A Fixer Uper To Do List

December 7th, 2010

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Gas fixtures take precedence over leaky pipes, roof

Barry Stone
Inman News™
 

DEAR BARRY: We just bought an old house that needs fixing up. There’s so much to do, we hardly know where to begin. How would you suggest that we prioritize all this work? –Mary

DEAR MARY: The first items to repair are those that involve safety, such as electrical violations, faulty gas-burning fixtures, problems with the fireplace, or defective guardrails.

Second on the list are things that leak, such as plumbing fixtures, corroded pipes, faulty drains and the roof.

Next are items that affect the use of the home, such as heating and cooling systems, cooking appliances, and showers.

Finally, there is the long list of cosmetic upgrades, renovations, and routine maintenance and repairs. Doors, windows, cabinets, and other fixtures will need various repairs or replacements.

Before you begin, a professional home inspection would help to know which issues are most in need of attention.

DEAR BARRY: We bought our home two months ago, and our home inspector said the roof was in good condition. But we just had a big rain, and now the living room is all wet. The roof repairs will cost $680, and we just paid $250 for some outlets that didn’t work. According to the home inspection contract, the inspector is liable only for a refund of the inspection fee, which is less than $300. Is this all we are entitled to after a negligent home inspection? –Robert

DEAR ROBERT: Some states recognize the refund limit that many home inspectors place on their liability, but some states do not. That is a matter to discuss with an attorney. However, your home inspector may or may not have been negligent, depending on whether the defective conditions were visible and accessible on the day of the inspection.

In some cases, roof inspections are limited by steepness, weather conditions or fragile types of roofing materials. If your roof was accessible on the day of the inspection, visible defects should have been reported by your inspector.

There are also variables that affect disclosure of faulty electrical outlets. If the outlets were located behind furniture, the home inspector may not have been able to test them. In that case, nondisclosure would not have involved negligence.

These conditions should all be considered when assessing the liability of your home inspector.

DEAR BARRY: I’m planning to have my bathroom remodeled and have gotten three quotes from contractors. One thing I keep hearing from them is, “The building inspector’s going to want to see this or it won’t pass.” How do I know what a city inspector wants to see? Would you recommend hiring a home inspector before or during this remodel? –Cathy

DEAR CATHY: The main things the municipal building inspector will want to see are plumbing lines, plumbing fixtures, electrical wiring and electrical fixtures. Other considerations are room ventilation, safety glass at the tub and shower, and proper room dimensions.

The primary concern for the city inspector will be compliance with building codes. Unfortunately, municipal inspections pay little or no attention to quality of workmanship. It is actually possible to do substandard work without violating the codes. This is where a professional inspection by a qualified home inspector could be beneficial.

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

Avoid seller-financed debt trap

November 30th, 2010

Q: I have a ranch in Colorado that I sold and carried the loan for the purchase of the property. The buyers have been living in my home now for more than a year and have not paid me any money. I have a lawyer but it doesn’t seem right that they can continue to live off of others. This is putting us in debt, big time, because we can’t sell the ranch, and we’ve been told that’s the law. Is there anything we can do? –Brenda, Colorado

A: Contrary to (increasingly) popular belief, it’s not legitimate or legal to get something for nothing. The buyers have breached their obligations under the mortgage note, which I’m assuming you had secured with a deed of trust against the property.

When you extend seller financing, you become the buyer’s mortgage bank. And you know what happens when you stop paying the mortgage payments to a bank? Yep, they foreclose on the home and, eventually, evict you from the property.

And that is your right as well — if you’ve been paid nothing in more than a year on a mortgage note that obligates the buyer to make monthly payments, it sounds like you are well within your rights to initiate and carry out foreclosure proceedings, foreclose on the home, regain title in your name, and evict the buyers in accordance with state law. Then, you’ll be able to sell the ranch to someone else.

What puzzles me is why your attorney has not given you this advice. Often, attorneys wisely recommend that wannabe litigants just let certain things go, because the emotional and financial costs of a lawsuit far outweigh any upside that could possibly be gained.

In this situation, however, it is beyond clear that something’s got to give. Either these people need to pay the mortgage they agreed to pay, or they need to get out. I’m perplexed at why your attorney is not advising you to move forward on one of these two fronts.

One possibility is that something in your paperwork, or the facts of your situation, are amiss. For example, perhaps you held a mortgage with a due-on-sale clause and sold the place anyway, carrying back a seller-financed loan, without notifying your lender.

This happens frequently in situations where the home is underwater and the seller prefers to avoid a short sale, or where the only interested buyer is unwilling or unable to qualify for a mortgage on their own.

Maybe your attorney knows this and is concerned that you’d be charged with having “unclean hands” in the situation. Even so, though, that would still not cause a court to prevent you from foreclosing and evicting the buyer/squatters.

This situation is apparently posing a major hazard to your family’s financial health, as it sounds like you are either (a) still making mortgage payments on the property, or (b) making payments on your current home, which you expected would be offset by the income from the buyers’ payments on the ranch.

If you were being faced with a major concern to your physical health, and your doctor advised you to do nothing, what would you do? You’d get a second opinion.

So, my advice is to get a second legal opinion from a local real estate attorney — not a tax attorney or a criminal defense attorney or a general practitioner. Ask around — especially asking the real estate brokers, agents and mortgage brokers you know — and get a referral to a real estate attorney who has experience with seller-financed mortgage notes.

It will cost you, but it behooves you to take the necessary legal steps to get these folks out of your home.

 

Getting Dirty

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Rate Trends Graph 1972 to Present

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Mortgage Trends For May 2010

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Mortgage Rate Trends April 2010

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Home Buyer Tax Credit Update April 2010

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Updated Interest Rate Trend as of March 2010

December 2009 Mortgage Rate Trends

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