The Home Guru

Home Appraisals in More Stressful Times

by Bill Primavera

The Home Guru

“It didn’t ‘appraise’” is the dreaded phrase that can throw a monkey wrench into the works of a home sale and, in today’s market, we hear it more and more.  A house appraisal is an essential component of every mortgage process in that it is an estimate of the value of the home being purchased.  In virtually every type of mortgage, an appraisal must be done, or quite simply, the buyer cannot secure a loan.

As opposed to an inspection or “engineering” whose purpose is to determine the condition of a home and to protect the buyer against potential defects, the appraisal is an opinion of the value of the house by a state-licensed professional who visits the house and inspects the size, condition, quality and function of the home.

From that exercise, a very detailed report is issued to the lender that determines the home’s true value, which may or may not agree with the price offered by the buyer and accepted by the seller.

In today’s market, the process of the appraisal can be tricky. The landscape has changed in how appraisals are done and, with homes decreasing in value, there is more tension among sellers and buyers about the home being appraised.

“We just try to be objective observers,” says Peter Fluchere, an appraiser whose office is in Carmel. “We’re not here to write a permission slip so somebody can borrow some money. Today, appraisers are working in an ambiguous market in a time of stress that none of us has ever seen in our careers,” he continues. “It is at the appraisal process that people can be at their best or at their worse.

“When I visit homes to appraise and one or more of the owners are home, I can tell by their behaviors and attitudes that they’re anxious about what will transpire. They give me their opinions, but I can’t really listen to them. It’s my job to give my opinion to the lender and not to them.”

On top of market conditions for generating stress is the radical change the appraisal procedure has undergone recently, courtesy of former New York Attorney General and now Governor Andrew Cuomo who turned the process on its proverbial ear. 

When the subprime mortgage crisis hit, Cuomo investigated the influence lenders were asserting on appraisers, looking for possible conflicts of interest, fraud and other misconduct in the residential mortgage lending industry that helped lead to artificially-inflated home values. He concentrated on the practices of the two government-sponsored enterprises, Fannie Mae and Freddie Mac that purchase residential mortgages.

The resulting “Cuomo Agreement” set forth a new code of conduct that prohibits any associate of a lender from influencing appraisals through any kind of coercion or intimidation to “make a number.” Further, the code prohibits the lender’s loan production staff from having any role in the selection of appraisers, or even communicating with appraisers. So today, the process is tightly observed and controlled to produce fair and honest appraisals.

“It used to be that the lender could pressure an appraiser to make the number needed,” says Fluchere. ‘If you didn’t give them the number they wanted, they would find somebody else. So you could either stand up to them and be honest, or there were others who would go along with it just to make a buck.

“The idea was there was too much collusion, so appraisals should be handed out ‘anonymously,’ without being cozy in the relationships,” he continues, “but you can still find people who are unethical.”

“When I go to appraise a house, I consider a host of variables and I look for features a buyer would be looking for:  the view, the size of the property and of the house, the number of bedrooms, bathrooms, a finished basement, overall condition, and extraordinary features. Further, I consider the town, neighborhood and school district. Even though realtors can’t comment on the differences between communities and school districts, a buyer is going to know that there is a difference between a four-bedroom home in (one town) and the same house in (another town) and between one school district and another.

“It’s an art, not a science,” he observes.

But what happens when the appraisal comes in below the number initially accepted by the seller, buyer and lender?  The negotiation process must be re-opened where either the seller lowers the price, or the buyer increases the amount of cash put down. “Sometimes another appraisal will be requested,” says Fulchere, “sometimes one opinion is not sufficient. I’ve seen as many as four appraisals done on one property. But a bank will check the quality of the report and the reputation of the appraiser hired to do them. We all have to include our resumes at the end of the report.”

Even though the appraisal is the requirement of the lender, it is the buyer who pays for it to the tune of $300 to $500. But that fee guarantees that the buyer is protected from paying too much for a property.

According to Fulchere, the bottom line is that the appraisal is “a form of consumer protection. It is a legal document and important decisions are based on it.” 

Bill Primavera is a licensed Realtor® (PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (PrimaveraPR.com). Anyone considering selling or buying a home can reach him directly at 914-522-2076.

 

 

The Toilet, Perhaps Indelicate, But Definitely Cool

By Bill Primavera

The Home Guru

When I suggested to my wife that I was interested in writing about the toilet and its history, her response was, "You're joking, right? Isn't that a bit indelicate?"

“How could such an essential fixture in our homes be indelicate?” I asked. It seems that some essential facts of life are always subsurface, such as the claim I heard recently that some people will buy toilet paper only when no one is looking.

But, the relevance of the toilet in modern life was hammered home to me when I met with a new seller client who told me that she totally rebuilt her old cottage-style home from the ground up 20 years ago because she grew tired of using an outhouse in the back yard. Did I hear right? And, 30 years ago when I bought my home built in 1734, there was still an outhouse in the backyard that didn’t look that long abandoned.

The removal of human waste from domiciles has been one of the greatest challenges and necessities of tolerable living from ancient civilizations to the Romans, who in their glory days had perfected a sophisticated sewage system. But when Rome fell, so did the technology of the sewer, along with baths, engineered water and basic sanitation.

In fact, by the Dark Ages, bathing and sanitation became uncommon, resulting in more than a quarter of the European population dying from such diseases as cholera and the plague. Until the 18th century, most people just did whatever they had to do, whenever and wherever they needed to do it.

As recently as the mid-19th century, the contents of chamber pots were commonly dumped from second story windows into the streets. This accounts for the origin of the tradition of men escorting women to walk on the curb side of the sidewalk, the spot where the contents of a pot were most likely to land.

When the connection was made between disease and waste, sanitation came to the fore once again, especially in cities with dense populations in Europe. In America, most of us relied on outhouses until the development of water supplies, indoor plumbing and a system to accommodate waste removal from the home, either to a septic or sewer.

The development of sewer and septic systems is a fascinating subject for future exploration, but the focus here is that porcelain-coated fixture we relate to most directly when the need arises. And to welcome our relief and rid our environment of any residual, all we need do, mindlessly at that, is press a handle, which even a cat can be trained to do.

For years, I believed that the toilet was invented in the late 1800s by an Englishman named Thomas Crapper. Seriously. Many have assumed that his name was adopted to crudely describe both the toilet and the function itself. But those old English words preceded Crapper’s flush toilet by some centuries and the connection with his name is purely coincidental, unfortunate though that might be.  Actually, Crapper was a Johnny-come-lately, to coin a phrase, to the championing of the flush toilet.

Three hundred years before, another Englishman, Sir John Harington, wrote a treatise of the toilet’s design and peddled its first installation to his godmother who happened to be Queen Elizabeth I.  The flushing mechanism consisted of pulling a knob to empty a water cistern which sat above the toilet bowl. A valve then released the water and waste from the stool pot into a collection vault beneath the floor, which had to be emptied routinely.  The mechanism is still basically the same, advanced by a number of improvements through the years.

Very honestly, I had rarely thought about how a toilet works, leaving any problems with its operation to my plumber. It’s like my car. I just fill it up with gas and it runs. But it’s actually quite a sophisticated piece of equipment, considering its invention in the 16th century.

Today, a toilet is composed of two main pieces -- the tank and the bowl, with the working parts in the tank. When the lever is pushed, it pulls on a chain which in turn pulls up a flush valve at the bottom of the tank, allowing water to rush into the toilet bowl. Immediately after flush begins, the water level in the tank goes down, as well as a float ball. A rod attached to the float allows the fill valve to be opened and water from the house water pipe begins to flow into the tank.  So, water is coming in and going out at the same time. When the tank is almost empty a flapper falls onto the discharge hole and seals it again. And water starts refilling the tank. That sitting water in the tank actually serves as insulation from smells and fumes from the pipes for removal.

The toilet’s significant contribution to the environment was further enhanced in 1992 when Congress passed legislation requiring new toilets to drain just 1.6 galls per flush instead of the then 3.5 gallons, conserving water resources.

In recent years, the look of the toilet has become more sleek, particularly the tank. The bowl shape had always been round, but newer versions feature an elongated shape, designed no doubt with the male anatomy in mind.  For guys, upgrading to an elongated shape can be the equivalent of switching from jockey shorts to boxers. 

And, of course, there has long been the “up or down” debate between men and women about the lid, as well as the rank humor attached to this serious, essential fixture in our homes. But, an exploration of that latter subject would indeed be indelicate.

 Bill Primavera is a licensed Realtor® (PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (PrimaveraPR.com). Anyone considering selling or buying a home can reach him directly at 914-522-2076.

 

 

Forecasting the Start of the Turnaround in 2011. Yeah!

 

 

By Bill Primavera

The Home Guru

Will Rogers used to say that all he knew was what he read in the newspapers.  But, how do the newspapers know? As the journalist for this column, I know by listening to other people who are good at rounding up information and making sense of it when analyzing the condition of the housing market.

When realtors sound so smart to their clients about the state of the market today and what’s coming down the pike, they usually have the backup of a good managing broker, part of whose job it is to make us look good by examining all the information from industry sources and packaging it in such a way that we can digest it and pass it on to our buyers and sellers.

In my office the one we rely on for this service is Joe Monaco who heads up Coldwell Banker in Yorktown. Just prior to the release of the end-of-2010 report from the region’s Multiple Listing Service, he presented his agents with a projection of what to expect in 2011. 

Appearing on the same day as this article is published, the MLS report will tell us in no small amount of statistical detail how 2010 ended up. Monaco’s short assessment of the year past was simply: “I’m glad to see it go!  As glad as I was to see 2009 go!” 

That said, Monaco continued on a more upbeat note, which is his usual bent, saying, “but we did all right, considering the economic environment, and if the prices of homes were on target and the buyers were motivated.”

Then, from his analysis of forecasts for 2011 from real estate pundits, Monaco listed those points of which we should be aware in the coming year.

First, it is the general consensus among observers nationwide that the market will be softer in the first six months of the year compared with the same period last year, which was boosted by tax credits.  Also, prices should continue to decline, but at a much slower pace.  While the slide in house prices in our area was as much as 20 percent in just the last two years, that decline should slow to another five to eight percent by mid-year, then level off.  

Distressed sales will continue to grow, with pockets of real alarm, such as in Florida where the number is as high as 70 percent currently. In our region, however, the picture is vastly different in that only 12 percent are short sales or foreclosures. But still, 12 percent is 12 percent.

Mortgage rates will remain low but will gradually rise from the current high four percent rates to the low five percent rates. 

A key element in 2011 will be affordability. Because house prices have dropped so significantly, real estate taxes in our area seem out of whack to home values. But, that concern among buyers is abated when they realize that higher taxes tend to deflate home prices and that purchases remain affordable from the standpoint of the monthly payment of mortgage, tax and insurance.

New mortgage options will start to appear. While FHA loans requiring only 3 percent down were stigmatized in the past, that’s not the case anymore.  In fact, besides these government backed loans, there is now a new conventional mortgage where only three percent down is required. While the mortgage insurance is a bit higher for these loans, they offer another option for affordability.

An element of major concern will be government regulatory requirements which can create risk aversion among investors. Corporations have lots of cash building up but are standing on the sidelines instead of investing it because they don’t yet have confidence in the regulations coming out of Washington.  How the government responds this year to the housing crisis will dictate whether investors will let go of their purse strings.

New home sales will continue to be affected by having to compete with a higher inventory of re-sales.  Many developers, even in this area, got stuck with buying land at the height of the market at a price that set the bar for the cost of housing to be built on it.  Because the cost for bricks and mortar is somewhat fixed, developers have very little room right now to build and make a profit.  In our area, some announced developments have been sitting dormant because a builder doesn’t want to build and not make money.

The wrap-up of predictions for 2011 ended on a positive note, as reported by Monaco. By the second half of the year, the real estate industry will see the beginning of a turnaround based on the assumption that the job market will improve, and this has already begun.

The bottom line is that more people will buy again when they feel more secure about their job prospects. So, bring on the jobs!

 Bill Primavera is a licensed Realtor® (PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (PrimaveraPR.com). Anyone considering selling or buying a home can reach him directly at 914-522-2076.

 

 

 

 

 

 

 

 

 

   

Roof Ice Dams, Damned Nuisance, Must Be Addressed

 

By Bill Primavera

The Home Guru

 

When I moved from the city to a home in the suburbs, I really enjoyed our first winter of heavy snow. I remember that when I build a snow man for my four-year old daughter, it stayed clean, fresh and white, rather than being speckled with black soot like the one I had built the year before in Brooklyn.

I also remember looking up at the roof line on the northern side of my house and admiring the icicles hanging from the fascia and gutters, thinking that they added interest to the wintry scene, much like a perfect Currier and Ives print.

Little did I know, naïve as I was as a homeowner at that time, that icicles were a byproduct of an ice dam, that winter roof phenomenon that can cause leakage into the house, damaging insulation, ceilings and walls.  And that’s exactly what happened to me, in a year full of surprises as the new owner of an antique house. 

I’ve since learned that ice dams form in a complex interaction resulting from heat loss from a house, snow cover and outside temperature. What happens is that snow on the upper part of the roof, where the temperature might be above 32 degrees F, melts and flows down to the lower part of the roof where the temperature might be below 32 degrees, and there it freezes to form the ice dam.

The dam continues to grow while the water trapped behind it finds cracks and openings in the exterior roof covering, dripping into the attic space and, from there, flowing into the exterior walls and ceiling. It can be a mess. 

The solution is complicated because a number of factors can contribute to the possibility of ice dams, including exhaust systems that come from our bathrooms and kitchens, recessed lights, skylights, complicated roof designs, and heating ducts in the attic.

Once an ice dam happens there is little that can be done for an immediate remedy. Trying to break the ice dam physically can do more damage than the dam itself.  That first year, one well-meaning neighbor suggested that, next time it snowed, I should physically remove the snow from the north side of my roof with a roof rake and push broom. Sure thing, I thought, all I have to do is climb on the roof when it’s snowing. That suicidal I’m not.

Another possibility is to make channels through the ice dam where water can run through them to the ground. But that too can be a dangerous proposition.

On many homes you see electric cables along the ridge of the roof and, while some roofers say they may be dangerous if the wires wear thin, several homeowners who have them have told me that they work fine and, at less than $1.00 a linear foot, make a cheap and quick fix. But that doesn’t fix the problem long term.

If you have the problem, the best long-term action is to call in a contractor who should check to see that your ceiling is air-tight so that no warm, moist air can flow from the house into the attic space.  After that, it can help to increase the ceiling/roof insulation to cut down on heat loss by conduction.  That’s what I did and it worked.

If you live in a relatively new home, you’re probably the beneficiary of state codes for proper ceiling/roof insulation levels that all but eliminate the possibility of an ice dam. Or, if you live in a house with a high-pitched roof, the problem is less likely to occur.

But if you are a homeowner with a lower-pitched roof and you see that ominous build-up of ice and icicles, call in a contractor to assess the situation and address it.

In the meantime, if you experience leakage from an ice dam into your house this winter, wait until the ceiling and walls have totally dried out before you attempt any repair work. But, more importantly, interior repair should be done in concert with correcting the heat loss problem that created the ice dam in the first place or the damage will occur again.    

Bill Primavera is a licensed Realtor® (PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (PrimaveraPR.com). Anyone considering selling or buying a home can reach him directly at 914-522-2076.

 

 

Want to Escape the Recession Blues? Think Pink!

 

By Bill Primavera

The Home Guru

 

After enduring the “blues” of a battered economy for the past few years, enduring “black” moods because  many of us find ourselves in the “red,” or  perhaps we’re “green” with envy of those doing better than we, why shouldn’t it seem appropriate to utilize the color metaphor to feel “in the pink” again? Specifically, with the color pink?

Physiologists and color psychologists say that pink in our living environment enhances mood and even improves our health, creating calm, feelings of security and actually lowering blood pressure. And, just recently, The New York Times’ Home Section anointed the re-introduction of pink into our bathrooms, long banished since its heyday in the 1950s. 

It’s funny because, from the time I got into the real estate business, any bathroom with pink tile and fixtures was considered dated and a problem to be remedied by a new buyer. But, now some house hunters are again seeking that retro look from the slaphappy days of the 1950s when bathroom fixture manufacturers first learned to mix color into porcelain and went craziest with pink.  And if retro isn’t to their taste, new surface materials, tiles and glass, are again available in pink.

In the 1990s, we embraced the confident boldness of such hues as Tuscan gold and Burgundy, right up to the early 2000s when our color choices retreated into the uncertainly of the recession with the tepid beiges and pale greens. Now we seem to want to color ourselves out of the neutrals and embrace pink once again as an antidote to the times.

The restorative powers attributed to pink have been out there for some time. Remember the stories of the prison wardens in several states who were experimenting with painting prison cells pink and even dressing inmates in pink prison garb? One jailer said that the color was chosen not to humiliate inmates by feminizing them, but to promote calm and make violence less likely. 

Now pink is also being used more in hospitals, dentists’ offices and even in male locker rooms, such as at Iowa State University.

Not only does pink resonate with our feelings of well being, but the color reflects light in a very flattering way to inhabitants of a room. Note all the restaurants interiors painted pink? And, it’s no secret why Broadway Babies always insisted on pink follow spots.

I have been a fan of pink for many years, sometimes enduring sarcasm about it from some of my buddies. I was most likely influenced by the prominent use of that color in my childhood home.  My mother told me that immediately after World War II, when she was a young girl, there was a trend that focused on the color pink, both in fashion and décor.  So, when my parents bought their first new home in 1954 and were given the choice of color bathroom fixtures, my mother selected pink. She didn’t stop with the bathroom, but extended the color’s use to our living room and dining room as well.  A smile crosses my mind now when I view my own living room, painted pink, with mauve draperies and a Sheraton sofa covered with pale pink damask.

In America, we have been attracted to pink for centuries.  When I was a summer fellowship intern at Historic Deerfield in Massachusetts, a living museum village with homes from the 1700s and 1800s, my favorite room in any of the buildings was one with walls colored a delicate pink, which I was told was created by mixing brick dust directly into the plaster. And in my own home, on the inside of one of the doors in a saltbox wing from the 1730s, is the original paint, a rosy pink color created, I’m surmising, from ox blood and milk, a technique employed at that time.

Today we don’t have to mix our own pink shades to achieve better health and spirit. Just check out the Benjamin Moore palette of pinks ranging in all shades and whimsical names to match any mood, from the fun Pink Popsicle, Bubblegum and Pink Cadillac to  loftier shades called Paradise Pink and Pink Cloud.

Whether earthly or heavenly in shade, pink is definitely a color not to be overlooked, especially in grey times. 

Bill Primavera is a licensed Realtor® (PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (PrimaveraPR.com). Anyone considering selling or buying a home can reach him directly at 914-522-2076.