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January 10, 2014November 23, 2021

Protect your home from extreme cold

Seasonal weather can test the integrity of any home; yet winter can present some of the harshest weather of the year. Even with regular maintenance, extreme cold can take a toll on your home’s pipes. Take measures to prepare your home for the the winter.

Burst pipes can not only flood your home’s basement, but it can be a major repair expense. Nationwide Insurance states that among the 30,000 claims they received in the last three years for burst pipes, the average claim was $10,000 (nationwide.com).

A common misconception about cold weather’s effects on pipes is that a rupture is caused from frozen water inside the pipe. However, it’s not ice, per se, that makes a pipe burst; but rather the pressure that builds inside the pipe that makes it rupture. Increasing pressure can build up in a pipe between an ice blockage and a closed faucet; when the pressure is excessive, the pipe can burst.

Experts describe ice buildup in pipes as being more common than people know. Besides temperature, wind chill is sometimes the culprit of freezing pipes; cracks in walls or foundations can allow chilled air to come into contact water pipes. Although pipes can freeze any time the temperature dips below freezing – extra precautions should be taken when the weather becomes extreme.

Common measures that many take to protect their home’s pipes during cold winter months include, “the dripping faucet,” and “winterizing.” A dripping faucet, which is connected to vulnerable plumbing, helps mitigate air pressure that can build up in a pipe. Additionally, many experts recommend sealing areas where air leaks into the home; especially where pipes are located. Some experts also suggest insulating pipes. The materials in the pipe insulation sleeves and jackets is thought to insulate pipes from cold air much like the insulation in your home’s walls and attic insulates the interior from cold air. There is no guarantee that your home’s pipes won’t burst; however, taking precautions may lessen the potential for damage.

“Winterizing” is a term that describes the draining of water and pressure from the plumbing system. Experts recommend winterizing your home if you plan an extended winter trip, leaving your home vacant. Winterizing a vacant home that you are selling is especially important; ruptured pipes are not a surprise you want the day before your scheduled settlement.

Pipes can still freeze or rupture even when you take precautions. If you have a frozen pipe – call your plumber. Opening faucets can reduce air pressure in the system to help prevent a rupture. And although it is tempting to thaw frozen pipes on your own, it is recommended to have your plumber guide you; attempting to thaw frozen pipes without professional assistance can have hazardous results. Additionally, finding a frozen pipe can be tricky because they are often hidden inside walls and between floors. If a pipe does burst, close the main water valve immediately and call your plumber.

Taking cold weather precautions is not just for your home; experts recommend ensuring your car is winter ready, as well as having an emergency kit available in case of a power outage. Additional extreme weather precautions can be obtained from your insurance agent, FEMA (ready.gov), and the Red Cross (redcrossorg).

Original located at https://dankrell.com/blog/protect-your-home-from-extreme-cold

by Dan Krell ©
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. This article was originally published the week of January 6, 2014 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.

December 19, 2013November 23, 2021

What’s a home worth – Appraisals, market analyses, and price opinions

“What’s the value of my home?” is a question that is often asked by many home owners at least once, usually before they decide to refinance or list their home for sale. Although the question seems straight forward enough, the answer may not be – and can vary depending on whom you ask.

Market Value can have different meanings. Some may view a home’s value in terms of an asset on a balance sheet, while others may consider a home’s value as a potential sales price. And although these approaches to value may be similar, there is often significant disparity in their conclusions.

Mortgage lenders consider a home to be an asset, which is the basis for lending you money; as well as the basis for bundling and selling mortgages on Wall Street. Additionally, a home is often considered an asset or liability when determining the disposition of legal proceedings, such as (but not limited to) probate and divorce. A real estate appraisal is most likely used in determining market value for these situations.

According to the Appraisal Institute (Pamphlet “Some Commonly Asked Questions About Real Estate Appraisers and Appraisals”; appraisalinstitute.org), “An appraisal is a professional appraiser’s opinion of value. The preparation of an appraisal involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience and professional judgment of the appraiser.” Additionally, Title 16 of the Business Occupations and Professions, Annotated Code of Maryland defines an “appraisal” as a “…means an analysis, conclusion, or opinion about the nature, quality, utility, or value of interests in or aspects of identified real estate” (§ 16-101. Definitions).

Not to be confused with an appraisal, a Comparative Market Analysis (CMA) can assist a home owner with deciding on a listing or sales price. In fact, § 16-101 differentiates a CMA from an appraisal by stating, “’Appraisal’ does not include an opinion to a potential seller or third party by a person licensed under Title 17 of this article [referring to a real estate broker] about the recommended listing price or recommended purchase price of real estate, provided that the opinion is not referred to as an appraisal.”

If you are asking about the value of your home because you’re planning a home sale, consider consulting with a real estate and a CMA. Although a thorough and professional CMA is not an appraisal, a CMA is a technical and methodical procedure that is typically limited to a specific neighborhood or subdivision so as to offer a rationale for a probable listing or sales price. Unlike appraisal methodology, which is uniform; there is no standard approach to preparing a CMA; however, a comprehensive CMA can be technical and systematic, as well as offering a market trends analysis in one, three, and six month segments.

Many lenders have also turned to agent prepared CMA’s to assist in determining potential listing or sales prices for distressed assets (e.g., foreclosures and short sales). Also known as broker price opinions, these CMA’s provide a market snapshot to assist with such disposition decisions.

The value of your home will vary depending on whom you ask; your neighbor may even have an opinion. However, if you’re planning a home sale, an experienced agent and their detailed CMA may be your best source of information to decide on a listing price.

by Dan Krell © 2013
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. This article was originally published the week of December 16, 2013 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © 2013 Dan Krell.

December 12, 2013December 13, 2022

Games people play in real estate

Studies suggest that your experience during a real estate transaction may depend on you and your agent’s ability to communicate. Clear communication between you and your agent should leave no doubt about your intentions, as well as your agent’s ability to convey and interpret motivations from your counterpart. How to understand the games people play in real estate.

A pop-psychology theory called Transactional Analysis, originally used as a psychotherapeutic tool, has been touted as a way to facilitate communication and assertiveness. One of the giants in the field was Dr. Eric Berne, whose work seems to carry more weight in the corporate world today as it did when his self help book “Games People Play” was first published in the 1960’s.

Games people play during real estate transactions

Have you ever wondered why a certain person makes you respond in a way, which, after the fact you thought was unpleasant or embarrassing? Transactional Analysis theory suggests that, unbeknownst to many, we often react and interact with each other in a way that can be described as games. Not so much the games that you might think, but more precisely these are psycho-emotional games that are played to satisfy unconscious needs that were not met during our childhood and adolescence (also called ulterior motives). And because these behaviors and traits are part of our behavioral “repertoire,” we are more than likely unaware of them in many situations. These ulterior motives can get in the way of a successful real estate transaction.

A simple explanation of Dr. Berne’s theory is that there are three mindsets from which we interact: the parent, the adult, and the child. When you interact as the “parent,” you are acting much like you perceived how your parents’ responded to situations; acting as the “child,” you react as you would have when you were very young. However, when you interact as the “adult,” you are reacting autonomously and objectively. Conflicts can arise when the mindsets are not amenable.

For example, if you’re butting heads with your agent because both of you are claiming to be the expert and the other should listen intently, chances are that both of you may be interacting with each other in a “parent” mindset. Likewise, if a home buyer and seller tantrum and attempt to bully each other over accepting the other’s offer, they are most likely reacting as the “child.” While the objective “adult” interacts and reacts free from unconscious motivations, and is most likely to communicate clearly and resolve most issues that interfere with a successful transaction.

Negotiation, like communication, is sometimes described as a game of personalities. It is a common misconception successful negotiators are good at bluffing; this belief may actually originate from a person’s own unconscious tendency toward dishonest communication described by Berne as “ulterior motives.” In fact, top negotiators happen to be honest communicators. Even though Sun Tzu’s “The Art of War” is often thought of as a metaphor for negotiation, it might be considered an early precursor to Transactional Analysis, since the piece is about sizing up and dealing with your counterpart.

This article not meant to give psychiatric advice (please seek a mental health professional if necessary); rather, this is meant to offer an alternate perspective of communication with your agent and counterpart. Regardless of the outcome, communication is a key factor in determining whether your home buying and selling experience will be positive or negative.

by Dan Krell
© 2013

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws. Copyright © 2013 Dan Krell.

December 4, 2013June 3, 2020

New real estate economics

A new economic paradigm for housing markets. The new real estate economics are about recovery trends and bubble fears.

Lawrence Yun, chief economist of the National Association of Realtors®, stated in a November 8th news release, “…existing-home sales have shown a 20 percent cumulative increase over the past two years, while prices have gained 18 percent, but incomes have risen only 2 to 4 percent in the same timeframe.” Additionally, it is expected that existing home sales to maintain 2013 gains through 2014; and home prices to continue and upward trend (realtor.org).

The 2014 prediction for U.S. housing sounds great. But does this mean we are expecting increased multiple offer situations with further plummeting of average days on market? In a post housing bubble world, some wonder if this year’s real estate activity is sustainable – maybe it was no coincidence that some descriptions of hot housing markets sounded like the go-go market that occurred during the housing bubble years. And yet with hindsight, should we be concerned about “priming the pumps” for another housing bubble?

Sentiment about over-valued markets around the world was expressed by none other than Robert Shiller. Shiller, of the S&P/Case-Shiller Home Price Index, won the Nobel Prize in Economic Sciences this year for the “empirical analysis of asset prices.” And if Robert Shiller is talking about over-valued markets, maybe we should listen.

Shiller’s book, “Irrational Exuberance” is said to have made the argument for the dot-come (2000 edition) and housing (2005 edition) bubbles, as well as predicting the subsequent market crashes. (Interestingly, the book title is said to be taken from an Allan Greenspan speech described the rapid cycling stock market activity of the mid 1990’s.)

Two weeks after Janet Yellen’s confirmation hearings to become Chairperson of the Fed, Robert Shiller was interviewed by the German magazine Der Spiegel. Yellen’s responses to Senators during the hearing suggested that there were no bubbles in equities and housing, although she conceded that bubbles are hard to predict; while Shiller expressed concern about over-valued equities in many markets throughout the world, as well as a sharp rise in home prices in some global real estate markets (including some U.S. real estate markets such as Las Vegas). Shiller made specific mention of the U.S. Stock market saying that data is suggesting an equities bubble. However, as he cautioned that it might be too early to sound the alarm, there is an expectation that the market will go even higher.

Is this the new real estate economics?

Are bubbles such a bad thing? Economist Matthew Klein (Is the Only Choice Bubbles or Recession?; Bloomberg; Nov 19, 2013) speculates that bubbles may actually be an important part of a modern economic cycle that allows for growth in various sectors. He states “…bubbles can transform wealth that would otherwise be stashed in government bonds and other safe assets into income for those who work in the expanding parts of the economy.” However, many economists assert that eroding wealth and savings to artificially grow an economy is dangerous and unsustainable.

How will real estate economics play out? Getting back to the NAR press release, Yun credited the current sales and price trends to a lack of housing inventory and buyer demand. Unfortunately, housing inventory is at about a thirteen year low; and unless inventory increases we can expect an interesting year ahead.

by Dan Krell
© 2013

Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws. Copyright © 2013 Dan Krell.

December 2, 2013July 1, 2019

High end real estate and hot markets

High end real estate is hot and is pushing home price limits to new levels. And although many luxury home buyers are seeking homes that are in vogue, other high net worth home buyers are looking for other things in their homes.

Many high end home buyers want their homes to be a piece of art; and it seems as if there is a market for pairing art and real estate. What seems to pair luxury real estate and art is Art Basel (the annual premier art show) in Miami, where luxury real estate agents are flocking to make sales.

According to The Miami Herald, South Florida developers have paired “exceptional art” with high end real estate to create something special. And there is a market for it.

However, while many luxury home buyers are looking for exquisite art, other buyers of high end real estate are looking for “safe havens.” These home buyers are looking for established markets that are performing well and have a history of stability.

Not sure where the hot high end real estate markets are located? According to Zillow some of the top luxury real estate markets are New York, Los Angeles, San Francisco Bay Area, Miami, and Washington DC. The metro DC area includes Maryland and Virginia, and is not only the seat of power – but is also culturally significant offering a wide variety of art and music. The superlative selection of high end homes in the DC metro area offer a multitude of home styles and locations for most any life style; many high end home inquiries in the Maryland area include Bethesda, Potomac and Chevy Chase.

by Dan Krell © 2013

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