Blog :: 2010

New Years? Already? Call your Realtor.

With 2011 just a few minutes away, I'm working on my annual list of projects: visiting with the CPA, scheduling the annual doctor's appointment and getting my teeth cleaned. I have one more item to add to your list: Meet with your Realtor.

An annual meeting with your Realtor? Even if you aren't planning on selling or buying? The short answer is yes.

I'll come to your home and do a quick walk through. At that time, I'll point out what maintenance you may not have noticed, or items you've forgotten from the inspection report. We'll work together to create a list of projects that should be done to maintain your investment and the comfort of your home. I'll help you prioritize these projects to make the most of your money and time.

I'll also give you an overview of your neighborhood and specific market value - which way is real estate in general, trending? And your specific neighborhood? We can discuss the projections for the future, as well.

I'll update you on any law changes that pertain to real estate, such as updates in tax codes, disclosure and inspection trends, and new landlord/tenant laws, to give a few examples. This will help you be better prepared when you do eventually decide to sell.

Of course, if you are considering selling or buying, I will guide you step by step through that process.

Regardless of whether you are buying or selling, or planning on staying put another ten years, take the proactive step of keeping updated about your home now--it will pay off in the future. I'll make sure you have the information you need so you can meet and exceed your real estate goals.

Brick Foundations- the stuff of nightmares

I work with a lot of first time home buyers and it's hard for them to resist the appeal of a Victorian home.  I mean who wouldn't love this?

It's like living in the doll house you had as a kid!

Besides the ghost that you may inherit from a 115 year old house, there's likely a bigger fright lurking in the basement-a brick foundation. Victorians were most often built with below-grade brick foundations.

A brick foundation consists of a brick wall, built with mortar and clay fired bricks, against the dirt underneath a house. Bricks themselves are actually made out of dirt-clay to be exact-and fired at high temperatures to make them strong. Burying a brick wall and exposing it to the constant moisture contained in our Pacific NW soil slowly degrades the brick. Brick and mortar cannot withstand high levels of moisture for over a hundred years.

And so the foundation of nearly all Victorians need to be re-built. Jacking up the house and re-pouring an entire foundation is not the typical weekend warrior project.

So, buyers, watch out for this frightful sight!

Basic Math

There are many reasons for you to buy property. Two very big ones are passive income and leveraged money. Let me explain:

Have you noticed that how much you earn relates to every hour you spend working? Every minute of your work life measured out in pennies? How can you get a head if you have to spend more of your precious time to make more money? You can't. That's why you must invest-so you can enjoy your weekend, and your investments can continue working. Real estate is one of those important investments.

Here's my example...I'm going to give you $10,000. What are you going to do with it? (OK, in this scenario humor me. You're going to buy a house.)

In the alternative example, you're going to go buy $10,000 worth of stock. Something moderately safe. When you go buy that stock (for the sake of simplicity) you get $10,000 worth of stock. That's it. When the stock goes up, you make 3% on your $10,000 ($300). Not bad-better than investing in your friends' bar tab.

If you go buy a house (with a mortgage), you get $200,000 worth of stock for $10,000. Did you get that? You get $190,000 more "stock" when you buy real estate. So when housing prices go up (let's say 3%, to make it comparable to the stocks) you make 3% on $200,000. That's $6000 in gain!

All that, before you even got dressed for work.

Chimney Dust

You may have noticed I find chemical reactions (especially in the systems of a house) fascinating. And so, here's another... Have you gone into the basement and noticed the bottom of the furnace chimney has a circle around it of red dust? Ever wondered what that was? (I did-so you don't have to...) Most of the furnaces in Portland use the original brick chimneys to vent toxic gases outside. When a lot of these chimneys were built, they didn't have chimney caps. (Picture a little umbrella over your chimney. Or look at this image.)

One of the by products of burning fuel (especially coal, oil or wood) is creosote. Creosote contains sulfur. Creosote's the fancy name for the black ash that remains when you make a fire in your fireplace.

Without a chimney cap, rain water drops into the bottom of the chimney, and gets the creosote wet. Water and creosote interact chemically (in the bottom of your furnace's chimney) and produce sulfuric acid. Yes, sulfuric acid. That's the stuff that will eat a hole in just about anything-including brick. So, the sulfuric acid degrades the brick and creates that halo of dust around your chimney.

So the chimney sweep contractor's not just trying to sell you a chimney cap to make money-it'll lengthen the life of your furnace's chimney.

HOA reserves for Condos

Government by its very nature is too often reactionary.  Something bad happens and society wishes to avoid the same mistake in the future, so our representatives pass laws making it impossible for citizens or corporations to make the same mistakes.

This theory of government seems to play out in the recent changes to RESPA (What's RESPA, you ask? Real estate settlement procedures act.  It governs how real property is transferred, what the time lines are, and what the corresponding paperwork looks like.)  With this new "fix" to the old problem, I find myself wondering which current problems will become the focus of future legislation.  My bet?  Homeowner's reserves.

Homeowner's reserves are most often associated with condominium developments.  It's a pool of money each of the owner's contribute towards the future maintenance of the structure and grounds.  Dues and how they are managed are not subject to much legislation (currently).  This is where it could get interesting.

What if the chair wants to spend hundreds of thousands of dollars suing the developer, instead of fixing the exterior siding problem?  A small example of what can go awry when a board controls you and your neighbor's money.

What should you do?  Make sure your building has a periodic update to its reserve budget, and check out the financials.  Who does the books?  What have they allotted for and when are those repairs scheduled?  Ask questions before you purchase that condo-it will make a big difference to your future.

And then when you do purchase-become an active member of your board-so you can decide where your money is spent.

Prune your Roses, City of Roses!

Have you noticed?  The early blooming bulbs are poking through the ground.  It's not spring yet, but the plants are whispering about it.  It stopped raining for a few hours and the sun broke through the clouds,  so I decided to get outside and take stock of the garden.  First order of business: trim the roses.

Here's an easy how to: http://gardening.about.com/od/rose1/a/RosePruning.htm

Penninsula Park Rose Garden

If you own a house in Portland, chances are you have a rosebush somewhere on your property. (Portland originally encouraged it's residents to plant roses in commemoration of the 1905 Lewis and Clark Centennial celebration-it was dubbed the City of Roses in the 20's.)

Roses are not the most forgiving plant, but give them some TLC and they'll thrive (and your house will look like a proper Portland house).  February is the best time to trim your roses, right before bud break- so get to it.  Oh, and you should probably fertilize them too.

Short sales

We've been inundated with news about foreclosures and short sales.  I know-you're bored with it all.

Let me put it in perspective-picture this:  my client and I walk up to the door of a cute little bungalow, painted yellow, in a moderately good part of town.  I open the lockbox, put the key in the door and we casually walk into someone's broken life.

The carpets are dirty and there are boxes lying all around the living room.  The boxes are half full of various things, the pieces of someone's life-a self-help book, a "Little Mermaid" DVD.  The house smells terrible-like the rotting food we discover minutes later-left on the kitchen counter.

This is the surreal reality of a short sale-as if aliens abducted the residents of the house.  They disappeared on a Tuesday at 2:14 pm, leaving their half-eaten dinner.

Your house is just a big savings account

Last I checked, I live in America.  There are many grand generalizations about Americans, but one true stereotype of all of us, from sea to sea; we LOVE to spend.  In fact, our economy is built on consumer spending.

And spending, dear reader, is the exact opposite of saving.  Savings is what you want if you ever plan to retire.  What, you ask does this have to do with a house?  You purchasing a house could be the only significant savings account you have.  Yes, paying a mortgage kinda sucks-but working through your retirement probably sucks too.

For so many reasons, now is a great time to buy a house.  Consider it part of your retirement plan.

 

Galvanized water pipes

So you've all heard about the tax breaks for replacing your energy munching water heater with a more efficient tankless system, right?  (If you haven't, check this out: http://energytrust.org/residential/incentives/water-heating/WaterHeating1 )  I decided to follow my advice and replace my antiquated galvanized water pipes.

Galvanized water pipes were used from the turn of the century (I'm talking the turn of the 20th century here) up until well into the 50's and 60's.  Their expected useful life was 25-30 years.

My house was built in 1908-and I've been using the same galvanized water pipes that were installed in 1915. How do I know the date of installation?  When we were remodeling the house, we found old permits.  Permits (in Portland, in the 20's) were literally an index card, with someone's perfectly scrawled handwriting, describing what they had done to the house,  stapled to a wall in the basement.  Which is where we found it when we were remodeling.

So, my point?  In our planned obsolescence world, can you fathom a system that was supposed to last 30 years working for 65?  No seriously!  Sixty five years of showers, toilets, baths and tea.  (Granted, the water pressure wasn't great, but what did you expect?)

RIP "galvy" (as the plumbers call it).  You served way more than your fair share.

No, it's not mold...

So you were in your basement the other day, and in a mood to worry about things, and you looked up at the subfloor (the six-inch boards that most often run diagonally and support your floors above) and you thought, "What's that greyish powdery substance on those boards?"  Move on, dear worrier, it's not grey mold.

In most cities, at the beginning of the twentieth century, there were no cement mixers or Portland Cement.  There was a guy, building a house, using the things he had on site.  So most often, those master carpenters took the boards that now support your floors, and made a  frame with them.  They mixed up some of the rocks on site and made a homemade cement.  Then they poured it into that mold to create the concrete walls you're now checking out.  Once the concrete set, they took apart the frame and reused the wood as your sub-floor.

These builders were recycling before recycling was cool.

So that grey dust that you see?  It's the ghost of the concrete that now supports your basement walls.  Cool huh?  No need to worry about the grey mold. (At least for now!)