Stone, please visit him on the Web at www.housedetective.com.

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Copyright 2006 Barry Stone