When real estate imitates cinema

Does cinema imitate life, or is it the other way around?

I have always said that being a real estate professional is more than just selling homes – it’s about the people, relationships, and the occasional interesting story. So, here’s a few recent stories where real estate imitates film.

Reminiscent of American Beauty… Late last year, a story emerged about a law suit against a real estate agent who allegedly used a home as a rendezvous place for sex. In their suit, the owners of the New Jersey home alleged that the agent they hired to list their vacant home kept buyers away by over pricing it; and by the way – he allegedly used the home as a clandestine sexual meeting place. The agents involved were reportedly recorded on hidden video cameras (nj.com).

Although the comedy Neighbors highlights the obnoxious relationship, real life bad neighbors are not as humorous… A recent report of a New Jersey home buyer taking action against the home builder received national attention. The buyer sued the home builder alleging that the home builder did not disclose that the neighbor is potentially antagonistic; and if it was known, might have affected the buyer’s decision to purchase the home (abcnews.go.com).

This story has a twist like Down and out in Beverly Hills…Thinking outside the box, a Denver real estate agent had the brilliant idea to help a homeless man. The agent passed this homeless man daily, and decided to help him out – but not with a handout. The agent hired him. The homeless man held a sign that used to read, “I’m cold. I’m homeless. I’m hungry. Spare Anything.” Now the sign reads, “No need for your cash! I’m sponsored by Joe Manzanares.” (kdvr.com).

Mistaken identity is often the plot of a movie, but not like this…This story comes from Fort Worth, where a couple’s home was mistakenly knocked down by the city. The family was planning to move into the home that the grandmother lived in. The owners visited the home often for maintenance. However, on one occasion they realized the home disappeared. The city mistakenly demolished the home, when the home next door was scheduled for demolition. The ABC News report explains that this occurs more often than you think; human error is often cited for mistaken demolition (abcnews.go.com).

Who You Gonna Call? – Ghostbusters! When they listed their Pennsylvania home, the home seller wasn’t sure about disclosing the strange phenomenon that he experienced. Even though the seller admitted having a scientific mind, some occurrences were hard to explain. The seller’s stories included hearing people talking when he was with his infant daughter, hearing doors slamming. When he listed the home, the description read: “Slightly haunted. Nothing serious, though.” You might think that home buyers might be scared away, but the seller was pleasantly surprised by the publicity that was gained from the report – and the abundance of offers for the home (zillow.com).

A real life War of the Roses … When a Michigan man moved into the home next door to his ex-wife and her husband, no one expected this. A twelve foot sculpture was erected in the back yard directed to the neighbor – “flipping the bird.” Oh, and there is a spotlight to help see it at night (deadlinedetroit.com).

by Dan Krell ©
More news and articles on “the Blog”
Google+

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 13, 2014 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.

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 ©
More news and articles on “the Blog”
Google+

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 25, 2013July 1, 2019

Will new mortgage rules set stage for subprime resurgance

After much speculation, new mortgage and appraisal rules have recently been revealed and will go into effect in January. Combined with the recent news of FHA’s reduction of loan limits (authorized increased limits sunset the end of 2013), there’s been a lot of buzz about how the housing market and home buyers could be affected.

On December 18^th, the Consumer Financial Protection Bureau (CFPB) launched a campaign to educate consumers about new mortgage rules that go into effect January 10^th; specific information and fact sheets can be found at consumerfinance.gov. Among the new rules, several include: the creation of the Qualified Mortgage (QM); new mortgage servicing rules; and additional protections financially challenged borrowers.

The QM is classified by the CFPB as a loan which qualified borrowers are presumed to be able to repay; and is described as a “safer” loan compared to some of loans originated prior to the mortgage crisis. One of the main features of a QM, as of January 10^th, is that mortgage lenders will have to assess the borrower’s ability to repay. Additionally, the borrower cannot exceed a total monthly debt-to-income ratio (all monthly obligations including mortgage payments) of 43%. Although lenders must make an effort to determine a consumer’s ability to repay based on typical factors including: income, assets, and debts; the new rules do not eliminate all subprime mortgages.

Two additional features of a QM include safer terms and limiting points and fees. A QM cannot have loan terms that have been attributed to “risky” loans, such as negative amortization or interest only payments. Furthermore, if you are directly paying a mortgage broker to originate your loan, they can no longer receive additional payment by another party for the same transaction; a QM is limited to 3% of the loan amount for points and fees.

To assist borrowers, the CFPB has set new mortgage servicing rules that include: providing clear mortgage statements that show how payments are credited; addressing mistakes promptly; crediting payments when received; and providing early notice for adjustable interest rate increase.

To assist borrowers facing financial challenges, the CFPB institutes rules that include: foreclosure cannot be initiated prior to 120 days delinquent; a foreclosure cannot be initiated if a complete application for mortgage assistance has been submitted; servicer call centers must be able to answer borrower questions relating to critical documents; as well as providing accurate and timely foreclosure status to borrowers who ask.

Financially challenged borrowers seeking assistance through their mortgage servicer have additional protections. Borrowers who make application for loss mitigation early on must have all their options evaluated with one application; an explanation must be provided to borrowers rejected for loss mitigation; and borrowers could appeal a loan modification rejection based on the servicer’s mistakes.

New appraisal rules instituted by the CFPB become effective January 18^th. Although these rules do not apply to all mortgages, typically a borrower should expect: a licensed appraiser; an interior of the property, and a copy of the appraisal prior to closing. Additionally, a second appraisal is required for a home that is considered a “flip;” a home sale that has sold in the previous six months is classified as a flip.

Although some have speculated the new rules, along with reduced FHA loan limits, will limit the availability of mortgages for some home buyers; others see the resurgence of the subprime mortgage to fill the gap.

New mortgage rules, lowered FHA loan limits, and other new changes are increasing investor backing of non-conforming mortgages.

by Dan Krell
© 2013

Protected by Copyscape Web Plagiarism Detector

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.

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
More news and articles on “the Blog”
Google+

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

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.