Real Estate in Steamboat

DEAR BOB: My husband and I sold our home in July 2005. Atthat time, the buyer requested additional time for inspections, and multipleinspections were conducted. The buyer requested a credit back, which wegranted. Now more than a year later, the buyer’s lawyer has sent us a letteraccusing us of nondisclosure and is demanding $85,000. The items the buyeraccuses us of withholding were not discovered by any of the inspections, and myhusband and I knew nothing of their existence. We are now involved inmediation, which is costing us lawyer fees and time. Our lawyer says that usuallyall named parties (inspectors, Realtors, and us) contribute to the settlement.My husband and I are outraged by the process. We do not agree to anysettlement. What prevents any buyer with remorse from accusing the seller ofnondisclosure? –Connie S.

DEAR CONNIE: The situation you describe is called a”shakedown.” You are the victims. Mediation is usually a simpleone-day procedure and should not be expensive. If that doesn’t result in anacceptable solution to the dispute, then the buyers can sue you.

Purchase Bob Bruss reports online.

After you win a lawsuit, then you can bring a”malicious prosecution lawsuit” against the buyers to recover yourcosts for suing you on a groundless claim. For more details, please consult alocal real estate attorney.

BOOK ABOUT PROBATE PROPERTIES

DEAR BOB: Please recommend the three best books you’ve readon how to profit from probate real estate –Joseph G.

DEAR JOSEPH: The only book I am aware of about probateproperties is the excellent “Creating Wealth Through Probate” byJames A. Banks. It is available in stock or by special order at localbookstores, public libraries, and www.Amazon.com.

ADDING SWIMMING POOL RARELY ADDS MORE VALUE THAN IT COSTS

DEAR BOB: Next summer our kids want us to have an ingroundswimming pool built at our house in the backyard. A few neighbors have them,but most nearby houses do not. It would cost at least $25,000, maybe more. Doyou think a swimming pool would be a good investment? –Janice P.

DEAR JANICE: No. You would be very fortunate if the swimmingpool adds as much market value to your home as it costs. Unless you live in ahot climate where most homes have swimming pools, my best advice is tell yourkids to make friends with someone who has a pool at their house.

In fact, swimming pools can be a detriment when you decideto sell your home. Many families with small children refuse to consider buyinga house with a swimming pool because of the drowning danger. Also, pools andtheir equipment can be very expensive to maintain.

The new Robert Bruss special report, “How to BuyFixer-Upper Houses with Little or No Cash for Fun and Fortune,” is nowavailable for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or bycredit card at 1-800-736-1736 or instant internet delivery at www.Amazon.com. Questions for this column arewelcome at either address.

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

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Inman News

DEAR BOB: I own a house where my elderly mother holds a lifeestate. She lives alone in the house and may someday opt for a smallerapartment. If this happens, and she refuses to release her life estate, do Ihave any legal recourse? –Patrick L.

DEAR PATRICK: Legally, you are the remainderman, subject toyour mother’s life estate.

Purchase Bob Bruss reports online.

You should get a copy of the document that created her lifeestate. If it was well written, it should say that when your mother dies ormoves out for longer than six months, her life estate terminates.

If the life-estate document was poorly written, it isopen-ended and gives your mother a life estate without stating what happens ifshe moves out for longer than six months.

Should that happen, you would probably have to bring a quiettitle lawsuit to terminate her life estate. For more details, please consult alocal real estate attorney.

IF YOU OWN A HOUSE, YOU NEED A LIVING TRUST

DEAR BOB: Is there any way to leave my house to my threesons after my death other than through my will? I don’t think I have enoughassets to merit having a living trust –Aida S.

DEAR AIDA: If title to your house passes under the terms ofyour will, and your will has to be probated in court, the attorney fees, othercosts, and delays could be substantial.

However, if you hold title to your house and other majorassets in your living trust, probate costs and delays are avoided.

Unless you die and leave a net estate exceeding $2 millionin 2006 or 2007, there won’t be any federal estate tax due. Depending on yourstate of residence, there probably will be little or no state inheritance taxbecause you are leaving your assets to your sons who are close relatives. Fordetails, please consult a local estate-planning attorney.

WHAT RECOURSE FOR NEIGHBOR’S DANGEROUS LEANING TREE?

DEAR BOB: A very large old tree in my neighbor’s backyard isleaning toward my house. It shows signs of significant rot and cracking at thebase of the trunk. If it falls toward my house, it would easily causesignificant damage and pose a major hazard, as it would crash through mybedroom. Besides asking my neighbors to cut down the tree, do I have anyrecourse? –Scott O.

DEAR SCOTT: Yes. You should consult your homeowner’sinsurance agent. He or she will probably write a polite letter to the neighboroutlining the negligence if the neighbor doesn’t remove or at least trim thetree to reduce the hazard of its falling onto your house.

I recently had a similar situation at my home. I contactedour local code enforcement officer who notified my out-of-town neighbors abouttheir two tall trees that were leaning toward my house. The absentee neighborswere very nice and had their two trees removed within a few weeks.

Presuming you have already tried being nice to the neighborbut without results, maybe it’s time to become more aggressive. After youcontact your insurance agent, and the local code enforcement officer, you couldsue the neighbor in a private nuisance abatement lawsuit. If the judge agreesthe tree is a hazard, he or she could issue a court order to force the neighborto abate the nuisance and remove the dangerous tree. For details, pleaseconsult a local real estate attorney.

The new Robert Bruss special report, “How to BuyFixer-Upper Houses with Little or No Cash for Fun and Fortune,” is nowavailable for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or bycredit card at 1-800-736-1736 or instant delivery at www.BobBruss.com. Questions for this columnare welcome at either address.

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

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Inman News

DEAR BOB: We put our home up for sale in early October.Within a week, we signed a sales contract with buyers. Eight days later, thebuyers backed out, stating they changed their minds. We opted to keep their$2,500 earnest money deposit. But we discovered the next day the real estateagent never received the $2,500 stated in the contract. We believe we are owedthis money but have been advised to “forget it.” Who is at fault fornot actually collecting the $2,500 and should we try to collect it? –Joy C.

DEAR JOY: Shame on that real estate agent. Unless the realestate agent told you the $2,500 earnest money deposit stated in the salescontract had not been received from the buyers and deposited in the agent’strust account, that agent is clearly liable to you for the missing $2,500.

Purchase Bob Bruss reports online.

If she refuses to pay you the $2,500 promptly, take her tolocal Small Claims Court to obtain a judgment against her. There is no validexcuse for a real estate agent ever bringing you a purchase offer to accept andnot informing you she hasn’t received the $2,500 earnest money deposit statedin the contract.

Real estate purchase contracts do not include a “freelook” allowing the buyer to back out eight days after the seller acceptedthe offer.

Of course, if there was a valid contingency clause, such asfor the buyer to obtain a mortgage, that would be a legitimate reason to cancelif the buyer was rejected for a mortgage by several lenders. However, if thebuyer never applied, then that escape clause can’t be used. For details, pleaseconsult a local real estate attorney.

REALTOR AGREES BUYING FROM FORECLOSING LENDER IS WISE

DEAR BOB: I love reading your articles, especially when Iagree with you. Recently you said you prefer not to bid at foreclosure auctionsbut instead contact the foreclosing lender immediately after the auction ifthere were no bidders. I’ve been a Realtor about 15 years and this is exactlywhat I did when I purchased my home. By contacting the lender after theauction, I was able to get the lender to pay for a new furnace that neededreplacing, erect a fence that was necessary around a pool, and I still paid about$6,000 less than if I had bid at the auction –Donald M.

DEAR DONALD: I always appreciate feedback on my articles,especially when we agree. Buying REO (real estate owned) from the foreclosinglender is the best way, in my opinion, to acquire foreclosure property. Manyforeclosing lenders also offer very attractive mortgage financing to buyers oftheir REO properties.

LATE-PAYING BORROWER MIGHT BE GETTING READY TO FILEBANKRUPTCY

DEAR BOB: We hold a mortgage note on a property we soldabout 10 years ago. The final payment is due in a week. A few days ago, theborrower called to say he might be late with the final payment. He said hismortgage broker was moving very slowly, and he even went to someone else to getrefinanced. Last January, the title company asked us to fill out the paperworkfor full payoff of this mortgage. In August, they requested an updated payoffdemand. What are my options? I think the borrower might be trying to combine acouple of mortgages on several properties he owns. I just want to be sure hedoesn’t take advantage of us –Linda L.

DEAR LINDA: Since you are dealing with a reputable titlecompany, you probably have nothing to worry about. However, if the due datepasses and the borrower shows no sign of paying the balance soon — aftergiving him an extra 30 days or so — I would suggest beginning the foreclosureprocess.

Most institutional lenders now give only 30 to 45 days’grace period. Once you begin foreclosure, the borrower must pay your expenses,such as attorney fee, filing costs, etc.

I am concerned the borrower might file bankruptcy, thusdelaying the time you will get your money. As a secured mortgage lender you arewell protected, but starting foreclosure soon shows the borrower you meanbusiness. For details, please consult a local real estate attorney specializingin foreclosures.

The new Robert Bruss special report, “How to BuyFixer-Upper Houses with Little or No Cash for Fun and Fortune,” is nowavailable for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or bycredit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this columnare welcome at either address.

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

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Inman News

George and Barbara Dawson purchased their home “subjectto” a first mortgage with Great Western Bank, a predecessor of WashingtonMutual Bank (WaMu), one of the nation’s largest home loan lenders. The loanfell into default for nonpayment.

WaMu held its foreclosure sale on Feb. 8 by submitting a”credit bid” for the mortgage balance. No bidders showed up so WaMutook title to the home.

Purchase Bob Bruss reports online.

But, unknown to WaMu, borrower George Dawson filed Chapter 7bankruptcy on Feb. 6. WaMu was therefore in violation of the bankruptcy”automatic stay” prohibiting further foreclosure proceedings.

On Feb. 20, WaMu served a “Notice to Quit” on theDawsons, claiming ownership of the house. On March 1, WaMu was notified thatGeorge Dawson had filed Chapter 7 bankruptcy on Feb. 6. On March 14, WaMudismissed its unlawful-detainer eviction proceedings against the Dawsons.

However, WaMu did not rescind the foreclosure sale untilAug. 8. On June 2, the Dawsons brought a lawsuit against WaMu seeking damagesfor willful violation of the bankruptcy automatic stay by holding the foreclosuresale.

George Dawson claimed emotional distress damages from WaMufor failure to rescind the foreclosure. He stated he feared loss of his homealthough WaMu had rescinded the eviction proceeding.

If you were the judge, would you award emotional distressdamages for WaMu’s refusal to rescind the foreclosure sale until Aug. 8?

The judge said yes!

The evidence shows WaMu violated George Dawson’s Chapter 7bankruptcy automatic stay, the judge began. Upon being notified of thebankruptcy filing, WaMu dismissed the eviction action but did not rescind theforeclosure sale until five months later, he reported.

Therefore, WaMu was clearly in violation of the Chapter 7automatic stay prohibiting further collection proceedings pending outcome ofthe bankruptcy, the judge explained. Based on the evidence, WaMu is ordered topay $20,000 emotional distress damages, plus $156,819 attorney fees, the judgeruled.

Based on the 2006 U.S. Bankruptcy Court decision in Dawsonv. Washington Mutual Bank, 346 B.R. 503.

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

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Inman News

Do yousteam when you follow up on a newspaper advertisement for “cozycottage” and find a falling-down fixer? Can the term “waterfrontaccess” accurately describe a public boat launch three miles away?

Advertisementssometimes are too complimentary and do not accurately describe the property forwhich they were written. Some homeowners and creative real estate agents, likemany people in the sales game, dress up a product prettier than it actually isto lure the largest number of potential buyers — especially when the markethas slowed in many neighborhoods.

Does themedium in which the ad appears have the obligation to check these ads foraccuracy? In a capsule, you don’t shoot the messenger. Most of the time, whenan ad is out of line, so is its author.

Ordinarily,the medium would not have the obligation to check the accuracy of the ad. Themagazine or newspaper would be held to the ordinary standard of care. Thisbasically means that unless the publication knew, or should have known, aboutan inaccuracy, it has no real duty to investigate the factual statements madein the advertisement. Most of the time, it is up to the seller or real estatebroker to verify information.

Thepublication is not in the business of confirming classified advertisingcontent, unless the error is a blatant misrepresentation. However, if an adstated, for example, that a home was a waterfront property and in a totallyhomogeneous neighborhood and it was neither, the medium could be heldaccountable.

There’s nodoubt that it is extremely difficult to continually find ways to describehomes. Let’s face it — ordinary places are ordinary. Many agents dread thetask and some firms now have designated ad writers. Some get carried away, buthow many lovely adjectives really exist to camouflage an absolutely tinykitchen?

Ten yearsago, when national home sales last experienced a significant slowdown, agentsand ad writers were faced with the difficult task of merely getting buyers tolook at homes. Some ads were clearly in dreamland. But the downturn was quicklyforgotten when an extraordinary, decade-long run of home appreciation was thesparkplug of the economy, and potential buyers flowed into weekend open houses.If there was a complaint, it usually involved perennial “Looky Lous,”or window shoppers, who constantly tour but seemingly never make a competitiveoffer.

We may seemore creative writing than usual, as many agents have to sharpen theirmarketing skills after years of taking orders. The housing correction isexpected to last about two years in the markets that were overheated andsubject to speculation, especially Las Vegas, Phoenix, Miami, Washington, D.C.,and many markets in California. Economists have advised buyers to examinemarket fundamentals such as employment and population growth before making amove.

In acapsule, a media advertisement is nothing more than a solicitation to make an offer.If a consumer feels misled by the ad, the question becomes: “How have youbeen damaged?” Other than your disappointment, how has this been to yourdetriment other than losing some time and fuel expense?

Most majorreal estate advertisers — large realty firms — not only are given booklets toexplain newspaper policies and copy guidelines, but they are also reminded thatmisleading advertising usually reflects negatively on the advertiser’s businessor product. Typically, when the newspaper gets a complaint — even the basicsof misrepresenting the number of bedrooms or bathrooms — classified managerssend a note to the advertiser about the inquiry.

Althoughnewspaper advertising is extremely popular, some companies rely on other meansto secure borrowers, including the Internet and television. In 1984, thetelevision industry was deregulated, allowing commercial content programming.Previously, programming was limited to seven minutes of commercials for each 30minutes of programming.

InWashington state, Puget Sound residents are spoiled and often take for grantedthe number of properties with amenities in this region. The numerous bodies ofwater coupled with terraced hillsides offer area residents view opportunitiesnot available in most areas of the country.

But don’tget carried away if you are a seller attempting to write an ad. A”peekaboo Sound view” should be more than standing on a toilet andcranking your neck to get a glimpse of water through the neighbor’s trees inwinter.

TomKelly’s new book, “Cashing In on a Second Home in Mexico: How to Buy, Rentand Profit from Property South of the Border,” was written with MitchCreekmore, senior vice president of Houston-based Stewart International. Thebook is available in retail stores, on Amazon.com and on tomkelly.com. Tom canbe reached at news@tomkelly.com.

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Tom Kelly

Q: Inone of our bathrooms (built in the 1960s), the water pressure in the shower islow. I’ve changed showerheads and it makes no noticeable difference. This seemsstrange because it is located next to the master bathroom (remodeled in the1990s), which has great water pressure. While both bathrooms must be connectedto the same main water pipe, the showers have remarkably different water pressures.

I’mplanning to renovate the old bathroom, taking out the old tiles and putting innew ones. This will give me access to the shower pipes, so is it an opportunityto fix the water pressure problem, and if so, how?

A: You’veprovided all the clues we need to solve the problem. The 1960s shower has lowpressure, while the newer model has great pressure. You’ve changed theshowerhead and that didn’t help. So we can rule that out.

Yes, theyare connected to the same main line, so the problem has to be in the showeritself.

We’repretty certain that the low pressure you’re experiencing in the 1960s vintageshower is caused by a blockage in the valve that regulates the water flow.After all, the poor thing is more than 40 years old and has a right to be a littletired.

Tub andshower supply valves of that era came with rubber washers. These washersprobably haven’t been changed in years, if not decades. We’d bet there is somedebris stuck in the valve. We’d also bet that the debris is actually pieces ofa worn-out rubber washer.

Thesolution is to replace the washers in the shower supply valve.

Start byturning off the water at the main shutoff valve to the house. In climates thatdon’t freeze, the shutoff valve is usually located where the water main lateralenters the house.

Next, prythe cover from the faucet handle and remove it from the cold water supply.Handles are usually attached to the valve stem with a Phillips-head screw. Nextunscrew the escutcheon that covers the hole where the valve stem penetrates thewall.

Unscrewthe nut holding the stem in the valve and unscrew the valve stem out of thevalve. At the end of the valve stem, there should be a rubber washer held inplace by another small Phillips-head screw. You may not be able to recognize itbecause of deformity, and pieces of it may be missing. Inspect the housing fordebris and remove anything you see.

Take thevalve stem to the local hardware store and get some replacement washers.Install a new washer on the stem and reverse the steps you just took to put thevalve back together. Repeat the process with the hot water valve.

Onceyou’ve replaced both washers, turn on the water and test the installation.Remove the showerhead so any debris left in the valve will have an unobstructedpath out of the system. This should do the trick.

In yourfuture bathroom remodel, we definitely suggest you replace the old showervalve. It’s the same principle as replacing a thermostat in a car when thewater pump goes. If the area is open, replace the old part. If you don’t, sureas shootin’ you’ll be tearing into the new shower to fix the valve you shouldhave replaced as part of the remodel.

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Bill and Kevin Burnett

You already know the current home “buyer’s market” (with more homes listed for sale than there are active buyers searching for residences) in most cities is a great time to purchase a home.

There is little competition from other buyers. Motivated sellers are setting realistic asking prices. In other words, it’s a more normal home sale market as compared to the record-breaking volume of the last few years.

Purchase Bob Bruss reports online.

But there’s another reason to buy a resale house now. Anxious sellers are offering sales incentives. A few offer vacation trips, higher sales commissions to buyer’s agents, and even automobiles as inducements to realty agents and their buyers.

However, there is one sales incentive that most listing agents and home sellers forget to offer. During the last five years, the “seller’s market” in many cities (with fewer homes for sale than there were qualified buyers) usually meant all-cash sales.

Buyers could easily get new mortgages at low interest rates. But those days have changed, as mortgage rates have increased, and many institutional lenders have toughened their lending rules.

Yet there is still one home mortgage source available in virtually every community that listing agents, home sellers, home buyers and buyer’s agents frequently overlook.

THE EASIEST, LEAST EXPENSIVE WAY TO FINANCE A HOME PURCHASE. Especially if you are a “cash challenged” or “credit challenged” home buyer, you will love this finance source. Not every resale home can be financed using this source, but all you need is one.

This under-used home mortgage finance source is the home seller.

With more than 50 percent of U.S. homes owned free and clear with no mortgage, those homes are the best candidates for seller financing. Smart home purchasers ask their buyer’s agents to search the local MLS (multiple listing service) listings for homes listed with no existing mortgage. Those sellers are the best prospects for seller carryback mortgage financing.

Having bought dozens of investment rental houses with seller financing, my best experiences have been with motivated retiree sellers who need more retirement income.

Instead of sellers taking an all-cash sale and parking the cash in a bank or mutual fund earning around 5 percent interest, suggest the seller of a free-and-clear home carry back the mortgage at 6 percent. That’s a “good deal” for both seller and buyer.

Whenever possible, try to meet the home seller to establish credibility before presenting a purchase offer asking for a seller financed mortgage.

FIVE ADVANTAGES FOR HOME SELLERS OF SELLER FINANCING. In addition to earning a high above-market interest rate, there are many additional seller advantages of financing the home sale that include:

1. Easy quick sale for top dollar. As every merchant and car dealer knows, sales are easiest when the merchandise seller offers easy financing. The same principle applies to home sales where sellers offer easy financing. Price often becomes a non-issue.

2. Vacant houses can be risky for home sellers. If the seller has moved out of the house, this is usually a sign of a very anxious and worried seller, especially if the house has been listed for sale several months. Most sellers of vacant houses will listen to reasonable purchase offers, including seller carryback mortgage terms.

For example, I usually ask for a 20-year seller carryback mortgage. But if the seller wants a shorter term I reply, “Well, let’s amortize the mortgage over 20 years but include an option for you to call the loan due in 10 years.” After 10 years of on-time mortgage payments, sellers rarely exercise that option.

3. Safety of a mortgage or deed of trust on property the seller understands. The major reason home sellers hesitate to carry back a mortgage for their buyer is they fear the buyer will default and not make the monthly payments.

I emphasize this often-unstated fear and explain when a buyer defaults, the seller then can foreclose and either get paid off at the foreclosure sale by a cash bidder or get the home back to resell for a second profit.

4. Installment-sale tax benefits are another seller advantage, especially when the taxable profit exceeds the seller’s $250,000 or $500,000 principal residence sale tax exemption of Internal Revenue Code 121. If the property was not the seller’s principal residence, spreading out the capital gains tax over the years of receiving buyer payments is usually far better than paying a large capital gain tax in the year of the sale.

5. Down-payment cash to pay the home sales expenses. In a typical home seller financing, the buyer makes a cash down payment of 10 percent to 20 percent of the sales price. This down payment is usually sufficient to pay all the sales expenses, including the realty agents’ sales commission.

HOW TO CONVINCE HOME SELLERS TO FINANCE YOUR PURCHASE. Even after explaining all the seller benefits of financing the home sale, some unmotivated sellers are hesitant to carry back a mortgage on the house they are selling.

When that happens, I have resorted to desperate measures when I realize a carryback mortgage is in the best interests of both the seller and the buyer (me!). “Convincer methods” that work include (1) offering to prepay six to 12 months of mortgage payments at the closing (instead of a large down payment); (2) providing a year’s post-dated checks so the seller can deposit a check on the first day of each month; and/or (3) giving the seller a copy of my credit reports and FICO (Fair Isaac Corp.) score obtained at www.myfico.com.

SUMMARY: Especially in the current buyer’s market for homes in most cities, seller mortgage financing is the easiest way to pay for a house or condo purchase with no institutional loan application hassles.

Home sellers and their realty agents need to understand all the seller benefits, including monthly income secured by a mortgage on the home being sold. The best seller finance candidates are free-and-clear homes, especially vacant houses. Not every home can be purchased with seller financing. But all you need is one.

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

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Inman News

There are two primary reader audiences for “Real EstateDebt Can Make You Rich” by mortgage broker Steve Dexter. The first groupof readers will be savvy home buyers and real estate agents who want to learnthe inner-secret workings of the home mortgage industry. The second group ofreaders are real estate investors who not only need to learn how mortgage loansare originated but also how “good debt” can be created to maximizeprofits.

“I am a merchant of debt. I have been putting people indebt for 15 years,” Dexter reveals as he shares how the mortgage brokerageindustry works and why consumers and investors need to understand its pros andcons. “You need mortgage debt, not consumer debt,” the authorexplains as he begins this one-of-a-kind “how to get a mortgage” book.

Purchase Bob Bruss reports online.

The author is an experienced mortgage broker, who says thereis a mortgage for virtually every real estate finance situation. He advises,”Therefore, you have two choices in life: you can either pay taxes or buyreal estate.” Then he proceeds to explain how owning real estate leveragedwith mortgages can lead to long-term wealth.

Along the way, the author even admits his first real estateadventure was less than successful before he learned what to buy and how tofinance it. Then Dexter shares how to avoid real estate mistakes, such asbuying the right personal residence and the right investment property.

Of course, that takes borrowed money and that is where theauthor’s expertise shines as he explains how to obtain the best mortgage andavoid what he calls “inexperienced or inept loan hacks.”

The author’s personality comes through as he emphasizes howsavvy mortgage brokers work with dozens of mortgage lenders to meet theirunderwriting requirements without burdening the borrowers. Dexter shares thegood and bad of so-called “no doc” or “stated income”mortgages where there is little or no paperwork in return for a slightly higherinterest rate.

“What you owe today is what you will be worthtomorrow” is the book’s theme. By that the author means if you manage yourreal estate debt wisely, maximize your income tax savings with home ownershipand real estate investments, your net worth will eventually become at leastwhat you owe today on your mortgages.

Dexter doesn’t hesitate to explain how a mortgage broker’sskill comes into play in obtaining the best mortgage for the borrower’ssituation. More important, he shares how some incompetent or inexperiencedmortgage brokers take advantage of borrowers. “The other part of theanswer is greed. The higher rate you get when the loan closes, the more profitthe loan officer makes,” he reveals.

An especially interesting benefit of the book is the authorshows how to read a mortgage lender’s rate sheet. He shows how extra costs areadded to the basic mortgage interest rate, such as for a 100 percent mortgage,manufactured homes, low FICO score, very low or high mortgage amount, andcash-out refinancing.

The author answers typical home borrower questions aboutfixed- and adjustable-rate-mortgage pros and cons, interest-only loans, so-called”option mortgages,” and various other mortgage borrower choices.Dexter also shares why he thinks APRs (annual percentage rates) are worthlessfor comparing mortgages.

Of course, the author is prejudiced in favor of mortgagebrokers who offer many loan types from different lenders, as compared to directlenders who offer only that lender’s in-house loan products.

The book winds up with several chapters aimed at real estateinvestors, especially those who elect to hire professional property managers.Dexter explains how to be your own property manager, including how to manageyour tenants successfully.

Chapter topics include “Why Lenders Love Paper, or HowMany Trees Have to Die for My Loan?” “Best Times to Use EachLoan”; “Should I Refinance My Property?” “Using Lines ofCredit to Enhance Your Wealth and Lifestyle: How to Avoid the Pitfalls”;”The Three P’s: Piggyback Loans, Private Mortgage Insurance (PMI) andPrepayment Penalties”; “Should I Lock in My Interest Rate?”"How to Stay in Control and Not Get Ripped Off”; “The Top 16Mistakes Real Estate Investors Make and How to Avoid Them”; and “50Questions to Ask Real Estate Agents and Property Managers.”

The list of real estate Internet Web sites is the best andmost complete I have ever seen in a book. That goldmine list is worth manytimes the book’s modest price.

Most books about getting a mortgage are boring and verybasic. This one is different because it reveals mortgage-lending secrets mosthome buyers, realty agents and investors have never heard before. On my scaleof one to 10, this superb new book rates an off-the-chart 12.

“Real Estate Debt Can Make You Rich,” by SteveDexter (McGraw-Hill, New York), 2006, $21.95, 156 pages; Available in stock orby 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

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

Last time,we saw how many well-known brands in the American building industry got theirstart through innovation and invention. It’s a credential that many of today’sreverse-engineered, flash-in-the-pan competitors can’t lay claim to –something to bear in mind next time you’re tempted by a slickly advertisedbrand you’ve never heard of.

Ironically,many old American companies tend to downplay their long experience, perhaps forfear of seeming fuddy-duddy in today’s high-tech world. As I have no suchcompunctions, however, I’ll single out a few more of our most venerable brands,some of them now well past the century mark.

Way backin 1901, for example, Chicagoan Albert C. Brown opened a small shop that madeplumbing fixtures and other hardware. In 1913, Brown invented a replaceable andvirtually drip-free faucet cartridge, which he called the Quaturn, because amere quarter-turn of the handle could turn the water on or off. Brown’sinvention soon became the mainstay of his Chicago Faucet Co. His cartridge hasbeen refined over the years, but amazingly, it’s still interchangeable with anyQuaturn faucet manufactured since 1913.

SomeAmerican firms not only go back a long way, but also practically created theirown industries. Willis Haviland Carrier, for instance, invented the basics ofmodern air conditioning in 1902, which helps explain why the Carrier name hasbeen keeping people cool ever since.

Perhapsless of a household name — unless you’re in the habit of reading your doorlatches — is that of German immigrant Walter Reinhold Schlage. A mastermechanic and inventor, Schlage’s first patent, granted in 1909, was for a doorlock with a built-in button that turned the room lights on and off. The ideadidn’t catch on, but around 1920, Schlage came up with the now-familiar locksetwith a push-button lock centered in the doorknob. What’s more, he designed thenew lock to fit in a simple round hole bored in the door, eliminating the needfor expensive mortising. This so-called “cylinder lock” created aminor revolution in the building industry, since it could be installed inminutes using ordinary hand tools. These two innovations remain the basis ofall interior locksets today.

A morefamiliar household brand traces its lineage back to 1911, when two brothers inSt. Joseph, Mich., founded the Upton Machine Co. to produce electricmotor-driven wringer washers. Eventually, retail giant Sears, Roebuck and Co.began marketing Upton-manufactured washers under their house brand of Kenmore.Today, the little company founded by the Uptons is Whirlpool Corp., the world’slargest appliance manufacturer.

Morerecent domestic products are just as likely to have sprung from innovation byAmerican firms. A classic example: Around 1946, Dr. Percy Spencer, an engineerwith Raytheon Corp., was surprised to find that the candy bar in his pocket hadmelted while he was working on a device that generated microwaves. Thefollowing year, Raytheon demonstrated the world’s first microwave oven, callingit the Radarange. In 1967, having acquired Amana Refrigeration, Raytheonintroduced the first countertop Amana Radarange oven. By 1975, microwave ovenswere outselling gas ranges.

Today, ofcourse, you’d be hard pressed to find any microwave ovens — including Amana’s– that are actually made in the U.S.A. Still, it’s worth giving credit whereit’s due.

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Arrol Gellner

If the timehas come to invest in a new roof, it might be worth taking a close look atmetal roofing as an option. Metal roofing is far more attractive than you mightthink and is available in a surprising number of colors and patterns. And whileit is a more expensive option than many other types of roofing, you’ll enjoythe benefits of a roof that is virtually maintenance free and that willprobably last the life of house. For most people, it truly is the last roofthey will ever have to buy for their home.

Besides itsdurability, metal roofing has some other advantages as well. In areas with coldwinters, snow and ice tends to slide off the roof much more readily then itwill with other types of roofing, preventing potentially dangerous snowbuildups. And since a typical metal roof installation has virtually nohorizontal seams, problems with ice damming are eliminated. This lack ofhorizontal seams also makes metal roofing ideal for low-pitched roofs, and itwill work very effectively on roofs with pitches down to three in 12, andsometimes even less.

Most metalroofing applications are also relatively lightweight, when compared with othertypes of roofing. If you have an existing home that needs a new roof, in manycases metal can be installed directly over your old shingles without concernsabout structurally overloading the existing framing, which saves you the costof removing and disposing of the old shingles. Metal roofing is also very fireresistant, and carries the highest fire rating – something that may even helpwith your homeowner’s insurance rates.

A couple ofthe advantages of metal roofing can also be disadvantages. Its ability torapidly shed large amounts of snow and ice can be a danger, particularly withhomes with steeper pitched roofs in areas that are prone to high snowfalls. Tominimize snow-slide problems, most installers will add snow guards, which arebars, clips or other products specifically designed to break the snow up as issettles on the roof and as it slides off, causing it to fall to the ground insmall pieces instead of large heavy chunks.

Anotherconcern about metal roofing is the potential for noise in a rainstorm. Metal sheetswill certainly reflect a lot more noise then other types of softer, densermaterials such as asphalt or wood shingles, but this noise is greatly reducedby installing the metal over solid sheathing such as plywood, and wheninstalled over a well-insulated attic, rain noise on metal is rarely asignificant problem.

WHAT’SAVAILABLE

“Metal”is obviously a very generic term. In actual usage for roofing, metal can referto steel, aluminum, copper, and even stainless steel. Copper, which goes onshiny and then weathers naturally to a green patina, is one of the oldestmetals used for roofing. Still used in some high-end applications today, itsbeauty is offset by the disadvantage of prohibitively high cost. Stainlesssteel, which will not rust or corrode even under the harshest conditions,likewise is prohibitively expensive for all but the most demandingapplications.

Forresidential applications, aluminum is fairly common. It is lightweight,rustproof and is especially suitable for forming into shingle patterns. For themost part, however, when you talk about metal roofing you are talking aboutsteel, which is both heavier and sturdier than aluminum, and is the most commonmaterial for most residential and commercial applications. Both aluminum andsteel are coated with a baked-on primer and then a finish coat of paint in oneof about 10 standard colors. Many manufacturers also offer custom colors byspecial order.

Metalroofing is also rated by the gauge of the metal, which refers to its thickness.In another of those oddities of construction life, the larger the gauge numberis the thinner the metal will be. Most metal roofing is in the 26- to 29-gaugerange, with 26 gauge being thicker and heavier, and also more commonlyavailable.

Metal roofing comes in two basic forms – shingles andsheets. Singles may be individual pieces or may be longer strips that arestamped to look like several smaller shingles. The shingles may have theappearance of slate tiles, wood shakes or ceramic tiles, and come in several colors.

More commonare the sheet styles, which range from 12 to 36 inches or more in width. Theindividual sheets are custom-cut to the ridge-to-eave length of your roof, orthey may be fabricated right on-site. Either way, installation is fast incomparison to other types of roofing, and there are a number of matching ridgecaps, end caps, valley flashings and other components to finish off andweatherproof the installation.

Metalroofing material and installation prices can vary widely with the type, styleand color of the metal and the complexity of the roof. If you’re interested ina new or replacement metal roof, talk with at least two suppliers or licensedroofing contractors, compare their product offerings and ask for a couple ofrecent local references so you can see the roofing installed and talk to theircustomers.

Remodelingand repair questions? E-mail Paul at paul2887@hughes.net.

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Inman News