Buying house before marriage can be risky
Instead of prenup, consider partnership agreement

Ilyce Glink
Inman News

Q: I live in California and plan on getting married. However, my boyfriend wants me to sign a prenuptial agreement. At the present time we're also looking into buying a home.

His credit is awful while mine is very high. We have both signed the loan papers for a preapproved bank loan but now I'm having doubts about going through with the purchase. He obviously makes more money than I do and if he decides to leave me I don't want to be stuck with a high mortgage I can't afford.

Is it better to take my name off the loan and still be on the title? Or should I just remove myself entirely?

A: In general, prenuptial agreements come into play when one person has a lot more assets (money, stocks, real estate, jewelry, etc.) than the person he or she is marrying. You have to decide first if you want to sign an agreement that will decide now how to divide all of the assets you accumulate together after your marriage.

I'm not opposed to prenuptial agreements, and in fact I think they can be very helpful, particularly in the case of a second marriage where each person has his or her own children. I do think you should consult with an attorney who can advise you on whether the agreement protects you as well as your fiancé.

Whether or not you eventually marry, you should be cautious about buying property as an unmarried partner (which is what you are now) unless you have created a legal partnership that governs the financial aspects of the purchase.

This partnership agreement will describe what each of you is bringing to the table, and lay out the financial workings of the relationship, including what expenses each of you are responsible for, and what share of the equity each of you will be entitled to in case the partnership doesn't work out. A real estate or family planning attorney can draft a partnership agreement for you, and I strongly recommend you execute this sort of agreement before you go ahead with the purchase.

If you and your fiancé do ultimately decide to get married, your partnership agreement can contain a clause that specifies what will happen to the property and your financial relationship.

Because you live in California, you may have some extra protections if you and your boyfriend live together for a certain number of years. Your first move is to sit down with an attorney who can go through the prenup, and help make sure that you're protected down the line.

Q: My husband signed a quitclaim deed four years ago while living in another state. Now, we're finally getting divorced. I have been paying the mortgage, which has been refinanced twice in my name only. Is the house a marital asset?

Please help me. I am so afraid I'm going to lose my home. I live in Massachusetts.

A: If you purchase a piece of real estate while you're married, that property is typically considered part of the marital estate. An exception would be if you purchase property using funds that are excluded from the marital estate, such as an inheritance that you have kept separate from your other assets.

In your case, your husband signed over a quitclaim deed, which should have turned over to you any financial interest he had in the property. While this property might have originally been part of the marital estate, you've got a good claim that it no longer is.

That doesn't mean your ex might not try to get a piece of it. You should immediately consult with a divorce attorney who can advise you of your rights, and how to protect your home.

Q: A property that was rented to a school has been sold and the school is moving to a new location. There is playground equipment that was purchased by the school that is cemented into the ground.

Can the school dig that up and take it with them or did it become a fixture and therefore goes with the property?

A: It depends on what the contract says about this sort of equipment. In a typical residential purchase contract, fixtures (items that are permanently attached to the property, like light fixtures and bookshelves) are typically left with the property. If you want to take a fixture with you when you move, then you would typically exclude those items from the contract.

When it comes to commercial property, fixtures sometimes belong to the tenants of the property and they are able to do with them what they want. The disposition of fixtures would depend on what the contract between the landlord and tenant says.

For example, if a restaurant leases out a space and then goes out of business, and the restaurant equipment, bar and light fixtures were all purchased by the restaurant owners, they may be entitled to remove these items even if they were attached to the rental space.

In your situation, if the school and the former owner of the property agreed that the school could take the playground equipment with them, then they'd be entitled to dig it up and move it. If the contract was silent on the specifics of which fixtures could be removed, then the school might not have been able to take the equipment. In that case, and for more precise answers to your question, you should talk to a real estate attorney.

If local residents are unhappy that a really nice playground has been removed, then you should talk to your local municipality about creating a new playground that features similar equipment. Many communities have raised private funds to create these kinds of child-friendly playgrounds, which help stabilize areas and provide a safe and fun environment for their children.

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

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Moving to a new city? Web's got you covered
From Google to Megan's Law, sites help make choosing destination easier

Helene Lesel
Inman News

Q: I'm relocating to another city and don't know which area to consider. How can I tell if a neighborhood is convenient, safe and close to what I want to do?

A: Thanks to the wonders of the Internet, checking out a new area is easier than ever before. Assuming you've figured out your budget, try pinpointing possible neighborhoods that fit into your needs by asking friends, colleagues or co-workers. Also make a list of your location must-haves, such as convenient commuter routes or favorite type of off-time activities.

Looking for a place to start inputting your choices? An amazing tool for researching a world of destinations is through the Web site earth.google.com. Once downloaded from the Internet and onto your computer system, for no charge you have a satellite view of the world down to the finest detail. Starting with a view of a twirling globe, with a click and roll of your mouse you can hone in anywhere on earth you desire -- from as general as the clouds above a region to a specific street address with amazing clarity. Views can be as close as 300 feet from above, and with a scroll of the mouse can be brought into sharper focus. Reversing the mouse will pull back the view and show the neighborhood and surrounding area in astounding detail.

Using a specific street address is best, so when looking for a place gather a few choices to input. Rolling the mouse will shift the view anywhere you want to go -- from driving down the nearest street to taking the expressway to another city. Do you want to know how to get from one location to another -- or the distance between them? You can input a city and state, region or specific address. If you know your job or school address, you can actually see the route to anywhere you choose. In larger cities, some areas can be viewed in 3-D and street-level view, right up to the front door by sliding the bars located on the upper right portion of the screen.

How are you planning to get to work or school? What time will you most likely be on the road? How long does rush hour stretch? Maps that pinpoint and provide directions between locations can be found through several map sites including maps.google.com, mapquest.com and maps.yahoo.com. In addition to providing invaluable directions and maps, they include real-time traffic activity that monitors traffic speed and incidents causing slowdowns. Try checking the exact route and time you'll be traveling, and then decide if the distance and cost of gas works for you.

Map sites also offer links to area restaurants, businesses, places of worship and more.

Want to look into public transportation? There are many routes to take -- bus, train or subway -- but in some areas choices are few and far between. Most public transportation options can be found online. Search "Public Transportation" and the city name for an area guide. For example, "Public Transportation City of New York" yields http://www.mta.info/nyct, which transports you to the home site for the New York State Metropolitan Transit Authority and links to specific city information. Likewise, searching "Public Transportation Seattle" suggests http://transit.metrokc.gov as a route to more information.

When looking for community details, don't overlook the U.S. Census Bureau at census.gov. The "American Fact finder" option offers a vast array of information ranging from housing type and density to economic and household details. The search can be based on any address, ZIP code, city, county or state you can name.

What about personal safety in a particular area? In the state of California, registered sex offenders can be tracked through meganslaw.ca.gov. For details regarding other state registry sites, access klaaskids.org for links.

Information about burglary, car theft and other crimes in an area are usually available through the local police or sheriff's office. Search "Crime Statistics" and the name of the city or town to look into details. Most provide a map that can be generated by inputting address or area. Sites provide specific details on type of crime, timeline and location.

What about the quality of local schools? Most states now have standardized test scores available for their district. Local schools often have individual Web sites that show photographs of the grounds and give in depth detail about available programs, staff and amenities.

Enjoy shopping at local farmer's markets? Stroll through ams.usda.gov/farmersmarkets/map.htm for directions. Like to garden? Some areas have communal growing space. Dig through localharvest.org for details and how to obtain organic foods through various sources.

Keep in mind that while using the Internet is no substitute for visiting the real thing, it does help kick off an informed search for a place to call home.

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Neighbor sabotage kills home sale
Harrassment toward Realtor, buyers forces critical action

Benny Kass
Inman News

Q: We listed our home for sale about a month ago, and our real estate agent has been conducting open houses. On more than one occasion, our next-door neighbor has made derogatory or rude remarks to the Realtor, potential buyers and other agents visiting on open house days.

One particular couple was very interested and even came back to see the house a second time -- only to have our neighbor "snap" at the wife. The couple's interest completely vanished following that incident.

My wife and I have spoken with the neighbor, asking her if there was a problem. The neighbor told us that our visitor had parked in her driveway and that she had merely asked the car be moved. The neighbor also admitted that she had been in a bad mood that day and that she may not have been very nice to the potential buyer.

Since then, our agent has told us that the neighbor has also snapped at visiting brokers and made derogatory comments directly to the Realtor about the price of my home.

Is there anything we can do to make the neighbor stop deterring potential buyers with her negative behavior and comments?

A: I am surprised that you are still calling her your "neighbor."

There are several things that you can do, starting slow and then, if need be, escalating your approach.

First, you and your wife should sit down and talk to your neighbor. If she is married or has a companion, insist that all owners of that house join you. Explain that you are concerned about the behavior, and that it may already have cost you a potential buyer. Find out if there is a problem. Your agent suggested that she may be concerned about the price you are looking for. Discuss this openly with her. I doubt that she is concerned that you have overpriced the house. However, she may be troubled that if you sell the house too low, that will impact on the value of her house.

It may be a good idea to get some market comparables from your agent in advance of your meeting. It may also be that you are, in fact, trying to sell the house too low and it would be worth your while to get a second opinion from another agent.

Do not threaten your neighbors in any way. Listen and be polite, but make it clear that you plan to sell and would appreciate no further interference from them.

If your neighbor really does have legitimate concerns, try to address them as soon as possible. Perhaps they would like you to move the times when you are holding your house open. Perhaps too many other visitors have been parking in their driveway. These issues can be resolved easily with the cooperation of your agent.

See if this laid-back approach works. You should also consider showing up at the next open house to see if there are any more incidents. You obviously don't want to interfere with your agent's activities when visitors show up to view your house, but you certainly can be around, making your presence known to your neighbors.

If this does not work, then I suggest you consider retaining an attorney who can write a strong letter to your neighbors, advising them that they are interfering with your right to peacefully sell your house and that they should "cease and desist." Often, a letter on a lawyer's letterhead will do the trick.

But if all else fails, you may have no alternative but to take them to court. The cause of action would be private nuisance -- by their conduct, they are creating a nuisance that is causing you economic hardship. The judge will be asked to issue a restraining order against your neighbor, especially during the times that you are holding those open houses. No one likes to be sued, and the mere filing of a lawsuit may resolve the problem.

If you have to file suit, you will need proof of the disturbances your neighbors are creating. Your agent will most likely be the principal witness on your behalf, so you will have to make sure that she has documented the times when there were problems. The ideal proof, of course, would be to get testimony from the couple who backed away from the house as a result of the neighbor's conduct, but I doubt they will want to cooperate.

I assume there has been no violence involved. If so, then you have every right to ask your local police to investigate and possibly even monitor the house during subsequent open houses.

One additional suggestion: While you may consider this to be a complete capitulation to your neighbor (and it certainly will not be as effective as an open house), you might want to consider having prospective buyers come to your house "by appointment only." Many homeowners do not like the concept of an "open house," with people opening closets and desk drawers, so it is one way to try to market your home.

There is no legal or moral obligation to be friendly with your neighbors. Some people want their privacy and consider their home to be their castle.

But there is an obligation to be civil, and that's the message you should be sending to your next-door neighbor.

Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to benny@inman.com.

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Be careful what you say about landlord online
Rent it Right

Janet Portman
Inman News

Q: I own a large apartment complex. I'm worried about the effect of an online message board on my business. Hosted by a large Internet service provider, the message board solicits input from tenants about housing issues, and there's currently a string of messages concerning my complex, complaining about the rent, security-deposit return practices, and general management. Two posters have written rambling, flaming rants about our employees and business practices. This is very damaging stuff if it's read by prospective tenants. Is there any way I can get the service provider to give me the identities of these message writers? --Jerry Y.

A: Regular folks with access to the Internet can become the equivalent of a town crier or a pamphleteer, and they can do so anonymously. The First Amendment's protection of free speech extends to them as it did to their paper-bound forebears, and that includes an author's decision to remain anonymous. However, that protection isn't without limitation -- the law has long recognized that when speech becomes defamatory, obscene, or likely to incite a breach of the peace, the author's right to continue to sound off will be cut off. Because the Internet affords such easy and unregulated posting, it opens the door to abuses like these.

Your complaint seems to be that these messages defame management and possibly interfere with your ability to do business. One response might be to simply join the group -- post your own messages, calmly and professionally countering the allegations and inviting posters to engage in a dialogue. A newcomer to the board will see that you are a rational businessperson who's taking the matter seriously. The difference in tone alone might lead readers to heavily discount the negative postings.

If you're bent on learning the identities of your detractors, you're facing an uphill battle. Most Web sites' "terms of use" agreements include a statement that the provider will disclose posters' identities when legally required. This won't happen until a judge has ordered the site to divulge the information. A judge means a lawsuit -- you'll have to sue these unknown posters, then serve the service provider with a subpoena to cough up the names. The provider will notify the poster that unless the poster objects, the provider will comply; the poster will object (anonymously, of course), and the judge will balance the alleged damage to you versus the harm caused by interfering with the poster's First Amendment rights. First, however, most courts will require you to show them sufficient evidence that defamation and harm to your business have actually occurred.

Getting past this hurdle may prove difficult for you. Defamation is the publishing of false statements of fact that result in injury to another. Defamation does not include opinions, and if the postings on the message board are, as you describe, illogical rants, they may not qualify as false statements of fact. Though crude, childish and offensive, they are protected speech as long as they don't include false statements of fact or allude to undisclosed, false facts that would confirm the poster's opinion.

Q: When roof repairs were scheduled for our apartment complex, we received a notice telling us that that our vehicles had to be moved from the parking lot by 8 a.m. The notice said to use "street parking," but did not mention anything about parking restrictions for the street on which the complex is located. Many tenants, including myself, parked overnight on this street. We got parking citations, because this street prohibits parking from midnight to 5 a.m. The landlady says she will talk with the city to see if the fines can be waived. If the city won't do it, is the landlady responsible for paying our fines? --Catherine A.

A: You may have a hard time coming up with a legal reason compelling your landlady to pay your parking tickets. Although she advised you to use street parking, she did not warrant that it would be OK to park on the street you used. You're responsible for checking the "No Parking" signs along the curb, and choosing a street that permits overnight stays. The outcome might be different had she urged you to "park right outside, opposite the building" or something similar, because in that case you could argue that she had represented that the street was available, despite what the parking signs might say (it would still be a stretch to say that you could reasonably believe she could trump the city's parking rules). But, she didn't say that. Like you, she probably didn't even think of parking restrictions when she advised you to move your cars from the apartment lot.

All is not necessarily lost, however. Your landlady now has a building full of annoyed tenants, which is a situation no careful owner wants to continue for very long. If she is unable to get the city to rescind the tickets (a long shot, to be sure), she may still be willing to subsidize your fines a bit. If she's wise, she'll chalk up the expense to marketing, figuring that appeasing her tenants (who should be the source of future good tenants) is well worth the expense. Needless to say, your chances of prevailing here will depend on whether you are good, stable tenants whom the owner wants to retain.

Q: We own and manage a rent-controlled apartment building. Our ordinance requires tenants to live in the unit more than six months in every year in order to keep the unit under rent control. One of our tenants has been given a new job assignment that takes him to another city for long periods of time. He's asked us to accept more rent in exchange for overlooking the fact that for the next few years he will no longer be here the required six months. Is this a good idea? --Jane P.

A: You must really want to keep this tenant, otherwise there would be no reason for you to pass up an opportunity to de-regulate his apartment and rent it out to someone new at higher, market rates. It's usually a fine idea to work with good tenants to find ways to accommodate their reasonable requests and keep them on the property. For example, though no law requires you to allow the tenant to paint the living room beige, the two of you can agree that the tenant may do so and you'll pay for the paint and the hourly labor. If you don't pay as promised, your tenant could even take you to small claims court, where a judge would enforce the agreement.

Your tenant's proposal, however, is significantly different than the scenario described above because you and your tenant would be circumventing a rent-control rule. The cops won't come to arrest you for this maneuver, but a judge will probably not enforce your agreement if you end up arguing about it in court. Rent-control rules, like usury laws and child labor laws, generally cannot be waived, even when both sides know exactly what they're doing.

You can probably see where this is going -- because your "agreement" is not enforceable, you could disregard it at any time, knowing that the tenant's last recourse (taking you to court) will end with a judge voiding the agreement. Suppose, in a year or so, you decide that the officially allowed rent, plus the under-the-table bonus, isn't enough in light of the increased market value of the apartment, and your tenant refuses to pay more? Willing to take your chances with a new resident, you initiate eviction proceedings based on the six months' rule. Your tenant's defense -- the agreement -- will do him no good when a judge invalidates it, and he'll be out. You get to choose a new tenant at high, market rates -- nice.

Of course, such shenanigans don't go down well with judges, who don't like seeing landlords manipulate tenants and rent-control ordinances. You'd probably be ordered to return all the extra rent you collected. And depending on how offended the judge is, you might find yourself with a vacant but still regulated apartment, leaving you with the risk of finding a new tenant but without the consolation of being able to charge market rates.

Whether this arrangement is a "good idea" depends, first, on how likely it is that you will be satisfied with it for several years. Second, if relations sour, think about how willing you are to be drawn into court, where you will "win" and get your apartment back, but possibly pay dearly for your out-of-bounds play.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord's Legal Guide" and "Every Tenant's Legal Guide." She can be reached at janet@inman.com.

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Denied short sale, struggling homeowners look for way out
Will filing for bankruptcy get lenders off their back?

Ilyce Glink
Co-written by Samuel J. Tamkin
Inman News

Q: We have lived in New Jersey for five years, and have been waiting for an opportunity to go back to Florida. My husband recently got offered a job in Florida that will pay $30,000 less than what he makes now. He will start his new job in mid May and I will follow in when our kids get out of school. We signed a rental for a home in Florida but we can't purchase a home at this time.

The house we currently live in (in New Jersey) is about 2 years old. Houses like ours in our development are now selling for $60,000 less than what we paid. We could do a short sale with our lender, but our credit score is close to 800 and we hope not to ruin that.

Another option we explored was filing for bankruptcy. We met with a bankruptcy attorney and now I feel like that may be our only option. We have two loans on our home and our first lender would accept the short sale but the second would not.

We thought about renting out our home but our mortgage is $3,000 a month and we can expect to receive a monthly rental payment of only about $1,800. We can't afford three payments per month (our two loans on our house and the rent for the home in Florida).

We have been advised to stop paying the mortgage payment. We do not want to do that but we really want to move to Florida. On the other hand, we want to make the best financial decisions and rebuild our credit as soon as we can.

A: You have an interesting situation. Unlike many people with mortgage troubles due to job losses, health problems or other financial difficulties, your situation appears to be self-created.

You know your home value has gone down, and you know you will make less money if you move to Florida now, and you know you can't afford to keep your current home and rent a home in Florida. And yet, you've gone ahead, accepted the job in Florida, and signed a lease for a home there.

What are you thinking? Your life in New Jersey must be pretty horrific if you're willing to file for bankruptcy just to get back to Florida.

You have excellent credit -- now. Unfortunately, going through a short sale or filing for bankruptcy will severely hurt your credit, and you can expect your credit score to drop several hundred points.

A short sale is where you sell your home for less than the amount you owe on it to your lenders. Both of your mortgage lenders would have to agree to take less than the full amount that is owed in exchange for allowing the sale to go forward.

When a home has two lenders, the second lender is in a position to lose all of the value of its loan. In some cases, the second lender may not even respond to the request for a short sale with the hope that it may get something later rather than agree to get nothing now.

If either lender fails to agree to the terms of the short sale, your sale with a prospective buyer will fall through. Make sure you are in good contact with each lender if you decide to go down this route. If you have a good line of communication open with each lender and each lender works with you in the short sale, you have a better chance of selling the property to a buyer that comes along.

You mentioned filing for bankruptcy as another option. Bankruptcy will certainly hurt your credit history -- if you even qualify. Your excellent credit will be shot for years to come and you would have to take steps over the next several years to restore your credit.

With a lower score, you may find that you will have to pay more for car and renters insurance and it may be much more difficult to obtain credit-card offers with low interest rates.

Just because you file for bankruptcy may not mean that you're out of the woods with your lenders. If you have other assets, you may find that your current lenders want a piece of those assets. If you have savings that are not in retirement accounts, you may lose those savings. If you sat down with a bankruptcy attorney, you should have gone through what you own, what you have in savings and what you owe to come up with a picture of where you would end up after the bankruptcy.

You do have another option: Sell your home and fund the shortage from savings. For example, if you sell the home for $60,000 less than you owe to the bank, but you can scrape together $60,000 from your savings, retirement accounts (you may have to pay taxes and a penalty on that cash), family or friends, you can close on the property and move on.

For many people, coming up with that kind of money to sell a home is prohibitive, but for others it gives them the option to move on without affecting their credit.

It may be too late, given the other commitments you've made, sooner rather than later -- but if you could hold off moving back to Florida for another few years, you might find that the real estate market is much better. You might find that you're able to sell your home for what you owe, and then move south without taking a hit on your credit score.

If you feel as though you can't live without whatever is waiting for you in Florida, then move and suffer the financial consequences. But from what you've described, it sounds like you're sticking a dagger through your wallet.

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

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Latest trends in kitchen cabinets
When remodeling, choose sizes and styles with resale value in mind

Paul Bianchina
Inman News

If you're contemplating remodeling your kitchen, one of the most important aspects to take into consideration is the cabinets. Certain trends are popular right now while certain others have lost a little of their appeal, which can certainly add or subtract from your resale value as well. Keep in mind that your cabinets, in addition to being a visual focal point for the kitchen, are also a sizable monetary investment. As such, it's best to stick with styles that have a broader, more timeless appeal and then accessorize around them, rather than opting for the latest wild trend and then facing the expense of changing them a couple of years later.

Which Woods: For natural wood cabinets, there are lots of choices in the type of wood you use. Oak remains a popular choice, with some people opting for an upgraded look by specifying more expensive quarter-sawn white oak, traditionally used in Mission-style furniture, instead of the more common plain-sawn red oak. Cherry remains a popular wood for kitchen cabinets, with a deep, rich color. Maple is also still popular, as is alder. At the higher end, in addition to the quarter-sawn white oak there are woods such as knotty chestnut and red birch. Again for those looking for something more unusual, there is the option of running the grain of the wood horizontally instead of the more traditional vertical orientation.

With any of these woods, popular finishes include natural (no stain added before the final clear coat is applied), and light to medium stains. For the most part, dark stains are not really popular.

A Color Instead: Thinking of painted cabinets instead of natural wood? White is still hanging around to some degree, although it's definitely diminished in popularity. In its place are softer earth tones, as well as pale green and pale yellow. If you're looking to make a statement, at the other end of the color spectrum some people are opting for deep blues and reds, and even black.

Keep it Organized: One definite trend in kitchens is that people want the room to be very functional in addition to decorative. Kitchen users want things at their fingertips, and that has led to popularity of some of the many organizational accessories and systems currently available -- many of which can easily be added to stock, modular cabinets. Larger storage areas are popular, and some designers are choosing to combine food and dishes in the same cabinet -- grab some chips and bowl to put them in at the same time.

More Visible Kitchens: With the popular trend of opening the kitchen up to the rest of the house, cabinets are more on display then ever before. This has had the effect of several design changes in the kitchen. Lighting is more unified with the surrounding rooms, and light fixtures are tending toward the decorative in addition to their functionality. Kitchen flooring is also a major consideration, as it tends to intersect the flooring in other rooms over a much broader area.

As part of that increased visibility, more kitchens are incorporating display cabinets. These are typically upper cabinets with clear or patterned glass doors, often with built-in lighting, that make it easy to display anything from Grandma's china to your salt and pepper shaker collection.

Stand Up Tall: With the open kitchen trend, there still needs to be some definition of the space between the kitchen and the adjoining rooms. Toward that end, you will find cabinet runs that are being anchored by taller-than-normal lower cabinets at one end -- typically 42 inches instead of 36 -- which helps keep the kitchen from looking like it ends in the middle of nowhere. Taller cabinets also offer more storage opportunities and can accommodate elevated dishwashers as well.

Furniture Influences: There is also a definite furniture influence in kitchen cabinets these days. This includes lower cabinets that are mounted on feet (or with toe kick areas that imitate the look of feet), as well as the use of decorative moldings on the cabinets in areas besides just the traditional crown molding.

Easy Personality: If you want a distinctive look in your kitchen without resorting to blue or black cabinets, you can easily dress up any kitchen to reflect your individuality simply through the knobs you choose. Options abound, from tiny silverware to brightly colored balls to elegant stainless steel shapes. And you can always change the knobs later for a quick makeover that won't break the bank.

Remodeling and repair questions? E-mail Paul at paul2887@ykwc.net.

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Homeowners react to falling real estate values
Many struggling after losing access to HELOCs

Ilyce Glink
Inman News

I'll admit to it: When home prices were soaring in my neighborhood, it made me feel really smart.

Like so many millions of other homeowners, we concluded that we chose the right house in the right neighborhood at the right time. And as the years went by, and all of us on the block could count our home appreciation month by month, all this paper equity made us feel financially secure, as in "Now we know how we're going to pay our college tuition bills down the road."

But as they say, easy come, easy go. Home prices in our neck of the woods have been falling just as they've been falling around the country.

The Case-Shiller Home Price Index released in April showed home prices in the top 10 metropolitan areas declined more than 13 percent since last year. Home prices declined in the top 20 markets, but if you were a single-family homeowner living in Las Vegas, Phoenix or Miami, you really got swatted: Single-family home prices in those cities declined by one-fifth.

Worse, many economists don't believe we've seen a bottom on housing prices. Some estimate home prices could drop a total of 25 percent from their recent highs.

We've lived in our house for nearly 15 years, so if the price comes down even 20 to 25 percent, there's still an excellent chunk of appreciation to fund the college dreams of our pre-teens. And, we've been working hard to pay down our mortgage balance, adding to our equity. I still feel like we made a good choice.

But if you bought your home in the last two to three years, all of your financial hopes and dreams, not to mention a good dose of self-esteem, may have evaporated overnight.

And, if you bought your house hoping to make a fast $50,000, you may find now that your home is worth $50,000 to $100,000 less than you paid for it. It may even be worth less than your mortgage balance. This is fine as long as you don't have to sell and you can afford your mortgage payment and plan to live in your home for some time to come.

If that news wasn't bad enough, I've been hearing from readers around the country who are in shock that their home equity lines of credit have been shut off. Apparently many readers missed the fine print on their loan documents that said the lender has the right to shut down the line of credit if their homes fell in value.

(And for those of you who are able to sell short -- that is sell your home for less than what you owe the lender -- and you don't have the lender forgive whatever part of the mortgage balance you can't pay, you may find that the lender may come after you for its loss or the private mortgage insurer that paid the lender its loss may come knocking at your new rental-house door to recoup that money.)

This is what a stuck housing market looks like. Nobody feels that smart anymore. The question is: What's going to get help?

At its most recent Open Market Committee meeting, the Federal Reserve Bank lowered the short-term interest rates that banks charge each other for overnight loans another 25 basis points, to 2 percent. The collective groan you heard was from anyone living on a fixed income, who knows that the paltry sum they're earning on their savings accounts and CDs isn't enough to keep up with inflation, let alone the fast-rising cost of basic necessities.

But longer-term mortgage interest rates haven't quite fallen along with CD rates. And while you can get a 30-year loan for around 6 percent if you have excellent credit, which is a terrific mortgage interest rate if you look at it from a historical perspective, it isn't low enough to compensate for the other mitigating factors.

The dramatic drop in home equity has spooked home sellers. Foreclosure rates have skyrocketed, hitting new records. Banks are still taking weeks and weeks and weeks to parse offers from prospective buyers. Buyers are getting fed up and are moving on to make other low-ball offers. Interest-rate locks are expiring, but if you have a jumbo loan (over $417,000), in some cases you're looking at a rate above 7 percent, even if you have good credit (and more like 9 percent if you have mediocre credit).

Fighting through all this to get a deal done is like wading through Jell-O. Just ask any real estate agent who hasn't torn his or her hair out yet.

If the real estate news wasn't bad enough, consumers have been spooked by rising prices on the basic necessities of life. The cost of gas is roughly the same as the cost of a gallon of milk. (If you want to buy a gallon of organic milk, it'll cost nearly double.) Stories in the media about how consumers are selling family heirlooms on craigslist and eBay to put peanut butter and jelly on the table are laid out next to stories about how low consumer confidence has fallen. Yuck.

The good news is that eventually, we'll move through the recession. We'll get through the presidential election (traditionally a drag on any real estate market), and people will start buying homes again.

Starting up a real estate market is a lot harder than getting the stock market rolling. But once it gets rolling, everyone is going to feel a whole lot better.

One final thought: If your lender has shut off your home equity line of credit (HELOC), you can request (and pay for) an appraisal to prove to the bank you have enough equity to support the HELOC. Or, if values in your area haven't gone down or you still have equity in your home, you can find another lender and get a different HELOC.

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

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Seniors, leave apartment painting for the pros
Tips on packing belongings, hiring painters, choosing paint

Bill and Kevin Burnett
Inman News

Q: What is the cheapest, quickest way to paint a full studio apartment? I am a senior with limited physical and financial resources.

My problem is common to many urbanites: In San Francisco, landlords are not obliged to repaint apartments, no matter how long the tenant has lived there. So they don't. Many of us have grown out of our places, but because of rent control and high rents elsewhere, moving is not a viable option.

Here are some of the things I need to know:

1. Do I ask painters to include in their estimate the packing and unpacking of the hundreds of books, art materials, office items, etc. -- or do I hire a crew to do that? If so, how do I find one?

2. I will need dozens of boxes. Can these be rented? Is there a recycled boxes source? I may be able to store everything in the house hallway. If not, what are those large soft-walled storage crates that I see outside people's homes? Is that service available without relocation? Is it expensive?

3. The painting must happen over the weekend, as that is when I have somewhere local to stay. Do painting contractors charge more to work over a weekend?

4. Is there a quick-drying paint that doesn't smell?

A: The quickest, cheapest way to paint a small apartment is to do it all yourself. By acting as your own packer and painter you can control the time it takes to pack, prep and paint. The cost will be a few gallons of paint, some rudimentary tools (a paintbrush and a roller) and perhaps some packing boxes if you can't find enough of them at the local grocery store.

But because you are a senior with financial and physical limitations, we'll try to give you some suggestions that can keep the costs down and make the job go smoothly. We'll assume that you are hiring painters to do the painting. The actual paint job should take just one day. The challenge for you will be in dealing with your books, art and other stuff. We'll try to answer your specific questions in the order in which you've posed them.

1. Don't ask the painters to pack and unpack boxes. Painters paint. That's all. To save money boxing up your belongings is something you should do yourself. If you find you can store the boxes in the hallway, we suggest you enlist some strong young backs to hoist the boxes. Your church or the local senior center may be able to suggest a source of this labor.

If you insist on hiring the packing out, we suggest you contact a local moving company to perform the service. They can provide the boxes and, if you wish, store your property during the painting and return it when the job is done.

2. Boxes are available at moving companies -- even self-serve outfits like Ryder and U-Haul have boxes to buy. For some freebies, try a grocery store or a liquor store. We're not familiar with the soft-sided storage of which you speak. For portable storage containers try PODS (Portable on Demand Storage, www.pods.com). If you decide to use a portable storage container, check out the local regulations if you plan to leave it on the street.

3. Painting contractors will work weekends. As for price, get three estimates from licensed painting contractors. Make sure to let each know from the beginning the scope of the work and that you want it done on a weekend.

4. Most water-based paints are quick-drying. While there will be some odor, the smell will dissipate over time and once fully cured there will be no odor at all. Low-VOC and no-VOC (volatile organic compound) paints generally are low-odor products. For a discussion of low- and no-VOC paints and a list of manufacturers go to www.eartheasy.com/live_nontoxic_paints.htm.

We hear your lament about having to repaint a place you're living in. The easiest interior paint job is one where there is nothing in the house. You might take solace that in our experience moving is much worse than painting.

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