Monthly Archives: May 2016

Know the best locations for your home

The old saying, “Location, location, location” is more like a mantra when it comes to real estate. Buy in the wrong one and you could be setting yourself up for financial ruin. Or at least an unhappy experience. Right?

In some cases, yes. But also, maybe not so much. Let’s get into it.

The argument for buying in the best location you can afford

You can change your home, adding, updating, and renovating down to the last square foot. What you can’t change is where it’s located. Add in an inherent desire to build equity when you buy a home, and it’s not surprising that real estate experts often recommend buying not only in the best location you can afford, but, if given a choice, buying the worst house in the best neighborhood instead of the other way around.

“A home is an investment – and the best investments have the most room for improvement,” said Realtor.com. “Ideally, you’ll be adding to the home during your ownership, building equity in hopes of a payoff when you (eventually) sell. Brendon DeSimone, author of “Next Generation Real Estate,” told them. “You can add value on your own. If you’re choosing between an awesome house in a crappy location or an awful house in a great location, I would choose the latter.”

Multiple recent studies bolstered the idea of buying in the best location you can, but identified new factors for determining location-worthiness. Namely, you need to buy a home with a Starbucks nearby. Or a Target nearby. Ideally, both.

“Among homeowners who sold in 2015, those near a Target saw an average 27 percent increase in home price since they purchased their home, which equates to an average price gain of $65,569,” said the Washington Post.

As for Starbucks, “Between 1997 and 2014, homes within walking distance, or one-quarter mile, of a Starbucks appreciated 96 percent,” said Forbes. “Compared to the national average for the same time period, 65 percent, it seems having a barista close by is a smart real estate move.”

Buying the house, not the neighborhood

Yes, buying in a neighborhood that seems to offer some cushion when it comes to values makes sense. But what if you fall in love with a house that’s not in your preferred neighborhood? What if it’s not in anyone’s preferred neighborhood?

The opportunity to buy a more affordable home can tempt people to take a chance on an iffy location. But how iffy is too iffy? The potential for losing money on a home that may not ever appreciate because of the neighborhood is only the beginning. Buying into an area that has higher crime can be dangerous to more than your finances.

Not sure what you’re getting yourself into? Here are a few ways to investigate the neighborhood:

  • Look at sales data – Beyond the safety issues, you want to know what you’re in for in terms of your investment. Just because a home in a questionable area is priced low doesn’t mean it’s a good value.
  • Check crime records – You’ll obviously want to pay attention to murder and violent crime rates, but also property crimes including break-ins, home robberies, and car thefts.
  • Check the sexual predator registry – That’s a given for any move.
  • Talk to neighbors and area business owners – Sometimes, the people that live and work there can provide the most telling information.
  • Consider the type of businesses in the neighborhood. Remind yourself about the Starbucks and Target value conversation. Those aren’t around? What’s in their place?

The quality of the businesses in the area can be one of the main determining factors when considering a neighborhood. A story from attn: asked the question, “Do Certain Businesses Attract Crime?” Their findings: “The prospect of a new liquor store or marijuana dispensary can spark safety concerns in some neighborhoods. But while the idea that particular businesses are crime magnets holds up in some cases, it’s not always true, and people’s concerns can be based on real evidence or flawed perception.”

What do you know more about home renovation

Question. We plan on adding two rooms and a bath to our house. What protection should we include in the contract with our architect and contractor?

Answer. I receive a number of questions on this topic every year. It is an area where an ounce of prevention can make a significant difference to the homeowner, and yet it always amazes me that homeowners will hire contractors for major renovations to their homes having only a loosely written one or two-page “letter agreement” or nothing in writing at all.

In my opinion, it is absolutely essential to have a written contract with your home improvement company (the contractor) that spells out all of the terms and conditions of the proposed renovation.

We lawyers have to be concerned with “horrible hypotheticals,” because all too often these turn out to be real situations. If they are anticipated, homeowners can avoid unhappiness and extra expense.

More and more homeowners are improving and adding onto their residences in lieu of buying new homes.

Selecting a good licensed contractor is often a difficult task.

Ask every contractor you interview for references. You also should inspect the contractor’s previous work, to assure yourself that he or she is right for you. It is also important to make sure that the contractor is licensed in your jurisdiction. Keep in mind that no contractor will provide you with an unhappy homeowner.

Once you have selected a contractor, it is extremely important to enter into a contract spelling out in detail all of the terms and conditions under which the remodeling or renovation job will be done.

Do not rely on good faith, promises, or a handshake.

Here are some suggestions for mandatory provisions in any contract that you sign:

Do not sign the typical one or two-page proposal submitted by your contractor. I call this the “two page special”. Although this is a contract — legally binding on you — these one or two-page proposals unfortunately provide very little, if any, protection for the homeowner. The American Institute of Architects sells standard form contracts you should use in your dealings with a prospective contractor. You may contact the American Institute of Architects, and ask for AIA document A107, entitled “Abbreviated Owner-Contract Agreement Form For Small Construction Contracts.” It is available to non-AIA members at a nominal cost.

The contract should contain a payment schedule that has been carefully worked out. Regardless of whether you or your bank will be making the actual payments, it is recommended that at least 15 percent of the payment be retained until the job is completed. All too often a contractor will leave a job unfinished after he has been paid in full, and homeowners are caught in a double bind. There is no money to pay anyone, including subcontractors, to finish the task, and you have already paid most if not all of the entire contract price.

What kind of warranty is the contractor willing to provide? This should be discussed in detail with the contractor before you sign, and the exact terms of the warranty should be spelled out in the contract itself.

The contract should state that “time is of the essence.” One common problem with remodeling contractors occurs when the contractor is unable to finish the job within the estimated time. It is also suggested that the contract provide for a daily penalty from the contractor for each day the work is not completed after the time specified for completion in the contract. This provision will give the contractor a real incentive to complete the work within the promised time period. As an additional incentive, many homeowners offer a bonus to the contractor for early completion.

Are you properly insured against possible claims by workers who may be injured on the job? Insist that the contractor be adequately insured, and check with your own insurance company to determine the limits and extent of your liability.

You should have the absolute right to terminate the contract if, after reasonable notice to the contractor, you are dissatisfied with the work. Of course, you have to be reasonable and cannot terminate the contract arbitrarily.

Arbitration must be provided for in the contract. You should not have to go to court to resolve any disputes that may arise. Legal fees, court costs and the time involved can be a deterrent to a prompt resolution of your dispute. Your contract should provide that all disputes be resolved through binding arbitration under the rules of the American Arbitration Association. I am not an advocate of arbitration, but it is certainly cheaper and faster than litigation.

How to cooling your home

When the temperatures spike, most families crank up the air conditioning to keep their homes cool. While blasting the AC is often viewed as the first step in cooling a home, there are a number of other ways to keep your home comfortable in the summer.

#1 Open Windows at Night

If you live in a region of the country where nighttime temperatures tend to dip into the lower 70s and upper 60s, open your windows at night and turn off the AC. Once the sun is down, that cool air can flow into your home overnight and help maintain a cooler starting point for the next day. Turning on any fans you have around the house will help circulate that cool air.

#2 Leave Interior Doors Open

During the winter months, it’s a good idea to close doors to unused rooms to avoid wasting money heating those spaces. But closed-off rooms can become heat blankets in the summer if you don’t open them up and allow for even airflow throughout your home. To help keep the house cooler, open your interior doors.

#3 Close Blinds During the Day

It’s nice to open the shades and let in some sunlight, but up to 30 percent of the unwanted heat in your home comes from windows. Shut your shades to limit the house-warming sunlight allowed into your home. Focus on closing only west- and south-facing windows to still give your home the benefit of natural light. This can help lower the mid-day temperature of your home by almost 20 degrees.

#4 Using Appliances at Night

Your oven, washer and dryer are the primary culprits when it comes to unwanted heat in your home. Using your grill to cook is a simple way of keeping unwanted heat outdoors. As for your chores involving laundry, leave those for the nighttime hours when temperatures are naturally lower.

#5 Keep the Furnace Fan On

The vast majority of thermostats give you the power to manually control the fan that blows hot air through your home in the winter. If you turn this fan on during the summer, it can help to distribute the cool air from your basement to the other levels of your home. This provides better airflow in your home and an overall cooler feeling.

#6 Leave the Bathroom Exhaust Fan On

The steam from your shower will create a pocket of hot air in your home that will exit the bathroom the moment you open the door. It’s already a good idea to run the exhaust fan while you’re in the shower, but consider leaving it on for 20 to 30 minutes after your shower to help blow out the hot air.

#7 Consider Upgrades Outdoors

There are two big things you could do to the outside of your home to help keep it cooler in the summer months. First, you could repaint the siding of your home with a lighter color to deflect more of the sun’s rays. The siding on your home is just like any dark surface or dark clothing. The darker it is, the more heat it attracts and retains. The same can be said for your roof. Slate, concrete, clay and various tiles offer better protection from heat than standard shingles.