Know Your Homeowners Association Before Buying

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Where Can I Find Markets That Have Been Hot During The Past Few Years? Q: Where have been the best places to invest during the past five years? A: The best way to answer this question is to think about the stock market. You can have a day when the Dow rises by 150 points, but what you really care about is how well your particular stock performed. In other words, general trends are interesting but they do not necessarily reflect individual results.With real estate the situation is similar: One particular property may produce different results than general community trends might suggest. According to the Office of Federal Housing Enterprise Oversight, the best jurisdictions to own property during the past five years have been Washington, D.C.(prices up 124 percent),Hawaii (113 percent),Florida (111 percent),California (115 percent),Nevada (106 percent) and Maryland (101 percent). It's important to say that past performance does not guarantee future results.We know what happened to prices and values in the past but we cannot predict with certainty what will happen tomorrow or in the next few years. If someone tells you otherwise, ask to see their soothsayer's license. Q: We're going to put our house on the market. We've put in new carpet and painted, but how do you get rid of cigarette odors? You know, that dead-rat smell. A:There are lots of ways to woo would-be buyers, but dead-rat odors are not on the list.A house that smells like a rodent mortuary is just not a place that will attract any sensible buyer. In addition to obvious health issues, smoking has now reduced the value of your home by thousands of dollars. Usually as a start one would advise painting and having carpets professionally cleaned. But you already have new carpets and you've painted.This suggests that the remaining odors are associated with furniture, drapes and household surfaces. One approach would be move and then try to sell the house. In essence, take the problem with you,then open some windows and wash every surface that remains.The difficulty is that empty homes may be See ASK OUR BROKER, Page 2

Never too early to start: Giving your patio a little fall spruce-up will take the tedium out of spring cleaning and have it ready to go come summertime.

Projects for a Perfect Next Summer BY BARBARA BALLINGER CTW Features

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t may seem a bit premature to think about getting your house ready for next summer when this summer has just past. But the time is ideal, since you’ve likely had a good opportunity to enjoy your yard and the exterior of your house, except on blistering hot days. Get a jump on the work you’ll do this fall, winter and spring, so you get projects completed before the 2007 summer begins.While the sky’s the limit in terms of what you can

tackle, here are a few to get you started: • Remember to follow an important rule of remodeling: Get at least two or three estimates, interview the owner of the company or a representative in person, ask for references, and see some finished jobs. If you schedule the work now for winter, some companies may give you a price break since their schedules then are sometimes slower. And, if you’re planning on putting your house on the market before next summer, the pre-summer projects will help you improve your home’s curb appeal, especially as inven-

tory continues to rise in most regions of the country. • Add or fix that patio, deck, or terrace. No matter what it’s called, most homeowners today want to have an outdoor space for cooking, entertaining, sitting, reading or just snoozing. If you’ve already got a porch or deck but it has old wooden railings, one way to spruce them up for the long term is to replace them with low-maintenance, high-density polyurethane members that resemble painted

See NEXT SUMMER Page 2

Know Your Homeowner’s Association Before Buying BY CHARLES SCUTT CTW Features

DO YOU ENVISION LIVING in a low-maintenance community where someone else takes care of the leaf raking, snow shoveling, lawn mowing and exterior upkeep? While this may appear to be a dreamy lifestyle, the reality is that condominium, townhome and single-family developments that share common areas and provide maintenance servic-

es to residents all require membership in what can be a strict and expensive club: a homeowner’s association. Also commonly referred to as a condo association, an HOA is an organization of homeowners living within a particular subdivision or multi-family development that is responsible for preserving community grounds and facilities and providing services for the common benefit of its residents. These grounds can include the

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parking lot, community swimming pool, shared hallways, tennis court, fitness area, golf course, gated entrance and more. The HOA serves a very essential duty, says Ken Roth, author of “Everything You Need to Know Before Buying a Co-op, Condo, or Townhouse” (Amacom, 2006). “When you have a specific community with common elements shared by the membership, they have to have a governing board, which at minimum

hires property managers and oversees but really represents the homeowners who pay fees to use those amenities,” Roth says.“If there are no common elements such as golf courses, gyms and tennis courts, then you merely have a town with private homes that are governed by local zoning laws.” Homeowner’s and condominium associations operate much

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HOA CONTINUED FROM PAGE 1 like any other corporate entity, says Roth.“They are governed by a board of directors who are charged with operating the association’s property and funds in accordance with applicable federal, state and local laws, as well as their charter,” which is found in the HOA’s documents given to each resident. Usually, the developer of the community forms the association after getting approval from the local municipality, says David Stone, president of Nevada Association Services, Inc., a Las Vegas-based agency specializing in handling collections for more than 1,000 Nevada homeowner’s associations.The developer appoints representatives to the HOA’s board of directors until the units or homes are sold. Then, the developer passes the association over to the membership through a voting process outlined by law. Many home shoppers don’t realize all that will be required of them before buying a home that’s part of a HOA, says Stone. “There will be rules and regulations you need to follow, and you will have to pay money every month or quarter for assessments,” he says.These assessments, also referred to as dues or fees, can amount to hundreds of dollars a month, depending on the community. Often, realtors may not remind buyers about these HOA obligations, and “with the market softening, some builders are trying to keep HOA assessments artificially low by offering incentives that cover assessments for the first six months or year,” Stone says. Among the numerous rules and bylaws an HOA may institute are stipulations on owning a pet,

NEXT SUMMER CONTINUED FROM PAGE 1 wood but only require occasional cleaning, says Greg Wolf, marketing manager at Fypon, a millwork producer in Archbold, Ohio. • Install a pergola. Do you wish your house was in Napa Valley or Italy so that your view might include a vineyard? You can capture a bit of that feeling with a pergola and other systems that you plant with greenery and vines.They’ll offer shade as well and can create a cozy place to read, talk or eat. Choose a design in weather-resistant PVC, which, left natural, will permit little maintenance, says Kevin Lowe, marketing representative at Dixie-Pacific Manufacturing, Gadsden,Ala. • Incorporate lighting.There’s no reason you should have to stop enjoying your yard as the sun sets, but the key to doing so is to add lighting along walkways, by patios and outdoor kitchens, and in and around pools.These days you can choose designs that are decorative unless you want them hidden but also energy efficient. Michael Berman, a certified light-

hours of operation of the various amenities, a limit on the number of guests you can have in your unit and for how long, and rental, noise and construction restrictions, says Roth. “One rule which many people seem to hate is a fire code restriction that says you can’t barbecue on your terrace,” Roth says.“There may also be restrictions on the placement of outdoor antennas.” Before purchasing an attached or detached home within an HOA, it’s important to research the community’s association and its bylaws carefully, says Kenneth J. Fleisher, current chair of the real estate section of the Philadelphia Bar Association. “Talk to current residents, members of the board, and a representative of the management company,” says Fleisher.“Get a copy of the rules and regulations and discuss any concerns you have with them.” Next, prospective buyers should review the HOA’s budget and check on the financial viability of the association, Fleisher says.“How much money is in the capital reserve, and what capital expenses are projected for upcoming replacement and maintenance costs? These are important, because the owners are responsible for the cost of all common-area repairs, such as a new roof or repaving of parking areas.” Secondly,“Investigate whether there have been any recent assessments, whether plans exist for future assessments and, if so, for what expected costs,” Fleisher says.“Third, find out what are considered the common areas and how they are maintained. Is it by outside professionals or by the homeowners themselves?” Also,“Check to see if there are any rules and regulations, such as restrictions on age and the leas-

ing of units, which is very common in resort communities, he says. Ultimately,“The two biggest commitments made by purchasers in these communities are financial and social,” says Fleisher.“Can you afford the costs of living the lifestyle and are you willing to conform to the applicable rules and regulations governing activities, some own which can reach into your personal residence?” If you do purchase into a homeowner’s association and butt heads with the HOA down the road, you do have some recourse, says Roth. “Yelling, screaming and name calling are counter-productive. If you feel that your association is violating rules, there are many avenues to voice your complaints,” Roth says.“You can hire an attorney or file complaints through various state regulatory agencies. If you are unhappy with the way things are, either run for election on the board of directors or support a candidate who favors your view. Getting involved with your HOA is the best way to protect your investment.” Lastly, don’t be too quick to assume that an HOA will crimp your freedom or lifestyle, says Stone. Despite the fact that unruly condo boards and excessively restrictive HOAs have garnered a lot of negative publicity in recent years,“In my opinion, HOAs get bad press and are often unfairly represented,” he says.“Those who do not follow along are often the loudest and receive the most press coverage.”

ing designer with Lamps Plus, Chatsworth, Calif., offers several specific ideas:Add a ceiling fan on a screened porch or covered patio. Use less light rather than more and strive for dramatic shadows and visual interest.Trim energy costs by setting your outdoor landscape lights with automatic timers so areas are well lit once evening approaches but not lit during the day.Add lighting that’s whimsical and romantic, such as a string of party lights in zany motifs, Chinese lanterns or candles, and highlight favorite trees or shrubs. • Spruce up your air conditioning system.You’ve probably been running it nonstop or at least around the clock on the hottest, most humid days, but before you turn it off for the season and bid adieu for high AC bills for now, make sure it’s hosed off and covered for the winter. If your system is old and nearing the end of its lifetime, be sure when you replace it you select an efficient model. Many prospective buyers look at the age of a potential home’s major mechanical systems. • Lock up your house. Summertime represents the peak of burglaries since homeowners often head out of town on vaca-

tion. Many owners also relax in their back yards and leave their front doors ajar. If locks don’t close easily, now’s a good time to call a locksmith. • Block unattractive views. Hate looking at those ugly outdoor trashcans or your neighbor’s less-than-sexy air conditioning unit? Joe Scott, founder of Glen Gate Co. in Wilton, Conn., a company that handles a myriad of outdoor projects, suggests blocking ugly views with landscaping or handsome manmade structures.

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© CTW Features

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harder to sell if prospective buyers cannot envision how the property would look if occupied. The alternative is to clean up. First, air out the house daily. Second, all drapes and upholstery should be cleaned,preferably by a professional.Third, all clothes should be laundered. Fourth, wash down all surfaces with appropriate cleaners. Fifth, keep open boxes of baking soda around the house. Sixth, stop smoking – indoors or out.

Q: We're in a buyer's market locally. We originally listed our townhouse for $259,900, then dropped it to $252,900. We now have an offer for $252,900 if we will pay $7,000 toward the buyer's closing costs. The prospective buyers are firsttime homebuyers and will be doing 100-percent financing. We're thinking of countering with either $259,900 plus $7,000 towards closing or $257,900 with $7,000 towards closing. Comparable sales during the past few months for like units have ranged between $248,000 to $259,900. The most recent sale was for $255,200. What do you suggest? A: Past sales are useful but may not address current market realities.Also, you don't know what discounts or concessions were within the sale price. If your local market has begun to favor buyers and is unlikely to turn around anytime soon, then the offer you now have may be better than any future bids – especially if the market sours.Also, consider that each month you have continuing costs to hold the property. A word about offers and counter-offers.You received an offer.You can accept it, reject it or make a counteroffer. If you reject the offer or make a counter, then the original offer is dead.This means if your counter-offer is rejected you can't go back to the buyer's original proposal. Speak with your broker for specifics.You've already accepted the idea of the closing credit; the real debate is the sale price. If it was me, I wouldn't dicker over a 2 or 3 percent difference in a market that was trending down. My wife and I sold an investment property last summer in a turning market.We could have held out for more.A similar home did go for more – but it took about 10 months to sell. Meanwhile, we bought a replacement property, immediately increased our rent roll and depreciation allowance and felt good about our transaction. © CTW Features Need real estate advice? Peter G. Miller, author of “The Common-Sense Mortgage,” would love to hear from you. Send your questions to [email protected]