INSPECTIONS - We begin with the whole house inspector. You may use anyone you like for this process.

In KS and MO inspectors are not required to be licensed, nor are they required to carry insurance. Most try to limit their liability to the price of the inspection. FYI - we are currently trying to change this through legislation. The key things to ask an inspector is what formal training do they have? Are they insured? And for how much? A top professional will have at least $250,000 worth of insurance, be a member of a association with educational requirements, and take continuing education on a regular basis.

Also, I choose inspectors that climb on the roof (weather permitting), crawl in the crawl space, and climb in the attic. Good ones will stay abreast of building material recalls and past problems.

On my web site, I have some that I trust. http://stevekornspan.com/referrals.htm#inspectors

TERMITES - In addition to the whole house inspection, it is prudent to have a termite inspection done. Lenders previously required it on all homes, now some do and some don’t. Termites are quite common in this area so if there is evidence of activity, it should be treated. Don’t get excited, KC has termites, the damage is normally not as bad as in the warmer climates where termites can really work on a home year round. Here you might see a couple of boards with damage. In most cases, the home inspector will bring in a termite specialist or be trained to do termite inspections.

RADON - Radon is a naturally occurring gas. The EPA rates geographic areas of the US based on the potential that it might exist at various levels. The counties in the KC area have, based on the EPA scale, the “highest potential” of exceeding 4.0 pCi/l.

Link http://www.epa.gov/radon/zonemap/kansas.htm

In my estimation, about 50% of the homes in the KC area have levels that exceed the EPA recommended limits. A home can be fine one day then be high the next. It can occur in any type of home, but in my opinion, it tends to be more of a problem in homes with non-walkout basements. Basically, the gas comes up from the ground and builds up in a confined space. If it is a drafty “older” basement or a home on a drafty crawl space, the gas is more likely to blow outside. Most home inspectors have a testing device that measures the levels over a 72 hour period.

Here is a link to the EPA website for more information. http://www.epa.gov/radon/realestate.html

If a home has radon levels exceeding the recommended levels, the fix (in layman terms) is to install a fan and seal the cracks.

TIME - The average home can be inspected in 2-3 hours. Most home inspectors will have lock box keys so they can let themselves in to begin the process. Then, it is normal for the buyers (and their agent) to come for the last hour or half hour to review the findings and ask any questions about the home. Home inspectors are happy to answer any questions or address any concerns. If you desire, you are welcome to be there during the entire process.

REPORT - Most inspectors will produce a very detailed report including pictures taken of any issues. Usually, the reports are posted to a website or emailed within 24 hours of the inspection.

PAYMENT - Payment is due at the time of inspection unless prior arrangements are made. In some cases, inspections can be paid at closing, in most cases the buyers can be reimbursed or credited on the closing statement. If you want a credit please be sure to give me the receipt.

SCHEDULING - Let me know a few days or time that work best for you so we can coordinate our schedules.

Generally, these tests are a good place to start with the whole house inspection. Depending on what they find, they might suggest you contact specialists for such things as A/C / Furnace, Roof, Foundation/Structural, Mold, Plumbing, Electrical or others.

Steve Kornspan
Re/Max Alliance
913-871-4148 fax: 913-814-3378
Steve@SteveKornspan.com
http://SteveKornspan.com

Detection: to solve the problem we must find it. This is often missed by many carpet cleaners and until we know the severity of the damage how can we offer a solution! This is where our training separates us from most others.

First line of detection is the nose. Once urine is smelled it is seldom forgotten. If you can smell it from the front door, “Houston we have a problem!” The challenge with urine is the urine starts out acidic and changes to moisture loving (hydrophilic) alkaline salts that can permanently damage carpet color. The other problem is in the summer when the humidity levels increase or when it’s rainy, it smells worse. This is because these salts draw moisture into the deposit and it starts re-evaporating or off-gassing the ammonia gas from the bacteria in the urine. If the carpet cleaner just comes in and cleans the carpet it will most likely smell worse because they just created humidity above it. It may go back to normal and probably improve a little because they removed some of the odor source from face fibers of the carpet. The real problem is in the backing, padding or the sub floor. The odor is also coming not just from the bacteria but also a chemical odor is emitted. This is why it may take a combination of different deodorizing products to achieve the desired results.The next issue is the stain. Urine has natural pigment from urea and chemically reacts with nylon to form that bright yellow stain we all know and love. To make matters worse it goes down warm (98.6 F) which decreases the surface tension as it runs straight down… Olefin and polyester carpets won’t stain as easy but it runs down into the sub-surface easier because the fiber doesn’t absorb it as much. So it would be nice to know the fiber content.

Second is by UV light. It picks up the dyes in the urine. It will glow like you just walked into a novelty gifts store at the mall in a white shirt. This is also why we want to know the sex of the animal. Females will go in open areas, males around objects like legs of chairs. Did it get the chair too? Has the animal been spade or neutered? If not they will most likely be marking territory in small amounts rather than emptying the kidney’s by the back door. The UV light will pick up anything that will fluoresce.

Third is the moisture meter, it will pick up the moisture drawn into the urine salts. Also this is one way to differentiate between urine and a drink spill under UV light. Another is the spill pattern. Is it a splatter or gradual circular from a squatting animal…?

Fourth would be visual inspection of the backing stains, they are easy to find but this is the most intrusive method and will require re-installation of the carpet. Offer a solution: Solutions may range from simple topical deodorization to erecting an odor control barrier from the sub floor to the tips of the carpet. As a rule, if the results of inspection indicate more than 20% coverage on the surface, replacement may be required to completely solve the problem. Understand that there is a lot of latex glue used in the construction of carpet and urine spreads as it goes down so the backing may have 60% coverage. In between the backing structures, the latex absorbs some of the urine, which is not only an odor issue but deteriorates the carpet construction itself.

At this point the age, value of the carpet, and level of tolerance must come in to play.

We provide clients the information they need to make informed decisions. If you are getting a new puppy this may not even be an issue.

For a consultation call

Brian R.Bock
IICRC Master Textile Cleaner
Bock’s Steam Star - Kansas City Carpet Cleaning
913-438-7767
www.steamstar.net

On Thursday, December 20^th, President Bush signed into law a bill passed by Congress: HR 3648 –Mortgage Forgiveness Debt Relief Act of 2007. The three major points are:

· Elimination of the “phantom tax” on foreclosures, short sales or other discharges of debt on a primary residence. Consider this scenario: A property is worth $250,000, and the mortgage balance is $300,000. Under the old rules, if a lender forgave the $50k difference as part of a foreclosure, short sale, refinance or loan modification, the borrower had to claim the $50k as income and pay federal income taxes on that amount. The new law eliminates this “phantom tax”, and the forgiven debt is no longer treated as taxable income to the borrower as long as certain requirements are met, such as the discharged mortgage balance must be on the taxpayer’s principal residence.

· The tax deduction for mortgage insurance premiums is now extended until December 31, 2010 instead of expiring at the end of 2007. The same rules apply as before in terms of the income limitations etc., and these rules are covered in the taxation section of the CMPS curriculum.

· The capital gains exclusion is now $500,000 instead of $250,000 for an unmarried individual who sells their primary residence within 2 years of the time their spouse has died. This new guideline applies to sales after December 31, 2007, and provides relief for widows and widowers by giving them a 2 year window from the time their spouse has died to sell their home and receive the $500,000 exclusion. Of course, the same rules apply as before, where the individual(s) need to have lived in the home as their primary residence for 2 out of the last 5 years.

You can read the full version of the bill by visiting the Library of Congress THOMAS web site and searching for HR 3648. Version # 6 (the enrolled / ENR version) is the final version that was passed by both the House and Senate.

Update # 2 - AMT Relief Passed by Congress (FINALLY)!

After much drama and a few rounds of chicken between the House and Senate, Congress FINALLY passed AMT relief on Wednesday, December 19. The President has indicated a strong willingness to sign this bill into law, and it is currently awaiting his signature. Under this one year patch, approx. 20 million taxpayers have escaped the clutches of the AMT. However, approx. 3.5 million taxpayers are still expected to be subject to the AMT.

*Increases the maximum loan term from 30 years to 40 years which will help more people to qualify for more by decreasing monthly payments

*upfront mortgage insurance and monthly mortgage insurance will be based on borrower risk, including credit scores.

*Condominiums will be views as a single family rather than a multifamily project. This will make it easier to make FHA loans on condominiums.

These are a few of the highlights. I will keep you informed. Have a great weekend.

Dan “The Wizard” Farmer
Loan Officer
Peoples Bank
7579 West 151st Street
Overland Park KS 66223
Office: 913-897-2000
“Kansas City’s Ultimate Door to Home Ownership”

There are some extraneous issues, which I am both unaware of and failed to act on. Yes, my home inspection report did cite some issues regarding my furnace, which should have placed responsibility on myself to request a service call. If there were indeed some ‘serious issues’, the specialist could have found them during the negotiation period (whoops, I failed to act on this…who can I blame?).

Some of the HVAC contractors my home warranty company sends do not charge the warranty company for these ‘warranty calls’ (I was unaware of this … fill in the blanks how they make their money).

When you receive these phone calls, it is imperative that your clients receive a 2nd, and even 3rd opinion. Substitute HVAC contractor for any other profession in this scenario. One of our agents very recently had clients scared to death over reported carbon monoxide poisoning issues with their furnace; he wisely recommended they obtain a 2nd opinion, which they did; the first reports were ultimately revealed to be inaccurate.

Another recent situation involved a warranty HVAC contractor stating there was a heat exchanger crack. The agent wisely told the clients they should receive a 2nd opinion; and that a general inspection is not responsible for identifying everything that a specialist might identify. I believe they ignored the recommendation for a 2nd opinion, in hopes of having their 17 year-old furnace replaced by HomeTeam. Needless to say, we did not replace the furnace.

Over a year ago, a first-time homebuyer was told (by the warranty company HVAC contractor) their furnace needed to be replaced, as it was “rusted out”. Since this did not pass the smell test with my report, I met with the agent and warranty representative and requested access to the furnace, which had already been replaced. The warranty representative stated the furnace had been disposed of and was no longer accessible (how convenient!).

The free 90-day warranty we provide to all clients, through American Home Warranty Company, does not send their preferred contractors to a warranty call. Rather, they give the clients free reign to select a reputable company. I firmly believe that the majority of contractors are honest, however, there are times when a second opinion is a wise move.

Contributed by

Mike Faulconer

HOMETEAM Home Inspections

www.kansascity-homeinspections.com

Usually, you can get it after talking to a loan officer for 15-20 minutes on the phone.

It is in NO WAY an obligation for you to use a certain lender. There is no charge to you.

After the contract is accepted, you normally have 2-4 weeks, and legally up until the day we close, to select any lender you want. This is the time to aggressively shop rates and charges. Although I can honestly say, my guys have never been beaten except by each other. They work very close for my clients and to keep my business.

Here are a few mortgage lenders that are very capable, well known and trusted locally. This is negotiating point in our favor. When I sit down with an experienced agent they ask me have I used a this lender before? Especially if they do not know them. Assuring the seller that they will get their money at closing is a key negotiating point in our favor.

LINK TO TRUSTED MORTGAGE LOAN OFFICERS
These are a few I use, I have a few more good ones and you are certainly free to choose anyone you like. I get NOTHING but great service and the occasional favor for my clients when they are in bind. Working with good people avoids many problems and when things happen, good people know how to fix them.

Each lender seems to do some loans better than others. Keep in mind, you are not committed to anyone until the day you close on the home.

If you have another lender that you prefer, let me know who it is and I probably know a loan officer there. It is best to work with someone you know in case a problem comes up.

If you would like to discuss financing options, I would be happy to help, as would any of the above. Again, like the rest of my team, they are all VERY GOOD at their jobs!

Best regards,

Steve Kornspan
Re/Max Premier
913-871-4148
fax: 913-428-2649
Steve@SteveKornspan.com
www.SteveKornspan.com

Dear Steve,
Do you have an opinion on foreclosures? Obviously, the no warranty (disclosure) part is disturbing, but in your experience, is a pre-purchase inspection typically enough to make it worthwhile?

Also, I don’t know anything about Missouri or Kansas law regarding an owners’ right of redemption. Is there a possibility that an owner could preempt my offer?

FORECLOSURES - In some cases the owner does have a right of redemption. In some cases they do not. We would have to check on each particular property. How’s that for a “lawyer like” answer?

Worse than preempting your offer, I have heard of people redeeming the property up to a year later, even after a buyer bought it and began repairs! Obviously, they did not do their homework.

Provided there is no right of redemption, my personal experience is that I would almost never recommend one for a first time home buyer for the following reasons:1) The previous owners seldom could afford to maintain the home properly so there will likely be issues. Not only maintenance, but they frequently have damaged the property.2) Many times the house sits abandoned (not maintained) for months or years before it even gets put on the market. So it will be run down and perhaps have rodents, mold, or worse.

3) As with any renovation, the buyer must be prepared to handle the unexpected ($$$). Many times you don’t know what you could find when you start fixing things. A simple job like replacing some tile in a bathroom could lead to all new drywall, flooring and/or cabinets. Or worse mold remediation. You just don’t know and unless you are prepared for it time wise and financially, don’t take the risk.

4) Many times the reduced purchase does not equate to the cost to fix it. Keep in mind, if you cannot do the work yourself, a bathroom can cost $2,500+, a kitchen at least $10,000+, new carpet $3,000+, Exterior paint $2,000+, Interior paint $3,000. Foundation issues $500 to $25,000. A new fence $3,000+. The list goes on. If you can do the work yourself, the costs are about half.

I couldn’t sleep nights knowing I put a family in a home that they were not able to live in or couldn’t afford to fix. You would not believe the homes I have seen.

That being said, I might recommend a foreclosure for a first time home buyer that:1) Has another place to live during renovations.

2) Is an experienced carpenter or tradesperson.

3) Is looking to create something very nice and financially prepared to make the investment.

4) Is ready to act fast. The good ones don’t last. We need to constantly watch and jump quickly on them.

There are some good deals and I am not ruling them out, but please do extra research, make sure everyone on your side (realtor, home inspector, home contractor, etc.) knows what to look for and even then be prepared.

DON’T GET IN OVER YOUR HEAD.

I like to sleep at night.

Steve Kornspan
RE/MAX PREMIER
Steve@SteveKornspan.com


www.SteveKornspan.com

On the other hand, a change in employment or earning ability an be a longer-term problem, especially if your financial outlook is unknown.

Respond to Contact  - Ignoring a problem rarely makes it go away. Unfortunately, in far too many cases
borrowers fail to respond to their mortgage service company (the firm that collects payments and sends notices when payments have not been received). The first step in showing good faith is responding to the calls or letters regarding your delinquency. Many service companies have a foreclosure prevention department that is trained to empathize with troubled borrowers. So make initial contact, but be careful not to agree to any new terms hastily.

Get Outside Assistance - The mortgage company may offer up several different solutions initially, but the last thing you want to do is to agree to something new that may put you into even more of a bind down the road. Before agreeing to any new terms, you should describe your situation to an outside expert. Seek outside help in the form of a real estate attorney, credit counselor or a housing counseling agency.

Document, Document, Document - The most caring mortgage lender in the world still sees things largely in black and white, so it’s important to gather as much information as possible. Begin by collecting all correspondence from the mortgage service company. Keep envelopes when possible, as sometimes the postmark of critical notices can affect a borrower’s eligibility for relief.

Document Income - Collect as much documentation displaying your income as possible. Lenders typically want to see at least one month of income, but get together as many consecutive recent pay stubs as possible. Find your last two to three tax returns and W2 forms. Also include three to six months of bank statements.
On the other hand, a change in employment or earning ability can be a longer-term problem, especially if your financial outlook is unknown.

Document Expenses - Assemble all bills, paid or unpaid, from the time you began to fall behind in payments until now. Include utilities, credit card bills and auto payments. It’s particularly important to show any of the reasons that you may have fallen behind in the first place (such as unexpected repair or medical bills). The documents will likely help tell the story of why you fell behind on your mortgage payments. Now it’s up to you to fill in the blanks with the human element. Write down all of the circumstances that lead to your current situation, and you’ll be better prepared to explain yourself to the powers that be. Possible Solutions. Depending on the number of payments missed, the size of the loan and the financial out look of the borrower, the mortgage company has a variety of potential solutions that it may offer. - If you haven’t missed many payments, the mortgage provider may work with you to form a repayment plan that allows you to pay off the past due amount bit by bit (in addition to your regular mortgage payments).

Reinstatement - Should you be experiencing a temporary shortfall of cash, your lender may provide an extended period of time to pay of the past due amount. In most cases you will still be responsible for any late fees or penalties you’ve already incurred.

Forbearance - If you need temporary relief, the lender may offer a forbearance plan. A forbearance plan suspends or reduces your payments for a set period of time, with the unpaid to be paid later in either pieces or one lump sum. Loan Modification - Longer term financial problems that affect overall income are sometimes solved by loan modification. Any term of a mortgage may be modified by a lender: the rate, the payoff date, and even the total amount owed. A lender may modify the terms of the mortgage if you cannot payments under the current agreement, but the lender is reasonably sure that you will be able to consistently make future payments under new terms. Modifications are extreme measures and are used sparingly, but are an option for lenders who conclude that foreclosure would be more costly.

Loan Modification - Longer term financial problems that affect overall income are sometimes solved by loan modification. Any term of a mortgage may be modified by a lender: the rate, the payoff date, and even the total amount owed. A lender may modify the terms of the mortgage if you cannot payments under the current agreement, but the lender is reasonably sure that you will be able to consistently make future payments under new terms. Modifications are extreme measures and are used sparingly, but are an option for lenders who conclude that foreclosure would be more costly.

Be Relentless, but Realistic - Most mortgage service companies are essentially broken into two branches. The first tier is the collections department, whose job is to track down delinquent borrowers and recover back payments. The second division is the foreclosure prevention department (sometimes called loss mitigation, delinquency customer service or loan resolution). This second tier is responsible for making the tough decisions. Getting past the collections agents and to the loss mitigation department is critical. The help of an attorney can be crucial in gaining you such access. When you do get through to a loss mitigation agent, tell your story and answer all questions about your income and expenses, and request an application for forbearance or modification. While the hope is that the lender will offer mitigation, you should be prepared for the worst case scenario that you will have to move out. However, if an the lender does over loan resolution, they likely will push you to make a quick decision. Instead take if they offer take time to consider it with an advisor before agreeing to anything.