By Barry Stone, Tuesday, April 22, 2008.

Inman News

Dear Barry,

My husband and I disagree over how to treat the termites in our home. For the past 27 years, he has sprayed poison wherever we’ve seen frass particles. I’ve heard that termites must be professionally exterminated, but he says that termites are a permanent problem in our area and that they will always return after extermination. What is your advice? –Ninel

Dear Ninel,

Here are some vital termite facts to help settle your domestic debate:

1. Termite colonies continually increase in population. The older a termite colony is, the more mouths it has to feed. A 5-year-old colony may contain a few thousand termites. A colony that is 27 years old could have a census of millions. Consider how much wood that many termites could eat on a daily basis.

2. Termites live deep within the recesses of the wood members of a structure. They eat tunnels in the wood framing until all that is left of a stud, joist or rafter is the outer veneer.

3. When termite tunnels become clogged with frass (termite poop), the little “wood-munchers” make small holes to expel these particles from their domain. The frass that you see in your home is a small sample, compared with what could be found in the attic or inside the walls.

4. Insect sprays cannot penetrate into the structural framing members where termites live, eat and multiply. The only way to eliminate them is to have your home professionally exterminated. Postponing this process ensures the continued consumption of the wood components of your home.

Dear Barry,

Home inspectors are often accused of negligence when excessive weather conditions prevent them from inspecting some areas of a home. For example, a home inspector might not inspect an attic when the outside temperature is more than 100 degrees. If problems in the attic are discovered at a later date, is it unfair to hold the inspector liable? –Gloria

Dear Gloria,

Weather conditions often prevent home inspectors from completing portions of an inspection, and liability can be a problem in some of these instances if undisclosed defects are discovered at a later date. Rain, for example, can prevent a home inspector from walking on a roof. Snow can prevent an inspector from even seeing a roof. And hot weather, as you suggest, can prevent inspection of an attic. However, in each of these instances, the need for disclosure does not end with a disclaimer in the inspection report.

In the case of an overheated attic, the inspection report should recommend further evaluation of the attic prior to close of escrow. If the attic is too hot in the afternoon, it will probably be much cooler the following morning. A home inspector who is concerned about the interests of customers will make that kind of recommendation. This applies to other situations, as well. Wet weather, cold weather, storage of personal property, inaccessibility or other issues can prevent the completion of an inspection. Home inspectors should always recommend further evaluation when conditions that prevent a full inspection have been eliminated. This approach serves the disclosure needs of home buyers and reduces the liability of home inspectors.

To write to Barry Stone, please visit him on the Web at www.housedetective.com.

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Copyright 2008 Barry Stone

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.

By Ilyce Glink, Friday, April 18, 2008.

Co-written by Samuel J. Tamkin
Inman News

Q: We bought a home about three weeks ago and did an inspection with my stepfather who is a contractor. We failed to go into the attic.

Two days after the closing, I went into the attic. To my surprise, almost all of the rafters and the wood that holds the shingles are burnt pretty severely. I have a disclosure statement signed by the seller stating that there was no fire damage.

I got another contractor to come out and give me an estimate of the repairs. Upon looking at the damage he stated that it would probably be around $50,000 to fix the roof.

What are my options here? Who is at fault? Is the real estate company at fault as well? What if the sellers don’t have this type of money?

A: It would be hard for the seller to deny he knew that the home had suffered a large fire and he never went into his own attic. You can probably find evidence that he stored items in the attic and was fully aware of the problem.

Most states require a seller to disclose to buyers material problems with the home. If your state has a specific reference to the home having been involved in a fire and the seller failed to disclose it to you, you have a pretty good shot at suing the seller for the failure to disclose this issue.

Seller disclosure laws were put into place to give buyers an opportunity to know more information about the home, particularly information that is known to the seller but that may not be readily known to the buyer.

If your seller disclosure form specifically mentions whether the home was affected by a fire and the seller failed to disclose it to you, the seller may be deep in trouble.

However, shame on you for not inspecting the house properly before you closed. Your stepfather may be a contractor, but it doesn’t sound like he is a professional or licensed home inspector. A competent home inspector would have easily found this issue and alerted you to the problem.

The whole reason to hire a professional home inspector is to avoid the big pitfalls in purchasing real estate. It’s nice to know that seller disclosure laws are out there to protect buyers, but it’s much better to have this kind of information ahead of the closing so you can avoid the issues you now face.

You may have saved a few hundred bucks by not hiring a professional home inspector, but now you’re facing a $50,000 problem.

You should get a second, and maybe even a third, contractor to come out to your home to give you another estimate of what it will take to fix the problem. Prices may vary and some contractors (especially those who are a bit slow right now) may want to do more work to the home than just fix the problem left from the fire.

Finally, when you actually know what it will cost you to make the repairs, you can sit down with an attorney and decide how to approach the sellers. It’s true that if the sellers don’t have the money to pay for the fix, you’ll be left footing the bill.

But the sellers may have the money and your attorney can advise you of your legal options. If the sellers have money and assets, your state laws may allow you to recover your attorney’s fees in connection with suing the seller for their failure to disclose the problem.

Q: I purchased a new home and am having problems with a leaky roof, along with other problems. The builder refuses to take care of the problems. Whom should I contact?

A: If you purchase a new home, and there are issues with that house, the first thing you should do is seek help from the builder.

Your contract or some of the other documents you received at the closing should tell you exactly how you’re supposed to deliver notice of any issues you have with the house. Did the builder give you a warranty? Typically, you’ll need to deliver notice of any issues you have with the home in writing and deliver it to the builder by certified mail, return receipt requested or by some other means to insure that you have a record that you send the notice and that the builder received the notice.

But if the builder refuses live up to the terms of the warranty or did not give you a warranty but still refuses to fix your problems, you’ll need to explore your other options.

One option is to see if you have other rights under the laws of the state in which you live.

Another option is to determine if there are any other warranties that are provided by the manufacturers of the products used in your home. See if you can find out the brand of the roof-shingle manufacturer and the name of the company that installed the roof. Frequently, the manufacturer of the roof will stand behind its product if the product was installed properly and the installer may also back its own work within a certain time after the installation. If you have that information, you can see if they will be willing to make the repairs.

For other items, such as appliances that may have a manufacturer’s warranty, you can call the manufacturer of that product to see what options are available to you.

If you can’t find any information on the products or the companies that made the installations, you might try to find a contractor in your area to give you an estimate to determine what it will cost you to make the repairs.

If the cost is minimal, you might decide to make the repairs yourself. If the costs are large, you will then have to decide on what to do next.

Your options include complaining about the builder to your local building department with the hope that it can put pressure on the builder to fix your issues. You can also file a complaint with the Better Business Bureau. If you file the complaint, at the very least, other buyers will be put on notice that this builder has unresolved complaints against his or her company.

In addition, you can hire an attorney to sue the builder. Litigation is expensive and at times it is cheaper to make the repairs than undertake the cost of litigating a problem. In some states, you may be able to sue the builder in small claims court and hope that you can maneuver through the intricate procedures of the legal system.

A real estate attorney who specializes in new construction ought to be able to help you further.

Copyright 2008 Ilyce R. Glink and Samuel J. Tamkin

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.

New-Home Sales in the U.S. Plunge More Than Forecast (Update2)
By Shobhana Chandra

April 24 (Bloomberg) — Purchases of new homes in the U.S. plunged more than forecast in March to the lowest level in almost 17 years as stricter loan rules and falling prices caused buyers to hold off.

Sales dropped 8.5 percent to an annual pace of 526,000, the fewest since October 1991, from a 575,000 rate the prior month, the Commerce Department said today in Washington. The median sales price slumped 13.3 percent from the same time last year, the most in almost four decades.

A jump in subprime mortgage defaults and record foreclosures have worsened the real-estate slump and led banks to limit lending. The threat of a prolonged recession is growing as lower home values constrain consumer spending and persistent declines in homebuilding subtract from economic growth.

“This blows away any hope that things are stabilizing in housing,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York. “It’s a negative for growth and for the economy, and it’s going to persist into the second half of the year.”

Treasuries remained lower after the report, pushing yields higher. The benchmark 10-year note yielded 3.81 percent as of 10:15 a.m. in New York, up 8 basis points from yesterday. Stocks were lower.

Economists had forecast new home sales would drop to a 580,000 annual pace from an originally reported 590,000 rate the prior month, according to the median estimate in a Bloomberg survey of 75 economists. Forecasts ranged from 560,000 to 602,000.

Durable Goods Orders

Separate figures from Commerce today said orders for durable goods, excluding transportation, rose a greater-than- forecast 1.5 percent in March. Total orders fell 0.3 percent.

The housing report showed the median price of a new home decreased to $227,600 from $262,600 a year earlier. The year- over-year decline was the biggest since July 1970.

While inventories decreased, builders were not able to keep pace with the drop in demand. The number of homes for sale fell to a seasonally adjusted 468,000, the fewest since July 2005. Still, the supply of homes at the current sales rate jumped to 11 months, the most since September 1981.

Sales were down 37 percent from March 2007.

Purchases dropped in all four regions, led by a 19 percent decline in the Northeast.

Reports this week signaled the housing recession is far from over as prices and demand continue to slide. Home values dropped 2.4 percent in February from a year earlier, the Washington-based Office of Federal Housing Enterprise Oversight said.

Home Resales

Sales of previously owned homes, which account for about 85 percent of the market, fell 2 percent in March, according to the National Association of Realtors. It was the seventh decline in eight months.

New-home purchases, which make up the remaining 15 percent of the market, are considered a timelier indicator because they are based on contract signings. Resales are calculated when a transaction closes, usually a month or two later.

Declines in residential construction have subtracted from economic growth since the first three months of 2006, culminating in a 25 percent drop last year that was the biggest since 1980.

`Anemic’ Growth

Economic growth slowed in nine of 12 Fed districts since February and homebuilding is “generally anemic,” according to the Federal Reserve’s regional business survey, known as the Beige Book. Fed Chairman Ben S. Bernanke this month conceded a recession is possible as housing, employment and consumer spending deteriorate.

Policy makers, who have lowered the benchmark overnight lending rate between banks by 2 percentage points so far this year, may cut rates again next week to prevent a deeper economic downturn.

Pulte Homes Inc., the fourth-largest U.S. homebuilder, today reported a loss that was almost three times higher than analysts’ projections.

“Across the country, the overall sales environment continues to be difficult,” Richard Dugas, Pulte’s chief executive officer, said today on a conference call. “Builders are intensely competing for a diminishing pool of buyers.”

Housing-related businesses are also struggling. Sherwin- Williams Co., the largest U.S. paint retailer, reported a 30 percent decline in first-quarter profit as the housing slump hurt demand and raw-material costs rose.

“We are not counting on a near-term recovery in the housing markets,” Chief Executive Officer Christopher Connor said on a conference call with investors on April 22. “We expect the new-housing market to continue to spiral downward this year.”

Garage Door Inspection Video Created for Home Inspectors

CLEVELAND, OH – North America’s two garage door associations have joined forces to produce a 14-minute training video for home inspectors. This professionally produced DVD, released to home inspectors in March, was developed by leading garage door engineers and technicians, with input from several professional home inspectors.

“Home inspectors have often asked for this kind of training,” says Chris Long, IDA’s managing director. “We realize that home inspectors play a pivotal role in disseminating reliable safety information to homeowners at a crucial time.”

The video demonstrates how to conduct a thorough inspection of a typical sectional garage door and garage door opener. The 10-point inspection, which covers all critical safety issues, can be conducted in less than five minutes.

The DVD was funded and created through a joint effort of the International Door Association (IDA) and DASMA. IDA represents garage door dealers, and DASMA represents the garage door and garage door opener manufacturers.

In recent months, DASMA and IDA presented a preview of the video to home inspector audiences in Providence, R.I., and Memphis, Tenn. Joe Hetzel, DASMA’s technical director, says, “Home inspectors were impressed with how this quick inspection can help them spot potential safety problems.”

The DVD includes a 10-point checklist that can be printed from a computer. A copy of the DVD can be purchased for $15 from IDA (800-355- 4432, info@longmgt.com) or DASMA (216-241-7333, dasma@dasma.com). Bulk pricing is available.

Purchasing home inspection software for your home inspection business is no easy task. It’s easy to flip through a trade magazine and get fooled by a familiar industry name, or be swayed into using what the competition is using. So what should you do?It is important for you to remember that there is often no correlation between price and quality of software. Good software does not have to mean expensive software. Expensive software may or may not have features that are available in less expensive software. Don’t let unnecessary bells and whistles sway you into making the wrong purchase. Home inspection software is a tool to make your job inspecting houses and producing inspection reports easier and less time-consuming. Before making a software purchase for your inspection company consider the following:

What do you need the software for?

What is the main reason behind your decision to purchase home inspection software? Are you buying it mainly for creating inspection reports, or do you need features such as time management, appointment scheduling, car mileage, roadmaps, etc? What are the necessary features the software must have? What are optional features that could be useful? Are they worth the extra price? What is your budget? Will you need to pay for additional licenses? What about upgrades? Are they free or will you need to pay a yearly subscription? Does the software require you to download blank reports and pay for each one you use?

What type of inspection report do you want to create?

Essentially there are three types of inspection reports: Narrative, checklist, and a narrative/checklist hybrid. Checklist-type software certainly makes the job of creating a report much easier for the inspector, but usually limits the amount of information they can provide to their clients. This in turn increases their liability and exposure to litigation. The narrative/checklist hydbrid is more flexible than the checklist in that it usually provides extra space for additional comments or narratives. Narrative reporting software produces reports that are all narrative (devoid of check boxes), and typically gives you free reign to write as much - or as little - as you think is necessary. For a host of reasons, most established and experienced inspectors (and real estate agents) prefer a narrative style report over the others.

Pictures

Do you want to include pictures in your report? This can be a good way to document problems, but pictures can be used against you if you miss something obvious that is visible in a picture. However, the majority of inspectors use pictures in their reports. If you decide you want to include pictures, how easy is it to include them in the report? Is there a limit to how many you can insert for any given problem or defect?

Compatibility

What operating systems will the software run on? If you have an Apple Mac in the office and use a Windows PC in the field, will the software run on both computers? If so, does it allow you to transfer the inspection files from one to the other? Will you need to upgrade your computers or purchase more memory? Be sure to try a demo of the software you want before you purchase it. Most software companies allow you to download a fully-functional demo from their websites. Ultimately, only you will know if you can run the software on any given computer and if it will do all you want it to.

Is Technical Support Provided?

Is help available by phone, fax, email or regular mail? Is help available around the clock? Is there a charge for technical support and, if so, how quick (or slow) is the response time?

Ease of Use

Perhaps the most important factor to consider is ease of use. That is, how easy is the software to use when you are on the job and trying to perform a thorough inspection while also creating an inspection report that will be well received by your clients and their agents? Do you have to jump around the screen, opening and closing windows all the time? Does the program allow you to use the entire screen? How easy is the software to use on a laptop? How about one with a touchscreen?

Ultimately, poorly designed software that does not meet your needs will result in a waste of precious, and often very limited, time spent in the field. If the software is overpriced as well, then that is simply a waste of good money.