Ask our broker

QandA

WITH PETER G. MILLER

How to Figure Future Traffic Flow into Price of a Home
Q: I’m buying an apartment condo. In one of the areas I’m looking the government is building a new museum, a move that’s likely to increase area traffic. How would this affect the property value of the apartment condo? A: More traffic and a unique, desirable attraction should increase the pool of potential buyers and thus enhance the value of the property.Alternatively, more traffic might also lead to parking problems and related issues.The larger question should be:Where would you prefer to live? Your chief concerns should be price, unit size, location, monthly fees and the like. Q: We’re selling a single-family home on a large lot. The market here is hot and the day the sign went up our broker received many inquiries. One agent asked if we would sign a full-price offer today, with one week for inspections and such. Our agent said that all offers would be considered in a few days when we return from a trip. Was the agent right or should we have immediately accepted the offer? A: By instantly accepting a written offer you would have gotten the full list price, a good result by any standard. However, you’re in a hot market.The sign just went up and you immediately have calls.The agent wants to get you the best possible price and terms, so it makes sense to let buyers compete for the property. Within a few days you’ll get the original offer if the buyer was serious and you may also get other offers – perhaps including offers for more than the asking price. Q: I want to make an offer on a property already under contract. The first contract requires certain financing, but if that requirement is not met the buyer can withdraw from the sale without penalty. I have made a back-up offer on the property. Can the owner accept my back-up offer instead, with no financing clause and a better price? A: No doubt the seller would prefer your offer, but before accepting a back-up proposal the owner must honor the current agreement. It’s a “contingent” contract; that is, certain requirements must be satisfied before the agreement is finalized. It may happen that
See ASK OUR BROKER, Page 2

Inside an award-winning remodel: great communication between client and Minneapolis design/build firm Otogawa-Anschel and a resourceful mix of the luxurious (a soaking tub for two) and the thrifty (a scrap granite sink surround) made for a spectacular remake of a master bath.

Bathroom Basics

Eight Tips from an Award-Winning Renovator
BY MARY CONNORS
Content That Works hat does it take to create an awardwinning bath? For OtogawaAnschel, a resourceful design-build firm, the formula was pretty simple: $28,000, four weeks and an innovative, open plan. One of 25 companies honored with a 2005 national COTY award from the National Association of the Remodeling Industry (NARI), the Minneapolis company took top honors this year for a residential bath renova-

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tion costing less than $30,000. You don’t have to spend that much to remodel a bathroom, of course.According to NARI, the average homeowner will spend in the neighborhood of $10,000 for a typical redo. By careful consideration of what’s important to you, working with design assistance tuned in to your budget and goals, it’s possible to craft something really special. Chemistry and communication between homeowner and the designer and builder are essential.To succeed with your renovation, “find a remodeler you like and who listens,”

says Michael Anschel, owner and principal designer.“It’s a relationship, and if it isn’t there the entire process is miserable.” His success with the award-winning bathroom remodel started with clients who were open to suggestion.“There are two types of clients,” he notes.“There are those who have researched and thought through what they want and those who watch TV shows and listen to their friends.” Is there a bathroom-remodeling project in

See BATH MAKEOVER, Page 2

Rules of the Road for First-Time Renters
BY CHARLES SCUTT
Content That Works Owing your own home may be the great American dream. But renting a residence also offers practical benefits, provided you do your homework, choose a rental unit carefully and read the fine print before signing anything. It’s a great time to rent, says Alexander E. Hamilton, real estate attorney with Benjamin,Weill & Mazer in San Francisco.“More and more people have invested in rental property rather than the stock market,” says Hamilton. “Tenants have more choices than ever before, and rents are generally kept in check by the presence of a lot of rental housing on the market.” First-time renters should make it their business to understand the differences between renting and owning and the tradeoffs involved, says Jim Kramon, partner in the Baltimore law firm Kramon & Graham and author of Starting Out or Starting Over, (Sphinx Publishing, 2004).You can usually rent an apartment, condo or single-family home less money than is required for ownership, but a renter obtains no equity or growth potential and no tax relief.A tenant also must

See FIRST-TIME RENTER, P. 2

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FIRST-TIME RENTER
CONTINUED FROM PAGE 1 follow the rules of the lease, which may mean a more restrictive lifestyle, and must be tolerant of neighboring renters in the building.

THREE RULES FOR RENTERS
Three criteria make for a good rental deal, according to Hamilton. • Is the space suitable for your needs? Says Hamilton,“Ask yourself: Is it big enough? Does it have amenities that improve your standard of living such as cable TV, high-speed Internet service, storage facilities, or new appliances? Has it been well maintained?” • Consider the location. Is it convenient to public transit? Is the neighborhood safe? Will traffic noise be a problem? Is it close to grocery stores and restaurants? Are there any nuisances, such as low flying aircraft? Is the weather good? Who are the neighbors, and what hours do they keep? • Scrutinize the terms of the lease. Is the rent in line with other units in the area? Who is obligated to fix things when they break? Is there a management company or are you required to deal directly with the landlord? Can you decorate without the landlord’s consent?

UNDERSTANDING THE LEASE
It’s vital for first-time renters to understand the contractual nature of a lease, notes Hamilton. Unlike a rental agreement, which is normally on a month-to-month

basis, a lease obligates the tenant to pay rent for an extended period, normally 6 months to a year. “A good lease is one that provides the tenant with the premises at a reasonable rent for a reasonable amount of time, permits the tenant to do everything reasonable he or she wants to do in the apartment, such as have a pet, and provides a renewal option at a small increase in rent,” says Kramon. Lease terms are not set in stone. It’s possible to negotiate with a landlord to meet your needs, Hamilton says. Rather than negotiating to revise a certain lease term, it may be easier to add a term, he says, such as one that allows you to get out of a lease early if you can find a suitable replacement tenant. Consider the time frame of the lease; if you don’t have a reasonable expectation that the residence will suit your needs for the full term of the lease, don’t sign it.“If you anticipate changing jobs, getting married, or having children, you should plan accordingly,” Hamilton says. Be prepared to provide credit references or find a family member willing to cosign the lease if you don’t have sufficient credit history to satisfy the landlord, says Hamilton. Read and understand all terms of the lease. Don’t skip the fine print.“Be certain you understand everything in it,” Kramon says.“It is very useful to have a checklist of your requirements before you review your lease.This will enable you to be certain that everything you need in your lease will be there.” If you’re unsure of any aspect of the lease, ask a knowledgeable relative, real estate agent or attor-

ney to explain it to you.

RENT INCREASES
Generally, a landlord cannot increase your rent during your lease term unless your lease allows for it. Once the lease expires, the landlord can usually increase your rent as much as he or she wants, as long as there are no limits imposed under rent control laws or your original lease. To increase your rent, a landlord must give you proper notice. State law may require your landlord to provide written notice and serve it personally to you.

Ask our broker
CONTINUED FROM PAGE 1

SECURITY DEPOSIT
Many landlords require a security deposit up front, a lump sum (often a month or two of rent) held in an escrow account and returned to the tenant when he or she moves out.The landlord is allowed to deduct amounts from the security deposit for legitimate reasons, such as damage to the property, unpaid rent or cleaning. In some states, a landlord who requires a security deposit is legally obligated to provide a new tenant with a statement detailing the condition of the premises before that tenant moves into the property.Walk through the apartment with your landlord or the property agent before signing the lease, to ensure that you agree on the condition of the unit. Keep a copy of the description in a safe place, along with your lease paperwork, so that you can refer to it when you move. © Content That Works

the buyer will withdraw the contingency because the financing terms have been met or just because the buyer wants the property; or it may be that the financing terms cannot be met and therefore the buyer will back out. In this situation it would be good to know the precise terms of the financing contingency. For example, it may be that the buyer must get be able to get a $300,000 mortgage at 5.75 percent to close the purchase, and it may also be that the seller has a 24-hour “kick-out” clause.This means if the buyer cannot get financing upon the seller’s demand within 24 hours, the deal is finished, the buyer gets back the deposit and the seller can look at other offers. For details, speak with your broker.

Q: I want to buy a home for less than the asking price. Can I make a reduced offer that requires the broker to lower his commission and thus leaves more for the seller? A:When a home is put up for sale through a broker, the broker and owner create a “listing” agreement that establishes the marketing price for the property, various sale terms and the broker’s compensation.This is an agreement between the owner and the broker, no buyer is involved, and it’s an agreement established before any purchaser makes an offer. Upon seeing a written purchase offer which includes a commission reduction, the broker can refuse to accept a pay cut.After the transaction, whether the bidder wins or not, the broker might also ask a lawyer if the buyer has engaged in “tortuous interference,” essentially the effort by an outside party to disrupt an existing contractual relationship. Please see an attorney for details. As a buyer your goal is to pay as little as possible for the property and get the best terms. Submit an offer reflecting what you want to pay and what terms your require.Whatever you propose, the seller might then accept your offer, reject it or make a counter-offer.As to what the seller pays for brokerage services, that’s a private matter between the owner and the broker. Alternatively, imagine if you had a buyer brokerage agreement.Your buyer brokerage agreement, like a listing arrangement, would also be a private matter between you and your broker. Its terms and fees are not something a seller could change.
© Content That Works

Renter’s Checklist
• Determine your priorities. Consider location, affordability, apartment size and style. • Research prospects. Use newspaper classifieds, drive-by searches, word-of-mouth recommendations. • Interview owners/landlords by phone. • Schedule a tour. Document the unit’s condition and indicate repairs needed to the landlord. Assess the appearance and condition of the entire building. • Talk to neighbors. Knock on a few doors and ask how satisfied tenants are. • Examine the lease. Consider a review by a lawyer. • Consider renter’s insurance. • Photograph or videotape the apartment before moving in, as proof of the unit’s condition.

Do you have a question or a quandary about buying, selling or renting? Peter G. Miller, author of The Common-Sense Mortgage, specializes in providing real solutions to real estate dilemmas. E-mail your questions to peter@contentthatworks.com.

BATH MAKEOVER
CONTINUED FROM PAGE 1 your future? Perhaps it’s time to turn off the T.V. makeover shows and get down to the practical business of planning a great bathroom.Anschel offers the following tips:

1. DON’T LET YOUR TIMELINE DRIVE
THE PROJECT

who want to complete parts of a job themselves.“Their involvement gives them real ownership of a project.” In his recent award-winning bath remodel, the homeowners handled the painting, using colors Anschel chose and following his painting plan. Other clients have stained floors and woodwork; qualified homeowners or their family members have handled plumbing and electrical work.“Our goal is not to monopolize the project,” he says.

They’ll last longer.” In his awardwinning bath,Anschel used 19 different colors of paint, creating visual effects to expand the space and add drama. Deep red tile next to the soaking tub added richness and drama.

it,”Anschel says.

8. BLEND THE PRACTICAL WITH THE
FANCIFUL

6. IF SPACE ALLOWS, PUT THE STOOL IN ITS OWN ROOM
This gives the bathroom more utility.“A separate water closet is a fact of life in Europe and Asia,” says Anschel.“It’s more and more common here, too. I think it’s here to stay.” Separate showers and tubs are more common, too, he says.“If you have the space,” says Anschel,“I recommend doing it.” In his award-winner, two rectangular cutouts in the wall of the shower enclosure let light spill through the space.

“Don’t call a firm in the spring and say, I want it done this summer,” says Anschel.“Truth is, the companies that are good are typically booked out a little ways.” Finding the right people to do your job may be the single most important factor in undertaking a successful remodel.“If you have to wait six months, so what? Be leery of the person who can start next week.”

4. CONSIDER HIRING A DESIGNBUILD FIRM

2. ESTIMATES ARE OVERRATED
Unless you have drawn up a set of plans specifying all aspects of the job right down to the door pulls on the vanity, asking for three estimates and choosing, say, the one in the middle, is not a smart strategy,Anschel says. “Instead, hold three interviews with remodelers and keep your ears open. Find a remodeler you like, one who listens to you and who you like listening to.”

Anschel is biased, obviously. Otogawa-Anschel is a “designbuild” firm.The company plans and executes a project, and is responsible for the whole nine yards, from conception, to blue print to project completion. Architects and interior designers can deliver a design plan, but they operate at a remove from real-world issues of construction and cost, he says. “When we encounter a problem with a design, we can address it instantly.”When a construction contractor working from a designer’s plan hits the same snag, he must stop work and put in a call for design help, which may or may not be available quickly.

7. THINK LOW-IMPACT DESIGN
Make ecologically sound choices where you can,Anschel urges.“Our clients like the idea of green design and we do, too.” Typically, going “green” means using a better quality product, so you don’t need to redo the room for a long time, conserving all sorts of construction material and energy. His firm often opts for bamboo rather than tile or hardwood floors, non-toxic, lowor no-VOC (volatile organic compounds) paints, now available in a full range of colors, and remnant granite. Green products are easier on the environment and using them doesn’t mean abandoning a quest for high style.“All the cutting edge stuff we see coming out these days has some green to

Anschel’s project stars a 21” soaking tub – with room for two – and a light dimmer.The tub is fiberglass, which is less costly than cast iron. Sunk in a wellbuilt deck with concrete, fiberglass delivers the same performance,Anschel believes. Instead of a chunky vanity or a pedestal sink with no counter space, the firm installed a $600 piece of remnant granite, carved and polished into a pleasing organic shape, and fitted with a stainless under-mount sink. As for the painting,Anschel selected the 19 colors, carefully plotted what shade went where, and let the homeowners handle the application.“I like when clients handle an aspect of a project,”Anschel says.“It gives them ownership.And then, when at some point a project isn’t progressing as fast as they seem to on TV’s Extreme Makeover show, they understand why.” ©Content That Works

5. DON’T BE AFRAID OF COLOR
Look for full, rich, deep colors that contain hints of other colors.“Avoid flat colors. Go for those that are a little warmer, a little richer.These are more pleasing, and will resist looking dated.

3. SWEAT EQUITY CAN MAKE A
BUDGET GO FURTHER

As long as they respect the project timeline,Anschel is happy to accommodate clients

© 2005 Content That Works – All Rights Reserved • contact us at 866-6CONTENT or CONTENTTHATWORKS.com for licensing information.

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