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What Goes, What Stays

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | June 13th, 2014

It's not unusual that a favorite light fixture does not remain in the house when it is sold. And every once in a while, a house will be listed with the special notation that certain outside plantings don't transfer.

But an entire kitchen?

Yes, according to a listing that caught Cindy Jones' eye recently. It was probably an error. Surely the listing agent meant that the seller would take certain kitchen appliances when they moved out, not the entire kitchen.

Maybe the sellers were from Europe, where it's practically unheard of to move into a place with a fully outfitted kitchen. That's why people from England, France, Italy and Germany buying a house in this country are pleasantly surprised when the kitchen is included.

In Germany, by law, sellers have to provide a stove and a sink, but nothing else. In France, all you need to leave is the sink. And in Italy, everything goes, nothing stays.

But that is there. This is here, which is why Jones, an independent real estate broker in Woodbridge, Virginia, found it so unusual. Especially since it is probably impossible to appraise a house without a kitchen. Or persuade a lender to give you a mortgage.

"How do you explain to the underwriter that the kitchen doesn't come with the house and expect to get a loan that includes the value of a kitchen?" she wrote in a recent post on ActiveRain.com, the wildly popular social network where real estate professionals hash over numerous topics.

As you might expect, Jones' comments sparked a lively discussion among her fellow agents.

Lenn Harley, another broker who serves the Washington area at Homefinders.com, reported that she had a sale once in which the seller took down a crystal chandelier before closing. Fortunately, her buyers noticed the switch during their pre-closing walk-through and asked for -- and received -- a $2,500 credit for the missing fixture.

Tom White of the TW Realty Group in Franklin, Tennessee, had a similar experience recently, in which there was "quite a big deal over a sentimental light fixture." The seller told the buyer that he would replace it with a new fixture. No problem -- "until my buyer saw it was a $79 fixture from Home Depot replacing the $600 fixture that had been there," Alexander said.

Many of the ActiveRainers commented that they have been involved in deals in which sellers wanted to take certain plants with them when they moved out.

Joan Whitebook of Better Homes and Gardens' Masiello Group in Nashua, New Hampshire, had one in which the sellers wanted to keep a Japanese maple -- but it could only be removed during a certain time of the year. And Inna Ivchenko of the Mannis Real Estate Group in Calabasas, California, is currently selling a place for someone who intends to dig up some plants, trees and a backyard brick walkway because "it has some sentimental memories for her."

Chris Griffith of Downing-Frye Realty in Bonita Springs, Florida, has a listing with a "raggedy old" grapefruit tree that will be removed because it was planted by the seller's grandchildren. And Michael O'Connor of Diamond Ridge Realty in Corona, California, listed a house for a seller who intended to take "some select rose bushes" from the front of the house that were a gift from her grandmother.

Beyond appliances, chandeliers and plants, however, sellers sometimes have more unusual requirements.

Sonsie Conroy of Century 21 Hometown Realty in San Luis Obispo, California, once bought a fixer-upper in which the contract allowed the seller to return to harvest his strawberry patch. Also, Conroy was required to guard the seller's piano until he could find someone to move it.

Mark Arlow of Keller Williams in Savannah, Georgia, had a client who wanted to take the front door. Turns out, it was the door to the family farm where they grew up. "When they sold the farm, they kept the front door as a reminder of the farm, and now the door goes with them wherever they go," Arlow said.

Mark Neighbor, a home inspector in Mcdonough, Georgia, had a seller who waltzed into his former house a month after closing to remove a showerhead. And Terry McCarley of Right Choice Realty in Cape Coral, Florida, knows of a fellow who doesn't cook, so he ripped out the kitchen after he moved in and turned it into a recreation room with a pool table. "The only appliance he put in was a refrigerator for his cold drinks," said McCarley. The lack of a kitchen will surely be a shock to potential buyers down the line, but at least they'll know what they're getting -- or not getting -- upfront.

Weirder yet is when a pet becomes part of the deal. "Some of the greatest counter-offers are when a loved -- or sometimes hated -- animal is used as a negotiating point," commented Brad Thomsen of Century 21 Real Estate Center in Lynnwood, Washington. Some sellers think that moving will be too disruptive for their furry or feathered friends, and try to dictate that the pet stays with the house. "Nothing gets things moving faster than to counter with a demand about a favorite pet," says Thomsen.

Or how about the deal that almost wasn't because of a flagpole? "When the buyers did the final walk-through and saw it was missing from out front, they asked, 'Where the hell is my flagpole?'" wrote Paul David Hiebing of Grampp Realty in Bettendorf, Iowa. "It may sound funny, but the deal almost fell apart at closing over a $500 flagpole."

And Kathy Cashmore of Real Estate by Hamwey in Billings, Montana, just closed on a house where the seller crawled all the way up to the peak of the roof and took the weathervane. "Of course, the buyer noticed immediately," she says.

Buyers don't miss much -- not when it's their money on the line. If you want to take something with you, it's always best to take it down, replace it and pack it away before you even put your place on the market. "It saves time and possibly a misunderstanding later on," says Jones, the Virginia broker who started this conversation.

Actually, it's just good business. The rule of thumb regarding fixtures is that if it is attached to the house or property, it stays. So curtains can go, for example, but curtain rods stay.

"When a seller starts keeping things that should stay with the house, I guarantee that the contract negotiations will be painful," says Eve Alexander of Windermere Real Estate in Orlando, Florida.

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The Greening of Mls Listings

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | June 6th, 2014

Homebuyers can search for properties with any number of characteristics: the number of bedrooms, for example, or the number of baths. You can even search for such items as fireplaces, garages and first-floor master suites.

But when it comes to features that make a home green -- Energy Star-rated appliances, geothermal heat pumps, solar heating, low-flow toilets or other energy-related attributes -- buyers in most places usually draw a blank. The only place to find them is in the descriptive portion of the listing, if they are mentioned at all. Consequently, buyers who have an interest in these green features have to read the narrative attached to each house that meets some of their other search criteria to determine if the place also has the green items they desire.

Hopefully, that's about to change. The National Association of Realtors (NAR) has just published a comprehensive guide for helping multiple list services (MLSs) promote the special features of a green home -- attributes that, research indicates, buyers covet.

In Chicago, the local MLS was one of the pioneers in helping sellers promote their green features and helping buyers find them. A preliminary read of recent data from that city found that the 10 percent of the sellers who chose to list their energy costs sold their homes faster and at higher prices than other sellers.

And NAR's most recent Profile of Buyers and Sellers found that the environmental factors most important to buyers are those that directly impact their pocketbooks. Heating and cooling costs, for example, were at least "somewhat important" to 85 percent of buyers; 36 percent said fuel costs were "very important."

At the same time, two-thirds rated both energy-efficient appliances and lighting as "very" or "somewhat" important. And nearly half said the same about landscaping for energy conservation.

"The demand for green is growing," says NAR President Steve Brown, a broker in Dayton, Ohio. "NAR's research consistently shows that today's consumers want homes and communities that are environmentally sustainable and resource-efficient."

Still, at last official count in 2010, only 125 of the country's MLSs -- just "a handful," according to the new guide -- offered specific fields for green or high-performance homes. Now, NAR claims, 79 percent of the 100 most populous metropolitan areas have access to an MLS with green fields.

But adoption has been slow, according to two members of NAR's MLS committee.

"I think consumers are ahead of us," says Lauren Hansen, MLS committee member and CEO of Information and Real Estate Services (IRES), the regional MLS for northern Colorado.

IRES was the first MLS in the land to add green search fields, but it had to be dragged into offering them by the state, which required every MLS within its borders to do so.

At first, says Hansen, "I rolled my eyes" at the requirement. "But as it turned out, it took us to school." Now, would-be buyers can search not just by energy features but also by third-party certifications that confirm claimed energy savings, or confirm the existence of features like upgraded insulation.

Prior to the housing market meltdown, Jeff Lasky -- another MLS committee member and director of communications and training at Midwest Real Estate Data, the MLS for the Chicago area -- agreed with Hansen that agents were too busy listing and selling houses to worry too much about energy efficiency. But when the market slowed to a crawl, they started to pay closer attention.

"When things slowed down and inventory shrunk," says Lasky, "agents were forced into thinking outside the box if they wanted to obtain a listing. There was also a concern about liability. ... Like anything new, it takes some time."

"It's like a roller coaster that's still going uphill," agrees Hansen about the green listing movement.

Now, the coaster is approaching the top of the hill. And with the help of the new NAR guide, energy features should soon become standard protocol for every MLS in the country. "Accurate marketing and assessment of green homes can only move forward with more standardized language among MLSs," says NAR president Brown.

The guide is designed to provide a blueprint for MLS staff, or their software venders, to populate the listing service with green data-entry fields. If the MLS does not yet include these fields, the guide offers a step-by-step method for adding them. And if the MLS already offers such fields, the book will show them how to standardize their entries.

The new standardized green fields will also allow for apples-to-apples comparisons when appraising green homes and determining such market trends as time on the market and sales-to-list price ratios.

Of course, the real estate community has a stake in the information beyond helping sellers find buyers and helping buyers find properties. In that regard, the guide will help protect agents, appraisers and other users from liability for posting incorrect or unverifiable information based on claims made by overzealous sellers -- a practice known as "greenwashing."

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Check Out That College Condo

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | May 30th, 2014

Purchasing an apartment for Junior or Buffy at the college of their choice is often a sound investment.

Giving the offspring a place to live eliminates the cost of boarding the little darlings. And if the condo is large enough -- say, two or three bedrooms -- the extra rooms can be rented to other students to help defray the cost of ownership.

Moreover, over the four-year span until your child graduates -- and often a year or two longer these days -- your investment is likely to appreciate. Although rising values are not guaranteed, housing near universities and colleges is usually a scarce commodity. If that's the case where your kid chooses to matriculate, the law of supply and demand is the rule, not the exception.

Still, while buying a condo as an investment near a college is not terribly different from buying one elsewhere, a more thorough diligence is often due.

Here's one caution that probably never entered your mind: Is the campus likely to remain where it is and not move to another location?

Most likely, it will stay put. But it's not unheard of for a campus to be closed in one place and reopen somewhere else, says Dan Barnabic, author of "The Condo Bible for Americans" (Neon-Publishing Corp., 2013).

It's fairly simple to find out if a move's afoot sometime in the near future. Simply call the registar's office, or perhaps the school's president, and ask.

But remember, the time frame that you hold the place might be somewhat longer than four years, and even longer if owning a rental apartment turns out to be a strong investment -- as opposed to one that just breaks even, or worse, loses money.

The Toronto-based Barnabic, a former real estate agent, broker, manager and condo developer, also wants you to beware of buying into a financially troubled or poorly managed property.

"If there has been mismanagement or the building is in financial distress," he says, "you could wind up paying dollars to replace the dollars someone else squandered."

To prevent that, he suggests standing outside the building and asking residents as they walk in and out about their experiences. Are there any maintenance deficiencies? Is management responsive? Are battles raging between neighbors -- or perhaps more importantly, between board members who are elected to run the complex and make sure the rules are followed?

Next, obtain an estoppel certificate, a document similar to a survey for a single-family property, that shows the unit, the maintenance fees, the amount of the building's debt and any assessments that are either contemplated or already set in stone.

It is most important to pay attention to the annual budget. If the budget or reserve is underfunded, you as the owner will be responsible for making up your share of the shortfall.

The author also advises potential condo-buyers to obtain a status certificate on the unit they are thinking about purchasing and submit it to a knowledgeable attorney for a thorough investigation. Here, it is worth paying $100 or more to the board to cover your lawyer's fees to determine if there are any outstanding liens against the unit, and whether you will have to pay them.

If there are liens for unpaid monthly or quarterly dues, maybe the board will be open to negotiations to wipe the slate clean. This would let them turn an otherwise non-paying apartment -- a drag on the books -- into one that pays its dues and assessments on time without a peep.

Similarly, Barnabic says you should gain approval from the board, if it is necessary, to check with the municipal zoning and planning department to be sure there are no pending work orders or infractions against the condo complex for violations of local building codes.

And while you're at it, ask the zoning or permit department if there are any new buildings planned in close proximity to yours, either in this complex or adjoining ones. If there are, your unit's value could be diminished not only by obstructed views, but also because newer units are always more desirable.

Consider investing in those new properties as they go up. Remember, even budgets for brand-new buildings are underfunded, especially if the developer wants his place to look as good on paper as possible. If that's the case, your share could double or even triple when the builder finally turns the property over to the condo board.

One more thing: People who buy larger units with the idea that their sons or daughters will act as their on-site property managers sometimes find out later that that kind of arrangement just doesn't work. That's especially true, says Barnabic, when the people who lease the extra bedrooms are friends.

Kids, even those of college age, are not usually very good property managers, he says. "To do a proper job, they must be diligent in collecting rent, maintaining the apartment and refereeing inevitable disputes between roommates. In other words, they must be responsible, and that's not always the case."

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