Real Estate in Steamboat

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, June 18, 2006.

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

Copyright 2007 Inman News

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, June 18, 2006.

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

Copyright 2007 Inman News

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, July 16, 2006.

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

Copyright 2007 Inman News

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, July 16, 2006.

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 2007 Inman News

Q: I have a Victorian on which the porch and stairs are in dire need of replacement. The stairs are treated lumber, so I know they aren’t original. The porch lumber, while original, is so dried and broken I can’t make out the material.

What porch and tread material would you recommend to restore it to its Victorian roots? I see some stairs and porches in the neighborhood that are stained a dark finish. Is that appropriate to the era? Should I stain or paint?

A: Rebuilding the entry stairs and front porch is probably the single biggest thing you can do to enhance a Victorian home. If it’s done right, even a small cottage screams elegance.

Over the decades, original stairs and porches that have not been maintained will fall into disrepair. The ravages of wind and water take their toll on the exposed wood. Once-grand features are reduced to a patchwork of loose and dried-out boards.

The original material is probably Douglas fir, which is often mistaken for redwood because it takes on a reddish hue with age.

Someone in the past was forced to repair the front steps, probably because of rot. The use of pressure-treated wood tells us that whoever did the job probably did it with little attention to historical detail, opting instead for utility. We encourage you to reverse that. Your challenge is to restore the character of your entry while complying with modern building codes.

We’ll discuss materials and finishes a little later, but first you’ve got some planning to do. Because the staircase has been redone in the past, the first thing we’d suggest is that you try to determine what the original looked like. We notice that you live in Alameda, Calif. Two good resources are the Alameda Historical Museum and the Alameda Victorian Preservation Society. The museum may have a picture of the house and the society has members who can advise you about the most likely facade, if pictures are unavailable.

Once you decide on the look, get a building permit. Building inspections will ensure that the structure is sturdy and safe. Our experience with Alameda’s building inspectors is that they are knowledgeable and helpful.

We’ve often spoken of Kevin’s restoration of his Mansard cottage, also in Alameda. The most significant thing he did on the exterior structure was to rebuild the stairs and porch railings.

When he bought the property, not much had been done since 1879. The occasional paint job, but that was about it. The entry was a shambles: stair framing rotten, the moon entry dry and peeling, and the stepped-down sides to the staircase tilting in opposite directions. It looked like a scaled-down version of the Bates Hotel. A new staircase and a fresh paint job gave the house new life and landed it a role in a film about Alameda’s Victorians.

We recommend you use clear cedar for newel posts. The posts will be set in the ground in concrete and will be subject to moisture and the possibility of dry rot. Cedar is naturally resistant to bugs and rot. Use clear heart redwood if cedar is not available. Either way, be prepared to lay out some cash for this lumber.

Before setting the posts, saturate the ends to be placed in the ground with a good wood preservative. Once you remove the existing treads and risers, take a good look at the stair framing. If stair framing needs to be repaired or replaced, use 2-by-12 pressure-treated boards for the stringers and pressure-treated material for other framing members. This also protects against bugs and rot.

Use clear Douglas fir for the rest of the structure: stair treads, risers, handrails and balusters. Avoid redwood or cedar here. Fir is much stronger and takes a finish nearly as well.

Some of the existing material is probably salvageable. We’re thinking primarily of the porch deck. It’s probably dry and cracked. To reinvigorate it, first sand it down to the raw wood. A belt sander works best for this. Start with 60-grit belts and work up to 150-grit belts for a paintable finish. Next, saturate the decking with linseed oil to restore the moisture in the wood.

As for the finish, use paint, not stain. Prime all sides of all new wood before installation. This is especially critical for stair treads and risers. We’d suggest two full coats of primer on the sides not exposed to the weather to prevent moisture from wicking into the wood. Exposed surfaces should be finished with a coat of primer, then a split coat of primer and finish paint mixed 1 to 1. Finally, apply a full coat of finish paint.

This is a lot of work. But do it right and the rewards will last for years, and your house will be the prettiest painted lady on the block.

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Copyright 2007 Bill and Kevin Burnett

Are the usual suspects returning to mortgage-related scams as a result of the subprime lending fallout? Does the practice of illegal “foreclosure rescue” operations extend even into the second-home market?

It always seems that when a large group of consumers are in trouble with their home finances, bad guys are around to help the unsuspecting homeowner dig their hole a little deeper. The latest attempt at the age-old practice of equity skimming is foreclosure rescue where scammers peruse county records to find properties that are facing foreclosure for nonpayment of mortgages or taxes.

“Foreclosure rescue scams have overtaken illegal property flipping as the most common scam; however, illegal property flipping is still a problem,” said Rebecca Jacobsen, Washington state assistant attorney general.

Two months ago, the attorney general’s office settled a foreclosure rescue case against three Washington-based businesses and their owners accused of taking unfair advantage of homeowners facing foreclosure. Unlike consumers who had fallen behind on their mortgages, these homeowners were targeted because they were in arrears on their property taxes.

“They (the defendants) told property owners that they would solve their foreclosure problems,” said Rob McKenna, Washington state attorney general. “But often, their real intent was to let the property go to auction and take any excess proceeds from the sale — money that would have gone to the property owner if the defendants hadn’t ‘helped’ them.”

Under the settlement reached and filed in King County Superior Court, Tacoma, Wash.-based Fiscal Dynamics Inc. and Cumulative LLC, along with Seattle-based Northwest Assets, denied the state’s allegations but agreed to pay a total of $290,000 in consumer restitution. Two individuals — Walt Scamehorn, who owns Fiscal Dynamics and Cumulative, and E. Arliss Morgan, who owns Northwest Assets — also denied the allegations but agreed to the settlement terms.

The money will be used to provide refunds to consumers who would have received proceeds from the sales of their homes or land had the defendants not diverted the proceeds for their own use. Based on current information, more than 100 consumers may be entitled to receive restitution.

Foreclosure rescue scams have made national news the past month in Massachusetts, Colorado and New Jersey.

According to the Massachusetts Attorney General’s office, the defendants in its case not only obtained the title to the homeowners’ residences but also stripped most of the homes’ equity though inflated mortgages, false fees for fictitious services and false certifications by closing attorneys. In certain cases, the defendants resold the homes amongst themselves, thereby extracting any remaining equity.

While some second homes in Colorado have been selling at a significant loss, rescue scams typically strike only single-property owners.

“Many times people who have second homes are more sophisticated and understand that foreclosure rescue operators are offering something too good to be true,” Jacobsen said. “The typical target that we are seeing are people with no other assets who really are in a desperate situation.”

Tom DiMercurio, a veteran of 37 years in the foreclosure business, agrees with Jacobsen about the second-home market.

“Some of the wealthy people in this country are looking at the $2 million vacation house they visit two or three times a year,” DiMercurio said. “Many have put them on the market and will not get out of them what they put into them, but they don’t draw the rescue plans you are talking about.

“Obviously, the very rich never worry about anything, but there were instant millionaires a couple of years ago who paid cash for expensive homes who now wished they hadn’t.”

According to Jacobsen, consumers who think they are being scammed should not sign anything until they get the documents looked at by a neutral party. They should contact the Consumer Protection Division of the Attorney General’s Office or their lender for suggestions on who would be an appropriate neutral party to review the documents.

If someone offers to bail you out, do your best to make sure they aren’t simply tossing more water into your sinking boat. Law enforcement officials believe most of the people offering the help are out to help you sink.

To get even more valuable advice from Tom, visit his Second Home Center.

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Copyright 2007 Tom Kelly

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, June 18, 2006.

DEAR BOB: Which home mortgage fees are proper for a lender to charge borrowers? I recall you said some fees are unnecessary junk or garbage fees to avoid –Stephen O.

DEAR STEPHEN: Mortgage lenders are constantly working 24 hours a day, seven days a week, to create new names for unnecessary junk or garbage fees to impose on innocent borrowers who have no clue when they are being ripped off. However, there are many honest mortgage lenders who won’t try to impose unexpected last-minute fees.

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I suggest you start shopping among at least a half-dozen mortgage lenders for a so-called “no cost, no fee” home loan. In today’s mortgage market with rising interest rates, I recommend obtaining a fixed-rate mortgage.

However, if you are certain you won’t keep your home more than five years, then an adjustable-rate mortgage (ARM) fixed for five years can save you a few interest dollars. But be certain it does not contain a prepayment penalty or negative amortization (where the interest rate adjusts monthly or semi-annually and unpaid interest is added to your loan balance).

If you are dealing with a direct lender, such as Wells Fargo, Bank of America or Countrywide, the lender’s good faith estimate must reveal all loan charges. But you might be asked to pay legitimate fees to third parties, such as for the appraisal, credit report and lender’s title insurance fee. That’s fine. Those are not junk or garbage fees.

However, if you are dealing with a middleperson, such as a mortgage broker, his or her written good faith estimate might be less reliable. The reason is the broker often says, “I got you the best mortgage, but the lender imposed these unexpected junk fees at the last minute. Take it or leave it.”

Watch out for unnecessary, 100 percent pure lender profit, previously undisclosed junk or garbage fees with creative names such as underwriting fee, document preparation fee, loan review fee, warehousing fee, and loan origination fee.

If the lender asks you to pay a loan fee of 1 percent or 2 percent of the amount borrowed, usually called points, ask how much reduction you will receive in the loan’s interest rate. For each one point loan fee paid, you should receive at least a one-eighth-percent reduction in your loan’s interest rate for the life of the mortgage. Pay a loan fee only if you expect to stay in the house at least 10 years. Otherwise, take the no-cost, no-fee mortgage with all lender charges included in the interest rate.

WHY ALL CONDO OWNERS SOMETIMES GET ASSESSED WITHOUT RECEIVING BENEFITS

DEAR BOB: Our condo homeowner’s association (HOA) got assessed $6,000 each for replacement of roofs, which we have to pay even if we sell the condo and move out. My roof was replaced last year, but they still want me to pay $6,000. What can I do? –Rita S.

DEAR RITA: Your HOA did not get assessed. Instead, the HOA is assessing the individual condo owners $6,000 each to replace the roofs.

That’s the way HOAs work. It’s like a mini-democracy. Even when your individual condo unit won’t directly benefit, you are subject to special assessments approved by the HOA board of directors, which benefit the entire condo complex but not your specific unit.

SHOP AROUND FOR PROBATE FEES

DEAR BOB: My widowed mother recently passed away. The lawyer who prepared her trust wants to charge an outlandish fee just to fill out the death papers for the court for her small estate. Is it possible I could file the papers myself with the court? Where do I obtain them? –Eugene B.

DEAR EUGENE: If your mother left her major assets in a revocable living trust, as I constantly recommend, no probate court proceedings are required.

However, if she left a will with a testamentary or irrevocable trust, then probate court proceedings are usually required. This is definitely not a do-it-yourself project.

Shop around among probate attorneys. Although state law sets the maximum probate attorney fees allowed, based on the gross value of the deceased’s estate, most probate attorneys will “adjust” their fees downward if you ask (unless there are lots of complications or a will contest involving the heirs).

Just because an attorney prepared a will and testamentary or irrevocable trust doesn’t mean you must hire that attorney after the principal trustor dies. Shop around. You will be spending part of your inheritance for probate attorney fees.

SPITE-FENCE RULES

DEAR BOB: Several days after we phoned our neighbor to ask him to quiet his barking dog and stop running his tractor and spewing carbon monoxide near my disabled daughter’s room, he built a tall spite fence. I live on a lake and had a nice view from my kitchen window for 28 years. The neighbor has lived next door for 17 years. But the couple next door is now splitting. What chance do I have to either remove part of the fence that blocks my lake view or cut it down by 2 feet? He moved out but still owns the house. The wife seems amenable to being reasonable. What recourse do I have? –Elly W.

DEAR ELLY: Unless your city or county has a view protection ordinance, you have no legal right to a view.

However, if the neighbor’s tall fence is defined by local ordinance as a spite fence (usually 6 feet or taller built without a required building permit), you may have a legal right to have the fence removed. For details, check with a local real estate attorney.

ADDING NEW HUSBAND TO HOME TITLE WON’T SAVE TAX YET

DEAR BOB: In 1988 my husband and I bought a house together. In 1994 we got divorced and I changed the title to my name only. In February 2006 we got back together and remarried in May 2006. I added his name back to the title. If we sell our home within a year and file our income tax returns jointly for 2006, can we claim the $500,000 home sale tax deduction? –Rita R.

DEAR RITA: Not yet. For your “new husband” to qualify for an additional $250,000 principal residence sale tax exemption, Internal Revenue Code 121 says he must occupy the principal residence at least 24 of the 60 months before its sale.

However, he does not have to be on the title if he meets the 24-month principal residence occupancy test and you both file a joint income tax return in the year of principal residence sale. For full details, please consult your tax adviser.

NO WAY TO LEARN WHO IS BUYING THE HOUSE NEXT DOOR

DEAR BOB: I am interested in finding out who is buying the house next door to mine. The sale is currently pending. Is there any way to learn other than asking the buyers or realty agents directly? –Carole B.

DEAR CAROLE: No. Until a home sale closes and the title transfer is recorded, the real estate agents and the other parties handling the transfer cannot legally disclose who is buying the home. That is confidential information.

Nor can they reveal the purchase price without breaching their fiduciary duty to the seller and buyer. The only way to find out the buyer’s name now is to ask the seller. But that individual doesn’t have to disclose the buyer’s name.

CAN HOME BUYER OBTAIN DISCLOSURES FROM PREVIOUS SELLER?

DEAR BOB: I feel the sellers from whom I bought my home did not disclose a material and expensive problem with the house. The neighbors tell me the previous owners tried extensive repairs over the years to remedy the problem, but did not succeed. Is there any way I can learn the disclosures the sellers of my house were given when they purchased? –Diane S.

DEAR DIANE: No. You have no legal right to obtain the written disclosures made to your seller unless that information is public information, such as local building permits, pest control inspection report, etc.

Of course, if there are any warranties, such as a 10-year roof warranty, you are entitled to the balance of that warranty period. For full details, please consult a local real estate attorney.

The new Robert Bruss special report “Probate Property Profit Secrets Revealed” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 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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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Inman News

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, June 18, 2006.

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 2007 Inman News

Dealing with a city’s building department can be a nuisance, depending on where you live. The cost of obtaining permits ups the overall cost of a project. However, skipping the permit process can potentially cost you much more.

One homeowner jeopardized a profitable home sale because a significant remodel to the house was done without required building permits. In this case, the renovations added about 1,000 square feet to the building. The buyer’s appraiser searched the public record for the recorded square footage of the house.

The public record indicated square footage for the building that was far less than the measured square footage. The appraiser refused to give full credit for the additional square footage unless the seller could substantiate that the work was permitted by the local building department.

Without full credit for the additional square footage, the house would appraise for much less than the contract purchase price. The buyer wouldn’t pay the price he’d offered if the house didn’t appraise for that price.

To remedy the situation, the seller went to the city building department and took out permits. Penalties were assessed so the permit fees were higher than they would have been if he’d taken permits out to begin with. This seller actually got off easy. The city building inspector could have required that walls be opened up to check the electrical and plumbing installations, which would have cost even more.

HOME SELLER TIP: It doesn’t make good financial sense to spend a lot of money on a major renovation without obtaining the building permits that are required by law. The value of the work can be diminished if required permits aren’t obtained. In some places, you might be required to undo work that was done without permits. And, you could be stopped from completing a job until you obtain the necessary permits.

To make sure that you don’t get into trouble when you sell you home, check with your local city or county building department to find out what, if any, permits are required before you start a home renovation project. Not all projects require permits, and this will vary somewhat from one place to the next.

Generally, permits are required for work that might impact the health and safety of a building occupant, like running a new gas line so that you can relocate your furnace. Structural modifications or additions also usually require permits. You may need several permits for such things as foundation, electrical and mechanical.

Permits can be obtained by homeowners or their contractor. You may be able to save money if you take out the permits yourself and agree to be present for inspections. Some contractors have been known to talk homeowners out of the permit process because it saves the contractor time.

Make sure if you do ask your contractor to take out permits that he actually does it. Some unsuspecting homeowners have discovered after a job was complete that the permits were never obtained. Keep copies of permits and make copies available to buyers when you sell your home.

Sometimes permits for work are obtained, but the final approval is never received. This can have implications for the next person who tries to take out a permit to do work on the house. A San Francisco Bay Area home buyer discovered after closing that a permit to change the furnace had never received the final approval.

She hired a contractor to do termite work, which required a permit. When the contractor went to the city to obtain a permit, he was denied. The outstanding permit needed final approval before a new building permit would be issued.

THE CLOSING: Sellers who do work without required permits, or who don’t have permitted work signed off, should disclose this to the buyers before closing to avoid legal problems with the buyers after closing

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

Copyright 2007 Dian Hymer

Dear Barry,

When I bought my home, the seller disclosed that the sunroom was added without a building permit. At the time, my Realtor assured me that a permit was not required because the room is less than 150 square feet. But now I’m doing some remodeling, and my contractor says the sunroom is not legal without a permit. When I called my Realtor, she said the contractor is wrong. Who do I believe? –Barbara

Dear Barbara,

Your contractor has advised you correctly. Your Realtor is badly and sadly misinformed, and she has caused you to be misinformed in a major investment decision. The proper advice for a Realtor, when faced with building code questions, is to simply say, “I don’t know, but I’ll check with the building department for the answer.” An agent who offers uninformed advice of this kind could get involved in a sticky legal mess with enormous financial consequences. Prudent Realtors, and there are many, know better than to do this.

The building codes are very specific as to what kinds of work require permits and what kinds do not. For example, Section R105.1 of the International Building Code states:

“Any owner or authorized agent who intends to construct, enlarge, alter, repair, move, demolish, or change the occupancy of a building or structure, or to erect, install, enlarge, alter, repair, remove, convert or replace any electrical, gas, mechanical or plumbing system, the installation of which is regulated by this code, or to cause any such work to be done, shall first make application to the building official and obtain the required permit.”

Wording of that kind doesn’t allow much wiggle room, does it? It’s straightforward and absolute, with few likely exceptions. Another example is Section 106 of the Uniform Building Code, which states:

“… no building or structure regulated by this code shall be erected, constructed, enlarged, altered, repaired, moved improved, removed, converted or demolished unless a separate permit for each building or structure has first been obtained from the building official.”

If your Realtor still disagrees with your contractor, ask her to explain these codes.

Dear Barry,

Why does the appraisal value of a home often differ from the price listed by real estate agents? When we bought our home, we paid a few thousand dollars more than the appraisal price. When we eventually sold, we got less than the value determined by the appraiser. Why is there so much variance among these relative values? –Betty

Dear Betty,

Real estate appraisal, the practice of determining the market value of property, is an inexact science. This is particularly true in an active market, when prices are rapidly rising, or in a depressed market, when prices are falling. It is also true for properties whose characteristics are unique.

Appraisers depend upon recent sales to determine property values. When market prices are rapidly rising or falling, recent sales prices may not be reliable unless adjustments are made according to the apparent price direction of the market. Appraisers also rely upon comparable properties for price comparisons. If a home is different in size and amenities than those that have recently sold, an appraiser has to make adjustments for those variables, and these can be somewhat subjective.

In truth, the value of a property is whatever a buyer is willing to pay. And that price then becomes the comparable sale to be used in future appraisals of other properties.

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

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

Copyright 2007 Barry Stone