Sunday, February 17, 2008

How An Honest Mistake Can Cost Big Time!

I'm sure we're not unique in our real estate business - strange situations can arise just about anywhere - it just seems that some times we have nothing but "interesting" situations!

One such interesting sale was just closed this past week. It was truly a beautiful home, almost 5,000 square feet and only a few years old. Unlike similar homes closer in to DC in Montgomery County which would have gone well over $1 Million, because this is in a different county and not really in commuting distance, the home sold for under $500,000 - quite a buy! The family who purchased the house were thrilled - they had done their homework, searched for six months or more and found everything they wanted in this home, or so they thought.

One week before closing, as we were contacting utility companies to make the change for our client, we ran into a problem. The gas company couldn't find any records of the property address. Ok, we thought, maybe we have the wrong gas company. So, we contacted the listing agent (the buyer was our client), and asked for the name of the gas company. They contacted the seller and got us the information - only problem was it was not a "natural gas" company, it was a propane company. Our buyer was, understandably, upset. They hadn't seen any propane tank, they had been told (and it was in the listing paperwork) that the house was natural gas, and in fact, natural gas was one of their big criteria!

After calls to the propane company, we discovered that there was no tank on the property, the development had a large holding tank, then the propane was delivered via underground pipes to the individual homes which were all on meters. We got copies of the propane bills for the past year to compare them to natural gas - they were higher to the tune of double or more! The selling agent was at a loss, she had not idea the home was propane and in fact, on looking at other listings - active, sold and under contract in the same development - about half the listings showed the homes were natural gas!

So, here we were, days from closing and as our clients really loved the house, we decided to go back to the seller with an addendum to the contract which, in essence, asked for a credit to cover the increased and unexpected costs and reserved the right to cancel the contract and retrieve our earnest money deposit if an accommodation could not be reached on the grounds of misrepresentation.

We asked for, and received, a $5,000 credit from the sellers - enough to cover the increased costs for a several years and the deal went to closing.

The lesson hear is that there would have been no credit had the heat, cooking and hot water fuel been listed as "other" and the propane delivery system (pretty much the same as regular natural gas) explained. I believe our clients would have still purchased the house had they known in advance. You might wonder how to find fault with the listing agent, her client told her the heat and hot water were "gas" - but if the agent specializes in that area she would know (certainly should know) and if she doesn't, she needs to become familiar with the area, similar homes, etc.

It is quite possible that had the closing taken place and the buyer discovered the situation after the fact, there may have been the basis of a suit against both the seller and the real estate agent!

So, do yourself a favor (as always), go over listing paperwork carefully - go over the MLS listing carefully, go over printed brochures carefully. It is up to you to find any mistakes that could be costly in the end.

As Always BE INFORMED and CHECK BACK HERE OFTEN

Saturday, February 16, 2008

Great Reading - The Housing Market Over The Years

This was one of the best collection of quotes that I have seen in a while that truly set perspective! Gloom and Doom seems to have been a trend over the years each time there was a dip in the housing market, but as we are aware today, things have always found a way out and upward! So, read these and smile, then pass them along to anyone you'd like - if you are an agent, your clients might like to see these, if you are a homeowner - take heart!

"The prices of houses seems to have reached a plateau, and there is reasonable expectancy that prices will decline." (Time, December 1, 1947)

“Houses cost too much for the mass market. Today’s average price is around $8,000—out of reach for two-thirds of all buyers." (Science Digest, April, 1948)

"The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs $28,000." (Business Week, September 4, 1969

"The era of easy profits in real estate may be drawing to a close." (Money, January, 1981)

"The golden-age of risk-free run-ups in home prices is gone." (Money, March 1985)

"Most economists agree… [a home] will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980s." (Money, 1986)

"Financial planners agree that houses will continue to be a poor investment." (Kiplinger’s Personal Finance, November 1993)

AS ALWAYS, BE INFORMED and CHECK BACK HERE OFTEN

Thursday, February 14, 2008

An Attic Full of Bats, Gloomy Home Inspection

Well, one of the more interesting negotiations we have conducted concluded today. I must warn you that this isn't pretty or for the faint of heart, so feel free not to read this post if you are squeemish in any way!

On a home we sold, the inspection report came back that there was some sort of animal droppings in the attic as well as four xerox box lids with a white powdery substance and it was suggested that it be further investigated. I received a call from the buyer's agent who reported this item and wanted me to speak to the owner to find out what they knew about it. The owner responded that the powder was simply baking soda that he had put in the attic to keep it "dry and fresh" and the droppings were undoubtedly from birds that had gained access through a hole in the sceen covering the end vent and that he had gotten them out and fixed the hole. This sounded reasonable to me until......

I called the buyer's agent to report what I had been told and was greeted with silence. After several seconds, she informed me that it was not bird droppings, it was more like rodent droppings and it was not a small amount, it covered an area at either end of the attic in a path 15 feet long, by three feet wide and was several inches deep and would forward me pictures. She did forward the pictures and decorum dictates that I not publish these pictures here, they're pretty disturbing! I immediately called a pest company that we trust and his immediate answer was BATS! He would go there that day and report back to me.

His report was exactly as he expected, it was bat droppings and there was either a gigantic colony or bats, or more likely, a colony that returned each year over the years and grew in numbers. Ok, so now what? The answer was somewhat surprising. I did not know that bats migrate in the winter for one thing and unlike migratory birds, not ALL bats migrated, some just "wintered" down in the walls. Great! How will we know and what do we do now?

Of course the guano (how the bat droppings are described) is actually a biohazard and the company that cleans up the mess must be appropriately garbed. They inspect as best they can down through the rafters and between studs, they remove insulation and basically try to find any of these guys who have decided to winter there. If they find none, they seal every little nook and cranny (it takes an opening of less than 1" for the bats to find their way in). They fumigate, they disinfect, and whatever else they need to do. They also come back in May when the "flock" or whatever it is you call a whole bunch of bats comes back to be sure they can't get in again, or if they missed any that might be sealed in!

The inspector who went in for us does not do this work himself and recommended a wildlife exterminator who is very professional and very reasonable. Of course we called him also, he went to inspect, and basically reported the same thing. The real surprise came with his price of $625! I was floored, I truly expected more in the range of $2,000 or more. So, we're on for this friday, but I still needed to deal with the buyer's agent.

My call basically started with one of those "good news/bad news" things. The good news was that there were no rats as the prospective buyer feared, and of course, the bad news was the truth. To my amazement, the agent seemed relieved and didn't believe that would be a problem for the buyers, she would get back to us with the home inspection response.

So, the outcome of this was that the buyers are satisfied with the deal as long as we have a licensed company clean and seal the premises as stated. The seller was so relieved that he couldn't thank us enough for our help in resolving this so quickly, so inexpensively, and so positively for him!

By the way, although this is an older house, built in the '50s, it has been completely renovated and is truly a lovely home! Not all buyers would react the same way of course, I don't know how I would have reacted on a purchase. All's well that ends well I guess, but talk about a curveball!

So, I hope you have found this little missive informative if not slightly amusing. I've been too busy this week to write much, but I do promise to follow up with some other home inspection items tomorrow that you might also find quite interesting. It sure has been an unusual week - we are still negotiating the home inspections on two other sales and have just written contracts on two additional purchases. The news may still be quite gloomy but the market has been very brisk for us this month!

As always, BE INFORMED and CHECK BACK HERE OFTEN.... I promise to be more diligent in my writing

Happy Valentine's Day!

Saturday, February 9, 2008

About Me - Answering your Request!

I have been asked by several readers to write a little more about myself, so this is going to digress from real estate somewhat and cover that. If you could see a picture of me,- you'd see all the typical lines and wrinkles associated with someone who has waved goodbye to 50 a while ago. We all hear things like 60 is the new 40 or some such thing and in some respect I believe that. Of course, it might just be our own view of the world, after all, when I was very young, I thought 30 was pretty much the end of the line! Being among the Baby Boomer generation, it is great to see how active my generation still is.

Maybe even more fun to write about is the fact that I am friends with my grown daughters - not just friendly "mother/daughter" stuff, but really friends. We go out together, we laugh together, last year my middle daughter and I took a cruise to Hawaii for a week with my youngest daughter convinced only one of us was going to make it home (insinuating that we would wind up killing each other after spending a week in such close quarters). Not only was that not the case, but this year we are planning a two week cruise in Europe! Neither of us are "beach" people, we both love to sightsee, we enjoy hitting the happy hours for Cosmos, we both read voraciously late at night, and we never missed a trivia game on board if we weren't out galavanting around the countryside. In fact, we left the ship undefeated trivia champions, having won every contest we entered and came home with 14 Beach Bags (they were obviously giving them as prizes) which we gladly gave to friends and family.

I have three grown daughters, I have been divorced for 15 years. All of my daughters are married - my oldest has a 9 year old daughter, my travelling partner has an 18 year old son and a 6 year old son - my baby is expecting her first child in April! Being the devoted family that we are, we planned our two week cruise for the end of May so that we'd at least be here for the event and a reasonable followup :)

My girls are all friendly, intelligent, kind people with very caustic senses of humor (chips off the old block). Growing up with a single mom doesn't seem to have created much trauma. I, obviously, am very proud of them and enjoy all of our time together!

I intend to continue working for at least another 7 or 8 years, I intend to continue travelling, I intend to sell my own home and downsize a little bit, and I intend to lose another 10 pounds - hope my intentions come to pass!

Two New Contracts - Interesting Negotiations!

The last several days have been extremely hectic, and although I try to write every day, some times it is just impossible, this week being a classic example. In the last few days, we have ratified (all parties have agreed to the terms and signed binding contracts) two contracts on homes we had listed for sale and have had a home inspection response on a home we had listed and signed contracts on last week. All three cases are interesting from the standpoint of what both buyers and sellers can expect when negotiating a sale and the "aftermath" of the initial contract.

Case #1 - this home was almost an identical twin to a home we sold in June of '07 (8 months ago) for $525,000 - several doors down on the same street, both totally renovated to virtually the same specifications. The only difference (besides 8 months) was the the home sold in June was currently lived in (and very nicely decorated) and this home is vacant. Because the owners had already moved, they wanted to set a price that would attract buyers and, hopefully, a quick sale. The original price was set at $465,000 on January 9th. By January 25th we had tracked numerous showings, but no offers and the price was reduced to $447,500 - The Magic Number! We quickly received an offer but it was too low to accept - our counter offer was close to the asking price - a very aggressive price - and the buyer accepted. Good values are still in demand and although offers may come in even lower, all things must be considered. Is there interest in the property, have other agents expressed interest in possibly making an offer, is the offer TOO low to consider - don't forget the home last week with 9 contracts - if we were to offer the property at this price we surely would get multiple offers. Working with a knowledgeable agent is, again, paramount! We presented our counter offer with the details of the comparable sale just doors away at $525,000, we presented our home inspection, we presented our termite inspection, and everyone knew this was a good deal!

Case #2 was an entirely different story. This home was listed in July of 07 at a price of $825,000 against our recommendations of listing under $800. An offer of $750,000 was received early on in the process and, we believe, could easily have been negotiated to at least $775-$780. The seller was in no hurry to sell and countered the offer at full price. Of course, this fell apart. In October, the price was reduced to $789,900 and no further reductions were taken. Although there continued to be good showings, there had been no further offers. We received an offer of $715,000 and countered with a "best and final" of $750,000 which was accepted. By overpricing initially and not negotiating the earlier offer, the seller will realize AT
LEAST $25,000 less - a lesson learned, again!

In the case of the home inspection, what a time we're having with that! This is a relatively new home, completed in January of 06 and rented for one year, the home inspector came up with a list of 107 items! You might think that this house is a disaster - it is not! There are items listed that are actually funny - for instance, the top of one of the doors does not appear to be "fully finished to the extent of the entire door" and the "deadbolt does not open to it's full length". Now, the inspector went so far as to inspect the tops of doors from a ladder and to measure with a tool he carries exactly how deep the deadbolt goes into the frame. Other items that really do not belong on a home inspection list, such as "provide operating instructions and warranty on garbage disposal" were included in this list. The buyer honed the list down to 44 items they would like corrected (none of which are "deal killers" by the way) and we are working on our response. ... I'll give more information on this as we progress.

So, this might help you get an idea of not only what agents do behind the scenes, but some of what buyers and sellers can expect in this strange market.

As always BE INFORMED and CHECK BACK HERE OFTEN

Tuesday, February 5, 2008

Chevy Chase, Maryland - Wow!










Chevy Chase, Maryland is certainly one of the premier communities in the greater Metro DC area. As of December 31st, there were 90 homes listed for sale in Chevy Chase, with 27% of these homes priced $1,000,000 - 2,499,999. This past year has shown a reduction of 13.5% of the average sold price (December 2007 vs December 2006)



Average Sold Price: 2007 $ 958,161 - 2006 $ 1,108,262 - 13.54 %
Median Sold Price: 2007 $ 805,000 - 2006 $ 1,050,000 - 23.33 %




Of course, the home prices in Chevy Chase have soared in the past. It is a small, extremely desireable community, which has become a LITTLE more affordable. Of course with the average sale price of $958,161 you get an average house - if you want new, upgraded, larger lots, you truly are at least $1.5 million. But what makes Chevy Chase so special? It is truly beautiful and exclusive. The following is a short history, and some pictures to give you a flavor of the community:


The Town of Chevy Chase is located in Montgomery County, MD, just north of Washington, D.C., with approximately 3000 residents. The Greater Bethesda - Chevy Chase real estate community is home to more than 115,000 people.



In the 1890s, the Chevy Chase Land Company was formed and set the stage for the development of Chevy Chase in the 20th Century. The name can be traced to the Scottish word "chevauchee" which means "border raid," and "chace," meaning hunting grounds. Post-World War I, Chevy Chase saw major development, with incredible growth since the 1990's.
Chevy Chase is a desirable area to work, live and visit, offering quality restaurants, shopping, arts and entertainment. The Bethesda-Chevy Chase area is served by the Metro (subway) system. Just three stops along Metro's Red Line make Chevy Chase easily accessible throughout the D.C. area. Additionally, there are two public bus systems, Metrobus and Ride-On. These buses serve the entire Bethesda, North Bethesda, and Chevy Chase areas.

Sunday, February 3, 2008

Protecting your Vacant Property

Don’t Let Your Vacant Home Sit Unprotected!

One of the things most homeowners do no give much thought to is their insurance when they vacate a property - they just keep paying the premiums and believe they are protected. This is not the case, most homeowners insurance policies do NOT cover homes that are vacant!

If you have a vacant investment property, a home for sale that is vacant, or a home that is vacant due to a renovation project or a delayed move, do yourself a big favor and check with your insurance company.

Of course, there are other things you really must do to protect yourself - make sure the lawn is maintained, ask a neighbor to pick up any newspapers, flyers, etc. that are left in your driveway, mailbox or front stoop. Leave drapes or blinds on the windows and leave lighting that is on timers, particularly upstairs where you can't easily see in the windows. If your home is listed for sale, ask your agent to check the house at least once every week. It's a good idea to leave a note on all doors to ask that the door be locked after opening. Sometimes clients will wander off in different directions and open basement or rear doors, not thinking to lock them and since the agent can't be with everyone all the time, it could go un-noticed and left unlocked. A sign on the front door (or main access door) saying something like "Please be sure all doors are locked before you leave, any problems please call XXX-XXX-XXXX (the phone number of your agent or a neighbor who has a key).

Finally in the MLS listing itself, there are two different areas for remarks - one that only agents see and one that is "internet remarks" that the general public sees. Ask your agent to be sure NOT to say "vacant, show any time" or any reference to vacant in the public remarks!

As they say, an ounce of prevention.........

As always.... BE INFORMED and CHECK BACK HERE OFTEN

Your comments and suggestions would be appreciated.

Saturday, February 2, 2008

Living in Bethesda, Maryland - A Great Place to Live!



I thought I might take some time and give a brief description of some of the towns located in Montgomery County, Maryland - one of the most popular living places for people working in the diverse culture of Washington, DC.

In addition to the Metro which zips people around the county and into DC and Virginia, there is a vast public bus system and parks, walking trails, sports complexes - just about everything you might want near where you live. Downtown Bethesda is a pleasure to walk through - restaurants have sidewalk cafe seating, there are bookshops, clothing shops, galleries, just about anything you could want and the atmosphere invites liesurely strolls.

Bethesda, Maryland is an unincorporated area of the Montgomery County real estate market near Washington, D.C., retaining its old-fashioned charm but with a modern flare. The town is named for a local church, The Bethesda Presbyterian Church, built in 1820, but originates from a passage in the New Testament. Residents enjoy an active lifestyle with both small town and urban amenities available.

Some prestigious institutions located in Bethesda are the National Institutes of Health, the Naval Surface Warfare Center, and Bethesda Naval Hospital where many political figures and others have been hospitalized over the years. Also, Bethesda is headquarters to Lockheed Martin Corporation and Marriott International Hotels and Resorts.

Bethesda is famous for its vast and eclectic 200+ restaurant offerings, farmers markets, and fine arts, and as well as for its shopping and nightlife. The Bethesda real estate market area is mostly outside the downtown area, but there still are many Bethesda homes for sale and choices located within walking distance of downtown. Bethesda is a wealthy and well-educated area, named "the best-educated city with a population of 50,000 or more." The outstanding Bethesda public schools get great recognition as well as the many public parks, recreation facilities and cultural events.

I'd be happy to answer questions or post your comments about Bethesda! I will also be describing some of the other towns in upcoming posts - Chevy Chase, Silver Spring, Kensington, Gaithersburg, Germantown and others!

Hope you found this interesting..... as always

BE INFORMED and CHECK BACK HERE OFTEN