Boca Raton, FL Real Estate Agent: April 2010

SPRING CLEANING & HOME MAINTENANCE GUIDE 

As current homeowners you need to keep your property in good condition so that the small maintenance issues do not become major and expensive repair items.  Here are some annual maintenance items that you should make on your calendar to keep your home in good repair and maintain its value. 

Do not read this list and become overwhelmed, it is an extensive list meant to cover maintenance items you should do once a year....schedule these tasks for weekends and as the season dictates.  You will enjoy your home more knowing that these items have been addressed.

•·         Clean the vents behind your dryer.  This will help your machine dry clothes more quickly, last longer and you will lower your risk of a fire.  Hardware stores carry kits that can help and there are service providers that will do this for you as well.

•·         Check your furnace filter once a month while in use for excess dust; you will want to change it once or twice a year so the unit operates more efficiently.

•·         Replace or wash out your Air Conditioner filters every three months while in use.  This will help lower your electric bill and improve the air quality in your home.

•·         Make sure your sump pump is clean and operating property before spring rains arrive.  Left the lever on the sump to make the float go up and wait for the motor to click on.  If you have a battery backup, unplug the unit and test the pump again.

•·         Now is the time to remove your storm windows and store them properly.

•·         Vacuum the refrigerator condenser coils.  Remember to unplug the unit first and use your vacuum's brush attachment.

•·         Check your fire extinguishers to ensure they have not passed their expiration date.  At a minimum you need one in the kitchen.

•·         Test all your GFIs (Ground Fault Outlet Circuit Interrupters) to see if they are working properly ( hit the "Test" button and the "Reset" button should pop out.  Replace those that are not working.  GFIs should be found in kitchens and bathroom or anywhere there is an electrical outlet near a water source.  If your home is older, you may not have them installed.  It is a good idea to have the old outlets replaced for your own safety.  They will show up as a deficiency in an inspection report when you go to sell your home as well.

•·         Change the batteries in your smoke detectors and carbon-monoxide alarms twice a year.  The best way to remember is the change them when you switch your clocks for to and from daylight savings time.  If you did not do this in March, then make sure you do it soon.

•·         Test your smoke detectors by blowing out a candle underneath them.

•·         If you have a home alarm system that is tied to a central HUB, call them and tell them you are running a test to ensure that they are receiving the notice of the alarm activation.

•·         If you have a wood burning fireplace, schedule an inspection and cleaning of your chimney once a year.  Many sweeps offer a discount in the Spring and Summer.  Also make sure to remove and ashes from your fireplace to prevent moisture buildup, which can damage your masonry.

•·         Inspect your home's exterior for loose siding or trim, cracks, and crumbling mortar. Examine the attic for any signs of leaks.

•·         Clean and repair gutters

•·         Wash and treat ( or paint) wood decks to prevent cracking

•·         Make an appointment to have your air-conditioning system professionally inspected and adjusted before the temperatures start to get into the 80s.

•·         Run a zone check of your underground sprinkler system.  Check for leaks around the hub and make sure that all your pop-ups are working and that none have grown over.  Check on the direction of the spray to ensure that you are getting full coverage of your foliage and limited watering of sidewalks, driveways, and streets.

•·         In preparation for the winter...If you are in an area that freezes, have your sprinkler system professionally blown out since water in the pipes can freeze and cause damage.  Take down garden hoses, drain and store, and put insulation around spouts.

•·         Look for signs of leaks and moisture in your basement which can cause mold, fungus and rust.  Water on the wall usually indicates a bad downspout or grading that is sloping toward the house.  Standing water usually requires a professional.

•·         Inspect your roof and look for loose shingles, mold, mildew or cracked mortar.  Fix problems early to avoid extensive and expensive repairs in the future.

•·         Check all the fascia and trim for deterioration

•·         Test your garage door beam sensor by waving a broom across the beach while the door is in motion.  The door should not close and raise back up if everything is working properly.

•·         Check the caulk around tubs, showers, sinks, shower fixtures, and toilets to make sure moisture cannot penetrate.  If the caulking is black or discolored that means that mildew has gotten below it.  This needs to be removed and recaulked to prevent further water damage to flooring or drywall.

•·         Drain and refill your hot-water heater to remove sediment.  Also test the heater's pressure valve according to the manufacturer's instructions.

•·         Check your attic for holes or thin spots in the insulation and make sure that the caulking around doors and windows does not leak.

•·         Empty kitchen cabinets, pantries and drawers and clean out all crumbs, etc.  This will significantly reduce the chance of attracting ants and roaches.  Throw our anything that has expired.

•·         Wash windows, wipe down sills, and clean screens to allow the great light into your home.

•·         Dust your home thoroughly. Take everything off shelves, tabletops anddressers to dust. Now is also the time to get to all the places you've been neglecting throughout the year, including ceiling fans, above kitchen cabinets and baseboards and doorways.

•·         De-clutter your garage.  Sort your things into different areas of the garage; one pile to keep, one sale, and a bunch of trash bags for the rest.

•·          Wash out trash cans. To really clean garbage cans, spray them with a hose and dump out the water. Next, spray the inside with a disinfectant spray, scrub with a handled brush and rinse. Leave them upside down to dry.

•·         Deep clean your flooring. Have your carpets professionally cleaned and wax wooden floors.

•·         While you are cleaning the floors look for cracked or missing grout and repair quickly. A small crack in the grout or caulk can lead to an expensive repair later. If necessary, re-seal as soon as possible

•·         Clean upholstered furniture. Vacuum pillows, as well as underneath the cushions. Look for stains and clean according to the care label.

•·         Investigate all doors and windows for leaks and drafts, particularly near the corners. Look for peeling and chipping paint, which can signal water intrusion. Seal any open areas between the frame and the wall to keep out water, which can deteriorate building materials.

•·         Set your oven to self-clean. Be sure to wipe up major spills before setting it to self-clean.

•·         Clean out refrigerator and wipe all surfaces clean of stains or spills.  Check all your bottles of dressings, etc. for expiration dates.

•·         Vacuum inside closets and watch for signs of insects. Be sure that the closet or area is also clean and free of anything that bugs might find delicious. Dust, other insects, crumbs or food and beverage stains are all attractive to pests.  Now is a good time to donate items to local charities.

•·         Sweep porch and deck, as well as around doors and windows to get rid of cobwebs and debris.

•·         Clean the kitchen exhaust hood and filter

•·         Repair all cracked, broken or uneven driveways and walks to help provide a level walking surface

•·         Check the shutoff valve at each plumbing fixture to make sure they function

•·         Replace all extension cords that have become brittle, worn or damaged

•·         Look for burn marks at the main electrical panel; they can be a sign of arcinginside the panel, which can easily lead to a fire. Loose connections or damaged insulation can cause the arcing. Note: Only a qualified electrician should remove the front panel cover.

•·         Check all electrical outlets for loose-fitting plugs they are an indication of a worn out receptacle. Worn receptacles should be replaced as they cause overheating and fires. Also check electrical outlets and switches to be sure they work properly. If any switches, outlets or receptacles do not work, have a qualified electrician determine the problem and fix it to avoid fires inside the walls of your home.

The Economics Of Why Short Sales Take So Long

Nothing is more frustrating in today's real estate scene than short sales. No one can fully explain why it remains such a difficult task to complete one short sale -- the process by which a lender agrees to accept less than is owed on a home -- while another sails through. The only certainty as to why lenders do what they do: their bottom line.

Understanding a bank's financial motivations will help buyer's grasp why short sales seem to take so LONG and why often the banks seem to be operating contrary to market conditions.  Just because a property is a short sale does not always mean it will sell at or below market value.

Sometimes short sales bring more cash than foreclosures, and vice-versa. Which one it is depends on a host of factors, not the least of which is whether a lender has an agreement with the Federal Deposit Insurance Corporation for reimbursement of most losses on a bad loan like those sold short.

Multiple liens on a house and fat home-equity lines of credit that must be dealt with first are easy explanations for why a short sale languishes. Another is that lenders cases each year are now overwhelmed with hundreds or more short sale offers in a month and are significantly understaffed to handle the demand.

Then there are the complexities of the post-boom world: loans that have been bundled with hundreds of others, then securitized and sold to an investor, and scores of banks on the verge of insolvency that do not want to account for losses on a short sale. Even with those hurdles, there are short sales that can take 90 days or less from offer to consummation; but not many.

Simply put, the decision an individual lender or investor group makes -- even if that is not to make a decision -- is laden with a convoluted mix of what-ifs, if-thens, no-ways and sure things.

The real estate community is keenly focused on short sales because distressed properties are the new normal. Mortgage lenders and servicers were caught unequipped to deal with the crush.  In the worst straits are those borrowers, usually through sub-prime loans, who have had their mortgage wrapped into an investment pool like those held by Citigroup and Bank of America; about 25 percent of boom-time mortgages are contained in such securities.  The process of bundling notes and selling them to investors as a security was a boom-time staple, said Irv DeGraw, a banking professor at St. Petersburg College. AIG, Citigroup, Lehman Bros. and others backed, or insured, these so-called "credit-default swaps." When the housing market began tanking in 2006 and foreclosures began piling up, pay-outs to the investors skyrocketed. Eventually the federal government stepped in with the multibillion-dollar bailout.

"It was an absolutely maniacal problem," DeGraw said. "Nobody understood exactly what we were dealing with and then it exploded. Those taking the risk did not understand the amount of risk they were exposed to." In a counter-intuitive move, many investment groups preferred a complete collapse of the security rather than agreeing to short sales. "When the mortgages start to get into trouble an

insurance policy kicks in and they are made whole," DeGraw said. "If they grant a short sale they are not made whole. It's one of these bizarre nightmare scenarios where people got too sophisticated."

Some banks are urging federal regulators not to come in and force them to admit all of their problem loans, he said.

"Most banks are trying to buy time. It is called the 'delay and pray strategy,'" Thomas said. "You delay valuating the house at market and pray the value will come back. If you mark it down for short sale and do that deal you have to take a hit to your capital."

Others employ what Thomas calls the "extend and pretend" strategy to keep regulators from noticing a delinquent mortgage, whether that be lengthening the term, lowering the interest rate or allowing a distressed homeowner to skip a few payments.  "Banks will say there is nothing wrong with that because we have one on the books for a million dollars and the market will come back in a year, so why we should we hurt our shareholders," Thomas said.

Banks are hoarding assets to avoid the fate that Thomas described, said Matt Augustyniak of Bradenton's Horizon Realty, Horizon Title and Horizon Financial.  "They have to show as much assets as possible to balance the books," Augustyniak said. "That is why these banks are dragging their feet on short sales."

When Bank A takes over failed Banks B's assets, usually laden with risky mortgages, the FDIC often agrees to a "loss-share" agreement to minimize the acquiring bank's risk. The agreements cover anywhere from 80 percent to 95 percent of any losses on the bad loan portfolio.  In some cases, that prods lenders to agree to a short sale, especially if they can make more with the FDIC cash than the banks would if the house fell into foreclosure. But the opposite can be true as well, with the lender actually making more from a foreclosure if the loan has a private mortgage insurance payout and can be resold at a good price.

The Committee for a Responsible Federal Budget, a Washington, D.C.-based think-tank, reports that the FDIC has taken over 203 failed banks since 2008, many with a loss-share agreement. Total deposits so far this year equaled $18 billion. In 2008, it was $389 billion, and at an estimated cost to the FDIC of $64.4 billion. Seventy-eight percent of the existing loss-share agreements have no deductible, so the

FDIC starts paying banks for their losses immediately.

For single-family mortgages, the loss-share agreement stays in effect for 10 years and covers losses when the loan is modified, foreclosed upon, when a second mortgage is charged off, or when the property is sold short. "It has helped us sell a considerable amount of assets that we normally would have had to keep," said FDIC spokesman David Barr. "We audit the loss-share agreements to look that they are modifying the loans in a timely manner and not just opting for foreclosure or short sale. They have to choose the option that makes the most economic sense to the FDIC."

Despite the efforts of the Obama administration to speed and streamline the short-sale process, experts say banks do whatever will provide the best outcome for their bottom lines.  Buyers cannot understand why they do not hear back from the bank when they put in an offer on a short sale.  Oftentimes the banks are delaying until they can take the proper y through the foreclosure process.  A bank can sell the property for significantly less in a foreclosure sale that it would have if they had accepted the short sale process, BUT from the bank's financial perspective they look to the interest payments they received from the Seller before they defaulted, the payout from the private mortgage insurer, and the proceeds of the foreclosure sale.  Often the bank is not really losing much and sometimes can actually make money on these deals so they have little incentive to take a short sale offer.

A Buyer can wait an long time anticipating the acceptance of their offer only to find that they will never actually hear back from the bank, much less receive a counter offer.

Baby Boomers, those born between 1946 and 1964, represent one-quarter of the U.S. population.  Because of their numbers, Boomers have a huge influence on societal trends, and now that Boomers are starting to retire, they are changing how and where Americans are spending their post-career years.

Many Baby Boomers are expressing a greater desire to relocate for their retirement, unlike generations before them that wanted to stay in their current homes as they age. "The later in the 20^th century that a member of the population is born, the more likely they are to move their primary residence in retirement, "concludes a recent AARP study.  Among younger Boomers, over 40% want to relocate in retirement, and half of those plan to move out of state.  "Unlike their parents and generations before them, Boomers are increasingly willing to relocate upon retirement, and their choices of locations are becoming more active, youthful, and far-removed from the stereotypical retirement spots, "according to CNBC.  In fact, retiring Boomers are moving back into cities in record numbers to take advantage of cheaper real estate prices, public transportation and abundant cultural options, observes real estate site Trulia.com.

Nonetheless, relocation has slowed, at least temporarily with the recession.  Many retirees have put their relocation plans on hold until they can get the price they want. Many are investing in their desire retirement home at current rock bottom prices with plans to move once the real estate market improves.

Those who choose to relocate do so for several reasons.  While in the past, a key motivation was to seek a warmer climate, the primary reasons now are to obtain greater access to health care and secure a lower cost of living including lower state taxes.  That makes North and South Carolina the top two destinations, although traditional retirement locales like Florida and Arizona still figure on the top of the list.  Another popular reason to relocate is to be nearer to family.  According to a Boston Collage survey, 28% of older Americans who relocate after age 51 did so primarily to be near children r relatives, and more than half of those interviewed said they want to stay within three hours of family.

Baby boomers, more than 70 million strong, are credited with the current rise in the second home and relocation sector.  Many of these boomers, possessing stronger financial security than any previous generation are buying or building second homes in the mountains of North Carolina.

While 55+ communities are still popular among retirees, almost 75% of Boomers say they want to move to an age-diverse community with residents of all ages.  Many relocating buyers are looking for an easy-living lifestyle, with "access to services that will free up their time from maintenance both inside and outside their homes," said the chairman of the National Association of Home Builders 50-Plus Housing Council.  Interestingly, many floor plans for retirees are being modified to make room for a home office. Almost three-quarters of Boomers surveyed say that, even though they may be "retiring" and relocating to a new community, they intend to keep working for many more years.

Baby Boomer ‘Retirement' Facts

The Boomer Market

• 76.4 million baby boomers

• Leading-edge boomers turn 62 in 2008

• Another baby boomer turns 60 every eight seconds

• In 2000, 35 million Americans were 65+

• By 2030, 70 million Americans will be 65+, and will comprise 20-25% of the US population

Boomer Finances:

• Average annual household earnings of boomers = $53,000

• Average boomer predicted to retire with $500,000-$1,000,000 in assets

• Mature consumers possess $7 trillion in wealth - 70% of the total wealth in the United

States

• 66% of all US stockholders and 60% of annuity owners are boomers

Employment After Retirement:

• 83% of baby boomers intend to keep working after retirement

• By 2010, 33% of labor force will be ‘mature' workers (age 45+)

• In 2004, only 5% of retiree income came from employment

• 56% of working ‘retirees' want to work in a new profession

• 44% of retirees worked for pay at some point after retirement

• 89% returned to work to stay active, not because of financial need

• 14% of those currently working say they'll never retire

• 28% of current working retirees will continue working as long as their health permits

• By 2010, it's estimated that US corporations will experience a 10 million shortage in talent

(76.4 million Boomers replaced by 66.4 million replacement workers)

• Workforce has increased only 1.5-2.0% over the past 20 years

• 45% of US companies have special positions for mature workers

• 50% of US companies are willing to negotiate special arrangements for older workers