Real Estate in Steamboat

DearBarry,

As aveteran Realtor, I’m writing to disagree with the advice you gave in a recentcolumn. Basically, you said that sellers should provide additional informationto buyers if they believe the home inspection report is incomplete orincorrect. This is very misleading to your readers. There’s nothing in thedisclosure law or in the disclosure forms that compels sellers to double-checkor amend the disclosures in the home inspector’s report. How can a seller knowmore than a home inspector about property defects? And since when are sellersexpected to review and correct the findings of a home inspector? This kind ofmisinformation can create confusion in real estate transactions and mayincrease liability for everyone involved. Don’t you think this warrantsreconsideration? –Michael

DearMichael,

It appearsthat you gathered more from my recent article than was intended or implied. Byno means are sellers required to scrutinize the accuracy or thoroughness of ahome inspection report or to amend a home inspector’s findings. But this doesnot excuse sellers from speaking up when an obvious oversight or inaccuracy inthe inspection report is discovered.

Realestate disclosure is a liability mine field upon which sellers, agents and homeinspectors must cautiously tread, and the letter of the law is not always thefirst and last word of prudent direction.

Transferdisclosure laws consist of typically complex, legalistic verbiage, but inessence, they are quite simple. Basically, sellers and agents must disclosewhatever they know that could be of concern to a buyer. That’s it. We can parsethe finer points of legalese and scrutinize whatever loopholes might be found,but what truly matters is that no significant information about the property bewithheld by anyone. If the sellers read the home inspection report and realizethat the inspector has incorrectly reported a condition, should they saynothing? If so, what happens when the buyer discovers the truth after the closeof escrow? If a lawsuit ensues, are the sellers absolved of responsibilitybecause they were not obligated to critique the inspection report?

The bottomline of real estate reality is liability exposure versus liability reduction.Those who participate in the business, either as professionals or as investors,should know this. Articles on disclosure liability abound, particularly inprofessional real estate journals. Seminars on disclosure procedures arefeatured at nearly all real estate conventions. It therefore behooves allagents and brokers to do whatever is reasonable and prudent to minimize thelikelihood of legal encounters after transactions have closed. This, of course,includes the counseling of sellers to disclose to the max, whenever possibleand without reservation.

In today’sreal estate environment, as in most fields of business, everyone is subject topotential assault by a vigilant army of litigious attorneys. If that were not so,the real estate purchase contract would still be a one page construct, we wouldhave no transfer disclosure laws, and there would be no home inspectors toamplify the disclosure process.

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

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Copyright 2006 Barry Stone

Question: The management has been renovating all the apartments where we live. They force tenants to move to other apartments while their apartment is renovated. All the temporary moves are at the tenant’s expense. If the tenant chooses to come back to the renovated apartment, he/she has to pay higher rent. Should the landlord management company pay the moving expenses? What are the tenant’s rights in this case?

Tenants’ attorney Kellman replies:

The landlord has a right to make routine repairs and maintenance on the unit. This right also includes renovations to upgrade the apartment. The policy of the law (i.e. the general trend of laws) is to promote the better and higher use of property. This is a public policy of many jurisdictions because local governments would rather have nicer, more expensive properties than ones that become dilapidated with age and lack of maintenance. (Of course, more expensive properties means more property taxes for them.) If you are renting month to month, the landlord may simply ask you to vacate the unit permanently (eviction) to work on a vacant unit without paying any of your expenses. If you do not live in a jurisdiction with some eviction controls and you are on a month-to-month agreement, a 30-day notice (or 60 days or even longer in some jurisdictions) to terminate tenancy without cause may be sufficient. If you are on an ongoing lease, the landlord would have to pay the expenses for the temporary move and you should not be evicted. As a tenant on an ongoing lease, you could decide to move entirely and ask the landlord to pay you for the early termination of your lease as well as your moving expenses. If you do not live in a rent-controlled area, the landlord could raise the rent upon your return to the renovated unit. Of course, if the rent is reasonable for the area and the renovations are significant, it may be worthwhile to stay there since you would be getting the benefits of the “newer” unit.

Question: I was wondering if you could help me with a situation I am having with my landlord. My wife and I signed a year lease about nine months ago. We have decided to buy a home and we close on this home at the end of next month but our lease isn’t up for four more months. I have informed my landlord of our situation and he still states that we are responsible for the remainder of the lease. I cannot afford a mortgage and rent for four months. What are my options here?

Property manager Griswold replies:

This is a question you should have asked before making the commitment to buy a new home. At this point, you don’t really have any options if the landlord is not willing to voluntarily let you out of your lease. You signed a legally binding contract with your landlord and now you have signed a legally binding contract to buy a home. It is not the landlord’s problem (or the home seller’s either) that you decided to buy a home and can’t afford the rent and a mortgage payment. You should have thought of that and not signed the lease last year or waited on the new home for a couple of months or made the purchase contingent on closing at the end of your lease. You could have even explained the situation to the new seller and he/she may have been willing to assist you with a credit in escrow or some other concession that might help with the financial burden. But it’s tough to get anyone to help you at this point, as you are legally obligated and your landlord and the home seller have no reason to come to your rescue. If you do vacate and move into the new home, the landlord is required to mitigate your damages and make a reasonable effort to re-lease the rental, but that is no guarantee that he will find someone within the four months left on your lease. I suggest you do your very best to leave the rental in rent-ready condition and try to assist the landlord by offering to allow prospective tenants to view the property while you still live there. You can also try to locate a new qualified tenant yourself by spreading the word to everyone you know and putting up signs or placing ads. Remember that they have to meet the landlord’s usual tenant screening criteria. This may work, but the only sure thing is to be prepared to pay for both the rental and the new home for at least four months.

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 James McKinley, member of the Moffitt & Associates law firm, which represents 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: I rent an apartment in a large complex. About six months ago, I accidentally let my dinner cooking on the stove get overheated. It caused a fire that resulted in about $15,000 damage to my apartment. Fortunately, nobody was injured. The landlord’s insurance company paid to have my apartment restored. Now the insurer is suing me for the $15,000. I don’t have renter’s insurance. Do I have to pay? –Sarah T.

DEAR SARAH: It sounds like you were negligent in allowing your cooking to overheat, causing a fire, which resulted in the $15,000 damage.

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The landlord could have sued you for negligence damages. Instead, the insurer paid the $15,000 repair costs. By doing so, the insurer became subrogated to the landlord’s right to sue you for damages due to your negligence.

Your situation is a classic example why apartment tenants always need a renter’s insurance policy. If you had such insurance, your insurer would have paid this claim. Renter’s insurance pays for loss due to fire, theft and other accidental losses.

REALTOR SAYS TO DISCLOSE PAST REPAIRS

DEAR BOB: As the manager of a large real estate brokerage office, I usually agree with you. But I must take issue with your recent advice. While it may not be legally required for a home seller to disclose past home repairs, at our firm we take the position that our sellers can never “over disclose,” and we probe for disclosure information. Any and all inspection reports, which have been done on a property and are in the seller’s possession, are presented to buyers in our disclosure packages. Great care is taken so a buyer can be fully informed before making a purchase offer on our listings –Rick LeD.

DEAR RICK: Although your policy is commendable, please be very careful you don’t harm your home sellers. Home sales disclosure laws require sellers to reveal current defects and problems, which have a material effect on the market value or desirability of a residence.

If a past problem with a house has been repaired, and there is no need for additional repairs, why bring it up and possibly kill a sale?

For example, shortly after I bought my current home my new neighbor came over to get acquainted. As we were chatting, he said, “I suppose the seller told you about when the hill in back of your house slid a few years ago and there was about 3 feet of mud against the house.” When I said I was not aware of that problem, he quickly pointed out the drains, which the seller installed to prevent future problems.

That was 28 years ago. The hill has been stable ever since. If I had known about that event, I might not have bought my home. Would I have to disclose that neighbor’s comment about a past problem if I sold my house today? I think not.

CAN LANDLORD MAKE TAX-DEFERRED TRADE FOR REIT STOCK?

DEAR BOB: Can I make a Starker tax-deferred exchange of my rental property and reinvest in a REIT (real estate investment trust) instead of another rental property? –Thomas C.

DEAR THOMAS: No. The reason is you would be selling real property held for investment or use in a trade or business and acquiring REIT stock, which is personal property. That is clearly not an Internal Revenue Code 1031 tax-deferred “like kind” exchange. For details, please consult your tax adviser.

DON’T LET HOME BUYERS MOVE IN BEFORE TITLE TRANSFERS

DEAR BOB: We are selling our house, which has been vacant since we moved out about two months ago. The buyers are obtaining a Veterans Affairs (VA) mortgage. But it will take another 30 days until the closing. Meanwhile, they are living in a motel nearby. They offered to pay us rent if they can move into the house now. Our listing agent says “no.” What do you advise? –Loren H.

DEAR LOREN: Listen to your smart real estate agent. Never let a home buyer move into the property before the sale closes, the title transfer is recorded, and you have your money.

The reason is if you let the buyer move in now and pay you rent, that buyer will surely discover real or imagined defects and refuse to close the sale until you repair the problems discovered. Although I know you want that rent income, it’s not worth the risk of letting your buyer move in early. Don’t do it.

ORAL PROMISES MEAN NOTHING IN REAL ESTATE

DEAR BOB: I have been living with my boyfriend about three years in his house. He has been very kind to me and I deeply love him. However, he is 78 and I am 54. He says that when he dies, his house will become mine. But he refuses to let me see his will, and his two children would be sure to contest his will if he leaves the house to me. What can I do to protect my best interests? –Nadine R.

DEAR NADINE: Oral promises mean nothing in real estate. Even if your boyfriend leaves the house to you in his will, and shows you that will today, he can revoke that will tomorrow.

One possibility is to get him to add your name to the house title as a joint tenant with right of survivorship. If you outlive him, then you would own the house by survivorship without probate. His will would have no effect on joint tenancy property.

However, a joint tenancy can be easily dissolved if he should later decide to convey his joint-tenancy interest to himself as a tenant in common. Then his half of the house becomes subject to his will. But you would still own half of the house as a tenant in common. For details, please consult a local real estate attorney.

MUST NEW OWNER HONOR TERMS OF EXISTING LEASES

DEAR BOB: For many years I have owned a small professional office building where I have my office. There are six tenants. We are all friends and get along very well. The “new kid” tenant has been here only six years. The other tenants have been here much longer, about 15 years average. As I plan to retire in 2007, I will then sell my office building to help fund my retirement. A few of the tenants have leases extending as long as four years at quite low rents. Would a new owner be able to raise the rents? –Ted N.

DEAR TED: No. The new owner must honor the terms of the existing leases. The rents can be raised only when those leases expire.

REMAINDERMAN SHOULD BE NAMED ON HOMEOWNER’S INSURANCE POLICY

DEAR BOB: I am the “remainderman” title holder on a house, subject to a life estate for my mother to occupy the house during her lifetime. She pays all the expenses, including the property taxes and homeowner’s insurance.

But I am concerned if there should be an accident on the property, such as someone tripping on the steps. Could I be held liable since my name is on the title? –Virginia G.

DEAR VIRGINIA: Yes. If someone is injured on the property, you can be sure you would be named as a defendant because your name is on the title. For your protection, you should ask your mother’s insurance agent to add your name as an “additional insured” on your mother’s homeowner’s insurance policy.

NOT MANY BUYERS FOR HALF OF A VACATION HOME

DEAR BOB: I own a lovely lakeside vacation home, which I rarely use. But I don’t want to sell it because it keeps going up in market value. Also, I might want to winterize it and retire there someday. However, the property taxes and upkeep are quite expensive. Several of my neighbors have ownership share arrangements. Would this be a good alternative to sell off half of the property? –Corbin Y.

DEAR CORBIN: There aren’t many prospective buyers for half of a vacation home. If you have a trusted friend or relative with whom you get along, that could work out. If you do sell a half interest, however, then you probably couldn’t later make it a full-time retirement home.

A major problem with co-ownership is one co-owner might force a partition sale of the property. If you do find a compatible co-owner, be sure an attorney prepares a partnership agreement, which prohibits a partition sale.

The new Robert Bruss special report, “How to Buy Fixer-Upper Houses with Little or No Cash for Fun and Fortune,” 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 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

Recently, a Los Angeles home seller thought his sale was a sure thing. Mere days later, his house was back on the market. What went wrong? The buyer didn’t qualify for financing.

In most cases, this sort of fallout can be avoided. One positive byproduct of the recent fast seller’s market is that lenders are prepared to preapprove buyers for financing in a day or two. It doesn’t make sense for either the buyer or seller to enter into a transaction that the buyer can’t complete financially.

To avoid disappointment, buyers should find out for sure what they can afford before making an offer. Buyers are in a better bargaining position with the seller if they can accompany their offer with a bona fide preapproval letter.

HOUSE HUNTING TIP: There’s a big difference between prequalification and preapproval. A prequalification letter merely states that the buyer might be qualified for a mortgage if the credit report and pertinent financial documentation pans out. A preapproval letter from a lender is a letter that says the buyer is approved for a mortgage subject to a ratified purchase contract, a property appraisal and an acceptable preliminary title report.

Sellers who receive a preapproval letter from a mortgage broker rather than from the lender who will make the loan should ask for permission to call the mortgage broker to find out if there’s any reason at all why the buyer’s loan shouldn’t be approved. Your listing agent can make the call for you.

Every once in a while, someone who’s not actively looking to buy a home walks into an open house and decides to buy the property. Sellers who receive an offer from an enthusiastic buyer who hasn’t had the time to be preapproved should issue a counteroffer that includes a provision for the buyer to be preapproved by acceptance.

If you give the buyer a day or two to accept the counteroffer, he should be able to provide a preapproval letter in that time frame. Or, if not, within the time frame it takes to negotiate the contract.

Some deals fall apart because the buyers discover something about the house or the neighborhood that makes them rethink their decision. It’s best for sellers to get all the news about property and neighborhood conditions — especially if it’s bad news — out in the open upfront. This lessens the chance that the deal will fall apart.

Buyers appreciate a complete disclosure package on a property, including presale inspections reports, so that they can make an informed decision about whether to buy the property. Sellers, however, often fear that the bad news will dissuade buyers or that inspections cost too much.

A failed transaction costs time, and sometimes money. Also, a property that goes back on the market can carry a stigma. It’s far better to deal with issues upfront.

Another reason deals fall apart is “buyer’s remorse.” That is, a buyer has second thoughts about going through with the purchase soon after the sellers accept his/her offer. Sellers should find out as much as they can about a buyer before accepting an offer.

For instance, why are they buying? Have they outgrown their present home? Have they been transferred into the area? How long have they been looking? Have they made offers on other houses? Why weren’t their offers successful? Did they back out of other deals?

THE CLOSING: As tempting as it might be to accept an offer and be done with the marketing process, it does little good if you’re back on the market shortly after acceptance. It takes committed buyers and sellers to close a real estate transaction.

Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.

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Copyright 2006 Dian Hymer

“I have been offered a tremendous deal — a house that appraises at $364,000 that I can buy for $294,000, with 100 percent financing, and the builder will pay all my closing costs … I can afford the payment for only six months, and it will take all my savings, but the broker says that I will be able to do a cash-out refinance in six months based on the appraisal and net about $60,000, which will cover the payment for another two years. …”

You need a reality check. If the builder could sell the unit for $364,000, he would not be offering it to you for $294,000. Appraisals done for builders usually produce the numbers the builders want. That this particular builder, in addition to offering the “bargain” price, is also willing to pay your settlement costs, is a reflection not of his generosity but of his desperation to sell the house.

Further, the probability that you will be able to do a cash-out refinance in six months is vanishingly small. Lenders won’t do a cash-out refinance in excess of your equity in the house. Since the true value of your house when you close is no more than $294,000, and your mortgages add to the same amount, you will have no equity. Payments of principal over the first six months will amount to about $1,000. The other $59,000 of equity you are looking for would require price appreciation of 20 percent over six months. That conceivably could happen in a go-go market, but the go-go markets are all gone.

What is distressing about your story is the willingness of the builder and broker to take advantage of your inexperience and naiveté. They rid themselves of what to them is a minor business problem by leading you into financial disaster. Don’t fall for it.

Your Mortgage Records Can Save Your Home Equity

“I have accumulated monthly mortgage statements for eight years, so when is it safe to begin throwing them out?”

I would retain them all until the loan has been paid off.

Why keep them, you ask? Marie McDonnell, a Massachusetts-based finance analyst who audits home loans when predatory behavior by servicers is suspected, related the following experience to me. Three years after her client’s mortgage had been originated, the servicing was sold to another firm, but the records of his account covering the first three years were not transferred to the new servicer. When the client with Marie’s help realized that he had been systematically gouged, the only available records for the first three years were those of the client. Had the client not kept the records, the skullduggery could not have been proved.

Mortgage servicers make mistakes, some of them deliberate, designed to increase the servicer’s income at the borrower’s expense. You don’t select the firm who services your mortgage, but even if you did, servicing can be sold without your permission. Under the law, you must be informed about such a sale but you can’t prevent it. The law should but does not require that when servicing is sold, the entire historical file be transferred to the new servicer. So keep your records, they just might save the equity in your home.

What is a 30-Day Delinquency?

Anyone who has read a credit report has noticed that payment delinquencies are shown as 30, 60 and 90 days. This confused the borrower who sent me the following note.

“I had a mortgage payment due Feb. 1 that I paid March 1. The lender reported me to the credit bureaus as being 30 days late, but in fact, I was only 28 days late — there are only 28 days in February. They refuse to fix it, how can I get them to recognize their mistake?”

You can’t. They are following industry practice, which is indeed needlessly confusing. The 30, 60 and 90 days really mean one, two and three months. The practice of expressing them in days probably reflects the attempt to minimize the number of digits used in credit reports. “60 days” uses seven digits whereas “2 months” uses eight.

Your March 1 payment was one month late, and the fact there were only 28 days in that month doesn’t matter.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.

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Copyright 2006 Jack Guttentag

DEAR BOB: Why did you recently say homeowners need insurance in case our tree falls on our neighbor’s property? This happened to us. Our insurer advised that we had no liability. The neighbor’s own insurance policy will have to pay for our tree’s damage to their fence –Harold W.

DEAR HAROLD: You always need homeowner’s insurance. In addition to providing hazard (fire) insurance, a homeowner’s insurance policy includes negligence liability coverage.

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Liability for your tree that fell on the neighbor’s property depends on the cause. If it was a windstorm (an act of God), then you have no liability to your neighbor because you were not negligent.

However, if the tree was diseased or was leaning toward the neighbor’s house when it fell and damaged the neighbor’s property, you would be liable for negligence, and your homeowner’s insurer would pay for the damage. Please ask your insurance agent to explain further.

HOW CAN SALE OF SECOND RESIDENCE ESCAPE CAPITAL GAIN TAX?

DEAR BOB: How can a second residence qualify for the $250,000 single or $500,000 married capital gains tax exemption, or the tax-deferred exchange benefit? –Patty C.

DEAR PATTY: To qualify for the Internal Revenue Code 121 principal residence sale tax exemption up to $250,000 (up to $500,000 for a married couple filing a joint tax return), you must own and occupy the home as your primary residence at least 24 of the last 60 months before its sale.

To qualify for the Internal Revenue Code 1031 tax-deferred exchange benefits, the property must be a rental and must be traded for another “like kind” rental property of equal or greater cost and equity. For full details, please consult your tax adviser.

IF YOU HAVE A LIVING TRUST, DO YOU NEED A WILL?

DEAR BOB: If I already have a revocable living trust, do I also need a will? –Joe S.

DEAR JOE: Yes. It is called a “pour-over will.” The reason you also need a will is you probably have some assets that are not included in your revocable living trust, which includes your major assets such as your house, bank account, stocks and bonds, etc.

But your automobile, furniture and other personal assets probably are not held in your living trust. When you pass on, your will can specify who you want to inherit real and personal assets not included in your living trust. That is why it is called a “pour-over will.” For details, please consult the attorney who created your living trust.

The new Robert Bruss special report, “How to Buy Fixer-Upper Houses with Little or No Cash for Fun and Fortune,” 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 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

Golfer Johnny Shin was hit on the head by a tee shot of a fellow member of his threesome, Jack Ahn. At the time of the injury, Shin was about 35 feet away, although Ahn didn’t see him.

Shin filed a lawsuit against Ahn for negligence. Ahn asserted four legal defenses, including the sports assumption of risk defense.

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But injured Shin argued the assumption of sports risk defense shouldn’t apply in this situation because, he alleged, Ahn was negligent in failing to determine the location of the other golfers in his threesome.

If you were the judge would you rule the assumption of sports risk defense protects golfer Ahn from negligence liability to Shin?

The judge said no!

The assumption of sports risk defense has two components, the judge began. One is the primary assumption of risk for a party’s own conduct, he continued, such as a skier who breaks his leg.

But a secondary assumption of sports risk defense applies to another party’s breach of a duty of care, as occurred in this case, the judge explained.

“The secondary assumption of risk doctrine has been merged into the comparative negligence system,” he emphasized. However, Shin may have been partially negligent for failure to notify Ahn of his whereabouts just 35 feet away, the judge noted.

Although the assumption of sports risk defense can prevent liability for a stray golf ball that hits a spectator or a golfer on an adjacent hole, that defense does not prevent liability in this situation, the judge ruled. Golfer Ahn had a duty of care to ascertain the location of other members of his threesome, the judge concluded.

Based on the 2006 California Court of Appeals decision in Shin v. Ahn, 46 Cal.Rptr.3rd 271.

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

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Copyright 2006 Inman News

Have youheard the one about the crook who looked for shabby yards?

We oftendiscuss the advantages of keeping the home in top condition — especially theexterior. A clean, well-kept yard not only increases value, but it also givesthe impression the owner is present and involved in its maintenance.

I wasreminded how detrimental extremely poor “curb appeal” can be when arental management company representing an absentee landlord allowed renters totrash a home in Tacoma, Wash., several years ago. It turned out that at leastone person was taking notes — and hoping to take the owner to the cleaners.

In thiscase, James Andrew Ryan pleaded guilty to four counts of forgery involvingfictitious quitclaim deeds. In each instance, Ryan went looking for what hejudged to be run-down homes with unkempt yards. He wrote down the address andresearched the owner’s name through county records. Ryan then forged theowner’s name on a quitclaim deed and finished it off with a bogus notary publicseal. The phony quitclaim deed, showing the owner’s interest conveyed to Ryan,was then recorded at the Pierce County, Wash., auditor’s office.

TonyEdwards, the absentee landlord, said his case was compounded by a poor rentalmanagement company. Edwards had intended to live in the home but a job transfersent him to Denver and then Salt Lake City.

“Ihad left the home in very good condition and with very good renters beforeturning over the maintenance to the management company,” Edwards said.”When the first group of renters moved out, the management firm rented toa large family that apparently had a lot of relatives. The place got run downin a hurry.”

Ironically,Edwards was contacted about Ryan by one of the renters.

“Therenters tracked me down and said the management firm had not shown up to fixsome plumbing,” Edwards said. “They also said there was a guy comingaround saying he was the new owner.”

Accordingto investigators in the prosecuting attorney’s office, some of the four homeshad old cars in the yards. When Ryan tried to get a car removed from one house,the real owner appeared and asked the tow truck driver what he was doing on theproperty.

The actualowners of the property denied ever knowing Ryan or selling or conveyingproperty to him. He was eventually sentenced to two months in prison, andordered to pay restitution to the victims and perform 240 hours of communityservice.

The Ryancase may be the first known case of real estate fraud focusing of run-downhomes coupled with bogus quitclaim deeds. The most common real estate fraudknown as equity skimming, or rent skimming, typically includes a supposedlygood-hearted investor looking to help a desperate homeowner.

Instead,the investor persuades the homeowner into believing the investor will pay thebank a sum of cash to keep the mortgage from going into default if thehomeowner “rents back” the home from the investor. The investor thenruns off with two to three months of rent and sometimes even the title to thehouse.

Accordingto investigators and attorneys, the problem with real property and property lawis that most everything in question is determined after the fact. Personalproperty is a lot different. You have a car and you have your name on thetitle. You physically give it over to the new owner. It takes longer to do thatwith real property.

The Ryancase jump-started questions about how far county auditors should go to checkthe authenticity of documents. There had been instances in which blatantlyaltered, bogus real estate deeds had priority over the real deed. The mostcommon avenue open to the consumer to prove that his is the correct deed is tohire an attorney and file a quiet title action in court.

If you areinvolved in a private real estate purchase without an agent or attorney, gothrough formal escrow and obtain a title report and title insurance. This maynot turn up every possible bogus activity, but you will probably get morewarning about possible blips on the title.

And, keepup your yard. You might not care what some people think — but you never knowwhat they might try.

TomKelly’s new book, “Cashing In on a Second Home in Mexico: How to Buy, Selland 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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Copyright 2006 Tom Kelly

Q: The brown shingles on our 1950s house are showing signs of wear. While not worn or damaged, the shingles look tired — waterlogged or parched, depending on the season.

We’ve asked painting contractors about oil treatments, but they all want to paint the house. They say there is no possible treatment that will extend the life and improve the appearance of the shingles without painting them. One even claimed that shiny, high-gloss paint was the best solution.

We love the natural look of shingles, especially here in our woodsy setting and neighborhood, and dread the thought of painting.

Is there a good alternative to paint? Thank you for any help you can offer. We are devoted to your column.

A: Thanks for the kind words. We don’t understand why the painting contractors you’ve contacted insist on painting the old shingles. We would consider painting only as a last resort.

There are few things more ugly than a failed, peeling paint job on a shingled house.

It sounds as if your sidewall shingles are starved for moisture. We’d bet they haven’t been touched for many years. Wood is ravaged by sun, rain and wind. For defense against the elements, wood must maintain a certain range of moisture content. Too much moisture and it’s the waterlogged look. Too little and it looks like a tinderbox ready to go up in flames.

Be warned, though, your siding may be reaching the end of its useful life — but maybe not. If your shingles truly do not look worn or damaged, they might be only dry and dirty — and salvageable.

With the price of new shingles these days and your aversion to paint, which we share, we think it’s worth the effort to try to salvage what you have. This is how we’d go about the job:

The first step is to give the shingles a good cleaning with a pressure washer. Be careful here. Pressure washers produce a stream of water under high pressure that blasts away the dirt and grime from the siding. But — and this is a big but — if the shingles are dry and brittle, you run the risk of blowing the shingles right off the wall.

To avoid this, use a wide spray pattern and keep the nozzle of the gun at least a foot away from the wall. Start at an out-of-the way spot until you get the hang of it. If you make a mistake, it’s away from the public eye. Try to remove dirt and leave the patina of the shingles. Go gently. The goal is to remove the dirt and limit the amount of wood you remove.

Once the washing is done, let the shingles dry for at least a week. The water absorbed by the washing must evaporate and the shingles must be allowed to return to their natural moisture content for the climate at the time you’re doing the job.

Once the shingles are dry, give the house a good once-over. Look for damaged shingles. Replace those that are severely cracked. The new shingles will look, well, new. But they’ll weather in time.

With the house washed and dried and the repairs complete, it’s time to put on a finish. We’d go for a clear wood preservative rather than a stain of any kind. But this is really an aesthetic choice. If you prefer a semitransparent stain, go for it.

There are a lot of wood preservatives on the market. Two of our favorites are Duckback and Preservawood. Both companies also make wood cleaners and brighteners that Bill has used with success. This will add an extra step to the process, but it’s worth checking out.

The best way to apply the preservative is with an airless sprayer. Do the job on a windless day, mask the windows, move the cars and warn the neighbors. There is a real risk of drift because these preservatives are very light and viscous. Another alternative to avoid drift is to use a garden sprayer. It will take longer, but you won’t risk spraying the neighborhood. Make sure to flood the surface.

Count on the shingles soaking up gallons and gallons of preservative. They haven’t had a drink in a long time. The job will likely take at least two full coats.

Finally, count on repeating the process in three or four years. Sun, wind and water will break down the protective qualities of whatever preservative you use. It’s a lot of work and it’s not cheap, but we think you’ll be happy with the results.

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

Copyright 2006 Bill and Kevin Burnett

One of the most unusual and best real estate books I have read is “Trump: The Best Real Estate Advice I Ever Received” by Donald J. Trump. The reason it is so good is it is filled with advice from 100 successful real estate entrepreneurs. Each contributor shares how he or she succeeded in real estate investing, brokerage and/or speculating. I was fortunate to be part of this esteemed group.

While reading the 100 chapters, I asked myself, “What do all these successful real estate entrepreneurs have in common?” Each individual took a different realty road to profits.

Purchase Bob Bruss reports online.

But the one thing they all have in common, including “The Donald,” is they each add value to real estate either by developing, improving or marketing properties. Perhaps Trump’s famous first “Apprentice” Bill Ransic said it best: “Learn to recognize value.”

My favorite “best advice” in the book, modestly excluding my own contribution, is from famous New York City real estate brokerage tycooness Barbara Corcoran. She shares how she got started in real estate brokerage with just $1,000. Her first apartment rental “listing” was a typical New York one-bedroom. However, her listing was competing with 1,246 one-bedroom rental ads in the New York Times.

Realizing she had to make her one-bedroom apartment rental listing stand out on a very limited advertising budget, Corcoran convinced the building owner to install a wall dividing the apartment’s large living room into two rooms. The next week she advertised the same apartment at a $20 per month higher rent as “One Bedroom Plus Den.” She was swamped with phone calls, quickly rented the apartment, and was on her way to real estate marketing success.

The book is filled with two basic types of real estate advice from a very diverse group of contributors. My favorite type of advice includes personal stories and their guiding principles. Readers can easily relate to these entrepreneurs who share how they got started and succeeded.

The second type of real estate advice can best be called general success principles. These are short, usually one page. Either the contributor didn’t want to share more than a few realty success basics, or was too busy to reveal the story behind their success.

An example is Donald Trump Jr. who said, “The best advice I have ever received is ‘There is no substitute for passion.’ ” Then he explained the key is to find something you enjoy doing and do it better than anyone else. His sister, Ivanka, was equally brief when she said, “Start building your reputation from the very beginning. Take your reputation very seriously, as it is one of the most essential elements you can exert control over.”

But the book has a major flaw. The advice from a wide variety of unknown and well-known real estate entrepreneurs offers many diverse routes to success, and Trump’s personal contribution was too short. Although his earlier books have revealed most of his personal success principles, he could have taken a chapter to remind readers of what factors he deems most important to becoming a successful real estate businessperson.

The book’s second flaw is the chapters are far too short. As I read the revelations of some major real estate tycoons, I almost started yelling, “Tell me more!” Many of these contributors should write their own books to share more of their personal success stories and real estate advice.

This unique book should be read by every person considering a real estate career, whether it be as a sales agent, developer or investor. It offers guidance for “mom and pop” investors, as well as big-time realty tycoons. Especially impressive is the wide variety of real estate advice. On my scale of one to 10, this outstanding book rates a solid 10.

“Trump: The Best Real Estate Advice I Ever Received,” by Donald J. Trump (Thomas Nelson Publishers-Rutledge Hill Press, Nashville), 2006, $19.99, 273 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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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2006 Inman News