New homes allure is neurological

new homes
New homes (infographic from candysdirt.com)

Last week I mentioned that new home sales jumped 18.7 percent year-over-year, which is a ten-year high.  It should come as no surprise that new homes are selling like hotcakes.  After all, existing home inventory has been and remains historically low, which doesn’t give many options to home buyers.  But there are other reasons for the allure of new construction.  Some of the home buyers’ motives are apparent and some are not so obvious.

The idea of buying new construction goes beyond the “new home feel.”  Buyers of new homes are attracted to modern designs and trends that are incorporated into new houses.  New home construction takes advantage of modern building techniques and materials that allow for the open floor-plan concept that many home buyers prefer.  Many of the materials used in new construction are “engineered” for efficiency and longevity.

Buyers of new homes like the feeling that there will be minimal maintenance for the first year.  Everything is brand new and there is sense of confidence that the home’s systems won’t need major repairs or replacement.  Being the first owner of a home also gives assurance that they won’t have to deal with the poor maintenance habits of the previous owner.  This is a plus for home buyers who don’t have a lot of financial reserves to address home maintenance emergencies.  Instead, they can begin to save and budget for future repairs and replacements that should be years down the road.

New home builders take advantage of current trends in green building practices.  Many new home builders tout their LEED certification, demonstrating their commitment to energy efficiency and sustainable resources.  Green building practices are not only used when the home is built, but is actually built into the design.  Home owners seeking LEED certified builders believe they will have a smaller impact on the environment and save money on energy costs.

A new trend that buyers are pursuing is the “healthy home.”  The healthy home concept emphasizes the quality of the air inside the home.  Home buyers are becoming aware of the physical and environmental benefits of good indoor air quality, which can improve their emotional well-being and reduce the potential for respiratory distress.

But there is another reason why home buyers are attracted to new homes, and it lies within the brain.  Research has demonstrated time and again that consumers respond to novelty.  This means that home buyers have a tendency to want “new.”  This can be interpreted into making an old home new by renovating a kitchen, bathroom, etc.  Or it can mean buying a newly built home.

new homes
the desire for new homes may start with the limbic system (infographic from success-mohawk.com)

The novelty seeking behavior of the home buyer isn’t just a choice, as some may argue, it’s neurological.  Basically, the desire for a new home lies within the brain.  A study conducted by Nico Bunzeck and Emrah Düzel (Absolute Coding of Stimulus Novelty in the Human Substantia Nigra/VTA; 2006; Neuron 51, 369-379) demonstrated that the hippocampal region of the brain responds to novel (new) stimuli.  The hippocampal region is part of the limbic system, which is noted for being responsible for memory and emotions.  It has also been associated with motivation.

The study also discusses the idea that novelty seeking behavior isn’t just emotional, but it is also rewarding.  This means that there is a behavioral loop for seeking new things, including buying a new home.

Home sellers need to take note of these findings.  Translating this study to home buyers may mean that a home’s feeling of “newness” is important, regardless if it’s construction, renovation, or even how the home is decorated.  Understanding what attracts and motivates home buyers can be the tipping point to get a home sold.

Copyright© Dan Krell
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Title fraud protection

title fraud
Title fraud and house stealing (infographic from fbi.gov)

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.

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.

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What’s the controversy with laminate flooring?

Infographic where formaldehyde is commonly off-gassed in the home. (from greatertorontobuilders.com)

Since my last installment of How your Home is Making You Sick, the Centers for Disease Control and Prevention (CDC) has released and revised their analysis of certain types of Chinese laminate flooring. The initial release was found to have used an incorrect value for ceiling height, which calculated airborne concentration estimates about “3 times lower than they should have been.”

The increased interest in health concerns over certain types of Chinese laminate flooring was due in part to an exposé by CBS’ 60 Minutes (which aired March 1st, 2015) that investigated California home owners’ claims that certain types of laminate flooring sold by Lumber Liquidators was making them sick. The investigation alleged that the Chinese laminate flooring sold by Lumber Liquidators did not meet California Air Resources Board standards for formaldehyde emissions in wood flooring. Lumber Liquidators questioned the testing methodology and results (Lumber Liquidators; cbcnews.com; August 16th, 2015).

In a May 2015 press release, Lumber Liquidators stated that “Initial results of the indoor air quality testing program for certain laminate flooring customers – conducted by independent, accredited laboratories – indicate that over 97% of customers’ homes were within the protective guidelines established by the World Health Organization for formaldehyde levels in indoor air.” However, sales of the products in question were discontinued; and company has offered air quality test kits for those who have purchased laminate flooring from the company.

reduceformaldehyde
from “Laminate Flooring Test Results – Health Issues and Solutions” (cdc.gov)

Since the 60 Minutes exposé, the US Consumer Product Safety Commission (CSPC) tested samples of Chinese laminate flooring and along with the CDC issued “Laminate Flooring Test Results – Health Issues and Solutions”.   The consumer handout states that formaldehyde is found in many home products; and levels typically decrease after 2 years of installation. Recommendations in reducing health risks are also listed (cdc.gov/nceh/laminateflooring/docs/nceh-atsdr_laminate-flooring.pdf).

The February 10th CDC press release initial reported analysis conducted by the Agency for Toxic Substances and Disease Registry (ATSDR) and the Centers for Disease Control and Prevention’s (CDC) National Center for Environmental Health (NCEH) of the CSPC data “…found that formaldehyde levels observed in select laminate wood flooring products could cause short-term irritation for people in general and in some cases exacerbate asthma.  The risk of cancer associated with long-term exposure to the observed formaldehyde levels is considered extremely small…” (ATSDR and CDC Analysis Finds Possible Health Effects Associated with Formaldehyde in Select Laminate Flooring; cdc.gov).

However, a correction to the analysis was made several days later indicated that that although “the final results are not yet available,” the estimated conclusions are to be close to these: Exposure to the range of modeled levels of formaldehyde in indoor air could cause increased symptoms and other respiratory issues for people with asthma and COPD; Exposure to the lowest modeled levels of formaldehyde could result in eye, nose, and throat irritation for anyone; and The estimated risk of cancer is 6-30 cases per 100,000 people (increased from the initial “Low risk of cancer” 2-9 cases per 100,000 people). The CDC cautions that these revised results are “very conservative” and “the calculated risk is likely lower than our modeled estimate.”

Even though the results are revised, the CDC states that their recommendations will likely remain the same – “we strongly stress taking steps to reduce exposures, which should alleviate respiratory and eye, nose and throat irritation.  These steps should also reduce the cancer risk.”

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Reclaiming the charm and appeal of old homes

Old Home“They don’t build’em like they used to…”

is often heard by those who praise the virtues of an old home.  Many home buyers might talk about the character and charm that exudes from an old home, while others might point to the quality of materials and workmanship that cannot be matched by new homes built today.

In some respects, it’s good they don’t build homes the way they used to because some materials used in the past that were thought to be beneficial have been found to be toxic and/or hazardous.  Building materials have changed through the years and continue to evolve for safety, strength, durability, and environmental impact.  Many home components are engineered and prefabricated to make installation straight forward, as well as make the home increasingly efficient and environmentally friendly.  Floor joists and trusses are engineered to allow for larger and open home designs; while roof and siding components engineered to help reduce heating and cooling costs.  Foundation and basement construction techniques and components are designed to be effective in preventing water penetration.

Workmanship has also changed over the years as well.  Because engineered materials are typically prefabricated, onsite custom design and installation is not necessary; construction crews are basically required to know how to use and install the pre-manufactured components.

Hazardous materials aside, there is something about old homes that grabs our attention.  Because the building materials and components were not mass produced or prefabricated, perhaps it’s the workmanship of the construction that demonstrates that the on-site craftsmen were not just masters of their trade – but artisans.

Although new homes incorporate modern fixtures and appliances designed for comfort, functionality, and efficiency; many are drawn to the antique quality of the old home.  Old home parts are highly sought after items for modern homes too.  Many are lured by the appeal and personality of vintage home parts, but I also sense there is also something about the durability of the parts that lets them continue in service.  Vintage doorknobs, especially the crystal type, are collectible and sought after antique home parts.

Those who appreciate old homes talk about the hearty materials that were used in construction.  Compared to the new engineered components manufactured to an exact specification, the craftsmen who built the old home onsite appeared to use ample materials that made the construction feel sturdy and robust.  This “over-engineering” is typically frowned upon today; using too much raw materials is expensive and considered wasteful.

old homeAnother comparison between old vs. new homes is the lumber that is used in a home’s construction.  Some are keen on old homes because they were built from first generation lumber, compared to engineered composites typically used in modern homes.  Compared to the wood composites often comprised of glued wood pieces and fibers, first generation lumber is believed to be stronger and more durable.  Also known as old growth lumber, first generation lumber refers to lumber that was milled from virgin forests where trees were hundreds of years old.  Because of deforestation, old growth lumber is no longer harvested for construction materials.

To incorporate the virtues of vintage and old building materials in modern homes, many reclaim those resources from tear downs.  From classic fixtures and hardware to first generation wood, the reclaiming industry has become popular not only to be environmentally friendly – but to reclaim the charm and character of a bygone age.

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 February 3, 2014 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.

Can a home make you sick

ConstructionHow safe are the materials that were used to build and finish your home?

There are a number of materials that were commonly used in the home that at one time were considered safe, but are now known to cause health problems.  And although some of these materials have been discontinued in residential buildings years after production and use, some can be found in older homes.  However, there are other materials that are of concern that are still used in building and furnishing materials.

Lead was used as a residential paint additive for many years to enhance the paints’ properties; it was thought to increase paint durability and speed up drying.  Since the acknowledgement that lead has deleterious effects on the nervous system, especially in developing children; there was a push to “get the lead out” of paint and other consumer products.  Lead paint was subsequently discontinued and banned in 1978 from residential paints.  Today, there are numerous disclosures about the possibility of lead paint existing in homes that were built prior to 1978; homebuyers are provided the opportunity to conduct a risk assessment to determine lead levels in homes where lead paint may exist.  Lead certified contractors must be used when making repairs and renovations to homes built prior to 1978 (epa.gov).

Before it was acknowledged that asbestos is linked to a number of serious health issues, including mesothelioma; asbestos was used for thousands of years.  The ancients mined and found many uses for asbestos.  Considered to be a “miracle mineral,” construction use of asbestos mushroomed in the late nineteenth century.  Although there were government bans on asbestos products during the 1970’s and 1980’s, asbestos is still used in some commercial applications (asbestos.com).

There has been a longstanding grassroots concern about vinyl and PVC materials because of the linked health issues thought to be from the off gassing and leaching of phthalates (phthalates are a group of chemicals used in the production of plastics).  Vinyl and plastic building materials have also been widely used in homes for decades: vinyl flooring has been used in bathrooms and kitchens; vinyl has been used in laminate flooring; and PVC piping has been used for plumbing.  The EPA has been and continues to study the production, use and effects of phthalates (epa.gov).

Imported drywall is a more recent issue that was reported to cause severe respiratory ailments; oxidized jewelry and corroded pipes were also highlighted. Although the bulk of the reports of problems associated with the imported drywall emanated from Florida, the Consumer Product Safety Commission (CPSC) has collected hundreds of reports from eighteen states and the District of Columbia. A majority of the complaints reported that affected homes were built in 2006 and 2007; which coincided with a time when building materials were in high demand due to a considerable increase in construction and the rebuilding of hurricane-damaged states (cpsc.gov).

As a result of the increasing awareness of toxins in and out of the home, the “green building” movement has become popular.  Besides helping maintain a healthy environment, a key feature of green building is to also maintain air quality in the home; green building uses natural materials to avoid off gassing of toxins.  For example, formaldehyde based materials, which are can be found in some “manufactured” woods and some carpets are avoided.

More information about green building, air quality and safety of building materials can be found at the EPA and CPSC websites.

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 December 30, 2013 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.