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November 10, 2017

Winter ready home

After several years of brutal winter weather, we were given a reprieve of mild weather last year. The warm weather trend has moved into the fall with some balmy days. But you shouldn’t become complacent thinking that winter weather is a long way off. Yes, it’s the time of year to take stock in your home and prepare for winter. Is your home winter ready?

Of course, at the center of your winter ready home is the comfort your heating system delivers. Regardless of the type of heating system you have, have a licensed a licensed professional inspect your home’s furnace. The inspection can identify any issues that can cause your furnace to be inefficient and/or fail. The inspection can also root out potential safety issues, such as carbon monoxide buildup. If the system does not need to be repaired or replaced, the HVAC professional will tune the furnace to optimize the its performance.

Another thought for being winter ready is the fireplace. Unfortunately, many homeowners overlook fireplace and chimney maintenance. However, putting off fireplace and chimney maintenance can become a safety issue. Wood burning fireplaces should be cleaned, inspected, and repaired if necessary. Gas fireplaces require a licensed technician to inspect the pilot and electronics in the firebox. Both wood and gas fireplaces require flue and chimney maintenance. Creosote buildup can combust and cause a chimney fire. Birds and other animals or debris can lodge in the chimney and prevent proper venting. Defective fireplaces or improperly vented fireplaces can produce excess carbon monoxide in your home, which can be deadly.

You’re not winter ready unless you’re prepared for emergencies. Test the smoke and carbon monoxide detectors in your home, replace them if necessary. If your heating system and/or fireplace burns liquid, solid, or gas fuel, then you need to have carbon monoxide detectors installed. Carbon monoxide is invisible, odorless and tasteless and prolonged exposure can result in brain damage and death. Experts recommend installing carbon monoxide detectors throughout the home, primarily near bedrooms.

Hose bibs are often ignored because many people don’t use them, or are not aware of how to maintain them. However, hose bibs that are not winter ready are probably the number one source of winter pipe leaks. If not winterized properly, the pipes leading to the hose bibs can freeze and expand. This expansion can cause the pipe to burst, creating an unwanted winter leak. If you’ve never winterized the hose bibs, or are not sure how, contact a licensed plumber. Attempting to operate pipe valves that have been idle or not operated in a while can create or exacerbate an undetected leak.

Make sure your home’s roof system is winter ready. Have a licensed professional inspect your home’s roof. If shingles are not secure, melting and freezing snow can create ice dams. Ice dams can lift and dislodge shingles allowing water to penetrate your home. Water penetration from ice dams can cause damage to your home’s interior. Besides damaging ceilings, water penetration can also damage walls and windows.

While your roof is being checked out, inspect the roof flashing, gutters and downspouts. Roof flashing is often ignored, however is as important as shingles. Roof flashing is used to transition from shingles (or other roofing) to other materials (such as brick, metal or PVC). The flashing prevents water to leak between the roof and chimney or vent pipes.

Clean and repair clogged gutters and blocked downspouts. Poorly maintained gutters and downspouts won’t allow for proper drainage of water from snow and rain. Improper drainage can allow water to penetrate the foundation, creating structural and mold issues.

Preparing for winter will reduce the probability of having surprises. Being winter ready will allow you to enjoy the winter months in your own winter wonderland.

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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.

October 22, 2017September 5, 2019

Title fraud protection

In the wake of the largest consumer data breach in history, ads for credit monitoring and other related services are flooding the airwaves. One of these associated services is home title monitoring. These commercials claim that they will protect you from home stealing and title fraud. But what is home title monitoring and is it worthwhile?

According to a FBI report (fbi.gov) “House Stealing, the Latest Scam on the Block,” house stealing is a combination of two popular “rackets:” identity theft and mortgage fraud. The 2008 report described a couple of versions of how the scam is perpetrated. One form of this crime is committed by obtaining a cash-out mortgage posing as you to get a check at settlement. Another form is committed by fraudulently taking title to your home and then selling the home for the proceeds. Although fraudsters frequently target vacant homes, house stealing can also occur while you’re still occupying your home. The FBI describes how scammers perpetrate house stealing and title fraud:

Here’s how it generally works:
-The con artists start by picking out a house to steal—say, YOURS.
-Next, they assume your identity—getting a hold of your name and personal information (easy enough to do off the Internet) and using that to create fake IDs, social security cards, etc.
-Then, they go to an office supply store and purchase forms that transfer property.
-After forging your signature and using the fake IDs, they file these deeds with the proper authorities, and lo and behold, your house is now THEIRS* [*Since the paperwork is fraudulent, the house doesn’t legally belong to the con artists.]
There are some variations on this theme…
-Con artists look for a vacant house—say, a vacation home or rental property—and do a little research to find out who owns it. Then, they steal the owner’s identity, go through the same process of transferring the deed, put the empty house on the market, and pocket the profits.
-Or, the fraudsters steal a house a family is still living in…find a buyer (someone, say, who is satisfied with a few online photos)…and sell the house without the family even knowing. In fact, the rightful owners continue right on paying the mortgage for a house they no longer own.

Both forms of house stealing (or title fraud) are typically intertwined with mortgage fraud. And because of the process, mortgage fraud usually has multiple conspirators carrying out the scam. An example of this is the 2013-2014 sentencing of at least five co-conspirators (including a title company manager and mortgage broker). These criminals perpetrated a complex multi-million-dollar mortgage fraud scheme that occurred in Maryland. One conspirator sold homes that did not belong to her.

According to the FBI report, house stealing is difficult to prevent. However, vigilance on your part is highly recommended. Red flags include receiving payment books and/or late notices for loans for which you did not apply. Additionally, it is recommended to routinely monitor your home’s title in the county’s land records. Any unrecognized paperwork or fraudulent looking signatures may be an indication of title fraud and should be looked into. Title fraud should be reported to the FBI.

Title fraud protection

You can visit Montgomery County’s land records office and get information on searching your home’s title from the very helpful staff. You can also search land records online. However, you should consult a title attorney for a detailed title search.

A problem with searching land records is that it is not always definitive. Of course, accuracy depends on those who prepare and file the documents with the county. Common issues that are found in title searches are misspelled names and aliases. Deeds and other related documents (such as quit claim deeds and mortgage satisfaction letters) are not always filed timely, or sometimes not at all.

After the Equifax breach, millions of consumers’ identifications are available to criminals to perpetrate house stealing/title fraud. Title monitoring services tout their ability to protect you from such scams. Before you decide to enroll, be aware of the fees, the limitations, and how it compares or differs from your owner’s title insurance policy (including cost).

Your title insurance policy may already protect you from title fraud. According to the Maryland Insurance Administration’s A Consumer Guide to Title Insurance (insurance.maryland.gov), “Title insurance protects real estate purchasers and/or lenders from losses that arise after a real estate settlement…A title insurance policy provides coverage for legal defense, as well as the coverage amount listed in the policy, which usually equals the purchase price of the real property.” Basic coverage typically protects you for fraud that occurred prior to settlement. However, enhanced coverage may provide protection for fraud that occurs after settlement.

You should consult with a title attorney about your title insurance coverage and how it protects you from title fraud.

By DanKrell
Copyright© 2017

Original published at https://dankrell.com/blog/2017/10/22/title-fraud-protection

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September 24, 2017

Mortgage Interest Deduction last chapter?

The mortgage interest deduction seems to be the everyone’s lovable fiscal scapegoat. The mortgage interest deduction was almost abolished in 2010 as a means of increasing revenue after the recession. And then again in 2012 it’s elimination was considered to increase revenue lost through sequestration. This time the mortgage interest deduction is in Congress’ sights as a means of tax reform.

The mortgage interest deduction is a remnant of consumer interest deductions that were allowed when income tax was first collected. It wasn’t until the 1980’s when most consumer interest deductions, such as credit card and auto loan interest, were eliminated (to reduce budget deficits after a deep recession). The mortgage interest deduction survived in a limited form, which implemented a cap on the amount of an individual’s deductions.

The mortgage interest deduction is again embattled. Reporting by AP’s Marcy Gordon reveals the divide in eradicating the MID (GOP eyes popular tax breaks to finance overhaul; apnews.com, September 18, 2017). The MID is viewed by some as a middle-class mainstay that is a political hot potato. While others see the MIS as an antiquated subsidy that can be removed as part of a major tax plan. However, the likelihood of totally abolishing the MID is slim because of the political fallout. More likely to occur is something akin to what happened in the 1980’s, which was a narrowed version that limited deductions. Speaker of the House, Paul Ryan hinted that the current $1million cap could be further reduced, by saying “We could change that limit — I suppose.”

Over the decades, the mortgage interest deduction has been criticized by some as poor economic policy. Those who argue against the mortgage interest deduction claim that it doesn’t increase homeownership. They also claim that the MID is a subsidy that artificially inflates home prices, and is used mostly by the wealthy. Additionally, the enticement of receiving a MID at the end of the year is used to encourage home buyers to buy homes that they really can’t afford. A recent study by Jonathon Gruber (known to many as the architect of Obamacare), et al, produced results that mimics the assertions of the mortgage interest deduction critics’ (Do People Respond to the Mortgage Interest Deduction? Quasi-Experimental Evidence from Denmark; National Bureau of Economic Research, Inc; Working Paper 23600, July 2017).

Proponents of the mortgage interest deduction, such as the National Association of Realtors, and the National Association of Home Builders, claim that the MID encourages homeownership and makes it affordable for many.

As a witness in the September 13^th Senate Finance Committee Hearing on Individual Tax Reform, Iona Harris (chair of NAR’s Federal Taxation Committee) testified that limiting or abolishing the mortgage interest deduction could actually have the unintended consequence of increasing taxes on millions of “middle class homeowners,” while “putting the value of their homes at risk.”

Ms. Harris stated:

“…it is estimated that American homeowners already pay well over 80 percent of all federal income taxes… 53 percent of individuals claiming the itemized deduction for real estate taxes in 2014 earned less than $100,000.”

And recapped the outcome of the 1980’s mortgage interest deduction reduction:

“…When Congress last undertook major tax reform in 1986, it eliminated or significantly changed a large swath of tax provisions, including major real estate provisions, in order to lower rates, only to increase those rates just five years later in 1991…Most of the eliminated tax provisions never returned and in the case of real estate, a major recession followed.”

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August 6, 2017November 23, 2021

Real estate BS detector

DARPA issued a recent request for information seeking ideas about how to create automated capabilities to assign “Confidence Levels” to scientific studies, claims, hypotheses, conclusions, models, and/or theories. In other words, the Defense Advanced Research Projects Agency wants to create a BS detector. First reported by Adam Rogers for WIRED (Darpa Wants to Build a BS Detector for Science; wired.com; July 30, 2017), DARPA doesn’t look at it as rooting out “BS” but rather establishing the what, why, and how scientists know stuff. Imagine how this could be applied as a real estate BS detector!

The Defense Advanced Research Projects Agency’s stated mission on their website is “to make pivotal investments in breakthrough technologies for national security.” So, chances are that if they are able to devise a real working BS detector, you won’t know about it.

When it comes to real estate, people sometimes bend the truth. Additionally, real estate agents are known for “puffery” and are generally not trusted because of the salesy techniques they employ. But having a real estate BS detector would be huge breakthrough! Imagine being able to weed through the BS and nonsense that many real estate agents spout when they are clearly trying to sell. Wouldn’t it be wonderful to check your real estate BS detector, when an agent is pontificating about a house or themselves, to know if the agent is wasting your time? Unfortunately, the real estate BS detector is not a real device. However, there are strategies to help you detect real estate BS.

“Luke, trust your feelings.” Ok, there’s no such thing as a Jedi, but empirical research has demonstrated that intuition can be used to weed out lies. Many say they rely on their gut instincts to protect themselves. But the truth is that many ignore or don’t trust their intuition because the rational mind takes over and dominates. Increasing your intuition could help you detect the real estate BS and prepare for (and maybe prevent) regretful situations. Becoming more aware about your “gut feeling” can increase your intuition.

Being cynical can also help detect real estate BS. Don’t be rude of course, but questioning what others say helps you clarify and understand them at a higher level. It can also reveal untruths. Question all claims and over-the-top statements. For example, if you’re dealing with a real estate agent, ask for support to any assertion they make about themselves or their services. Ask to speak to their references. Also, ask for additional information that support their opinions on the housing market and deciding on a price to sell or buy a home.

Do your due diligence to discover real estate BS. After asking questions, take what others say or do during the real estate transaction at face value and take it upon yourself to verify it. It can save you a headache down the road. It’s easy to verify many aspects of the real estate transaction, because many local jurisdictions have their databases online. However, making a call or two to a helpful government employee is straightforward and can provide bonus information. Verify licenses of real estate agents, loan officers, and even home contractors. Verify permits of home improvements. Verify the local schools and the home’s zoning.

Finally, don’t feel pressured to do anything. The BS artist will make it seem as if you have to act immediately. But if you are not comfortable with the situation or are not yet ready, take a pause.

By Dan Krell
Copyright©2017

Original published at https://dankrell.com/blog/2017/08/06/real-estate-bs-detector/

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July 16, 2017December 13, 2022

Self-driving cars and home buying

Technology has made homes more efficient and environmentally friendly, while also making them more comfortable. Technology has made the business of real estate become increasingly easier through electronic communications and electronic signatures. Technology has also made finding a home much easier too. It’s obvious that the real estate industry has been greatly impacted by technology, but will the self-driving cars technology impact real estate?

A curious article that appeared in a recent issue of Appraisal Journal suggests that self-driving cars will eventually influence real estate (A Largely Unnoticed Impact on Real Estate-Self-Driven Vehicles; Appraisal Journal; Winter2017, Vol. 85, No.1, p51-59). The authors, Levine, Segev, and Thode, discuss how self-driving cars will likely become a standard on our roads, as well as likely changing the way we think about where we live. There is a suggestion that the wide spread adoption of self-driving cars could bring about a suburban renewal. As self-driving cars become more abundant, some suggest that would influence some home buyers and their decisions on where they choose to live. The concept of owning a self-driving car could make the choice a little easier to opt for the less expensive suburban home with more land.

However, you should consider that owning a self-driving car might not make your suburban commute more convenient. For many home buyers, a reason to move closer to an urban area is to reduce the commute time to their jobs. For some, the thought of increasing their commute time even by ten to fifteen minutes (by virtue of an extra metro stop) is unacceptable. Sitting in your self-driving car is not much different than sitting in a metro car or bus. So the notion that owning a self-driving car could spawn suburban growth may not hold water.

Owning a self-driving car won’t make the suburban commute less expensive. Many home buyers decide to live closer to their jobs to save money and energy. The self-driving car is like any other car, such that there are operating costs. Regardless whether your self-driving car is electric, gas or hybrid, there are fuel costs. There will be maintenance costs too. And of course, you need to a place to park it like any other car.

Even the value of commercial real estate may not necessarily be affected by self-driving cars. These vehicles won’t reduce travel time to the store, nor would they make any business more convenient than another.

Let’s face it, self-driving cars isn’t the internet. These vehicles are a convenient way to travel for sure, but they won’t change how we communicate. Nor will they change the basic requirements we seek from our homes.

However, a government policy shift, much like the policies favoring designated car-pool vehicles and mass transit, could tip the scales in making the self-driving car the vehicle (no pun intended) to changing the real estate landscape. Creating special lanes for self-driving vehicles could reduce commute times, thus reducing fuel costs. Requiring dedicated parking for self-driving vehicles could also influence commercial real estate. However, like the impact of designated car-pool vehicles, a major impact to our lifestyle is unlikely from self-driving cars.

Choosing where you live is a personal decision that is impacted by many external factors, including quality of life. Of course the self-driving car is a technological advance that is surely to affect how you travel. However, it is doubtful that owning a self-driving car will largely impact your quality of life and how you decide where to live. In fact, the authors of the above mentioned article point to a 2016 Kelly Blue Book survey that indicates that a majority of Americans prefer “cars that are not fully autonomous and retain some ability for individual control.”

Original published at https://dankrell.com/blog/2017/07/16/self-driving-cars-home-buying/

By Dan Krell
Copyright© 2017

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