Home Work

Temporary Atonality

Apr 23, 2003 at 2:06 pm

The word "bubble" has entered the common vernacular with increased frequency. The stock market bubble busted three years ago beginning with the demise of the overhyped technology sector, and millions of people lost. Then came a corporate ethics bubble and the ensuing Enron/Andersonitus that afflicted many of America's most esteemed corporations and accounting firms, and many people lost.

Even Thomas L. Friedman of The New York Times has developed a new entry for the Lexicon entitled the "Terrorist bubble," which began in the 1990s with the bombing of U.S. troops in Saudi Arabia and continued up through 9/11, and many people lost their lives.

As the economy continues to spin with an axis leaning more and more southward, when will the high-flying housing bubble burst? Locally our housing market remains strong — sales are good, values are rising and all indications are the ascent will continue, though with a more moderate attitude.

How long this will continue is a bubble of unknown proportion and duration. But as I continue to survey what the economists report and the pundits opine, I can only conclude that the economic malaise currently affecting our economy will someday, maybe affect real estate too. I think.

If the current economy could be described or written about in musical terms, it would be entitled Requiem for the Atonal: A Salute to the Contretemps of Our Time.

Of course it would be written in flats and minor keys only. No majors, no sharps, nothing melodic or even close to striking a chord. Its largo pace would go on and on, emphasizing no particular theme and moving in no particular direction.

I'm sure that there will be at least one music aficionado who will proclaim that a continuity of realism and beauty exists within this musical pathos, emulating a newfound synergy that's now unfolding before our eyes.

In the face of a mountain of economic bad news — continued layoffs, bankruptcies, under-the-public-table executive pension increases, stagnant productivity, poor job creation and book-cooking — up pops a report from the Mortgage Bankers Association of America (MBA) stating that mortgage delinquencies were down for the last quarter and the expectation is that they'll continue to fall. How can this be with all of these nabobs of negativism being bandied about is beyond me. What I do understand is what my gut and reason tell me — when people are laid off, money runs out and mortgages are bound to go unpaid.

The good news is that help might be on the way for those who find themselves unable to keep up their mortgage payments. HEMA, also known as the Homeowners' Emergency Mortgage Assistance Act, was introduced in Congress last month to help homeowners who are at least two months delinquent in their mortgage payments and have been notified by their lender of intent to foreclose. Persons utilizing the program would be required to repay the assistance with interest within a three-year period. It's pending legislation you might want to note and pass on to someone whose finances have gone temporarily atonal and need help with a few notes.

This Week's Tip: Don't forget the home inspection

You've conducted an exhaustive search for the home of your dreams. Heck, you were smart enough to approach a lender and get approved for a mortgage before you started looking. You're almost ready to start measuring for curtains and sizing up which of the 2,000-plus shades of off-white will look best in living room.

Before you move too quickly, though, a real estate professional, your Realtor ®, will offer you an important bit of advice: "Get a home inspection."

Home inspections and seller disclosure forms are prevalent in today's real estate transactions, because more buyers want to know the condition of the home before moving in. A home inspection is a thorough evaluation of a property by a professional trained to spot problems and potential problems with a home's structure.

As an aside, the seller disclosure form you received during your home's purchase is mandated by the state of Ohio. It requires the seller to reveal current and past problems they know about. It's important to note, however, that it doesn't replace the need to have your home professionally inspected.

Remember that no home is perfect, so it might be unreasonable to expect to find one without any faults.

It would be time consuming and expensive to hire an inspector for every home you see. Instead, you'll need to make a quick assessment of each home as you walk through it with it with your Realtor. In most cases, after making an accepted offer on the house you'll want to hire a home inspector. The professional inspection will cover an array of the home's features — from the roof to the foundation.

Typically, the inspector will look at the condition of the home's structure, walls and floors. The furnace and air conditioning system will be examined, along with the plumbing and wiring.

A home inspection isn't free and is paid for by the buyer most of the time. The professional you select might spend as long as four hours going through the house with you and should provide you with a detailed, written report several days after the inspection is complete.

After you've seen the report, you will need to decide whether you still want to purchase the house. Rarely does a buyer back away from a contract because of the home inspection, but at least you'll know what to expect once you move into the home.

Home Work is a weekly column geared toward residential real estate.