Q: My neighbor recently extended a retaining wall for a driveway and encroached upon our property by a distance of 12 inches by 9 feet. We had our property surveyed three weeks after the construction and discovered this.

Our neighbor proposes that we settle the problem by providing him with an easement for this use. What would be the implications in this for us?

A: The issue you face is quite common. Frequently, neighbors do not know the exact location of their lot lines. Other times, contractors doing work for the homeowners fail to follow the property lines when making improvements to homes.

The most common problem between neighbors has to do with the installation of fences. Depending on the configuration of the lots, bushes, trees, other obstacles and the location of the home on each lot, neighbors frequently pick a line that usually ends up on one neighbor’s side of the property by a couple of inches to a couple of feet.

If your neighbor had come to you to ask whether he could install the retaining wall on part of your property, would you have agreed? If you would have been fine with his request, you have nothing to lose with giving him the easement. If you would have objected, you now have a decision to make.

The easement your neighbor requests will give them the right to keep the retaining wall on your property without your ability to have them remove it in the future. If you’re planning to sell your home, the easement would also make sure that your buyer couldn’t require your neighbor to remove the wall.

If you go the easement route, you need to make sure that there are provisions in the agreement that state that the neighbor is required to maintain the wall and pay all costs associated with the wall. You could have a provision in the document that would require your neighbor to remove the wall in the future if it needs replacement.

A real estate attorney can assist you in the drafting of the easement agreement. Your neighbor should pay all of the expenses having to do with preparing the easement agreement and having the document recorded.

One issue that you have to consider is the impact the wall has on your property. If the impact is not noticeable, there may have been no harm done by your neighbor. If your lot is narrow and the impact of the wall is large, and having the wall could alter the value of your property, you’ll need to decide how to proceed with your neighbor.

Sam Tamkin

Now, let’s look at the other side. Assuming that you would not have allowed your neighbor to build the retaining wall on your property, even if your neighbor had good reasons to do it that way, you can now require the neighbor to remove the wall from your property or request that he pay you a lump sum for the privilege of having the wall on your property.

You can even structure the easement agreement to have your neighbor pay you an annual fee to keep the wall on your property. If he innocently built the wall on your property, you have him in a rough spot. It’s probably would not be very neighborly of you to demand payment from him or to have him remove the wall, particularly if it does not impact your home, but you might have the right to do it.

You have to decide what you want to do. If your neighbor made an innocent mistake, and you charge him for the easement or make him take down the retaining wall, he could be a less-than-friendly neighbor for many years to come.

On the other hand, if your neighbor just decided to build the wall and didn’t even consider whether he would be on your property, and you’re not all that neighborly to begin with, you may make a different decision.

For more information on your legal rights or to draft the easement agreement, consult a real estate attorney.

To get even more valuable advice from Ilyce, visit herPersonal Finance and Real Estate Center.

Copyright 2007 Ilyce R. Glink and Samuel J. Tamkin

Q: My landlord ignores my repeated requests for repairs. Can I get things fixed and take it out of the rent?

A: Yes and no. Yes, the remedy known as “repair and deduct” does exist as an option for renters living in a multitude of states. It is a last resort to consider after exhausting all other options. No, you can’t just skip paying the rent and start wielding a hammer. Like all laws, there’s a procedure to follow to avoid getting into hot water and getting scorched by landlord retaliation. Consulting with a legal resource such as an attorney, mediator or tenant organization is vital.

First, get organized by listing and photographing the offending conditions. A step by step path that may resolve the problem with your landlord is offered through various sources, including a joint project of Housing Rights Inc. and the East Bay Community Law Project in Northern California. Suggestions include putting repair requests in writing, continuing to pay the rent until the issue is settled, and calling in inspectors, if necessary.

The book “Every Tenant’s Legal Guide” lists every state in the country and their respective repair-and-deduct remedies. Some states have no statute or case law on the books, while others have detailed laws and statutes to protect renters’ rights. Further legal options and resources can be found via the Housing and Urban Development Web site at www.hud.gov/renting.

Generally, the repair-and-deduct remedy allows a tenant to deduct money from the rent — up to one month’s rent — to pay for repair of defects in the rental unit. The remedy may only be applied to serious conditions that affect the “implied warranty of habitability” or “unsafe conditions.”

What’s an implied warranty of habitability or unsafe condition? Where the law applies, landlords are required to maintain their rental units in a condition fit and safe for occupation by human beings.

For example, a place is considered downright unlivable if it lacks certain basics. “Effective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors,” is the first item on the approximately eight-item list California law defines. Other common abuses include a lack of utility hookups, such as hot and cold running water or electrical service. Naturally, unsanitary conditions ranging from rubbish to rodents is also unacceptable. Trash receptacles must be provided. Safe passage down hallways and stairs, which should be kept “in good repair,” is typically expected.

Further provisions are also defined by a combination of civil codes, health and safety codes, and case law. As a result, a cornucopia of regulations exists to protect the rental consumer, which can be delved into detail with the help of a legal resource.

There’s another side to the “habitability” situation. Damage or uninhabitable conditions cannot be a result of actions made by the tenant or anyone they are responsible for, such as family, guests or pets. Tenants are required to keep the place as clean and sanitary as the condition of the premises make possible.

Other tenant-required behavior includes using gas, electrical and plumbing fixtures properly. For example, if something is too large or inappropriate for the pipes to handle, the tenant might be held responsible. Proper maintenance, such as keeping gas burners unclogged and clean, is also expected. Disposing of trash appropriately is also important. For example, tossing leftover bread out the back door to feed birds is poor housekeeping and could invite unwanted critters.

Allowing anyone to deface or damage the premises or remove fixtures also shifts the blame from landlord to tenant, as does abusing the use of rooms. Using a bedroom as a spare kitchen (or visa versa) is dangerous and could negate a landlord’s responsibility for repairs in that situation.

In addition, some repairs may be described as the “tenant’s responsibility” in the lease. For example, some appliances are provided in “as is” condition. If the refrigerator was rented ‘as is,” don’t have a meltdown if the ice cream starts to melt and expect repairs to be on the landlord’s tab.

Finally, the remedy can usually be used only twice in a calendar year. You cannot repair and deduct if any rent was already due, even if it’s just a dollar. Watch out: If the defects you find troubling are not severe enough to warrant the deduction, you may be subject to eviction for nonpayment of rent. Once again, consulting a legal professional is crucial before using this powerful tool.

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Copyright 2007 Helene Lesel

Q: I inherited my mother’s house and rented it to tenants who are complaining about noise from the neighbors. The neighboring property is a townhouse that’s occupied by college students (who are also renters), and they do indeed make a racket, with loud parties many nights. I’ve talked to them and tried to get them to quiet down, to no avail. My renters are telling me that they can break their lease (and not be responsible for rent for the rest of the lease term) because of this situation. Since I can’t evict the neighbors, it seems to me that I’ve done all I can do, and that my tenants should not be able to get out of their lease. –Eloise D.

A: In most states, your tenants will indeed have the right to break the lease, with no responsibility for future rent, if the situation has become intolerable — even if you’re doing all you can do to make things better. An intolerable situation would be one in which a reasonable person could not live peacefully in your rental. Night after night of loud parties next door would probably qualify in most judges’ eyes.

But let’s think again about whether there are avenues you haven’t tried yet. First, talk to the townhouse owners and see if they will deal with their tenants (they have the power to terminate the lease if the students’ behavior truly disturbs the peace of the neighborhood). Second, find out if your city has a noise ordinance, and if it does, tell your tenants to arrange for the noise to be measured. Try to have the city send any notices of violations (and fines) to the townhouse owner, not the students. That might get results. Finally, talk to the homeowners association for that development. The association undoubtedly has a rule prohibiting unnecessary noise, and you can ask them to enforce it (unfortunately, you cannot sue to enforce it, because you aren’t a member of the association). Finally, if all else fails, consider a lawsuit in small claims court, in which you describe the situation as a public nuisance, and ask the judge to order the noisemakers to stop and to pay your tenants damages for having put up with the problem.

Q: We live in a multifamily apartment building that prohibits smoking in common areas. However, tenants can smoke in their apartments. Our next-door and downstairs neighbors smoke a lot, and because the windows are set close together and the ventilating system serves all apartments, we get a large dose of their smoke. Sometimes this second-hand smoke makes me cough, and the smell is noxious. Is there anything we can do about it? –Tom and Susan D.

A: The ill effects from second-hand smoke are becoming increasingly known, and lawmakers and courts are taking note. In California, for example, the state’s Air Resources Board has added second-hand smoke to its list of toxic air contaminants. Though no laws require landlords to forbid smoking in individual rental units, there are legal arguments you can use to try to clear the air. Here are some that tenants have used:

• It’s a nuisance! A legal nuisance is any condition or activity — like accumulated garbage or drug dealing — that is offensive to public morals or health and safety. If you can convince the landlord to view second-hand smoke as a legal nuisance, you give the landlord the power to stop it, since landlords are legally required to forbid nuisance-making behavior, no matter what the lease says. Landlords who need convincing might be persuaded by local health inspectors, who are charged with making sure multifamily living conditions are nuisance-free.

Keep in mind that these theories are not sure winners. No laws require judges and health inspectors to label second-hand smoke a nuisance, nor can you be sure you’ll be excused from honoring a lease because smoke is all around. One thing is for sure, however: If a significant number of tenants join together to present their gripe, the landlord is likely to listen, and might consider banning smoking in future leases.

Q: An old friend has moved to town and is staying with me while she looks for an apartment. The market is tight and she’s been here for a month, and that’s fine with me. But my landlord, who lives downstairs, told me she’d have to leave or begin paying rent! My lease doesn’t say anything about guests. Is the landlord within her rights to make this demand? –Tamara T.

A: Landlords are understandably leery about long-term guests. They fear they’ll turn into occupants, whom they haven’t screened (you probably went through a credit check and reference check). They also know that more residents, whatever they’re called, equals more wear and tear, and they set their rents based on an expected amount of wear and tear. Careful landlords include clauses in their leases that forbid additional occupants unless they’ve given consent, and they write guest clauses that define permissible guest stays.

Check your lease for a clause that deals with additional occupants. If it’s there, your landlord is probably within her rights to view your friend as an unauthorized occupant at this point. But all is not necessarily lost. Sit down with the landlord, explain the situation, and see if you can work out a compromise. If you expect your friend to stay longer, it’s not unreasonable for her to pay a reasonable sum. She is, after all, expecting to pay rent when she finds a place.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide.” She can be reached at janet@inman.com.

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

Copyright 2007 Janet Portman

Ignorance may be bliss, but it could mean a lot of pain for all the players in the subprime crisis when a record number of adjustable rate mortgages reset.

NEW YORK (CNNMoney.com) — About $50 billion in adjustable rate mortgages reset this month, driving interest rates up for many borderline borrowers. And despite efforts to raise awareness, it doesn’t look like anyone is really prepared for what’s to come.”I don’t know if there’s anything much [borrowers] can do,” said Keith Gumbinger of HSH Associates, a publisher of mortgage related information. “Hopefully, they’ve been prudent about preparing for it, building a nest egg or refinancing the loan.”

But most borrowers are likely to just scramble to pay the higher expenses – some of which will jump by 50 percent and come as a big surprise.According to a survey conducted last month for the AFL-CIO by Peter D. Hart Research Associates, three quarters of borrowers have little clue about how much their payments will increase when their loans adjust. Nearly half don’t know how their loans actually reset.

“This survey shows that many homeowners simply are not prepared for the steep rise in mortgage payments that this market inflicts on ARM holders,” John Sweeney, president of the AFL-CIO, said in a press release.

When asked whether they were confident or worried about making their monthly mortgage payments over the next few years, 41 percent of homeowners whose adjustable rate mortgages (ARMs) had already reset said they were worried. Only 18 percent of pre-reset borrowers were concerned.

The record round of resets has been getting a lot of attention across the board. Congress, the Bush administration, government agencies, regulators and community groups and lenders all have their own ideas on how to offer relief. Mark Zandi, chief economist for Moody’s Economy.com, believes that borrowers are more informed than in the past, but he doesn’t see that knowledge translating into better results.

“The success rate for loan modifications is not improving much,” said Zandi. “In September, defaults surged.”

Zandi blamed the surge, in part, on the sheer number of borrowers seeking help; servicers who need to hire and train new loan counselors are unprepared for the volume.

And technical roadblocks to mortgage modifications are slow to being dismantled. Contractual obligations between servicers and investors who buy the loans can limit the options servicers may offer borrowers.

According to Michele Taylor, a community reinvestment organizer for the Chicago-based National Training and Information Center (NTIC), some investors stand to make less money if a loan is modified, so they’re not playing ball.

“We’re hearing from servicers, ‘Nothing can be done because the investor won’t allow it,’” she said. That occurs even when the same servicers have worked out favorable modifications for other borrowers.

Tax and accounting considerations are also hindering workouts. One initiative that could help is the Bush administration’s proposal to forgive taxes when mortgage principals are lowered. But any relief action as a result is unlikely to take place before October’s record round of resets.

There is a light at the end of the tunnel, however. “We may be approaching a tipping point after which we’ll have more success with saving borrowers’ homes,” said Zandi.

He thinks servicers may move toward giving ARM borrowers an extra three to five years of payments at initial low “teaser rates,” giving them a little breathing room until home prices rebound. Unpaid interest could then be folded back into principals and loans refinanced.

NTIC is pushing for a similar freeze as part of its “Save the American Dream” campaign. It’s suggesting a two-year moratorium on resets.

But the mortgage situation can’t hope to improve until banks tighten lending practices, and it doesn’t look like they’re quite on track. This past summer, the Mortgage Bankers Association revealed that delinquency rates for loans made in 2006 were rising.

And a new report from investment bank, Friedman, Billings, Ramsey, suggests that as conditions began to collapse during the first half of 2007, lenders still failed to vet borrowers carefully.

According to the report, lenders did not tighten underwriting standards until July or August, when the subprime crisis came to a head. As a result, delinquency rates for these most recent loans are even higher than those for 2005 and 2006.

With so many poorly underwritten loans, future delinquency rates and foreclosures could soar. And while October will be the peak year for resetting ARMs in 2007, new records will be set in early 2008; March will see more than $100 billion in resetting loans.

It could be a bumpy ride. 

By Les Christie, CNNMoney.com staff writer

Q: I have pine paneling in my bedroom, on the walls as well as the ceiling. The paneling is dry and looks worn out. I was thinking of giving it some kind of “whitewash.” In other words, put a very light coat of white paint on it that still allows the pine to be seen. I am not a handy person but was wondering if this is something I could do myself.

Our house is a 1905 Craftsman. But not every room is in the Craftsman style, including the bedrooms. The two other bedrooms have coved ceilings, which are about 9 feet 6 inches high. My bedroom, with the pine paneling, has a ceiling height of only 7 feet 10 inches, so I have to assume the ceiling was dropped to put in the paneling.

Any advice you can give me would be much appreciated.

A: These houses are some of the grande dames of the San Francisco Bay Area. We know them well. Brown-shingle siding and a spacious front porch invite visitors into large parlors and living areas. Coved ceilings are common.

Unfortunately, at least in our view, over the years well-meaning homeowners often tried to update them.

Your instinct is probably right. Your pine-paneled ceiling was once probably a full 9 feet with coved corners. The mystery is why did someone lower the ceiling? Either they wanted a rustic look (popular in the ’70s), or the ceiling had some major problems.

We always recommend restoration when possible, but to determine whether that’s feasible, you’d have to remove the pine. That’s a risk you might want to consider taking. If you’re lucky, the ceiling will be coved and intact. If not, new wallboard and the added ceiling height should return your investment at least dollar for dollar.

If you reject that suggestion, a light stain isn’t a bad alternative.

In Kevin’s painting days he did such a ceiling on a new home in the hills of Hayward, Calif. It was messy work, but the result was attractive.

The painting and decorating process you describe is called “paint wiping.” The goal is to allow the wood grain to show while coloring the underlying wood. In this case, you’re trying to color the yellow pine white while maintaining its wood grain.

Paint wiping is relatively easy to master, but it’s messy. The first thing you absolutely have to do is cover up. Put drop cloths or plastic over every part of the room that is not going to be painted. This means floor, doors and windows.

Next, prepare the surface. For unfinished wood, vacuum or sweep the wood to remove any excess dirt or cobwebs. For finished wood, it’s necessary to do a light sanding to ensure that the paint adheres. We suggest you invest in a small palm or orbital sander for about $50. Sand the entire surface with 150-grit sandpaper. This will give it the “tooth” the paint needs to stick.

After the prepping, it’s time to paint. Use a good-quality, oil-based, semigloss enamel. It does not need to be top of the line, but it does need to contain enough solids to withstand substantial thinning and still retain some coverage. Do not use water-based paint — it dries too quickly.

Thin the paint with mineral spirits. Start with about a pint of thinner to a gallon of paint. Add enough thinner so that when you apply the paint to the ceiling or wall, it seems to cover — but when you gently wipe it off with a rag, the color remains but the grain shows through. Getting the paint thin enough is especially important if you’re working with raw wood. Too thick and the grain won’t show; too thin and you’ll have a splotchy job and a runny mess.

Apply the paint to the wall or ceiling with a short-nap (1/8-inch) roller. Work with a relatively dry roller to minimize drips. Dab paint into corners with a brush. Allow the paint to set on the wall for a couple of minutes and then gently wipe it off with a rag.

This is the critical part of the process. Finished wood requires a light touch, raw wood requires harder wiping. You’ll develop the feel for the time the paint needs to set and the amount of wiping required to get the effect you want.

If you are doing the entire room, start with the ceiling first because it’s inevitable that you’ll get drips and runs. Clean the drips from the walls as you go along. We also suggest that you wear a long-sleeved shirt, a hat and long pants. Have plenty of rags around and open the windows when you’re working.

Have fun and try to keep as much paint off of you as you can.

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

Copyright 2007 Bill and Kevin Burnett

CORAL GABLES, Fla. — While the subprime market crisis is affecting credit markets around the world, baby boomers and retirees can still find funding for their second homes, especially in countries with a stable political environment and solid infrastructure.

According to experts gathered for the recent Latin America Real Estate Conference, the desire to seek vacation and second homes abroad has just begun, even though some potential buyers are stymied by the flat or dwindling values of their primary home.

Dr. Stephen Roulac, chief executive of Roulac Global Places, a San Rafael, Calif.-based consulting firm that advises senior management and investors in real estate affairs, told conference attendees that the trend of North Americans to acquire real estate in popular Latin America countries such as Mexico, Costa Rica and Panama has very little to do with the subprime issues in the United States.

“There’s really no direct correlation at all,” Roulac said. “Most of the people who can afford a second home outside the United States are either going to be paying cash or have a variety of places they can get funding. The subprime situation is not a factor for these people.”

Phillip Fitzgerald, a principal at Los Angeles-based Paladin Realty, focuses on residential, resort and commercial projects in Latin America. He said he is concerned about the number of U.S. households seeing their property values decreased due to ballooning inventories in many markets.

“Suddenly, you have the family who wanted to buy a place south of the border looking at declining equity in their primary residence,” Fitzgerald said. “Instead of perhaps borrowing against that equity to help them get started on a vacation home in Costa Rica, they are backing away and pulling in the reigns. After years of only positive appreciation, I’m seeing people go back to sitting on the fence when it comes to buying in Latin America.”

A few Mexico developer representatives echoed Fitzgerald’s opinion. They are concerned about the U.S. economy and are already seeing a slowdown in residential purchases in many of their targeted tourism areas. The consensus is that the situation will get worse before it gets better. However, it may be a good sign since many of these markets (Cabo San Lucas and Cancun) have become overheated.

The slowdown in equity and future buying could be countered by the largest wealth transfer in the nation’s history — reportedly between $41 trillion and $136 trillion over the next four decades, according to the Center of Wealth and Philanthropy at Boston College. Much of this cash will be left to the boomers from their parents.

Gary London, a real estate economist and consultant, said while the reports of an inventory glut in the Rosarito-Ensenada corridor south of San Diego are “spot-on,” he believes that the oversupply will be absorbed by long-term investors and that “Mexico’s fundamentals look strong for the next 20-25 years.”

Latin America developers are targeting the 79 million baby boomers in North America — the largest, healthiest and wealthiest group ever seen on the growth landscape. According to statistics compiled by the U.S. Census Bureau and Federal Reserve, this group controls 67 percent of the country’s wealth, or $28 trillion, and households by someone in the 55-to-64 age group had a median net worth of $112,048 — 15 times the $7,240 reported for the under-35 age group.

Much like the boomers’ parents — members of the Greatest Generation — had targeted Florida, Palm Springs or Arizona, the boomers are clamoring for homes south of the border because of the different experience, affordable prices and the thrill of the exotic. In a nutshell, the lure is the beach, mountains, forests, colonial cities and a chance to step outside the second-home box.

Paul McBride, who leads Prima Panama, a consumer-oriented Web site marketing property and lifestyle in Panama, said other countries should take Mexico’s lead and help developers with roads and services.

In many countries, developers face a problem when considering a real estate project since traditional funding for land acquisition and infrastructure is not commercially available. FONATUR, the Mexican government agency responsible for tourism-related development in Mexico, understands the challenge and makes the investment in infrastructure improvements in order to mitigate the cost of development. This provides an incentive for developers and kick-starts projects in targeted areas.

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

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Copyright 2007 Tom Kelly

Dear Barry,

We bought our first home during the frenzied real estate boom of 2004. It was a seller’s market, so we agreed to an as-is purchase. Our real estate agent told us that a home inspection had already been done for a previous buyer who had backed out of the deal. To save money, she suggested that we forego hiring our own inspector. Because she is a personal friend, we trusted her and signed a form that waived our right to an inspection. This, as it turned out, was a big mistake. Shortly after moving in, we began to have recurrent plumbing leaks. When we contacted the seller, he admitted knowing about these problems but not disclosing them because he had repaired the pipes himself and didn’t think they would leak again. We finally hired a plumber who opened the bathroom wall and found the seller’s substandard repair work that will now cost $1,200 to fix. We also encountered air-conditioning problems, with a repair estimate of $3,800. When we called the seller about this, he said that our waiver of a home inspection relieved him of the obligation to disclose. How do you advise handling this mess? –Brenda

Dear Brenda,

As you say, declining a home inspection was a big mistake. In fact, it is never wise or prudent to forego a home inspection, regardless of the circumstances. Even when there is a report from a previous transaction, you have no assurance that the inspector who made that report was qualified, experienced or thorough. Unfortunately, too many real estate agents are uninformed in this regard and often give the same faulty advice that you received from your agent. As a personal friend, her counsel may have been well intended, but she needs to learn from this occurrence that such advice should never be given to any buyer.

The seller’s position is indefensible. He has clearly violated the ethical standards of real estate disclosure — a matter of law in most states. He states that he was aware of specific defects with the plumbing and air-conditioning systems but chose to withhold that information. His denial of responsibility on the basis of a declined home inspection is totally groundless. His obligation to disclose known defects is an entirely separate issue from any inspections that did or did not take place. Home inspections do not absolve sellers from their requirement to provide full disclosure to buyers.

Your first step in addressing this mess is to realize that there are more undisclosed defects than you have yet discovered (whether few or many is not yet known). The only way to get the full picture is to hire a home inspector of your own — someone with many years of experience and a reputation for detailed disclosure. Once you have a comprehensive report of property conditions, you’ll be prepared for the next stage of communications with the seller. Given his unwillingness to cooperate in a fair and equitable manner, a letter from your attorney might be needed to awaken his serious attention.

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

August 10, 2007

The Denver area’s housing market perked up a bit in June, when both the number of sales and the median price increased from May. Despite this normal seasonal uptick, however, sales and prices still fell moderately short of year-ago levels, a real estate information service reported.

A total of 5,773 new and resale homes closed escrow in the Denver-Aurora metro area in June � the highest total for any month this year. Sales rose 5.7 percent from 5,463 sales in May but still fell 13 percent short of 6,523 sales in June 2006, according to DataQuick Information Systems of La Jolla, Calif. The firm tracks real estate trends nationally via public property records

Continuing an eight-month trend, sales of newly built homes fell the hardest in June, dropping 23.5 percent on a year-over-year basis. Resale houses and resale condos saw annual declines of 11.4 percent and 3.8 percent, respectively.

Total sales in June were the lowest for that month since June 2003, when 5,218 homes sold. In comparison, total sales in April and May this year were at 9-year lows. Sales of all home types combined have fallen on a year-over-year basis for most of the last 19 months.

High-end sales have been relatively strong � a trend playing out across much of the West and nation. In June, 19 Denver metro area homes sold with a price or loan of $2 million or more, up 46 percent from 13 such sales in June 2006, according to county property records.

DataQuick’s statistics for the Denver MSA reflect sales in Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Jefferson and Park counties (see MSA exclusions below).

The median price paid in June for all homes combined was $245,000 � the second-highest median on record. That was up 3.4 percent from $237,000 in May but down 1.2 percent from a record $248,000 in June 2006.

The median price paid per square foot for resale single-family (detached) houses, another gauge analysts track, shows a similar trend. June’s $161 median per square foot declined 2.3 percent compared with a year ago, though was the highest since September 2006. The median per square foot has declined on a year-over-year basis for 11 consecutive months. However, June’s 2.3 percent decline was milder than the 4.2 percent drop in May. Declines in prior months ranged from 1.8 percent to 6.4 percent.

Although the Denver area’s housing market posted a stronger performance in June than in recent months, analysts will look for a multi-month trend of continued strengthening before proclaiming a definite rebound. Moreover, June’s stronger results came at a time when it’s normal for a housing market to log peak sales and prices for the year.

In neighboring Boulder County, 749 homes closed escrow in June. That was up nearly 23 percent from 610 in May but down 7 percent from June 2006. The median price paid was $310,000, down from $315,000 in May and down 2.8 percent from $319,000 in June last year. June marked the second consecutive month in which Boulder County’s median has fallen on a year-over-year basis. The $310,000 June median was 6 percent lower than the peak $330,000 median in September 2006.

*Data not available for Elbert and Gilpin counties, which are part of the Denver-Aurora MSA

info gathered from www.dqnews.com

How would you feel if you bought a home that seemed perfect, only to find out you couldn’t use the property like you thought you could?

One buyer bought a home with a good-sized yard that he thought would be perfect for his large dogs to roam free. Soon after the sale closed, he hired a contractor to construct a fence around the property. The day the work started, a neighbor showed up to inform the new homeowner that he couldn’t completely fence the property because of an easement that ran across his property.

An easement grants property rights to someone other than the property owner. Common easements are for ingress and egress, utilities and sewers. Easements must be kept unencumbered.

In the case above, the easement provided the neighbors access to their property. A fence could not be built over the easement because it would deny the neighbor their rights to access.

The property owner had to revise his fence design, which was disappointing. But, easements can be even more problematic, particularly if you assume there is an easement in favor of your property but there isn’t.

A homeowner in the Oakland Hills (Calif.) subdivided his property and sold off the lower half to a builder who constructed a new home on it. The homeowner then put his home on the market and entered into contract to sell it.

The buyer’s real estate agent reviewed the preliminary title report and found that there were no easements either benefiting or restricting use of the property. In particular, there was no sewer easement.

The agent asked the seller how the sewer line from the house connected to the main city sewer line. It turned out that the sewer line ran downhill across the portion of the property that had been subdivided and sold.

In this case, an error of omission occurred during the subdivision process. A sewer easement should have been granted in favor of the owner of the upper portion of the property. Consequently, the owner of the upper property no longer had a legal right to run his sewer line across the adjacent property.

HOUSE HUNTING TIP: Make sure you have a clear understanding of the title issues affecting a property before you buy it. In some states such as California, title companies check the record and issue a title report that includes such things as the recorded owner and liens, easements and encumbrances affecting the property. In other states, buyers hire attorneys to search the title record and produce a report.

In the aftermath of the subprime lending crisis, it’s especially important to investigate the status of any liens secured against the property. A preliminary title report will give you the original amount of such items as mortgages and taxes owed. But, the preliminary report won’t necessarily tell you the amount the sellers currently owe.

All liens secured against the property must be paid in full in order for the seller to pass clear title to a buyer. If the seller has an interest-only mortgage and has not made any payments toward retiring the principal amount borrowed, he could still owe the original amount he borrowed. If the mortgage was a teaser-rate adjustable with an option to pay the minimal amount due, the seller could owe more than what is indicated on the title report.

THE CLOSING: Problems that could delay or derail closing can develop when the owner of record is not the same person who listed the property for sale. Before concluding a home purchase, make certain that the seller has the power of sale and that the property you’re buying is what you bargained for.

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 2007 Dian Hymer