11/22/2006
By JONATHAN GIBBS
When lives are stripped away of frill, affectation, artifice and the generally unnecessary, what's left? What's needed, as opposed to wanted?
Most would settle on food, shelter and safety as the bare essential minimum needs. Try going without the security of having those three basic elements of survival for, say, more than a year, and you have a situational crisis unprecedented in this, the most affluent country in the world.
This crisis has a name that will long be associated with bureaucratic inertia, governmental ineptitude and neglect on all levels: Katrina. We all saw the images: submerged houses with people clinging to their rooftops; streets turned into canals dotted with floating detritus and worse.
The area that bore the most extensive damage was Louisiana, specifically New Orleans. It was here that a group of realtors from Rhode Island joined last week with the National Association of Realtors (NAR) members - 20,000 strong (out of nearly one million total) - to help bring some life and much-needed cash back to the flagging convention industry in New Orleans.
The numbers associated with Katrina tell one truth: 645,000 people displaced from their homes. About 6 in 10 of these persons were again living in the home from which they had evacuated. The metropolitan New Orleans area saw 1,185 people die, and there are 485 still missing.
And those who saw the TV images and read the accounts were aghast at the numerical representations of this national tragedy. But it can safely be said that the only way to truly experience the state of the city in all of its terrible ruination is to see it close-up, in person. And that is what the Rhode Island contingent of the NAR convention did.
Ron Phipps of East Greenwich, the National Chapter of NAR Liaison for Housing and Diversity, was among those who toured the city.
"It can't help but leave you with a profound sense of lossBIG EASY, from page 1 and sadness," Phipps says of his visit. The most visceral of these feelings was felt during the group's visit to the city's Lower Ninth Ward, where many of the houses still have 'X' marks on the doorway for every dead person found who was found within.
"It's appalling how bad the Ninth Ward is," he says. Burnt-out and rolled-over cars, trash all over the street and water-ravaged, mold-encrusted houses staring back as if scolding the onlooker for the blatant neglect that had been paid to them.
NAR decided to do something about the carnage about one year ago, says Phipps, who in his role as NAR Liaison, directed the effort with Rebecca Moniz of North Kingstown. Not only did the Rhode Island contingent raise $70,000 for the Habitat for Humanity effort to rebuild New Orleans , they contributed their time and poured sweat into the rebuilding by framing four (of a planned seven) houses. While there, they dedicated another completed house the group built this past August.
They put their money - and calloused hands - where their mouths were.
"You can write a check but there's no real connection there," says Phipps. "When you build a house and then watch a family move in, there is a sense of involvement. The time you spent working on the house is always there."
Moniz says she, too, was shocked at the suffering she saw there and the lingering nightmare experienced by those who are trying to rebuild their homes.
"I want everyone to know that the devastation of Katrina has not gone away," Moniz says. "New Orleans and the Gulf Coast live this nightmare everyday. Imagine losing your home, and every record existing that you are actually the property owner. Most people don't understand that even the chain of title was washed away. ("Prove it was yours. Where is your lot line? Prove it.")
Along with the water damage, bureaucratic roadblocks also persists.
"The landscape [of this kind of disaster] is virtually uncharted," adds Moniz. "Imagine trying to come up with a record that has vanished and the only source you have is the insurance company that you're fighting with. In this section, where the levy actually broke, houses were swept off the foundation and fell apart. Nothing was left. They certainly need more help."
The NAR volunteers certainly helped. During their one-week stay there, they put in more than 8,600 hours.
In addition to the putting up money and man-hours to build the houses, they helped out with the cleanup of area hospitals and city parks. They worked organizing books for the New Orleans Library, helping it get back on its feet and open sometime within the next two months as opposed to the previously-expected six months timeframe.
"Realtors are, by their nature, 'fixers,' says Phipps. "It was really something to see some of the leaders in the market, some very affluent and successful people, down on their hands and knees picking up trash to get the site ready for building. It was one of my proudest moments as a realtor. This was a true group effort for Rhode Island and all of the realtors across the country."
Monday, November 27, 2006
Monday, November 20, 2006
COPING WITH THE HOUSING SLUMP
OF4-11/2/06 9:25AM COPING WITH THE HOUSING SLUMP
The Osgood File. I'm Charles Osgood. Most of the time for decades now. housing prices have risen. and KEPT rising. But that was then. Moody's economy.com is forecasting that overall. across the country will fall three and a half percent next year. CBS News correspondent Anthony Mason spoke with Moody's Mark Zandi.
"When's the last time we saw that?" asked CBS News Correspondent Anthony Mason.
""That's unprecedented. You'd have to go all the way back to the great depression to find a year in which house prices declined." said Mark Zandi, Moody's Economy.com.
Some straws in the wind.
Home builders who have been expanding in boom times are now contracting. Hovnanian, one of the biggest, has more than 6000 employees.
"It was closer to 7. Its slowly been getting closer to 6." said Ara Hovnanian, CEO Hovnanian.
Ara Hovnanian is CEO. He tells Anthony Mason many people who planned to buy homes are getting cold feet.
"Right now, a lot of customers are saying, boy, I think this is not the right time." said Hovnanian.
"How long do you see this period lasting?" asked Mason.
"That's the million dollar question." said Hovnanian.
People with homes to sell are trying to think of ways to entice buyers. In Connecticut Lou Aloupis cut the price of his place by 60 thousand dollars. That didn't do it.
"And one night it just came to me. I said, hey, why not offer my Mercedes. And here we are." said Lou Aloupis, homeowner.
So now, the price INCLUDES the Mercedes. Ron Phipps a broker in Rhode Island. knocked more than a hundred thousand dollars off the asking price on one Waterfront home. And now.
"We're including this 33 foot sailboat as part of the total purchase price." said Ron Phipps, realtor.
With Another house:
"It's a little dated with the wallpaper but really lovely." said an interior decorator.
So Phipps is throwing in 10 thousand dollars worth of interior decorating. Anything to get the buyers attention says Phipps.
"Now the real litmus test is do we sell it." said Phipps.
The Osgood File Charles Osgood on the CBS Radio Network
The Osgood File. November 2, 2006
The Osgood File. I'm Charles Osgood. Most of the time for decades now. housing prices have risen. and KEPT rising. But that was then. Moody's economy.com is forecasting that overall. across the country will fall three and a half percent next year. CBS News correspondent Anthony Mason spoke with Moody's Mark Zandi.
"When's the last time we saw that?" asked CBS News Correspondent Anthony Mason.
""That's unprecedented. You'd have to go all the way back to the great depression to find a year in which house prices declined." said Mark Zandi, Moody's Economy.com.
Some straws in the wind.
Home builders who have been expanding in boom times are now contracting. Hovnanian, one of the biggest, has more than 6000 employees.
"It was closer to 7. Its slowly been getting closer to 6." said Ara Hovnanian, CEO Hovnanian.
Ara Hovnanian is CEO. He tells Anthony Mason many people who planned to buy homes are getting cold feet.
"Right now, a lot of customers are saying, boy, I think this is not the right time." said Hovnanian.
"How long do you see this period lasting?" asked Mason.
"That's the million dollar question." said Hovnanian.
People with homes to sell are trying to think of ways to entice buyers. In Connecticut Lou Aloupis cut the price of his place by 60 thousand dollars. That didn't do it.
"And one night it just came to me. I said, hey, why not offer my Mercedes. And here we are." said Lou Aloupis, homeowner.
So now, the price INCLUDES the Mercedes. Ron Phipps a broker in Rhode Island. knocked more than a hundred thousand dollars off the asking price on one Waterfront home. And now.
"We're including this 33 foot sailboat as part of the total purchase price." said Ron Phipps, realtor.
With Another house:
"It's a little dated with the wallpaper but really lovely." said an interior decorator.
So Phipps is throwing in 10 thousand dollars worth of interior decorating. Anything to get the buyers attention says Phipps.
"Now the real litmus test is do we sell it." said Phipps.
The Osgood File Charles Osgood on the CBS Radio Network
The Osgood File. November 2, 2006
Wednesday, November 08, 2006
A Maserati -- as bait
Sellers, builders and agents are pulling out all the stops, and perhaps a plasma TV.
By Ann Brenoff, Times Staff Writer
September 24, 2006
Stopping short of installing glue traps to ensure that prospective buyers can't get away, sellers, builders and real estate agents have been reaching deeper into their bag of tricks in their efforts to move the ever-increasing homes-for-sale inventory.
They are giving away new cars, trucks, plasma TVs and chances to win expensive vacations to those who buy, refer a buyer or, in the case of Coldwell Banker, even just agree to chat with them without using a pseudonym.
The market's slowdown has spurred a flurry of buyer incentives — and some creativity — on the part of people trying to sell homes, new or otherwise.
So, how creative are they?
A Denver-area couple, whose condo was listed for more than a year, made national news when they announced they would give away round-trip, first-class tickets to Europe or a bottle of Château Lafite Rothschild — worth thousands — to a buyer willing to sign on the dotted line.
Closer to home, Mark Tacconelli, an agent with Noble Real Estate in Ladera Ranch, has clients who are offering a brand-new Toyota pickup truck to whoever buys their 2,300-square-foot La Habra home, listed at $750,000.
"If they don't want a pickup, they can have a Prius," Tacconelli said, covering all bases. "Or if they don't need a new car and just want to knock $15,000 or $20,000 off the price, that's fine too." The man is practically begging here.
Then there's this spin on the car giveaway: Instead of giving the car to the buyer, the seller of a new Tuscan villa with five bedrooms and seven bathrooms in Bel-Air will give a 2006 charcoal Maserati to the realty agent who brings him a buyer. The house is listed at $5,280,000, says listing agent Michael Mandekic, Prudential Realty Beverly Hills, who has co-listed the property with Todd Marks of the same agency. The Maserati is already parked in the driveway; the seller will pick up the lease for two years. Please, no drooling.
Thinking "green"? Builder Clarum Homes, trying to sell five energy-efficient homes in a Watsonville senior citizens housing development, is giving away the popular Toyota Prius hybrids to buyers of their units. Clarum, which incorporates solar panels and water-conservation features into its homes, hopes the hybrid will be more tempting buyer bait than upgraded counter tops or fancier appliances.
Appealing to a different market are the developers of a San Diego condo complex with a primo downtown address and relatively low prices, starting at $300,000. They've resorted to giving away free plasma TVs and gift certificates worth $5,000 toward decorating.
If you buy a Beazer Homes town house in its Iris Landing project in the Moreno Valley, you'll also get a free 42-inch plasma TV.
When it comes to giveaways, Ron Phipps of Phipps Realty in Warwick, R.I., may rule the roost. He offered a Lexus last November with one of his listings. The buyer wound up rejecting the car and taking a price cut instead, but the gimmick generated a lot of interest in the house, he said.
Phipps' personal favorites on the creativity scale: $5,000 toward the installation of solar panels; a tradable time share; a $10,000 gift card and a personal shopper to help use it; and, one that his wife abhors — a fur coat — apparently a popular giveaway in the colder climates of the East Coast.
Phipps now tries to tie his own promotions to some specific aspect of the property he is selling — things like free landscaping for a year or paying the homeowner association fees for a fixed period of time.
What's in a name?
Sometimes, it's just a matter of getting clients in the door — even just to talk.
That's why Coldwell Banker is offering to send a lucky Californian on a $10,000 trip to New York just for giving the agency his or her name and contact information. The sweepstakes program offers three or four trips a year, said Coldwell Banker's Sarah Mac Donald, who sent the contest mailings to the Santa Monica neighborhoods she sells in.
Agent Mac Donald considers it just one piece of her overall marketing pie. She's been selling real estate for 22 years and says she personally would never advise clients to offer cars or trips when they list their homes.
"It's silly," she said. "This is a price-driven market; it's that simple. If it's priced right, it will move."
Go tell that to home builders with unsold inventory who have joined the giveaway bandwagon.
Greg Paquin of the Gregory Group of Folsom, which provides market research and consulting services to the new-home industry, has seen builders in the Sacramento area offer free trips to Las Vegas, home-entertainment systems, gift certificates to local furniture stores and an annual membership in the golf club.
Dallas-based Centex Homes gave away in-ground swimming pools to buyers of their last few, lingering houses in a Northern California development, Paquin said.
Then there are home builders who figure that the best way to reach someone may be through their wallet. They "buy down" interest rates to make their homes more affordable or absorb closing costs for their buyers. Some builders offer special incentives to those who already own one of their homes if they refer a friend.
Centex, for an unspecified "limited time," is offering Southern Californians special financing programs with initial interest rates starting at 0.875%.
Cars, TVs, free vacations — does it really make sense to do business this way?
Not from a buyer's property-tax perspective. If the value of the car being given away is $40,000, why not just lower the price of the home by that much and be done with it? After all, the new buyer will be paying property taxes based on the purchase price of the home. The lower the purchase price, the lower the annual tax bill. Of course you may not need the tax break, given that the interest on that hefty mortgage payment is tax-deductible.
In this market where competition for buyers' attention is fierce, it may be that the agent with the most clever gimmick will win the prize.
ann.brenoff@latimes.com
Times staff writer Gayle Pollard-Terry contributed to this report.
By Ann Brenoff, Times Staff Writer
September 24, 2006
Stopping short of installing glue traps to ensure that prospective buyers can't get away, sellers, builders and real estate agents have been reaching deeper into their bag of tricks in their efforts to move the ever-increasing homes-for-sale inventory.
They are giving away new cars, trucks, plasma TVs and chances to win expensive vacations to those who buy, refer a buyer or, in the case of Coldwell Banker, even just agree to chat with them without using a pseudonym.
The market's slowdown has spurred a flurry of buyer incentives — and some creativity — on the part of people trying to sell homes, new or otherwise.
So, how creative are they?
A Denver-area couple, whose condo was listed for more than a year, made national news when they announced they would give away round-trip, first-class tickets to Europe or a bottle of Château Lafite Rothschild — worth thousands — to a buyer willing to sign on the dotted line.
Closer to home, Mark Tacconelli, an agent with Noble Real Estate in Ladera Ranch, has clients who are offering a brand-new Toyota pickup truck to whoever buys their 2,300-square-foot La Habra home, listed at $750,000.
"If they don't want a pickup, they can have a Prius," Tacconelli said, covering all bases. "Or if they don't need a new car and just want to knock $15,000 or $20,000 off the price, that's fine too." The man is practically begging here.
Then there's this spin on the car giveaway: Instead of giving the car to the buyer, the seller of a new Tuscan villa with five bedrooms and seven bathrooms in Bel-Air will give a 2006 charcoal Maserati to the realty agent who brings him a buyer. The house is listed at $5,280,000, says listing agent Michael Mandekic, Prudential Realty Beverly Hills, who has co-listed the property with Todd Marks of the same agency. The Maserati is already parked in the driveway; the seller will pick up the lease for two years. Please, no drooling.
Thinking "green"? Builder Clarum Homes, trying to sell five energy-efficient homes in a Watsonville senior citizens housing development, is giving away the popular Toyota Prius hybrids to buyers of their units. Clarum, which incorporates solar panels and water-conservation features into its homes, hopes the hybrid will be more tempting buyer bait than upgraded counter tops or fancier appliances.
Appealing to a different market are the developers of a San Diego condo complex with a primo downtown address and relatively low prices, starting at $300,000. They've resorted to giving away free plasma TVs and gift certificates worth $5,000 toward decorating.
If you buy a Beazer Homes town house in its Iris Landing project in the Moreno Valley, you'll also get a free 42-inch plasma TV.
When it comes to giveaways, Ron Phipps of Phipps Realty in Warwick, R.I., may rule the roost. He offered a Lexus last November with one of his listings. The buyer wound up rejecting the car and taking a price cut instead, but the gimmick generated a lot of interest in the house, he said.
Phipps' personal favorites on the creativity scale: $5,000 toward the installation of solar panels; a tradable time share; a $10,000 gift card and a personal shopper to help use it; and, one that his wife abhors — a fur coat — apparently a popular giveaway in the colder climates of the East Coast.
Phipps now tries to tie his own promotions to some specific aspect of the property he is selling — things like free landscaping for a year or paying the homeowner association fees for a fixed period of time.
What's in a name?
Sometimes, it's just a matter of getting clients in the door — even just to talk.
That's why Coldwell Banker is offering to send a lucky Californian on a $10,000 trip to New York just for giving the agency his or her name and contact information. The sweepstakes program offers three or four trips a year, said Coldwell Banker's Sarah Mac Donald, who sent the contest mailings to the Santa Monica neighborhoods she sells in.
Agent Mac Donald considers it just one piece of her overall marketing pie. She's been selling real estate for 22 years and says she personally would never advise clients to offer cars or trips when they list their homes.
"It's silly," she said. "This is a price-driven market; it's that simple. If it's priced right, it will move."
Go tell that to home builders with unsold inventory who have joined the giveaway bandwagon.
Greg Paquin of the Gregory Group of Folsom, which provides market research and consulting services to the new-home industry, has seen builders in the Sacramento area offer free trips to Las Vegas, home-entertainment systems, gift certificates to local furniture stores and an annual membership in the golf club.
Dallas-based Centex Homes gave away in-ground swimming pools to buyers of their last few, lingering houses in a Northern California development, Paquin said.
Then there are home builders who figure that the best way to reach someone may be through their wallet. They "buy down" interest rates to make their homes more affordable or absorb closing costs for their buyers. Some builders offer special incentives to those who already own one of their homes if they refer a friend.
Centex, for an unspecified "limited time," is offering Southern Californians special financing programs with initial interest rates starting at 0.875%.
Cars, TVs, free vacations — does it really make sense to do business this way?
Not from a buyer's property-tax perspective. If the value of the car being given away is $40,000, why not just lower the price of the home by that much and be done with it? After all, the new buyer will be paying property taxes based on the purchase price of the home. The lower the purchase price, the lower the annual tax bill. Of course you may not need the tax break, given that the interest on that hefty mortgage payment is tax-deductible.
In this market where competition for buyers' attention is fierce, it may be that the agent with the most clever gimmick will win the prize.
ann.brenoff@latimes.com
Times staff writer Gayle Pollard-Terry contributed to this report.
Tuesday, August 08, 2006
Romancing the buyers
As inventory grows, one agent organizes a candlelight tour of homes to boost traffic
01:17 PM EDT on Monday, August 7, 2006
EAST GREENWICH -- At 5:30 p.m., the elegant Victorian house at 136 Spring St. was clean and clutter-free. A scented candle was flickering, perfuming the humid July air. In the dining area, there were fresh flowers, cool drinks and an array of appetizers, including chocolate-covered strawberries.
These romantic touches were not prepared to soothe a tired spouse or impress a new date. They were aimed at what is, this summer, a most elusive creature: the home buyer.
On July 27, 56 houses for sale in East Greenwich were opened to the public for a 5-to-7:30 p.m. candlelight house tour. Most of the real estate agencies in town participated, according to Jeanne Smith of Re/Max Professionals.
Smith, who organized the effort, said she planned to continue the Thursday night tours until mid-September. The next one included North Kingstown and the Cowesett neighborhood in Warwick, in addition to East Greenwich.
The first night was "positive," Smith said, but she acknowledged, "we had a few houses that no one saw." Smith said she would stick with the plan and hope that business picks up in the coming weeks. Although some houses had no visitors, "some got two, some got five ... the highest got nine couples," Smith said.
Generally, those houses closest to the downtown area were the busiest, Smith said.
"We did this in 1985 and it worked very well," she said. "I sold a house from the tour in '85, so I know it works."
One of Smith's clients, Kathy Gazzola, lives at 520 Stoneridge Drive, a large, four-bedroom, 2 1/2-bath house at the end of a quiet cul-de-sac, in one of East Greenwich's leafy subdivisions. The 1.2-acre lawn is perfectly manicured, and the 1986 house is in good condition. The house is now listed at $609,900; when it first went on the market, in December, the price was $649,000.
Gazzola said she and her husband are motivated sellers; they want to move to a condominium they've purchased in Lincoln, closer to her job at the Community College of Rhode Island, where she is chairwoman of the dental health department and a professor of dental hygiene. Their two sons are grown.
The July 27 open house didn't bring any prospects, but Gazzola seemed determined to keep doing her best to sell the house. She's already painted the inside, powerwashed the exterior and installed new carpeting; now she's planning to replace the countertops in the kitchen with granite, almost considered the standard today for high-end properties.
"When you're going into it, you know you have to be patient, especially in this price range," Gazzola said. In addition, "you have to put your best foot forward."
Gazzola said she would advise other sellers to remember that "patience is a virtue" and that "you probably need to depersonalize your house so people can see themselves within your home."
Smith said she thought of weeknight house tours because weekend open houses have not been attracting buyers. "We've seen some very hot Sundays. We know they're not going to come."
"As a start, we're encouraged," said Ron Phipps, owner of Phipps Realty, which had four houses in the July 27 tour. "There are so many open houses on Saturday and Sunday." He said he liked the notion of showing houses on a summer weeknight, when it's cooler and stays light fairly late.
"We were pleased with the results," Phipps said. "It's a new concept, so it needs time to, frankly, become part of the consciousness of buyers and sellers."
Phipps added that the real estate market now is "very, very intriguing." Inventory is about double what it was a year ago, the time it takes to sell property is growing, and yet "seeing the prices hold . . . has been fascinating," he said. "It belies the fundamental principles of Keynesian economics."
For real estate agents and brokers, Phipps said, "the challenging thing about it is how you advise your buyers and sellers."
Gayle Flaherty, who works for Remax Heritage in Barrington but plans to join Coleman Realtors soon, says she thinks many potential buyers are "afraid of making an actual commitment to something because they're afraid prices will come down" after they buy. Sellers, on the other hand, are often reluctant to reduce their prices significantly unless they "are already committed to the next place they are going to."
Flaherty held two twilight open-house tours in the East Bay towns of Barrington, Bristol and Portsmouth in May and June. The first was held on a Thursday night; the second, on a Wednesday evening.
"I had a little bit of turnout," she said. "If it becomes a common event, I think it will go very well. I got the idea from one of my clients on the West Coast," she said, where weeknight open houses are more common.
In the West Bay, Smith plans to keep trying to reach buyers with the Thursday-night tours this summer.
"If even one house gets sold, it will be worth it," she said.
cdunn@projo.com / (401) 277-7913
Monday, July 10, 2006
Single women have come a long way in real estate
By Dana Dratch • Bankrate.com
These days more than one in five home buyers is a single woman.
Spurred on by a healthy real estate market, a variety of new loan options and more buying power than they had in the past, single women have become a powerful demographic in the real estate market.
"We saw the trend starting 10 years ago, and it became so common three to five years ago that we don't notice it anymore," says Ron Phipps, broker with Phipps Realty in Warwick, R.I.
In 2005, 21 percent of all home buyers were single females, up from 16 percent in 1993, and were the second-largest group of home buyers, according to statistics from the National Association of Realtors.
"It's a wonderful phenomenon," says Ilyce Glink, author of "100 Questions Every First-Time Buyer Should Ask." "There has been a real change in the sophistication of single women in response to their own money -- they feel they can do it."
A long way, baby
It wasn't always that way. In the 1950s and 1960s, single professional women had a hard time even getting a mortgage, says Richard Gaylord, Realtor with RE/MAX Real Estate Specialists in Long Beach, Calif., and first vice president of the National Association of Realtors. His mentor in the business -- a woman -- had to fight to get mortgages for her clients. And while it seems unthinkable now, he remembers her telling him that even with an independent, high-dollar income, banks worried, "what if she becomes pregnant and can't work?" he says.
Glink recalls going to a bank with her husband in 1989 for a mortgage. She started talking about her paycheck and remembers being told, "Don't worry honey, your income doesn't even count," she says.
These days, mortgage lenders are actively courting single female customers. And many real estate agents and consumer finance gurus believe that the increasing number of different loan products is at least partially responsible for the trend.
With things like 5/1 adjustable-rate mortgages or new, no- or low-down payment loans, loans have become "more creative and more flexible," Glink says.
Thomas Stevens, president of the National Association of Realtors, agrees. "There are so many new loan products that where there's a will, there's a way," he says.
Other factors that may be helping are the large variety of home-improvement shows and the wealth of do-it-yourself products and seminars from big-box retailers.
"The modern media kind of reflects this," Glink says. "Women are seeing women who are out there buying and selling. It gives women a lot of confidence."
It's creating "a ripple effect," says Rachel Drew, research analyst with the Joint Center for Housing Studies at Harvard University. "As more women are buying homes on their own, their friends are seeing that happen and saying, 'Maybe I could buy a home.'"
But it's not just younger women who are doing the buying -- women of all ages are taking the homeownership plunge solo.
"It used to be younger professional women doing the buying," says Phipps, who says he's now seeing more middle-aged women and seniors buying homes on their own. "We're kind of seeing that become more common."
But, often they are not looking at the same homes, says Drew. Older women are likely to buy homes that are newer and more expensive. "They are more likely to have reserves from wealth accumulation," she says.
And that shows up in how they pay for the home, says Drew. Twenty-eight percent of women are able to buy a home without a mortgage, she says. (For single men the figure is 27 percent and for couples, 20 percent.)
But for most women, mortgages are a must. And 40 percent put down less than 5 percent for a down payment.
What do women want?
While it's hard to generalize, real estate professionals have noticed that women, on the whole, seem to be looking for a home that is secure and free of maintenance worries.
Condos and town houses, in particular, seem to be a very popular solution. For solo female buyers, "condos and townhomes are definitely more popular," Stevens says.
Looking at buying habits from 2000 to 2003, Drew found that condos made up 15 percent of the home purchases for single females, as opposed to 12 percent for single men and just 5 percent for couples.
Single women also are looking for smaller homes than their married counterparts, she says. One-third of single women purchased two-bedroom homes. By contrast, 84 percent of married couples purchase homes with three or more bedrooms.
"They are also more likely to own older homes," Drew says. "Part of it is price; part of it is location." Single women are more likely to buy near a city center where housing stock tends to be older.
And single women tend to be very practical in their requirements, according to statistics with the National Association of Realtors.
When women look for a home, they prize:
• An upstairs laundry room.
• Skylights for natural light in the bathroom.
• Slate floors that are cleaning-friendly.
• Security features, such as alarms.
• Gourmet kitchens.
• Name-brand appliances.
• Built-in vacuum cleaners.
• And "xeriscaping" or some other form of low-maintenance landscaping.
Single women, like single men, tend to be "more detached with the analysis" that goes into buying a home, says Phipps.
One for the money
For many women, buying a home is not simply about the shelter. A house is also a chance to get in on a great investment opportunity. For the past five years or so, the national real estate appreciation rate has been about 12 percent, says Stevens. Even though "that's not normal," the 6 percent to 7 percent that real estate agents expect to see over the next few years is a tidy profit for homeowners.
"It's still better than you can do with your money anywhere else," he says.
And many women are taking advantage of the opportunity to have a home and nest egg all in one.
"For a long time now, professional and nonprofessional women acknowledged the value of purchasing real estate as a wealth-building tool and an obvious financial strategy," says Phipps.
But a woman's path to homeownership is not without its challenges.
Single women and men spend about the same for a home, with a median purchase price around $100,000, says Drew. But for single women, that will take a larger chunk of their paycheck.
Forty-three percent of women spend more than 30 percent of their income on their mortgage payments -- a threshold Drew calls "cost-burdened."
Only 30 percent of single men and 25 percent of couples are spending that large a portion of their income on housing.
Doing the homework
The secret to a good buying experience is plenty of research.
Spend a little time online to get an idea of your own budget and what can you afford. Then start shopping neighborhoods.
At some point in the process, start talking with lenders and get prequalified for a mortgage, says Glink.
And don't be afraid to wear out a little shoe leather. "Walk around the neighborhood on your own," she says. While you're there, take notice of the agents who are active in the area.
If you can narrow your search to a couple of areas, "you're ahead of the game," she says. "Homing in on a neighborhood is a plus, and knowing what you can afford is a big plus."
These days more than one in five home buyers is a single woman.
Spurred on by a healthy real estate market, a variety of new loan options and more buying power than they had in the past, single women have become a powerful demographic in the real estate market.
"We saw the trend starting 10 years ago, and it became so common three to five years ago that we don't notice it anymore," says Ron Phipps, broker with Phipps Realty in Warwick, R.I.
In 2005, 21 percent of all home buyers were single females, up from 16 percent in 1993, and were the second-largest group of home buyers, according to statistics from the National Association of Realtors.
"It's a wonderful phenomenon," says Ilyce Glink, author of "100 Questions Every First-Time Buyer Should Ask." "There has been a real change in the sophistication of single women in response to their own money -- they feel they can do it."
A long way, baby
It wasn't always that way. In the 1950s and 1960s, single professional women had a hard time even getting a mortgage, says Richard Gaylord, Realtor with RE/MAX Real Estate Specialists in Long Beach, Calif., and first vice president of the National Association of Realtors. His mentor in the business -- a woman -- had to fight to get mortgages for her clients. And while it seems unthinkable now, he remembers her telling him that even with an independent, high-dollar income, banks worried, "what if she becomes pregnant and can't work?" he says.
Glink recalls going to a bank with her husband in 1989 for a mortgage. She started talking about her paycheck and remembers being told, "Don't worry honey, your income doesn't even count," she says.
These days, mortgage lenders are actively courting single female customers. And many real estate agents and consumer finance gurus believe that the increasing number of different loan products is at least partially responsible for the trend.
With things like 5/1 adjustable-rate mortgages or new, no- or low-down payment loans, loans have become "more creative and more flexible," Glink says.
Thomas Stevens, president of the National Association of Realtors, agrees. "There are so many new loan products that where there's a will, there's a way," he says.
Other factors that may be helping are the large variety of home-improvement shows and the wealth of do-it-yourself products and seminars from big-box retailers.
"The modern media kind of reflects this," Glink says. "Women are seeing women who are out there buying and selling. It gives women a lot of confidence."
It's creating "a ripple effect," says Rachel Drew, research analyst with the Joint Center for Housing Studies at Harvard University. "As more women are buying homes on their own, their friends are seeing that happen and saying, 'Maybe I could buy a home.'"
But it's not just younger women who are doing the buying -- women of all ages are taking the homeownership plunge solo.
"It used to be younger professional women doing the buying," says Phipps, who says he's now seeing more middle-aged women and seniors buying homes on their own. "We're kind of seeing that become more common."
But, often they are not looking at the same homes, says Drew. Older women are likely to buy homes that are newer and more expensive. "They are more likely to have reserves from wealth accumulation," she says.
And that shows up in how they pay for the home, says Drew. Twenty-eight percent of women are able to buy a home without a mortgage, she says. (For single men the figure is 27 percent and for couples, 20 percent.)
But for most women, mortgages are a must. And 40 percent put down less than 5 percent for a down payment.
What do women want?
While it's hard to generalize, real estate professionals have noticed that women, on the whole, seem to be looking for a home that is secure and free of maintenance worries.
Condos and town houses, in particular, seem to be a very popular solution. For solo female buyers, "condos and townhomes are definitely more popular," Stevens says.
Looking at buying habits from 2000 to 2003, Drew found that condos made up 15 percent of the home purchases for single females, as opposed to 12 percent for single men and just 5 percent for couples.
Single women also are looking for smaller homes than their married counterparts, she says. One-third of single women purchased two-bedroom homes. By contrast, 84 percent of married couples purchase homes with three or more bedrooms.
"They are also more likely to own older homes," Drew says. "Part of it is price; part of it is location." Single women are more likely to buy near a city center where housing stock tends to be older.
And single women tend to be very practical in their requirements, according to statistics with the National Association of Realtors.
When women look for a home, they prize:
• An upstairs laundry room.
• Skylights for natural light in the bathroom.
• Slate floors that are cleaning-friendly.
• Security features, such as alarms.
• Gourmet kitchens.
• Name-brand appliances.
• Built-in vacuum cleaners.
• And "xeriscaping" or some other form of low-maintenance landscaping.
Single women, like single men, tend to be "more detached with the analysis" that goes into buying a home, says Phipps.
One for the money
For many women, buying a home is not simply about the shelter. A house is also a chance to get in on a great investment opportunity. For the past five years or so, the national real estate appreciation rate has been about 12 percent, says Stevens. Even though "that's not normal," the 6 percent to 7 percent that real estate agents expect to see over the next few years is a tidy profit for homeowners.
"It's still better than you can do with your money anywhere else," he says.
And many women are taking advantage of the opportunity to have a home and nest egg all in one.
"For a long time now, professional and nonprofessional women acknowledged the value of purchasing real estate as a wealth-building tool and an obvious financial strategy," says Phipps.
But a woman's path to homeownership is not without its challenges.
Single women and men spend about the same for a home, with a median purchase price around $100,000, says Drew. But for single women, that will take a larger chunk of their paycheck.
Forty-three percent of women spend more than 30 percent of their income on their mortgage payments -- a threshold Drew calls "cost-burdened."
Only 30 percent of single men and 25 percent of couples are spending that large a portion of their income on housing.
Doing the homework
The secret to a good buying experience is plenty of research.
Spend a little time online to get an idea of your own budget and what can you afford. Then start shopping neighborhoods.
At some point in the process, start talking with lenders and get prequalified for a mortgage, says Glink.
And don't be afraid to wear out a little shoe leather. "Walk around the neighborhood on your own," she says. While you're there, take notice of the agents who are active in the area.
If you can narrow your search to a couple of areas, "you're ahead of the game," she says. "Homing in on a neighborhood is a plus, and knowing what you can afford is a big plus."
Tuesday, May 23, 2006
Tune in to TV, Turn on Sales
“People just love having a chance to look inside somebody else’s house,” says Melissa Sykes, senior vice president of program production at HGTV, the national cable channel, summing up the
explosion of real estate television shows in recent years.
Indeed, it seems that every time you turn on the TV, another salesperson or designer is explaining the intricacies of real estate to a wide-eyed buyer or seller (see page 60 for our interview with Suzanne Whang, host of HGTV’s “House Hunters”).
“Real estate is the new stock market,” says Michael Morrison, senior producer at A&E, another national cable channel with a number of real estate shows in its lineup. “There’s an insatiable appetite for everything real estate–related.”
Still, many real estate professionals are wondering whether, and how, to jump on what is starting to seem a fairly crowded bandwagon. Is cable television a force practitioners will need to contend with in the future?
“As a blanket statement, it’s hard to say TV is a good thing or a bad thing,” says Greg Herder, CEO of Hobbs/Herder Advertising in Newport Beach, Calif. “It depends on the market and the practitioner and how he or she uses it. For many practitioners, television makes no difference. But in certain markets, it could be a huge advantage.” If you want to make a name for yourself on the small screen—whether through paid programming or a reality TV stint—your opportunities are limited only by your imagination. What follows are accounts of how four real estate professionals are using television to their advantage. Their approaches vary widely, but all have expanded their business
in ways that would have been impossible without television exposure.
Matt Phipps of Phipps Realty in Warwick, R.I., just wants is a minute of viewers’ time. Every week, Phipps and his father, Ron, tape a 60-second commentary that airs 14 times a day on Saturdays and Sundays as part of the local cable news broadcast. “It’s not a typical commercial where we’re trying to sell the product outright,” says Matt Phipps. “Our goal is to inform and educate Rhode Island’s general public about what’s going on in real estate.”
Make no mistake: Phipps pays for the spots—$500 per week to Cox Communications, the local cable provider. But the father-and-son commentaries are presented in a way that blurs the distinction between advertising and editorial. Toward the end of the newscast, an announcer says, “And now our ‘Real Estate Minute’ presented by Phipps Realty.”
“It’s very conversational,” says Phipps. “We come up with a topic and then I ask Ron a few rapid-fire questions about it.”
“Real Estate Minute” made its debut last September. Since then, the father and son have discussed
everything from the lack of affordable housing in Rhode Island to the much-analyzed national real estate “bubble.”
The Phippses use as a backdrop a large photo of one of the company’s listings. During the sign-off, Matt Phipps, using his best public television voice, says “If you have questions about homes like the one behind me, log onto PhippsRealty.com.” At the end, the photo is replaced by a list of upcoming open houses. The goal, of course, is to position Phipps Realty and its associates as real estate experts concerned with the well-being of the entire community.
This approach gets high marks from advertising experts. “The worst thing you can do on TV is come off as an aggressive closer,” says Hobbs/Herder Advertising’s Herder. “People don’t necessarily
call the most educated or qualified salesperson. They call the one with whom they feel the most comfortable. If, in one minute, you come across as friendly and as someone viewers can relate to, and then there’s some brand identity at the end, it can be very effective.”
“It definitely raises our profile,” says Phipps. “We’re a pretty small company—we never have more than 35 listings in our office—but I’m recognized all the time as the guy who does the ‘Real Estate Minute.’ Last week, I had a call from a guy who wanted to list with us because he liked the way we handled ourselves on TV.”
Phipps says the “Minute” is by far the most cost-effective component of the company’s advertising
efforts. “If we had gone the route of making a regular commercial, it would have been very
expensive because we would have had to pay to air it on different channels in different markets,”
he says. “But this is a one-time fee, and it reaches virtually everyone in the state.”
Image plays on small screen Five years ago, Carl Cole of Bakersfield, Calif., was learning the ropes in a subdivision sales office. His partner, David Crisp, was splitting his time between real estate and a part-time job as a waiter.
Then they formed Crisp & Cole Real Estate, a firm that has had the kind of explosive growth one associates more with oil strikes or winning the lottery than with building a real estate business.
Last year, the company had annual sales of $250 million.
The Bakersfield market’s 30-plus percent appreciation rate in each of the past two years had something to do with their dramatic rise. But part of their success—maybe the largest part—is due to the pair’s use of cable television advertising to establish a glamorous, upscale image. Two years ago, Crisp and Cole created an in-house, three-person production company that turns out a steady stream of 30-second spots and half-hour infomercials that run just about every day of the week on local television. “The production company cost about $100,000 to set up,” says Cole, adding each commercial and infomercial costs about $15,000 to produce. “We financed it initially by using equity lines on our houses.”
The 30-second spots are mainly image-driven while the infomercials focus on listings. Almost from the beginning, image has been paramount. A recent 30-second spot hyped the fact the company uses a private jet to fly certain clients in and out of the market. “We typically dress in black-and-white business attire and all of our salespeople drive BMWs or Mercedes,” says Cole. “It knocks people’s socks off.”
The infomercials are hosted by Julie Farmer, the firm’s chief operations officer, and provide brief views of up to 70 listings. This kind of billboard show is, of course, ubiquitous in the industry. What distinguishes Crisp & Cole’s version are the production values.
“We light all the candles in the house, put a fire in the fireplace, make sure the ceiling fan is turning, and use extra lights if we have to,” says Cole. The camerawork is also notable. “We have a boom that allows for high and low angles and also lets the camera swoop around. It really makes the listing pop.”
Overall, the company spends about $1 million a year in advertising with most of it going to television. “People want to see that you’re successful, and you can convey that much better on TV than you can in print,” says Cole.
Show them the inventory
For some, a commercial or cable show just isn’t enough. Such is the case for Shorewest, REALTORS®, in Milwaukee. “Our goal is to be a local version of HGTV,” says Joe Horning, president
of Shorewest, describing Shorewest TV, the 24-hour cable channel the company launched last October.
Believed to be the first local all-real estate channel in the country, Shorewest TV showcases the company’s listings around the clock and also provides information on subjects such as mortgages and home builders.
The rationale for the channel is simple, says Horning. “People want more immediacy when it comes to listings. The newspaper comes out on Sunday, which means whatever ad you run has to be submitted by Wednesday morning, which means the newest properties and price changes aren’t there. With TV and the Internet, you can make these changes as they happen.” The channel’s programming schedule is organized according to community and price and changes daily. “If you tune in every evening at seven, you won’t see the same show twice in the same week,” says Horning.
The “shows,” in the main, are brief video tours of listings, hosted by a local Milwaukee television
personality. “We have enough listings that they don’t repeat within a day,” says Horning, whose company was No. 26 in REALTOR®Magazine’s 2005 “Top 100 Companies” ranking by transaction sides (July 2005, page 33). “We tell sellers that their house will be featured 15 to 30 times a month.”
Shorewest TV is made possible by an innovative software program developed by Milwaukee-based Rainmakers Marketing. The software recycles images and information from Shorewest’s Web site into television shows.
“The content of the listings is already done,” says Horning. “The sales associates turn in photos and copy for the Web site, and then we put the information on TV. The only things we’re adding are community information and a few special segments.” Rainmakers handles the administration of the channel and charges Shorewest’s salespeople $20 a month for broadcasting their listings. It also makes money by selling commercial time on the channel to real estate–related companies such as movers.
“What we’ve done,” says Roger Scommegna, president of Rainmakers, “is develop an inexpensive
format to present homes and give salespeople the opportunity to connect with consumers. We make our money with commercials. They make money because of the increased traffic.”
Although Shorewest TV viewership isn’t measured—doing so would involve paying a fee to a company such as A.C. Nielsen Co.—Horning says he’s pleased with the results. “It’s new and different,” he says. “We gauge success by the number of calls coming in where people say they saw a property on TV or they want to list with us because we have a cable channel.”
Rehab reality on display
Two years ago, Richard C. Davis was investigating the possibility of franchising his company,
Trademark Properties, a full-service Charleston, S.C., brokerage with an investment division specializing in renovating blighted homes.
“I didn’t want to do it one office at a time,” Davis says. “I needed a way to reach a lot of potential
franchisees very quickly.”
That, he says, was the inspiration for “Flip This House,” an hour-long reality show on the A&E network that made its debut this past summer and has emerged as a break-out hit in the increasingly
crowded line-up of real estate shows.
Every week, upwards of 2 million viewers tune in to watch Davis and his harried staff at Trademark buy, renovate, and resell yet another distressed property. “I haven’t changed anything about the way I do business,” says Davis. “I give myself two weeks to get in, get out, and go on to the next deal. The only difference now is the camera is running.”
The key to the show’s appeal, he adds, is the unvarnished view it provides of life in the real estate world. “We don’t hold anything back,” he says. “We show what it takes to be successful in this business”—namely market expertise, speed, and an aggressive approach to deal-making. But viewers also see Davis bantering (and sometimes bickering) with his staff, “drinking beer, and driving without a seatbelt,” he laughs. The tone, overall, is closer to “Home Improvement,” the 1980s Tim Allen sitcom, than to a typical real estate show.
“It’s a hybrid,” says Michael Morrison, senior producer at A&E. “People are intrigued by the
personalities at Trademark, and Richard is the pied piper of those personalities. Each week the
house being renovated serves as the catalyst that creates the comedy and drama among the
principal characters. It’s an entertainment show with lifestyle takeaway value as opposed to a
how-to lifestyle show. It’s new and different.”
Davis, who owns the copyright to the show, wrote the treatment for the show’s pilot and came
up with $85,000 of his own money to film it. “I was cocky enough to think I was going to get
this on TV,” he says. “I knew I had something no one else had.” He showed the pilot to three different national channels, had offers from two of them, and ultimately went with A&E because he could retain creative control.
Davis says his local business remains pretty much what it was before the advent of the show.
“I didn’t do this to make my phones ring. We’ve got all the business we can handle,” he says.
More intriguing, he says, are the 60,000-plus e-mail messages he has received since the show
went on the air from people interested in how he does business. “Five years from now, you’re
going to see Trademark Properties all over the country,” Davis predicts. But reaching that goal won’t mean the end of “Flip This House,” he says. For Davis and other camera-loving practitioners, the fun of television is just too good to give up.
Tuesday, January 31, 2006
Extreme home selling
As the market slows, home sellers are throwing in sweeteners to move properties...dual-mode toilets, anyone?
NEW YORK (CNNMoney.com) - Everybody wants something for nothing, and as housing markets slows, homebuyers are starting to get just that. Sellers, reluctant to drop home prices, have been finding creative ways to move product.
The trend is especially evident among developers and homebuilders who have to act much more decisively than individual homeowners who have the option of sitting tight.
Some recent freebies include trips to Las Vegas, home-entertainment and security packages, furniture store gift certificates, golf club passes for a year -- even swimming pools, according to Greg Paquin of the Gregory Group, a market-research company.
The Gregory Group reports that in Sacramento, Calif., the value of incentives by homebuilders in the fourth quarter averaged $8,965, double the prior quarter. Incentives include price discounts, upgrades, and promotions.
"Builders don't want to hang on to standing houses -- they have to pay their bills, financing, and taxes," said Paquin.
Steve Melman, a spokesman for the National Association of Home Builders (NAHB) reports that sales incentives have become the rule among its membership -- 56 percent feature non-price incentives. Some 16 percent of NAHB members are now offering to absorb financing points, up from 13 percent six months ago, and 33 percent are paying at least some closing costs, up from 27 percent.
But it's the non-price incentives that attract the public's fancy and 40 percent of the builder's NAHB surveyed are offering optional items at no extra charge to help close deals. A year ago, only 28 percent were doing it.
Bamboo? A standard option?
The offers can be anything from hardwood floors to upgraded lighting, but the most popular incentives seem to revolve around the kitchen, according to Melman. Granite countertops, commercial quality appliances, and wine storage all appeal to buyers. A relatively new option, bamboo floors, has recently emerged as a deal maker.
The giveaway trend is not confined to new-home builders. Ron Phipps, a Providence, Rhode Island broker appeared on the CNN show, Open House, with Gerri Willis in November. He was giving away a Lexus (for two years) with the sale of an existing home. "My goal is to differentiate the property and draw attention to it," said Phipps.
He tries to tie the promotion to some aspect of the property. If the yard is beautiful but requires a lot of care, he'll offer free landscaping for a year or two. If a bathroom is dated, he'll throw in a renovation allowance.
One of his favorite freebies wasn't even aimed at buyers; it went to those merely shopping. Anyone who came to look at one house received 30 days of free groceries. He also targets other real-estate agents. One house came with a trip to Europe for the agent who provided the ultimate buyer. Phipps says he heard of a Florida real-estate broker who was giving away jewelry.
One builder, Georgia-based Forrest Homes, is giving away a two-year lease on a Volkswagen Beetle with a home purchase. That's right, these houses come with their own Bugs.
Pulte Homes, a Michigan-based homebuilder, is paying the heating bills for six months to anyone who buys a home in one of its Maryland developments. Pulte also will throw in a free-gas fireplace, hardwood floors, upgraded cabinets, and a washer/dryer -- and a 42" plasma TV.
Apparently, though, the deal may sound better than it actually is -- a Pulte spokesman, Jim Zeumer, was quoted in the Wall Street Journal saying that all but the plasma TV were already standard in the houses.
The incentive ideas keep, shall we say, flowing. The NAHB's Melman recently attended a show where many homebuilders showcased their free upgrades. The incentive item that caused the biggest, well, splash, was an upgraded Kohler bathroom that included a toilet that had number-one and number-two buttons.
"It saves on water bills," he says.
R.I. housing market becoming 'more rational'
Sales are cooling with some real-estate agents saying that sellers are getting a dose of realism.
01:47 PM EST on Tuesday, January 24, 2006
Rhode Island's housing market ended last year with overall prices up, sales down and selling time longer than it's been in five years.
A report released today by the Rhode Island Association of Realtors shows that the statewide median price of a single-family house in the fourth quarter rose 5.6 percent, to $285,000. That's compared with a 13-percent increase in the median price during the fourth quarter of 2004. (House prices are typically compared with the same quarter of the prior year. For the full year of 2005, the median price was $282,900.)
During October, November and December, house prices fell in nine communities: Tiverton, Barrington, Bristol, Johnston, Lincoln, Smithfield, Westerly, Narragansett and East Greenwich.
The average number of days on the market for a single-family house during the fourth quarter rose to 67, up from 61 days during the same period in 2004.
The market's downshift has forced real-estate agents to adopt a whole new lexicon for describing what is taking place. The housing market is "tempering" or "moderating" or "becoming more balanced."
"It's not quite as frenetic," said Bob Del Deo, a real-state agent with Coleman Realtors, on the East Side of Providence. "It's a more rational market."
Michele Caprio, president of the Rhode Island Association of Realtors, said, "Generally, there's been a sort of tempering effect. . . . I'd say the market's moderating."
The market shift has meant that sellers with "elevated expectations" are getting a dose of "realism," the agents say, but, some say, customers aren't getting it soon enough.
"I lost a listing this morning where two other [agents'] prices were higher," said Peter Ciccone,a real-estate agent for RE/Max Professionals, in East Greenwich. "I just said . . . it's probably gonna sit" on the market. "And I don't want to get stuck."
In East Greenwich, the median price during the fourth quarter fell 15 percent, to $480,000, compared with $565,000 during the same period in 2004.
Similarly, in Bristol, the median house price during the quarter fell 10.4 percent, to $326,950, compared with $364,900 during the fourth quarter of 2004.
The market's shift has created a "communication barrier" between sellers and buyers, said Ron Phipps, a real-estate broker for Phipps Realty, in Warwick.
"I have a significant number of sellers in East Greenwich who got offers in the last quarter and refused them," he said. "The buyers were reading national press and saying, 'I can offer 10-percent less than the list.' And the sellers were saying. 'I'm not selling!' "
Ciccone said sellers are "used to the last five years. . . . If you throw realism at them, they don't necessarily want it."
Expectations aside, prices overall are still going up, said Caprio. And the fact remains that last year ended with the second-highest number of single-family house sales ever recorded.
House prices rose by 10 percent or more last year in 14 cities and towns in the state, the Realtors' association said in its news release.
And despite lousy weather, Caprio's and others' talk about January sales is warming. "Right after Christmas, we had a meeting at the Rhode Island Association of Realtors and people were coming in saying, 'Wow! Our phones haven't stopped ringing! . . . So that's a good sign."
"There's nothing wrong with a flat market," added Ciccone, "it just means we can't have these inflated prices."
larditi@projo.com / (401) 277-7335
Tuesday, January 24, 2006
Tender loving care beats costly home repairs
By Noelle Knox, USA TODAY
For want of a nail, the saying goes, a kingdom was lost.
OK, so your home isn't exactly a castle. But it's probably the most valuable asset you'll own. So when was the last time you changed the filter in your air conditioner or put a battery in your fire alarm? Tested the pressure valve on your water heater? Or are you thinking, "Uh ... there's a valve?"
"I can't tell you how many people who live in an expensive house, that they spent a significant amount of money on, assume it doesn't require ongoing maintenance," says Ron Phipps of Phipps Realty in Warwick, R.I. "They pay the electric bill and get the grass cut, but they don't do maintenance."
The average homeowner should budget 1% to 3% of the home's value for annual maintenance, depending on the age and size of the home and area climate. Some years it might cost more, other years less.
But many of us are like Sarah Van Elderen, 23, who closed last month on her first home, a condo in Grand Rapids, Mich. "I haven't done a lot of budgeting for it, and I know I should," she admits.
All it takes is an unchecked leak under the upstairs bathroom sink, and instead of replacing a $30 valve, you're spending your vacation fund on home repairs.
"It's not just the wood under the sink; the water can quickly spread into the downstairs ceiling," explains Gil Engler of Master Home Inspectors in Bethesda, Md. "And that's a $500 repair."
Even condo buyers should beware. Don't look just at the monthly association fee. Ask about the cash reserves of the condo association and any maintenance that must be done. Phipps learned the hard way, when he bought a condo in late 2004.
"Within four months, there was a $4,000 special assessment for re-shingling the roof," he says. "This year, there was a $2,200 assessment because they want to paint the building. The condo fees are $2,000 a year. Yet within two years, I've spent another $6,200 on special assessments."
So if you've already broken your New Year's weight-loss resolution, consider burning a few calories doing your own home maintenance. Remember: Every one to three months, you should change the air filters in your heater/air conditioner and check the smoke detector. Here's a month-by-month guide, based in part on National Association of Realtors recommendations:
Month-by-month to-do list
January
•Dig out warranties and product manuals from under that stack of restaurant-delivery menus and check on recommended maintenance for furnaces, equipment, appliances and tools. Mark your calendar to track scheduled upkeep and service.
•Make a room-by-room inventory of everything in your house. This will be important, in case of fire, flood or any of the 10 Plagues covered by your insurance policy, in filing an insurance claim. It's also a good excuse to use the new camera you got for Christmas.
•Don't close vents to crawl spaces. If you live where pipes can freeze and the floors become very cold, you should either move to San Diego or insulate pipes under the floor. Double-check insulation around exterior pipes that are exposed to freezing weather to be sure water can't seep under the insulation.
February
•Remove drain traps under sinks and clean them thoroughly. Inspect grout and caulk around tubs, sinks and showers. Chip out cracked grout and replace. Stained, discolored and mildewed caulk should be cleaned with household cleaner.
•Musty closet odors can be reduced or eliminated by removing the closet's contents and washing walls with a diluted solution of chlorine bleach.
•To keep valves from sticking and to check for leaks, turn all water valves off and on. That includes outdoor faucets and valves to toilets, bathroom and kitchen sinks, laundry, bar, etc.
March
•After heavy rain, inspect your basement walls for signs of moisture or, worse, swimming sharks. If you detect wetness, first try running a portable dehumidifier. Check the downspouts and the grading around the foundation.
•Check to make sure your sump pump works properly by pouring water into the pump silo to raise the float and activate the motor.
•Test the pressure and temperature relief valve on your water heater by opening it and allowing some water to flow out. Bad valves can cause explosions. Remember that office building in The Matrix Reloaded?
April
•Replace batteries in smoke detectors. Battery: $2. Your life: priceless.
•Inspect screens for tears and bent frames. Check outdoor structures for deterioration — especially signs of rot. Also inspect the crawl space or basement after rain for water accumulation or excessive moisture. Look for signs of water damage on the sub floor and joists beneath bathrooms, the kitchen and laundry.
•Check fire extinguishers to make sure they're not outdated, have lost pressure or are damaged.
•Check all weatherstripping around doors and windows for wear, damage or loss of flexibility.
May
•Clean gutters. Make sure downspouts or splash backs direct water at least 6 feet from the foundation.
•Have central air-conditioning unit checked. Replace the filter in the forced-air system. Clean debris from condenser or heat pump outside.
•Remove mineral deposits from faucet aerators and shower heads by soaking parts in white vinegar and scrubbing with an old toothbrush.
•Have swimming pool cleaned. Inspect and service pool liners and filters.
June
•Clean and seal decks, using ultraviolet-resistant sealer.
•Hire a certified chimney sweep to inspect and clean chimneys and watch Mary Poppins with the kids.
•Clean lint from the entire clothes dryer vent system, from the dryer to the exterior vent cap.
July
•Check all exterior walls for peeling or cracked paint. Carefully inspect brick or masonry siding for cracks or missing mortar.
•Inspect roofing material for cracks and loose or missing shingles and repair as necessary.
•Prune trees and shrubs so branches do not come in contact with exterior siding.
•Clean and repair cracks in concrete driveways using epoxy patching material. Repair asphalt driveways using asphalt patching material. Seal asphalt driveways every other year.
•Inspect foundation walls for signs of termites — tunnels or dirt bridges.
August
•Use a vacuum with a narrow nozzle to clean condenser coils on the back or underneath your refrigerator — for the first time in your life.
•Check faucets for leaks and replace washers or repair the faucet as necessary.
•Clean underneath range hood. Remove and clean or replace range hood filters. Yes, they can be changed.
September
•Paint interior rooms while it's still warm enough to leave windows open.
•Check heating system, including filters, pilot lights and burners, and have the system serviced by a qualified professional. Read: This is dangerous.
•Survey the outside of your house to make sure soil around the foundation is properly graded. Soil should slope 3 to 6 inches for a distance of 3 feet out from the foundation walls.
October
•Detach hoses in case of freezing temperatures. Ask yourself why you didn't move to San Diego.
•Inspect weatherstripping around doors and windows and repair or replace if necessary.
•Clean gutters after leaves have fallen. Make sure downspouts are in good condition.
•Change batteries in smoke and carbon monoxide detectors. Check gauges on home fire extinguishers to ensure a full charge.
November
•Inspect automatic garage-door opener and lubricate according to the manufacturer's directions.
•Check for leaks around washing machine. Prime suspects for leaks are the water supply hose washers.
December
•Check the operation of all circuit interrupters in your ground outlets by pushing the "test" button. The "reset" button should pop out, indicating the receptacle is operating properly. Press in the reset button.
•Check inside bathroom vanities and kitchen-sink cabinets for moisture and other signs of leaks. Carefully inspect pipes for condensation or slow drips.
Now you can gloat.
Your home's value is rising faster than your neighbor's.
Simple maintenance beats expensive repairs
Relatively easy routine maintenance now will save you lots of money in repairs later on. Some examples:
•Furnace/air conditioner
Normal life expectancy: 20-25 years for gas furnace, air conditioners and heat pumps about 15 years.
Maintenance: Change filters every 1 to 3 months/annual service contract.
If you do it: $1 to $15 per filter/service contract $150 to $250 annually.
If you don't: $3,000 for a new, 100,000 Btu/per hour furnace; $3,000 and up for new 3-ton air-conditioning unit.
•Water heater
Normal life expectancy: 15-18 years.
Maintenance: Test temperature-pressure relief valve once a year. Sediment at the bottom can be drained twice a year (particularly on well water), by opening drain valve and letting water flow until water runs clear.
If you do it: Free.
If you don't: $600-$800 and up (50-gallon electric).
•Bathroom caulking
Life expectancy: Varies with use.
Maintenance: check to make sure no cracks in grout or corner joints.
If you do it: $3 per tube for caulking/professional re-grouting $125 to $200.
If you don't: Retiling shower $2,500 and up.
•Outside wood deck (200-square-foot)
Normal life expectancy: wooden, pressure treated deck without protection 15 years.
Maintenance: Protect with ultra-violet resistant sealer.
If you do it: $25 a gallon for Cabot deck sealer.
If you don't: Replacing it will cost about $3,000.
•Roof shingles
Missing or damaged, have exposed rake board of the roof.
Normal life expectancy: Asphalt shingle roof 15 to 25 years.
If you repair it: $75-$100.
If you don't: Replace rake board, roof decking, dry wall, structural repairs. Replacement could cost thousands.
•Roof gutters
Clean roof gutters in spring and fall, make sure down spouts are aimed more than 2-feet away from the home's foundation. Grade the dirt away from home at a one inch per foot slope.
Normal life expectancy: At least 30 years.
If you do it: Free/for professional $80 and up.
If you don't: Potential foundation/structural damage, wet or moldy basement. Repairs could cost thousands.
Source: Master Home Inspectors Inc.
For want of a nail, the saying goes, a kingdom was lost.
OK, so your home isn't exactly a castle. But it's probably the most valuable asset you'll own. So when was the last time you changed the filter in your air conditioner or put a battery in your fire alarm? Tested the pressure valve on your water heater? Or are you thinking, "Uh ... there's a valve?"
"I can't tell you how many people who live in an expensive house, that they spent a significant amount of money on, assume it doesn't require ongoing maintenance," says Ron Phipps of Phipps Realty in Warwick, R.I. "They pay the electric bill and get the grass cut, but they don't do maintenance."The average homeowner should budget 1% to 3% of the home's value for annual maintenance, depending on the age and size of the home and area climate. Some years it might cost more, other years less.
But many of us are like Sarah Van Elderen, 23, who closed last month on her first home, a condo in Grand Rapids, Mich. "I haven't done a lot of budgeting for it, and I know I should," she admits.
All it takes is an unchecked leak under the upstairs bathroom sink, and instead of replacing a $30 valve, you're spending your vacation fund on home repairs.
"It's not just the wood under the sink; the water can quickly spread into the downstairs ceiling," explains Gil Engler of Master Home Inspectors in Bethesda, Md. "And that's a $500 repair."
Even condo buyers should beware. Don't look just at the monthly association fee. Ask about the cash reserves of the condo association and any maintenance that must be done. Phipps learned the hard way, when he bought a condo in late 2004.
"Within four months, there was a $4,000 special assessment for re-shingling the roof," he says. "This year, there was a $2,200 assessment because they want to paint the building. The condo fees are $2,000 a year. Yet within two years, I've spent another $6,200 on special assessments."
So if you've already broken your New Year's weight-loss resolution, consider burning a few calories doing your own home maintenance. Remember: Every one to three months, you should change the air filters in your heater/air conditioner and check the smoke detector. Here's a month-by-month guide, based in part on National Association of Realtors recommendations:
Month-by-month to-do list
January
•Dig out warranties and product manuals from under that stack of restaurant-delivery menus and check on recommended maintenance for furnaces, equipment, appliances and tools. Mark your calendar to track scheduled upkeep and service.
•Make a room-by-room inventory of everything in your house. This will be important, in case of fire, flood or any of the 10 Plagues covered by your insurance policy, in filing an insurance claim. It's also a good excuse to use the new camera you got for Christmas.
•Don't close vents to crawl spaces. If you live where pipes can freeze and the floors become very cold, you should either move to San Diego or insulate pipes under the floor. Double-check insulation around exterior pipes that are exposed to freezing weather to be sure water can't seep under the insulation.
February
•Remove drain traps under sinks and clean them thoroughly. Inspect grout and caulk around tubs, sinks and showers. Chip out cracked grout and replace. Stained, discolored and mildewed caulk should be cleaned with household cleaner.
•Musty closet odors can be reduced or eliminated by removing the closet's contents and washing walls with a diluted solution of chlorine bleach.
•To keep valves from sticking and to check for leaks, turn all water valves off and on. That includes outdoor faucets and valves to toilets, bathroom and kitchen sinks, laundry, bar, etc.
March
•After heavy rain, inspect your basement walls for signs of moisture or, worse, swimming sharks. If you detect wetness, first try running a portable dehumidifier. Check the downspouts and the grading around the foundation.
•Check to make sure your sump pump works properly by pouring water into the pump silo to raise the float and activate the motor.
•Test the pressure and temperature relief valve on your water heater by opening it and allowing some water to flow out. Bad valves can cause explosions. Remember that office building in The Matrix Reloaded?
April
•Replace batteries in smoke detectors. Battery: $2. Your life: priceless.
•Inspect screens for tears and bent frames. Check outdoor structures for deterioration — especially signs of rot. Also inspect the crawl space or basement after rain for water accumulation or excessive moisture. Look for signs of water damage on the sub floor and joists beneath bathrooms, the kitchen and laundry.
•Check fire extinguishers to make sure they're not outdated, have lost pressure or are damaged.
•Check all weatherstripping around doors and windows for wear, damage or loss of flexibility.
May
•Clean gutters. Make sure downspouts or splash backs direct water at least 6 feet from the foundation.
•Have central air-conditioning unit checked. Replace the filter in the forced-air system. Clean debris from condenser or heat pump outside.
•Remove mineral deposits from faucet aerators and shower heads by soaking parts in white vinegar and scrubbing with an old toothbrush.
•Have swimming pool cleaned. Inspect and service pool liners and filters.
June
•Clean and seal decks, using ultraviolet-resistant sealer.
•Hire a certified chimney sweep to inspect and clean chimneys and watch Mary Poppins with the kids.
•Clean lint from the entire clothes dryer vent system, from the dryer to the exterior vent cap.
July
•Check all exterior walls for peeling or cracked paint. Carefully inspect brick or masonry siding for cracks or missing mortar.
•Inspect roofing material for cracks and loose or missing shingles and repair as necessary.
•Prune trees and shrubs so branches do not come in contact with exterior siding.
•Clean and repair cracks in concrete driveways using epoxy patching material. Repair asphalt driveways using asphalt patching material. Seal asphalt driveways every other year.
•Inspect foundation walls for signs of termites — tunnels or dirt bridges.
August
•Use a vacuum with a narrow nozzle to clean condenser coils on the back or underneath your refrigerator — for the first time in your life.
•Check faucets for leaks and replace washers or repair the faucet as necessary.
•Clean underneath range hood. Remove and clean or replace range hood filters. Yes, they can be changed.
September
•Paint interior rooms while it's still warm enough to leave windows open.
•Check heating system, including filters, pilot lights and burners, and have the system serviced by a qualified professional. Read: This is dangerous.
•Survey the outside of your house to make sure soil around the foundation is properly graded. Soil should slope 3 to 6 inches for a distance of 3 feet out from the foundation walls.
October
•Detach hoses in case of freezing temperatures. Ask yourself why you didn't move to San Diego.
•Inspect weatherstripping around doors and windows and repair or replace if necessary.
•Clean gutters after leaves have fallen. Make sure downspouts are in good condition.
•Change batteries in smoke and carbon monoxide detectors. Check gauges on home fire extinguishers to ensure a full charge.
November
•Inspect automatic garage-door opener and lubricate according to the manufacturer's directions.
•Check for leaks around washing machine. Prime suspects for leaks are the water supply hose washers.
December
•Check the operation of all circuit interrupters in your ground outlets by pushing the "test" button. The "reset" button should pop out, indicating the receptacle is operating properly. Press in the reset button.
•Check inside bathroom vanities and kitchen-sink cabinets for moisture and other signs of leaks. Carefully inspect pipes for condensation or slow drips.
Now you can gloat.
Your home's value is rising faster than your neighbor's.
Simple maintenance beats expensive repairs
Relatively easy routine maintenance now will save you lots of money in repairs later on. Some examples:
•Furnace/air conditioner
Normal life expectancy: 20-25 years for gas furnace, air conditioners and heat pumps about 15 years.
Maintenance: Change filters every 1 to 3 months/annual service contract.
If you do it: $1 to $15 per filter/service contract $150 to $250 annually.
If you don't: $3,000 for a new, 100,000 Btu/per hour furnace; $3,000 and up for new 3-ton air-conditioning unit.
•Water heater
Normal life expectancy: 15-18 years.
Maintenance: Test temperature-pressure relief valve once a year. Sediment at the bottom can be drained twice a year (particularly on well water), by opening drain valve and letting water flow until water runs clear.
If you do it: Free.
If you don't: $600-$800 and up (50-gallon electric).
•Bathroom caulking
Life expectancy: Varies with use.
Maintenance: check to make sure no cracks in grout or corner joints.
If you do it: $3 per tube for caulking/professional re-grouting $125 to $200.
If you don't: Retiling shower $2,500 and up.
•Outside wood deck (200-square-foot)
Normal life expectancy: wooden, pressure treated deck without protection 15 years.
Maintenance: Protect with ultra-violet resistant sealer.
If you do it: $25 a gallon for Cabot deck sealer.
If you don't: Replacing it will cost about $3,000.
•Roof shingles
Missing or damaged, have exposed rake board of the roof.
Normal life expectancy: Asphalt shingle roof 15 to 25 years.
If you repair it: $75-$100.
If you don't: Replace rake board, roof decking, dry wall, structural repairs. Replacement could cost thousands.
•Roof gutters
Clean roof gutters in spring and fall, make sure down spouts are aimed more than 2-feet away from the home's foundation. Grade the dirt away from home at a one inch per foot slope.
Normal life expectancy: At least 30 years.
If you do it: Free/for professional $80 and up.
If you don't: Potential foundation/structural damage, wet or moldy basement. Repairs could cost thousands.
Source: Master Home Inspectors Inc.
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