Extreme home selling

As the market slows, home sellers are throwing in sweeteners to move properties...dual-mode toilets, anyone?

By Les Christie, CNNMoney.com staff writer

January 26, 2006: 2:53 PM EST

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

BY LYNN ARDITI
Journal Staff Writer

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

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.