Real Estate in Steamboat

Getting to be time for some new kitchen appliances? One way to save some money along the way is to do the installation yourself, which is not as hard as you might think.

Most appliances come in several standard sizes, so if you can find a replacement that’s the same size as the old one, the installation is considerably easier. New appliances that are larger then the old ones will require that you enlarge the cabinet or countertop opening, which can sometimes be a tough chore. New appliances that are smaller will require that you reduce the size of the opening, and that can definitely lead to a number of problems.

SOME GENERAL PRECAUTIONS

1. Always shut the electricity and gas supplies to the appliance before removal and reinstallation. Do not reactivate either one until you are sure all the installation steps have been completed, and all of the tape and other packaging materials have been removed. If you have any questions or concerns about the gas or electrical supply or connections, or any other installation step, always consult a licensed professional before proceeding.

2. Appliances are very heavy and require two people for installation. Do not try to do this all by yourself — you risk damage to the appliance, the cabinets, the floor, and, most importantly, you!

3. Place a piece of plywood, heavy cardboard, packing blankets or other protective material over your kitchen floor to prevent damage to the flooring during the removal and installation steps.

RANGES

Ranges are found in three basic configurations. These include freestanding, which sit on the floor and fit between the counter on either side of it; slide-in, which sit on the floor but also overlap the counters for a cleaner, more custom look; and drop-in, which rest on both the counter and the lower part of the cabinet, and do not go all the way to the floor.

Freestanding ranges are very easy to install. Remove the old one by sliding it forward enough to reach and unplug the electrical cord or disconnect the gas line, then remove it completely from the opening. Install a new electrical pigtail (power cord) or gas line on the new range following the manufacturer’s instructions, slide the new range into the opening, plug in the cord or connect the gas line, and adjust the leveling feet as needed. Slide-in ranges are installed in the same manner, but the countertop cutout might need to be adjusted slightly prior to installation — check the manufacturer’s template for exact sizes.

A drop-in range is typically hard-wired instead of just plugging in. Slide the range out far enough to access the electrical junction box and then disconnect the wires (or disconnect the gas line), then remove the old range by lifting it out of the opening. Consult the manufacturer’s templates and make any adjustments to the cabinet and counter openings that might be required. Carefully lift the new range into position, reconnect the wires or gas line, and then slide the range completely into place. If required, finish the installation by installing any fastening screws provided by the manufacturer.

COOKTOPS

A cooktop drops into an opening in the countertop, so here again it is best to have a replacement unit that fits directly into the old opening. To remove the old cooktop, disconnect the wires inside the junction box or disconnect the gas line, both of which should be located inside the lower cabinet. Lying on your back reach up inside the cabinet and undo the fasteners that hold the cooktop against the countertop — usually screws, small bolts or thumbscrews. Lift the old cooktop out of the opening.

Check and adjust the countertop openings as needed, then drop the new unit into the counter. Following the manufacturers instructions, install the fasteners that hold the cooktop to the counter. Finally, reconnect the electrical or gas lines.

BUILT-IN OVENS

First, remove the old oven door. This will give you access to the fasteners, and will also make the oven lighter and easier to remove. Unscrew the attachment screws that hold the oven to the cabinet, then slide the oven partly out of the opening. Rest the oven on a bucket, box or other support, and disconnect the electrical wiring or gas line, then remove the oven completely.

Check the cabinet opening to be sure the new oven will fit properly, and adjust as needed. Remove the oven door, following the manufacturer’s instructions, then carefully lift the oven partly into the opening and support it as before. Reconnect the electrical or gas lines, and slide the oven all the way into the cabinet. Check the fit, and then secure the oven in place by installing the new attachment screws. For hardwood cabinets, be sure you predrill the cabinet before attempting to install the screws.

Remodeling and repair questions? E-mail Paul at paul2887@ykwc.net.

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

Copyright 2007 Inman News

In the financial panic underway now, frightened money is pouring into Treasurys, but for the first time in modern experience the overflow is only a modest benefit to mortgages. The 10-year Treasury note is all the way to 4.78 percent, down a half-percent in three weeks, but mortgages are stuck near 6.625 percent, just a hair off the June high.

This disconnect is the mark of credit suspicion extending all the way into Fannie/Freddie “A” paper — very much misplaced concern, says here. Mortgage defaults will spread into Alt-A, and some parts of “A” adjustable-rate pools, but the old-fashioned, main-line Agency underwriting will hold up. The Treasury-mortgage spread should begin to close, to the benefit of mortgage applicants.

There are two separate credit events underway, and a gazillion money bloggers are trying to combine the two into a financial cascade. Don’t buy (yet).

Event one is the still-orderly downside to the biggest-ever boom in home prices. Event number two is the disorderly adjustment on Wall Street from absurdly underpriced risk, the extent of re-pricing and consequences unknown. The ONLY connection between the two: a minor portion of the Wall Street underpricing was bad mortgage ideas, now defaulting in the housing recession. The larger part: Wall Street bloated by a subprime mortgage equivalent in corporate finance.

Housing in the Bubble Zones is still sliding, inventory accumulating, foreclosures rising, all likely to continue for years. Those ignorant of housing propose resolution by sellers cutting prices, but it doesn’t work that way: overextended prices stay flat until purchasing power accumulates to support them. The farther the boom pushed prices beyond purchasing power, the longer it takes. This time, years and years.

Financial market commentators now speak casually of home prices falling 7 percent or 10 percent or another percentage du jour. Prices will fall that much in some micro-markets, but most of the country did not join the Bubble party, and will experience nothing of “falling prices.” The stock market can fall single-piece in a heap (99 percent of the S&P 500 stocks fell in Thursday’s wreck); homes are a neighborhood-by-neighborhood affair.

Have generally flat prices of homes diminished consumer purchasing power? Sure. Made the economy a tad fragile, could get worse? Sure, sure — but housing is going to unfold over time, and there is no good way to know the side effects in advance.

This Wall Street credit event is an entirely different matter. A “credit crunch” is a lender strike, and a bad one is a common initiator of recession: not just raising rates for risky deals, but choking off credit altogether.

In this cycle, bad mortgages were merely the first of the overpriced parade to be exposed, but that was a matter of luck, not linkage. The real economic link here is not housing-to-mortgages-to-stocks, it is the one from the global excess pool of savings to Wall Street. The buyers overpaying for IOUs have been led by Asian exporters and Petro pushers desperate to earn a return on their winnings. Along the way they have propped prices of all other traded assets, and invented ones called “derivatives.”

To cause a recession, a credit crunch has to be big and durable enough to harm the real economy, not just Wall Street. So far in this one, The Street is stuck with piles of IOUs that it promised to buy, and did, but now cannot re-sell. Clogged drain. In the best line by far to describe current conditions, Bill Gross, chief investment officer for Pacific Investment Management Co., wrote a country-boy metaphor: “This is the constipated owl — absolutely nothing is moving.”

If the Asian/Petro investors go to cash, earning 5 percent in dollars or 4 percent in euros, and stay there, then the owl’s condition will persist and the disaster-bloggers will have better copy. Alternately, the cash-drowning vendors to us will begin to nibble at the much higher yields and lower prices suddenly available in the markets, loosen up the owl, and we can get back to watching finance types try to understand housing.

And watch the serious show: the Fed leaning against $75 oil while the economy is gradually slowing.

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

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

Copyright 2007 Lou Barnes

MOST people who buy a second home are seeking refuge, a place to recharge their psychic batteries, to leave the worries and trivia of their jobs and hometowns behind. The last thing on their minds, generally, is to get sucked into the whirlpool of local politics.

Becoming involved in a second community might mean attending an occasional meeting of the homeowners’ association or writing a check to support a local cause. Reading the local newspaper or learning who the mayor is, however, just might not be quite as important as finding the best bagel in town.

But then there’s the experience of Peter Blaes, 54, a psychiatrist from Bethesda, Md., who has a vacation home in Rehoboth Beach, Del., a rare resort town where second-home owners can vote in local elections and thus become embroiled in issues of zoning, preservation and building codes. For people like him, the idea of getting away and getting involved is not a contradiction.

“I struggle with important issues all week long, so the whole point of coming here was to get away,” Mr. Blaes said. “But the risk of losing the character of this place as we know it is worth the expenditure of energy.”

No man is an island, and no vacation home exists in a vacuum. As much as second-homers might try to defy the pull of local issues – even tiny issues – such resistance is sometimes in vain. Bucolic getaways can turn into dens of contention over things like the paint color on the interior walls of a condominium, as happened in Punaluu, Hawaii; the environmental and visual impact of a proposed wind farm on Nantucket Sound five miles off the southern coast of Cape Cod; or whether homeowners around Lake Tahoe, Calif., can put new buoys, boat ramps and piers on their properties.

In the New York region, second-homers were key players in the battles over outlawing charcoal barbecues in Ocean Beach on Fire Island in the 1990s. More recently, second-home owners have jumped into tussles over cellphone towers in the Catskills and the proliferation of McMansions in the Hamptons. And a group of second-home owners in Southampton tried, in vain, to incorporate their beachfront property into a new village, to be called Dunehampton, several years ago because of dissatisfaction with the local government.

In the case of the Cape Cod wind farm controversy, part-time residents have donated millions of dollars through private foundations to nonprofits that are fighting the project, said Wendy Williams, co-author of “Cape Wind: Money, Celebrity, Class, Politics, and the Battle for America’s Energy Future on Nantucket Sound.”

“The people who have second homes on the cape do not have voting rights,” she said, “but they have a huge influence.”

More typically, weekend residents wield their power in community affairs through letter-writing campaigns, getting the local news media involved and putting up lawn signs. Some part-timers claim their vacation home as their primary residence so they can vote in local elections.

Rehoboth Beach is one of the few municipalities nationwide that explicitly permit second-home owners and renters to vote and hold certain elected offices. Delaware’s election code grants cities and towns the right to set qualifications for voters and elected officials in municipal elections. “Nonresident voting is not totally unknown, but it’s not widespread,” said Doug Lewis, the executive director of the Houston-based National Association of Election Officials.

In many places it’s against the law. There was controversy last year, for example, after a Suffolk County, N.Y., grand jury subpoenaed election records for Saltaire on Fire Island after complaints that some summer residents had voted illegally by casting ballots there as well as at their primary residences.

The second-home activists in Rehoboth Beach don’t take their suffrage rights for granted. On a Friday night in May, about 70 people, some right from their jobs in Washington, gathered in the great room of a spacious beach cottage for a cocktail party-voter registration drive. As guests drank white wine and ate canapés laden with artichokes and sun-dried tomatoes, organizers greeted them with cards telling them how to get their names on the town’s rolls. The city charter requires municipal elections for the second Saturday in August, so the campaign season heats up with the weather.

MARY PECK and her husband, Kevin, listened as Patrick Gossett, 53, one of the three city commissioners who are part-time residents, gave updates on two thorny issues: recent changes to the city’s building codes and the possibility of establishing an architectural review board to approve new building plans.

The Pecks, who own a five-bedroom bungalow on a beachfront block, are unhappy about the look and the sparse landscaping of two new houses that went up across from them, Ms. Peck said. They registered to vote the morning after the party.

“We hadn’t known what kind of a voice we’d have because we’re already registered where we live,” she said. “It’s kind of unusual to vote in two places.”

For Rehoboth Beach’s concerned part-timers, involvement often goes beyond the voting booth. Some say they routinely stretch their weekends to attend Monday night meetings of the board of commissioners, the city’s governing body.

Architectural aesthetics and space allocation are the key issues for second-home activists in Rehoboth Beach, which is a mile square and has little undeveloped property.

Nonresidents, as local officials call part-timers, make up an estimated three-fourths of the 3,256 property owners there, according to the office of the city manager. They are a powerful and active constituency, coming mainly from Baltimore and Philadelphia in addition to Washington and Virginia. There are only 1,556 full-time residents, according to 2005 population estimates from the Census Bureau.

The housing stock is coveted, with the average price of a single-family home in the Rehoboth Beach area at $675,863 in the first quarter of 2007, almost double the average of five years ago, according to the Sussex County Association of Realtors.

The typical lot is 50 feet by 100 feet, with most properties in full view of the street. An abundance of mature trees adds a measure of privacy and shade. With houses so close together, many in Rehoboth Beach say that the size and style of new houses are not just matters of personal choice.

Dennis Barbour, 56, a lawyer, pointed to a 3,500-square-foot, three-story Bauhaus-style house in the final stages of construction on a treeless lot. It looms over an older, two-story wood-shingled house.

“When one house towers over the surrounding houses,” he said, “it cuts off the neighbor’s sunlight and air circulation.”

Mr. Barbour said he realized the importance of neighborhood preservation after buying a cottage in Rehoboth Beach as a sanctuary from his Washington workweek. He soon discovered that the owner of a house across the street was petitioning the city to rezone his lot from residential to commercial so he could open a home-based hair salon. Mr. Barbour and about 40 neighbors protested the change.

They lost, and up went an addition that turned a small house into what Mr. Barbour called a “huge, monstrous thing” – a full-fledged shop with a gravel parking lot.

Years later, Mr. Barbour became one of the founding members of Save Our City, the main citizens action group in Rehoboth Beach. In 2005, he made a successful bid for city commissioner in a contentious election that pitted preservationists against real estate interests and advocates for property rights. He has kept the position, even after taking a job in Cleveland. His weekend commute is now an hour-plus flight to Washington and a nearly three-hour drive east.

Save Our City, with about 300 members, has helped enact several changes, including revisions to the city’s floor-to-area-ratio that limit the size of new houses to two and a half stories and 60 percent of the lot size.

SOME say the group’s agenda unrealistically limits property rights. “Save our city is exactly what they’re not doing,” said Eugene Lawson, a lawyer who splits his time between Rehoboth Beach and McLean, Va. “The new ordinances have created an entire separate level of bureaucracy and government control that we’ve never had before.”

But, in any second-home community, if there wasn’t an ax to grind, what would an activist be able to do besides relax?

Nancy Martin, an organizer of Save Our City, called the hours she spends on Rehoboth Beach politics “pure enjoyment.” Many of the activists are baby boomers who went to college during the 1960s, she said.

“We’re reliving the spirit of our college days. It’s fun.

By LISA A. PHILLIPS

Published: June 22, 2007

www.realtytimes.com

I thought this was an extremely applicable article for our lifestyles here in Steamboat Springs, CO…

Condos and houses have their advantages and disadvantages. Use our chart to help compare your options.

Be it in New York, Atlanta or Miami, the condominium market is thriving, with modern towers and low mortgage rates luring would-be home buyers with the possibility of building equity at rent-like prices.

Should you join the condo club or go for a more traditional home? Consider your lifestyle and weigh the pros and cons of each before deciding which to buy.

Of course, regardless of whether you buy a house or a condo, it’s important to do your homework and consider the future of the neighborhood you’re buying into. The old axiom of “location, location, location” remains true for both. Each is a significant investment, and you need to find a safe and vibrant neighborhood capable of nurturing your investment into the future.

 Published on January 12, 2007 on www.realtytimes.com

I was purusing the Denver Post the other day and came across this article. I found it to be very informative and full of precise helpful advice for anyone, whether you’re buying or selling…

In the market to buy or sell real estate? Follow these tips from the people behind the HGTV program “Bought & Sold” to make the process easier.1. Arranging an open house to attract potential buyers doesn’t necessarily work. Nosy neighbors and real estate agents will be attracted to the event but not serious buyers.

2. Despite conventional wisdom, the smell of baking cookies does not make a home more appealing to potential buyers. To enhance the chances of selling a home, ensure that the home always looks and smells good, and is well-lit inside and out.

3. Hire a home-stager to help maximize your furniture and accessories. An expert can help rearrange these items to make each room look more appealing.

4. Flipping real estate is great, but be sure to hire an agent with house-flipping experience. First-timers should start with a smaller project to get familiar with the process.

5. Reduce the asking price if there are no takers within the first month. If selling the home is a top priority, reduce the price substantially. It lets potential buyers know that you are serious about selling.

6. A good listing agent can usually point out property damage, such as termites or asbestos, that could become an inspection problem.

7. Roofs, air-conditioning units, wet basements with drainage problems, and major structural issues such as dry-rotted or cracked support beams, are usually the most costly issues uncovered during home inspections.

8. Many people interview agents to list their home for sale but never consider interviewing them to help them look for a new home. Both endeavors are equally important.

9. Interview several real estate agents before selecting the one for you. It is important to meet with at least three. Don’t feel obligated to accept the one that an agency assigns to you.

10. Don’t ask your agent for predictions. In a fluctuating real estate market, no one can predict what will happen during the buying and selling process.

- Sheba R. Wheeler

DEAR BOB: I recently purchased my first home, a townhouse condominium. While getting acquainted with my new neighbors, the subject of insurance came up. One of my neighbors, who rents her townhouse condo, says she has a renter’s insurance policy. Since I am an owner, do I also need a renter’s insurance policy? –Nancy B.

DEAR NANCY: No. As a condominium owner, you need a condominium owner’s insurance policy. It will protect you against negligence liability, such as when somebody is injured in your condo. The policy also provides coverage for fire or other damage to your furnishings, theft, accidents and damage to the interior of your condominium.

Purchase Bob Bruss reports online.

The homeowners association carries a master insurance policy on the buildings and common areas. This policy provides liability coverage and for structural loss such as due to fire, wind, water damage (but not flooding) and other coverages.

If you buy your condo owner’s policy from your automobile insurer, you may be entitled to a multipolicy discount. Also ask the insurance agent if you need an inexpensive umbrella liability insurance policy to protect against large losses due to your negligence.

SOLUTION TO THE 90-DAY LISTING PROBLEM

DEAR BOB: Thank you for your suggestion a few months ago about listing a home for sale. We took your idea to sign a 180-day listing but with an unconditional cancellation clause after 90 days. Because the home-sale market in our town is slow, we didn’t receive any purchase offers during the first 90 days. But the agent was doing a very good job, advertising our home, and holding open houses. So we decided to give her another 30 days before canceling the listing. Thankfully, she found us a buyer and everything turned out well. However, if we didn’t have that cancellation clause in our long listing, I’m afraid we might still be waiting for our home to sell. –Clancy H.

DEAR CLANCY: Congratulations on using a 180-day listing, including a cancellation clause, to your advantage in a buyer’s market. The threat of being able to cancel the listing after 90 days without cause gives the listing agent maximum incentive to get the home sold.

LOW HOME-PURCHASE OFFER FROM RELOCATION COMPANY

DEAR BOB: My employer is closing the office where I have worked for 14 years. But the company provides a relocation program and I decided to accept an out-of-town transfer. As part of the “package,” my employer offered to handle the sale of our house. Before accepting, we tried listing the home for sale with a local realty agent. No offers. So we decided to accept the employer’s offer to purchase our home. However, by the time we accepted, the employer’s relocation company dropped the price at which it would buy our home. We were told the market for homes in our area slowed down so the relocation company had to lower its purchase offer price. Is this legal? –Alan R.

DEAR ALAN: Because you did not accept your employer’s relocation company initial offer, there was no obligation to keep that offer open. The firm was within its rights to reduce the purchase offer price for your home.

Please be aware your employer’s relocation company will incur considerable costs selling your home, such as a real estate sales commission and possible fix-up expenses.

The new Robert Bruss special report, “Pros and Cons of Investing in Rental Houses and Condominiums,” 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

Real estate apartment investors Donald Sterling and Lawrence Taylor entered into a handwritten memo agreement for the sale of three large apartment buildings owned by Taylor’s investment partnership.

The very simple contract said the total price was to be “approx. 10.468 X gross income. Estimated income $1,600,000, Price $16,750.000.”

PurchaseBob Bruss reports online.

After several letters and memorandums back and forth, Sterling wanted to lower the sales price to $14,404,841 based on the actual gross rental income and the 10.468 multiplier noted in the original handwritten memo.

But Taylor returned Sterling’s uncashed deposit checks. Later, Sterling sued Taylor for breach of contract and fraud.

Taylor argued there was no sales contract because the alleged contract was not definite enough as to the sales price and it violated the statute of frauds because it was an insufficient writing.

If you were the judge would you rule there was a valid contract and Taylor breached the contract?

The judge said no!

Although extrinsic outside evidence is allowed to determine if a sales memorandum complies with the statute of frauds requirement for a written agreement, the extrinsic evidence is not allowable to change the meaning of the original contract provisions, the judge began.

“Because the memorandum itself must include the essential contractual terms, it is clear that extrinsic evidence cannot supply those required terms,” he continued. “The extrinsic evidence offered by the plaintiffs is at odds with the writing, which states a specific price and does not indicate that the parties contemplated any change based on actual rental income,” the judge emphasized.

The written memorandum did not indicate the sales price was to be based on the actual rental income, rather than the estimated $1,600,000 rental income stated, the judge explained. Because there was not a meeting of the minds necessary to form a valid contract, there could not be any breach of contract or fraud, the judge ruled.

Based on the 2007 California Supreme Court decision in Sterling v. Taylor, 55 Cal.Rptr.3d 116.

(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

DEAR BOB: In your articles you always seem to extol the virtues of revocable living trusts. However, living trusts are not for everyone. (1) You must fund the trust, and re-titling bank accounts and getting new property deeds can be onerous; (2) you still need a will if you have assets that are not part of the living trust; (3) if you hire a lawyer, you have to pay for his or her time; (4) in its simplest form, a living trust won’t reduce estate taxes; and (5) because of all the hype about living trusts, high-pressure sales seminars are hawking them to uninformed senior citizens with con artists selling living trusts for as much as $2,000 and gathering personal information to turn over to annuity and insurance salespeople who use it to sell additional financial products. –Wallace H.

DEAR WALLACE: I’m sorry you have such a negative attitude toward revocable living trusts. Do you have a better alternative for avoiding probate and allowing management of the living-trust assets if the trustor becomes incapacitated?

PurchaseBob Bruss reports online.

Your heirs will thank you if your major assets are in your living trust to avoid probate hassles. To answer your objections: (1) re-titling your bank accounts and real estate titles is relatively easy and should be handled by the attorney who creates your living trust; (2) a “pour-over will” distributes any assets you left out of a living trust; (3) hiring an attorney is usually far cheaper than paying probate costs; (4) the purpose of a living trust is not to reduce estate taxes; and (5) living-trust benefits far outweigh the modest cost (usually much less than $2,000).

Please let me know if you have a better method to avoid probate problems. More details are in my special report, “24 Key Questions: Living Trust Secrets Reveal How to Avoid Probate Costs and Delays,” 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.

MORTGAGE CARRYBACK MAY BE THE BEST WAY TO SELL HOME

DEAR BOB: We own our free-and-clear condo and are trying to sell it. What is a seller carryback mortgage and how do you go about doing this? –Pat O.

DEAR PAT: When you carry back mortgage financing for your buyer, you are making a loan to the buyer just as if that buyer borrowed money at a bank. Your security for the promissory note will be a mortgage or deed of trust recorded against the title to the condo being sold.

To minimize chances of foreclosure, you should insist on at least a 5 percent to 10 percent cash down payment. If the buyer defaults, then you can foreclose and either get paid in full at the foreclosure auction or get the condo back to sell it again. For more details, please consult a local real estate attorney.

PROS AND CONS OF TENANCY IN COMMON

DEAR BOB: In a recent discussion of holding real estate title as joint tenants with right of survivorship, you mentioned tenants in common twice. Please expand on the pros and cons of tenants-in-common ownership. –Martin K.

DEAR MARTIN: Tenants in common (TIC) refers to two or more real estate co-owners. Each TIC can pass their share by will, but a joint tenant with right of survivorship cannot.

TICs can own unequal shares whereas joint tenants, by definition, always own equal shares. When one joint tenant dies, the surviving joint tenant(s) automatically own the property without probate. For more details, please consult a local real estate attorney.

The new Robert Bruss special report, “Pros and Cons of Investing in Rental Houses and Condominiums,” 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

Q: I am a high-school student doing a science project on how to prevent mold growing on wood. I do realize that this is a factor that many people are very concerned about in their homes.

Do you guys have any suggestions on how I could set up this project or what type of mold resistors I should use? I did some research and found a product called Anti-Growth. Should I use that product in my project or something else? I would be very happy to know some of your ideas for my project. Thank you.

A: We’re flattered that you thought of us when trying to figure out what to do with your science project. We can remember puzzling over the how-tos and the whys of high-school assignments years ago.

Before beginning your experiment, we think it would be helpful for you to understand something about mold, how it grows and what it needs in order to proliferate.

We recall when one of the nightly news programs did a segment on mold infestation in homes flooded by Hurricane Katrina. As the floodwaters receded in New Orleans, mold crept up the interior walls of flooded homes.

One clip showed a house where mold had grown about a foot and half from the floor up a wall. The contractor being interviewed noted that if allowed to go unchecked the mold would creep to the ceiling by the end of the week.

This news clip illustrates the key thing mold needs to flourish — moisture.

The most important thing to consider in controlling mold on wood or any other surface is to remove the source of the moisture it needs to live. If mold is present in a home, look for the source of moisture and eliminate it.

According to literature provided by the Western Wood Products Association, mold growth cannot be supported on wood that is dried to below 20 percent moisture content. Lumber used in residential building, including framing that has been in place for a while during construction, has a moisture content of below 20 percent and won’t support active mold growth.

Green lumber used in framing contains more than 20 percent moisture initially, but between the time the walls are framed and the framing is covered, the studs will have had enough exposure to air to reduce their moisture content below 20 percent. In homes, mold can nearly always be attributed to moisture infiltration of some kind.

Mold can develop if there is a moisture source such as a leaky pipe or dripping gutter. Moisture content can be increased and mold can grow. Once the moisture source is eliminated, cleanup of small infestations is easy.

The U.S. Environmental Protection Agency recommends using a mild detergent and water for most mold cleanup. The Centers for Disease Control recommends a chlorine bleach solution of one part bleach to 10 parts water. The Wood Handbook published by the U.S. Forest Products Laboratory recommends a 2-to-1 water-to-bleach solution.

If you use bleach in any strength to clean mold, make sure the area is well ventilated, wear gloves and do not — we repeat, do not — mix the bleach solution with cleansers containing ammonia. The gas formed is toxic.

Now as to your science demonstration. We suggest you consider setting up a three-part experiment. In three enclosed environments — a cube of clear plastic perhaps — place a wet piece of lumber, a dry piece of lumber and a wet piece of lumber treated with the Anti-Growth product you mention.

You’ll need a moisture meter to measure the moisture content of each piece of wood. We assume that your teacher can help you introduce mold spores into the enclosed areas.

Keep the wet piece and the treated piece in moist environments (more than 20 percent moisture content in the wood). Keep the dry piece at less than 20 percent moisture content (you may have to let air into the enclosure).

We suspect the wet lumber will grow mold and the treated piece and dry piece will not. If this is the case, you will have proved that expensive chemical treatment is not necessary to control mold, rather that by controlling the moisture in the environment you can control the mold.

Good luck on your project, and let us know how it turns out.

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

Copyright 2007 Bill and Kevin Burnett

Reverse mortgages definitely are on the rise. Senior homeowners are taking equity out of their longtime residences to make ends meet during their retirement years, and to remodel their homes and help their children and grandchildren with the financial challenges of higher education.

In fact, the Home Equity Conversion Mortgage, which is insured by the federal government and is the nation’s most popular reverse mortgage, jumped from 43,081 closings in fiscal-year 2005 to 76,276 in fiscal 2006.

As reverse-mortgage funds are spent and the interest on these mortgages accrues, the lender gains a greater piece of the home. But let’s consider another possibility. What if a family member or a close friend received that equity instead of the lender?

Circle Lending, an aptly named, Waltham, Mass.-based company specializing in the organization of family and small-business loans, has introduced Family Advantage, a sort of reverse mortgage that keeps the home in the family — or with a friend or associate — once the senior homeowner moves out or dies.

“It’s not for everybody, but it has filled a niche, especially for some adult children who are already supporting their parents,” said Jim Smith, vice president of marketing and sales for Circle Lending. “It puts the arrangement into a business deal where all family members can see that it’s all documented and very clear.”

Conventional reverse mortgages allow senior homeowners, with a minimum age of 62, to receive proceeds from a lender — either in a lump sum, regular monthly payments, a line of credit or in a combination of those options. When the house is sold, or the last remaining borrower dies or moves out of the home, the loan amount plus the accrued interest is repaid. The borrower can’t owe more than the value of the home. The HECM program has insured more than 240,000 reverse mortgages since 1990, while private “jumbo” reverse plans also have been available.

The Family Advantage concept requires a family member or friend to write a check every month — or make a lump-sum payment — to the parent or homeowner. In return, the person writing the check earns an equity interest in the home, plus interest, when the homeowner moves out. It’s basically a home-equity loan funded by a family member or friend, secured by real estate. Hence, payments are received tax-free.

The challenge is locating a family member or friend with the means to play the bank. According to Circle Lending, the average rate negotiated between the two participating parties has been about 6 percent because the lending (related) party is not looking to maximize the return.

“A lot of times, at least one of the kids is already supporting the parents with some sort of monthly income,” Smith said. “But none of these payments are documented, or other siblings have no idea that one of their brothers or sisters is even helping the folks at all. Family Advantage documents all of these payments and creates a lien on the home that is repaid before other family members receive their interest in the home — which makes up a great deal of the average person’s estate.”

The cost to set up the Family Advantage loan averages $2,499 (includes documentation, lien recording, ongoing service, upfront consultation and distribution of the repayment) plus $9 for each payment made, typically a monthly check to the folks. However, lump-sum payments can be substituted at any time, allowing the lender-child to earmark expected bonuses to the program or other funds that could be coming from stock sales, home sales or potential big-ticket windfalls.

“We have one client who is a widow with no children,” Smith said. “She owns her home and contacted an acquaintance — somebody who has significant assets. They are obviously unrelated but they worked out an arrangement where the acquaintance will slowly accumulate equity in the property by making monthly payments to the homeowner. They worked out an acceptable interest rate for both sides.”

The upside of the concept is that there is no age restriction; the property secured could be a principal residence, second home or investment property; and the upfront closing costs are less than the standard reverse mortgage. In addition, borrower and lender are free to negotiate a reasonable interest rate yet one that clearly reflects a genuine business deal.

The downside of the deal is that the homeowners have no immediate recourse if the payments cease.

“We were simply looking for a way for people to annuitize their home and have the relinquished equity go to somebody they knew,” Smith said. “We provide a professional, third party to oversee the deal. We’ve found it’s simply a vehicle some families and friends can use.”

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

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Copyright 2007 Tom Kelly