UkiahCityHall

Solving the California Housing Shortage in Ukiah

City leaders are currently discussing ways to address the local impacts of our statewide housing shortage. This is a complex problem, so I don’t envy their task. What I can offer is a perspective, one based on more than 40 years in the real estate business.

First, it’s important to gather accurate data. To that end, the City of Ukiah just completed a housing survey. Although the survey was flawed (the way information was collected skewed the results and the questions didn’t differentiate between homeowners and renters very well), some information is better than none.

Shortcomings aside, the City found that 70 percent of respondents—renters and owners—are unsatisfied with available housing. Forty percent said it took more than nine months to find a home they wanted. Most people cited the cost of housing as a primary barrier, while others said the lack of available housing options prevented them from moving into a more satisfactory home.

In the past decade, an average of 80,000 homes a year have been built in California, which is less than half the units needed to keep pace with population growth through 2025, according to a California Department of Housing and Community Development report. Ukiah has a similar problem. Since 2010, only 92 residential building permits have been pulled in the greater Ukiah Valley most of which were for middle to lower income subsidized homes). During that time, to keep up with population growth 420 new housing units should have been built.

Even with housing prices as high as they are, regulations prevent developers from investing here—it isn’t cost effective for them.

I was particularly disappointed to read Phil Baldwin’s ill-informed op-ed on this subject earlier this month. Baldwin clearly doesn’t understand the complexity of the housing market nor the basic laws of economics, but he is fairly good at spreading fear and distrust.

He noted that the Realty World Selzer Realty website listed 48 residential properties for sale and suggested that if there are that many properties for sale, we must not have a housing shortage. Based on the number of prospective buyers my Realtors are working with, there are about 200 active, qualified buyers in the Ukiah Valley. Even if 48 of the buyers were perfectly suited to buy the 48 homes for sale (whether those homes be mobile homes or million-dollar properties), we’d still have about three-quarters of the prospective buyers left with nothing to buy. And if you assume that many renters would also like to buy, the number of prospective buyers skyrockets. There is more demand than supply. This means we have a housing shortage.

Baldwin also rails against community leaders who support the Lover’s Lane development. He assures us that this development will cause urban sprawl and implies that when the free market determines the cost of these new homes, it is somehow evil. By the way, this development is on ag land that isn’t very productive, according to local farmers. By building market-rate housing, we’ll be able to keep the qualified professionals who want to serve our community but cannot find a place to live, the ones we are currently losing to other communities.

By building a new subdivision, we don’t prevent infill development. We have enough of a shortage to build a new subdivision and build on vacant lots throughout the city. As for the idea of creating a mixed-use, commercial/residential zone, we’ll have to see if there’s a market for it here. Baldwin cites the city of Windsor’s town square where people live in condos above retail space. In Ukiah, we didn’t allow that type of zoning for a long time, so now we’d have to rethink things.

The point is this: we have a housing shortage. Baldwin would have us only build subsidized housing for the poor and elderly. Price controls don’t work. Does anyone remember what happened with gas lines in the 1970s? Not pretty. Let’s reduce regulation, invite developers to build more housing at various price points, and go from there.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

alex-holyoake-lightbulb-expensive mistakes

Avoid These Expensive Mistakes on Home Furnishings and Maintenance

Owning a home can be costly in the best of times, so there’s no reason to waste money on expensive mistakes. Here are a few to avoid.

Using Incandescent Light Bulbs – Replace traditional light bulbs with compact fluorescents (CFLs) or light-emitting diode (LED) bulbs. LEDs especially may be more expensive to purchase, but they’ll save you money in the long run. Incandescent bulbs cost about a dollar per bulb and their average lifespan is about 1,200 hours. CFLs cost about $2 per bulb and go for about 8,000 hours. LEDs cost about $8 per bulb, which seems expensive until you realize their lifespan is about 25,000 hours. Let’s do the math: to get 25,000 hours of light, you’ll spend about $20 on incandescents, but only $6-8 on CFLs or LEDs. When you add in the cost of electricity used, it’s still a no-brainer. For every $100 you spend on light with incandescents, you’ll only spend $24 on CFLs or $19 on LEDs. You also save the hassle of changing bulbs.

In using CFLs and LEDs, you’ll need to figure out how much light you want. These bulbs aren’t sold by wattage (how much energy is used), but rather lumens (how much light is emitted). More lumens equals more brightness. To replace a 100-watt incandescent bulb, choose a bulb with about 1600 lumens. To replace a 75W bulb, choose a bulb with about 1100 lumens. To replace a 60W bulb, choose a bulb with about 800 lumens. To replace a 40W bulb, choose a bulb with about 450 lumens.

Ignoring Leaky Faucets – A leaky faucet that drips one drop per second can waste more than 3,000 gallons per year, which is enough water to take more than 180 showers. I recently had a leaky toilet valve that cost an additional $50 in just a couple months. I figured it out when the excess water caused a pretty green patch on the hillside next to my house where the leach lines for my septic tank drain.

Using the Wrong Air Filters or Forgetting to Replace Filters Regularly – If an air filter doesn’t fit properly or it gets too dirty, it can’t function well. This can not only increase your power bill, it can shorten the life of your furnace.

Not Adjusting Vents – In many offices, some areas are burning up while others are ice cold. Rather than having employees bring space heaters and fans, adjust vents to balance the temperature throughout the office.

Water Heater Temp Set Too High – Most of us have traditional water heaters that keep water hot 24/7. If you set the water temp too high, you’re wasting money (and putting family members at risk of getting scalded). In our rentals, we set the temperature to 120 degrees. You can turn this down in the summer.

Overwatering Your Lawn – Automatic sprinklers that come on early in the morning are great, unless you have a broken sprinkler head that is gushing water or misdirected so you’re watering the fence instead of your lawn. Periodically run your sprinklers during the day so you can see how they are performing when you’re not around.

Hiring a Handyman for Simple Repairs – If you have YouTube, you can probably figure out how to do most of the minor repairs in your house and save a lot of money. However, if you’re like me—not handy with tools—by all means, leave repairs to the experts. If you need a referral to a fix-it professional, from plumbers to electricians, ask your Realtor.

Ignoring Roof Repairs – If you see curled shingles or damaged flashing and mastic around roof penetrations (like chimneys, stove vents, or bathroom vents), do not ignore them. Water is really good at finding small flaws and making them bigger.

Houses are expensive enough without allowing these mistakes to bite into your pocketbook.

If you have questions about getting into real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

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Finding the Best Interest Rate

I recently went online in an attempt to find the best interest rate for a 30-year, fixed-rate JUMBO real estate loan with 65 percent loan-to-value. I did not go to a comparison site, but a single lender’s site, where I entered my information and requested their lowest rate.

I shared the information a lender would need to give me their lowest interest rate: my annual income, net worth, FICO (credit) score, and property value, along with my contact information. Within a day or so I was receiving calls from 7:30 am to 7:30 pm from all sorts of people trying to sell me their loan services. My email inbox blew up with emails offering rates from as low as 2.5 percent to 6 percent.

Although I didn’t intend to have my information shared with a bunch of people, I figured I’d ask the same question of each lender: what is your lowest interest rate given the criteria above? Many of them wouldn’t give me a rate unless I allowed them to run a credit check, which I wouldn’t. The more often you allow people to check your credit score, the worse your score becomes. In essence, if I allowed them to run my credit, I’d have to stick with them.

Some lenders said they needed to run the credit check because each situation is different. While that is true—each loan is unique—their lowest rate doesn’t change. Regardless, they danced around the answer but wouldn’t give it to me.

These were nationwide companies—the ones you see ads for on TV—not local lenders. The few who did give me a rate often gave me rates that were too good to be true. I could tell I wasn’t getting a straight answer.

I realized later that I had been too vague. I should have asked for their best annual percentage rate (APR), because the term “interest rate” can be used to mean an introductory rate or some other special rate. Then they make up the difference between that low rate and the profit margin they want by charging fees (called points).

APR is a legal term. It’s a metric that was developed specifically to allow buyers to shop for loans using an apples-to-apples comparison. Otherwise, it can be really hard to know which loan is best.

If someone offers you a 30-year, fixed-rate loan at 4.5 percent with 2 points, is that better or worse than a loan at 4.75 percent with no points? As it happens, the 4.5 percent with 2 points is slightly better over 30 years. However, if you’d asked about a 15-year, fixed-rate loan, the 4.75 percent loan would be better. This is why you need to ask for the APR.

To avoid disingenuous lenders who are simply out to make a quick sale, I highly recommend asking your Realtor for a referral to a loan officer they trust. When you live in a small town, it becomes obvious in a hurry whether you’re out to fleece people or whether you’re providing a good value for your clients.

With local lenders, you won’t get calls at all hours of the day and night, but you should get straight answers. The loan process will still require a mountain of paperwork with W2s, bank statements, tax returns and the like (and if you’re self-employed, the mountain will be twice as high), but at least you’ll get a solid loan without hidden fees or surprise balloon payments.

It’s okay to buy some things online. Loans are not one of them.

If you have questions about getting into real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

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 Our Housing Shortage: Rearranging Deck Chairs While the Titanic Sinks

I recently attended several meetings that made me shake my head in disbelief. It was akin to watching people rearrange deck chairs on the Titanic while the ocean rushes in.

At these meetings, people discussed how to provide rental housing for displaced fire victims. Their recommendation was to put fire victims at the top of the list for newly available rentals. I have two problems with this. First, why should fire victims be put above others who need housing? Why, for example, should a doctor or teacher or other person coming to the area to help our community be put at the bottom of the list? Second, we have almost no rentals to offer these people, so no matter who gets priority, we simply don’t have enough housing to go around. Why are we talking about priority instead of how to increase the housing supply?

We have had a housing shortage in this valley for at least 15 years, and last fall’s wildfires made the shortage much worse. If we want to address housing, our local leaders need to recognize how supply and demand influence people’s behaviors and then make policy based on these well-established norms.

In the past 30 years, we’ve had no new market-rate apartment complexes of any consequence. Since 2010, only 92 residential building permits have been pulled in the greater Ukiah Valley. During that time, if we were simply to keep up with population growth, 420 new housing units should have been built, whether they were single family homes, duplexes or apartment buildings.

Clearly, we need more market-rate housing—housing that people who live and work in Ukiah can afford with salaries they earn from legitimate local employment. Although local government doesn’t have complete control over the housing market, they can influence the cost of development. Right now, their influence is going the wrong way.

In 2009, the county implemented an inclusionary housing ordinance. Inclusionary zoning requires real estate developers to give the county a certain percentage of the lots they develop or pay a fee in lieu of the “gift”. In our county, developers can either include low-income units as part of their development or build low-income housing in a different location as a condition of approval for their main development. This fee makes it prohibitively expensive to build market-rate housing in many cases. For the Lover’s Lane development in Ukiah, the inclusionary fee demanded by the county is $1.7 million, which makes any hope of a profit on the project pretty slim. If developers cannot make a profit, they will not build here. Would you go to work every day if your employer didn’t pay you? I didn’t think so.

In the meetings I attended, our county supervisors were getting bullied to make poor economic decisions. A lawyer associated with Legal Aid said the county could expect to be sued if the county removed the inclusionary housing ordinance. This is crazy.

If the only housing we build is subsidized for low-income residents, it will change our community. I’m not suggesting we shouldn’t have a mix of housing. We should. But the inclusionary housing ordinance is preventing market-rate housing from being built—housing for our fire victims, housing for incoming professionals who will enrich our community.

We have an opportunity to change course. We need to revoke the inclusionary housing ordinance and make it easier to build new subdivisions in the Ukiah Valley. If profit margins are thin in Ukiah and thick elsewhere, developers will go elsewhere. That’s just plain common sense. If you could do the same job in two equally great places and one place paid twice as much, where would you go?

If this matters to you, I strongly encourage you to call your county supervisor. Let him or her know you value market-rate housing and you hope they will stand up to the bullies.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

Spring Cleaning

Spring Cleaning and Home Maintenance

As flowers bloom and the weather warms, it’s time to think about spring cleaning and annual home maintenance. Whether you gather family members for a long work weekend or chip away a little at a time, maintaining your property protects your investment.

One of the smartest things you can do each spring is to plan ahead. For example, if you use wood to heat your home, you can have it delivered now, so by fall it is both stacked and seasoned when temperatures begin to drop. You can also test your air conditioner before the full heat of summer is upon us. If your air conditioner doesn’t work in April, I’m confident you’ll get a speedier response from the repairman than you will during the first blazing hot day when everyone is testing their air conditioners.

Next, take a walk around your property. Make sure you have 100 feet of defensible space; note any brush that needs clearing and identify any tree limbs that need removing, growing over your roof or fences. Remember, putting off tree trimming only makes matters worse—those limbs won’t get any smaller as time goes by.

Do a visual inspection of your roof to make sure you don’t have missing or worn shingles or other damage, especially around roof penetrations like vents or skylights.

If you have a propane tank and you want to check for leaks, you can mix up water with a little dish soap in a spray bottle. Spray the mixture on gas line couplings. If you see bubbles emerge, call the gas company immediately.

As you walk around, check concrete walkways and patios for cracks, especially if it makes for uneven footing. Smooth concrete can prevent everything from stubbed toes to broken hips. Rather than simply grinding down the rough spot, see if you can take care of the root of the problem, literally or figuratively. I’m not sure why people always plant trees with shallow roots wherever there’s concrete, but they seem to.

To prevent shallow roots from ruining concrete, I just learned you can line the hole where you plant the shallow-root tree with special mesh to force roots to go a little deeper. Obviously, this is not useful if you have a 10-foot maple that’s already well established. But if you’re about to plant something, it could be helpful.

Once your walkways are smooth, take a look at the exterior paneling of your house. Is the paint in good condition? If not, don’t wait. Like those limbs hanging over your roof, peeling paint is a problem that only gets worse with time.

If you’re planning outdoor work (like roof repairs or exterior painting), don’t get lulled into a false sense of security if it hasn’t rained for a few weeks. As my mother and mothers everywhere have said since time immemorial, “April showers bring May flowers.” Be sure your project can be buttoned up to prevent water damage if need be.

Once you’ve taken care of outdoor maintenance, head inside and check the washing machine connection, continue to replace heating/air conditioning filters monthly, and consider getting your carpets cleaned.

Tim Cabral of Cabral Carpet Care recommends cleaning carpets once a year, unless you have a lot of traffic (kids, dogs, etc.); then every six months is a good idea. Tim said you can just get the high traffic paths cleaned, if need be.

Vacuum cleaners are great for top-level dust, but they cannot pull all the debris out of the bottom of the carpet fibers, debris from doggy paws, shoes, and those moments when you’re watching TV and your team scores and the salsa goes flying onto the carpet. So, while vacuuming is good, getting your carpet cleaned professionally will get rid of that deep dirt and revitalize the carpet.

If you have questions about getting into real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

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A Science-based Approach to Water, Wildlife and Our Economy

I recently attended a presentation by Janet Pauli, Ph.D., the preeminent expert on our local water supply. She made a compelling argument about why all of us should understand a little more about where our water comes from, so we can avoid running out in the future.

This is a complex issue to tackle in a column, but I want to share some key points and encourage folks to visit www.pottervalleywater.org to learn more.

Brief History

We have two main rivers in Mendocino County: the Eel and the Russian. In 1908, a mile-long, underground tunnel was built to connect them and divert less than 2 percent of the Eel River through what was named the Potter Valley Project.

We also have two dams in Mendocino County: Scott Dam, which was built in 1922 to form Lake Pillsbury, and Coyote Dam, which built in 1959 to form Lake Mendocino. Scott Dam was created primarily to provide hydroelectric power and Coyote Dam was created for flood control. Today, the value of the water supply they provide far outweighs the value of their original purposes.

When Coyote Dam was originally built, it was supposed to be a three-phase project: 1. Build the Coyote Dam north of Ukiah, 2. Build the Warm Springs Dam in Sonoma County, and 3. Increase the height of Coyote Dam by 36 vertical feet. Because this was the original plan, easements were put in place, the bridge on Highway 20 was elevated, and the dam was engineered to support the new height. However, the third and final phase was never implemented because the existing height of the dam protected the Ukiah Valley in subsequent floods.

Current Issues

Our biggest worries now are not related to floods or power, but to water supply and how to balance environmental concerns with economic ones. During recent droughts, Lake Mendocino hit dangerously low levels.

When the dams were originally built, people focused on economic progress and largely ignored the environmental impacts of their actions. Today, some people argue for removing all dams and allowing rivers to take their natural courses in hopes of returning to a bygone era, but this is impractical and unrealistic. We need to find a balance between protecting wildlife and addressing the needs of people who live in Mendocino County.

There is no turning back time. Removing existing dams doesn’t undo the decades of evolution caused by logging, commercial and recreational fishing, past droughts and floods, cannabis cultivation and the changing ocean currents of the Northern Pacific Ocean.

Removing existing dams would, however, require hundreds of thousands of people to find a new water source for drinking water, fire suppression, recreation, agriculture, and many commercial and industrial uses. A recent study by Dr. Robert Eyler calculated that $740 million of Mendocino County’s business revenue is directly dependent on irrigation water diverted from the Eel River through the Potter Valley Project and stored in Lake Mendocino. And the flow of water doesn’t stop at the county line. In the Alexander Valley where they use 11,000 acre-feet of water from the Russian River, the economic benefits have been estimated at $145 million.

More than 600,000 people in Mendocino, Sonoma and Marin Counties depend on water from the Potter Valley Project’s Eel River diversion for their domestic and agricultural water supplies. This water also helps meet the instream flow requirements necessary for protection of the ecology and recreational value of the Russian River.

The lakes created by Scott Dam and Coyote Dam provide a haven for bald eagles, migrating waterfowl, elk, deer and many other species. Also, although the dams hurt the salmon migration when they were built; since then, the fish hatchery, fish ladders and strategic releases of water have helped migrating fish.

To protect the people and wildlife in our area against future droughts, we need to raise Coyote Dam.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

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Smart Homes Keep You Connected 24/7 – Part II

 

Last week, I shared some of the smart-home innovations made possible by modern technology, things like thermostats you can adjust with your cell phone regardless of your location, and smart doors and doorbells that allow you to unlock your door automatically or respond to a visitor at your door without being home.

These are just a few of the conveniences modern families can enjoy. Here are more you may not have heard about yet.

AMAZON DASH BUTTON

Don’t you hate it when you get home from a long day at work and realize you forgot to pick up cat food (again)? Amazon.com knows we’re busy, so they’ve made it incredibly easy to purchase household items with their Dash buttons. At home, I have a Dash button affixed to the wall in the garage directly above the place where I store my cat food. When we’re running low, I hit the button and it flashes green. Two days later a 25lb bag of cat food is delivered to my front door.

It’s really quite brilliant. You simply affix an Amazon Dash button on the wall or on the inside of a cabinet door (near the place your store the item in question), and when you run low on whatever it is—pet food, dishwasher detergent, soap, toilet paper, or any other essentials—you simply press the button and your wi-fi sends a signal to Amazon.com to put your item in the mail to you. Each Dash Button costs about $5, but since Amazon discounts your first order by that amount, the button is, in essence, free.

SMART REFRIGERATOR

At this January’s Consumer Electronics Show in Las Vegas, LG featured a new refrigerator that did everything except make dinner. You can look into the fridge without opening the doors, create notes and reminders, scroll through recipes, peer into your fridge remotely, and monitor the freshness of your groceries. Right now you have to manually enter expiration dates to get alerts as those dates approach. Eventually, you’ll be able to scan those expiration dates, removing the need for manual entry. Gone are the days when you have to call home to find out whether you have enough butter.

ROBOT VACUUMS

Probably one of my favorite inventions is the Roomba, in our house we call it “Robby the Robot.” Granted, this is not a smart-home innovation as far as its connection to the internet, but it sure is convenient. Our version just vacuums hard surfaces, but the newest robot vacuums can also mop the kitchen floor and clean windows.

SMART GLASS

Smart glass is another cool invention. With an electrical charge, clear glass becomes opaque. I can imagine installing this in the bathroom. When someone’s in the shower or on the commode, you make the glass opaque; otherwise, you allow the clear glass to make the bathroom feel more expansive.

SMART TELEVISION

Voice-activated television is sure handy. You can surf the net, watch YouTube, enjoy a show on Netflix or Amazon Prime, and you never have to get off the couch. I can say, “Hey Google, I’d like to watch Scandal.” Google responds, “Would you like it on YouTube or Netflix?” If I choose Netflix, Google remembers and sets it up that way next time, too.

You do have to be a little careful because advertisers have discovered that if they include “Hey Google” or “Alexa” in their commercials, they can cause your smart-gadgets to order their product for you.

ATOMIC CLOCKS

If all this smart gadgetry seems a little too much, you may consider starting with an atomic clock. These battery-powered clocks connect to an atomic clock so they are always on the right time. When Daylight Savings begins or ends, the clocks automatically make the adjustment. Maybe that’s enough convenience for now.

If you have questions about getting into real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

MCCC

Mendocino County Construction Corps

As long as there have been schools, there have been students who knew sitting in a classroom all day wasn’t for them. This feeling doesn’t necessarily go away when it comes to the workplace; not everyone is meant to sit behind a desk. But because kids often hear that they have to go to college to amount to anything, they don’t consider other avenues.

Well, I’m here to present another avenue: getting into the trades. In Mendocino County, many tradespeople are approaching retirement age and they cannot find enough people to replace them. I just attended a meeting of the Mendocino County Construction Corps (MCCC) program, a pilot program that encourages high school seniors to pursue a career in construction, and I enthusiastically support it.

MCCC is made up of tradespeople and business people, educators, and community benefit organizations. It’s a great example of community members recognizing a need and working together to address it.

As a real estate broker, my business depends on having enough housing for the people who live in our valley. Right now, we have a shortage—one that just got worse because of last October’s fires. I love the idea of local people supporting themselves financially by becoming carpenters, plumbers, electricians and general contractors. I also love the idea of having enough plumbers in town so if my washing machine breaks and water is flowing all over my house, there’s someone I can call who can help me immediately.

In recent years, there’s been more school funding for what they call “career technical education” (CTE), programs that help students get the skills they need to pursue careers that do not necessarily include going to a four-year university. CTE programs remind students that there are plenty of people who make a good living fixing cars, growing food, and building houses, among other pursuits.

While there is some money for CTE programs, it’s limited, so when Ukiah Unified School District CTE Coordinator Eric Crawford was inspired to start the MCCC, he knew he’d have to figure out how to fund it with grants and donations. He pulled together a steering committee and since then, he has been able to raise more than 75 percent of the funding needed to provide 14 weeks of education for the 21 students who were chosen through a rigorous selection process.

The program includes weekly evening classes and four all-day Saturday classes on subjects like power tools, reading blueprints, construction safety, first aid/CPR, framing, roofing, solar, plumbing, concrete, electrical, construction math and more. Students also learn to drive a forklift and other heavy machinery.

Once they complete the coursework, which is mostly hands-on practice, the students participate in a two-week boot camp where they help build houses for Rural Communities Housing Development Corporation and the Hope Crisis Response Network. At the end of all this, they’ll receive a $750 stipend for their work and a tool belt with tools to get them started.

Local tradespeople who believe in the importance of supporting our community and who like the idea of creating a pool of well-trained people have volunteered to teach the classes. John Boies of Granite Construction said Granite encourages employees to give back to the community, which made it easy for those who like to teach to sign up.

In addition to teaching, several local businesses signed up to be major donors (donating $1,000 or more) include Christensen Construction, Friedman’s Home Improvement, the General Contractors Association, Granite Construction, Guillon Inc. Construction, John McCowen, the Mendocino County Office of Education, Mendo Mill, Menton Builders, Jim and Arlene Moorehead, Realty World Selzer Realty, and the Ted and Wilma Westman Fund of the Community Foundation of Mendocino County.

After the boot camp, local contractors will have the opportunity to hire MCCC graduates. If you’re interested in learning more about this program, visit https://sites.google.com/uusd.net/mcccwebsite.

If you have questions about getting into real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

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Warning Signs of Underlying Problems

When you fall in love with a house, it’s easy to get swept away in the emotion of it all, imagining summer barbecues in the backyard and holiday celebrations around the hearth.

However, before you begin arranging the furniture, be sure to look for these warning signs that things may not be as perfect as they appear.

  1. Overpowering Scent
    When your Realtor opens the front door to show you a house for sale and your nostrils are immediately accosted by strong smells, from candles to air freshener, be suspicious. It’s one thing to notice a pleasant aroma; it’s another when the smell is strong enough to mask a problem. Pets, mold, smoking and other issues can cause long-term odors.
  2. Gaps in Tile Work
    Poorly executed do-it-yourself remodeling can be problematic for a few reasons. At best, it’s unappealing. At worst, it may indicate this and other work on the house doesn’t meet professional standards. For example, is the tile the only problem, or did the previous owners neglect to remove the dry rot underneath, opting to patch over it instead?
  3. Major Cracks and/or Sticky Doors and Windows
    Most homes have hairline cracks in walls in ceilings, but if you see major cracks, take a closer look. Is the house settling on its foundation, or is the foundation crumbling? Also, pay attention to any doors or windows that are hard to open and close. If you’re concerned, consider hiring a contractor, home inspector or engineer to check things out.

    While foundation problems may be more common on hillsides, flat lots can be unstable, too. I once owned a building on a flat lot. It was a concrete building on a slab floor. What I didn’t know when I bought it was that one corner of the building had been built on an old dumpsite. The landfill underneath began to settle and that corner of the building settled with it. After extensive and expensive testing and renovation, the problem was finally solved, but it was a huge bummer.

  1. Mold
    A few small, black or gray mold spots may seem like no big deal but think again. Mold can cause major health problems, and it may indicate more extensive water damage that isn’t visible during a casual inspection. Look carefully at walls, inside cabinets, under sinks and behind furniture in kitchens, bathrooms, laundry rooms, around water heaters, and anywhere else water is commonly used. Keep in mind that problems resulting from mold can be so bad that some insurance companies exclude them from homeowner policies.
  2. Cosmetic Enhancements
    Paint can hide a multitude of problems. While many people put a new coat of paint on the interior and exterior of the house to spruce things up before they sell, others use paint to cover flaws. It’s perfectly okay to ask your Realtor, “Is that new paint covering anything I should know about?”

It’s always better to find problems before escrow closes. Of course, sellers are legally required to disclose problems, but they can only disclose what they know or should reasonably have been expected to know. This is why inspections are so important: home, roof, pest and fungus, heat and air, well, pool and more! Can they get expensive? Sure, but not getting them can be even more expensive. Consider the cost of inspections a down payment on your peace of mind.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

arbitration

Arbitration

When you buy or sell a house, it can be very exciting, whether you’re becoming a homeowner for the first time, upgrading to a new neighborhood, or selling a home to start an adventure elsewhere. Sometimes, however, things do not go as planned.

There’s a paragraph in the standard purchase agreement from the California Association of Realtors that allows a buyer to include an arbitration agreement as part of the offer. The agreement basically states that if the buyer and seller have a disagreement that will likely amount to more than a small-claims-court-sized settlement, then both parties agree to binding arbitration.

Arbitration is an alternative to taking someone to court. It’s a dispute resolution process whereby both parties agree to an arbitrator who acts like a judge, listening to arguments from both sides, reviewing the evidence, and “awarding” one side or the other. Usually, arbitrators are attorneys or retired judges, but sometimes a real estate expert can fill the role. The upsides of arbitration are that it is typically cheaper and faster than litigation. The downside is that it is often binding, whether the arbitrator makes a bad decision or not. If there’s mistake is in your favor, that’s great; but if you’re on the losing end, you’re stuck with it.

While this may give you pause, arbitration is often a faster, less expensive alternative to litigation. Here’s how it works.

A typical arbitration starts with selecting an arbitrator. Both sides must agree to the arbitrator, preventing one side from insisting that their brother-in-law, who happens to be a lawyer, preside over the case, for example. Since most people don’t go into arbitration too often, they contact a private arbitration service to fine a qualified person.

Once the arbitrator is selected, the buyer and seller submit formal written statements before the hearing, outlining their positions on the dispute. Both sides then prepare for the hearing, which to the untrained eye seems exactly like a court trial. Both parties submit evidence, call and cross-examine witnesses, and make arguments to the arbitrator. They can also depose witnesses and gather written evidence and documents.

After the arbitrator considers all the evidence and testimony, they announce their decision (usually several days after the hearing ends). This whole process can take months, which may sound like a long time until you realize that if it were litigated in the courts, the same case could take years.

The types of disputes requiring arbitration include things like breach of contract, misrepresentation and/or fraud. The arbitration agreement most often used in Mendocino County excludes certain matters from arbitration, including those within the jurisdiction of small claims, probate or bankruptcy court.

Be aware that if a dispute includes the actions of a third party (someone other than the buyer and seller), arbitration usually isn’t worthwhile because the third party isn’t bound by the arbitrator’s decision. For example, if a dispute involves an inspector, insurer, or appraiser, unless they agree to arbitration, they can simply refuse to comply with the arbitrator’s findings.

Even if the buyer and seller did not agree to arbitration in their original purchase agreement, they can still opt to go that route in the event of a dispute. The bottom line is this: there are pros and cons to arbitration, and the best way to know if it is a good choice for you is to ask your attorney. Talk to your attorney for advice; advice WILL change based on the facts of the case.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.