Barcelona Pavilion, also known as German Pavilion, was the place where the international exposition of 1929 took place. The Pavilion building is well-known for its great modern architecture and extravagant materials. However, the purpose of the building was to accommodate the Spanish King and Queen during the inauguration of the international fair. Ludwig Mies Van der Rohe, a German architect, and Lilly Reich designed the famous Barcelona chair, which became the only furniture that decorated the Pavilion building. The International Fair held in Barcelona also had many pavilions, most of which have now been converted into museums.
The Pavilion Building
The Barcelona Pavilion building, a fine example for modern architecture, has various extravagant materials like marbles and travertine. The building featured a passage to the exhibition halls and other terrace-like avenues. The building has a large travertine marble podium channeled between separate vertical and horizontal spaces. However, the building neither had a functional program during the fair nor any exhibits. Moreover, the building did not have any significant importance during the fair and it was dismantled after the Fair. A replica of the Pavilion building was reconstructed on the same site in 1986. It was said that during their visit to the Pavilion, the King and Queen of Spain did not use the Barcelona chairs.
Barcelona Chair
Mies, the architect who designed the Barcelona Pavilion, designed the Barcelona chair along with his long time partner Lily Reich. The main purpose of the Der Rohe Barcelona chair was to serve as thrones for the Spanish King and Queen during their visit to the Pavilion building. However, the furniture Barcelona chairs including stools, couches and tables went unused by the King and Queen. Despite being unused by the Royal visitors, Mies Barcelona Chair gained reputation as “a design worthy of kings”.
Barcelona chair designed by Mies featured white leather strands, firm cushions, pig skin leather material and x-shaped bolted frame. The Barcelona chairs designed by Mies also featured an ivory color. It was also said that Barcelona chair was inspired by the Egyptian style folding chairs and the Roman footstools. Though Mies thought that his designs should be affordable to the common masses, Barcelona chair was too expensive and required plenty of hand work thereby making it inaccessible to the common masses.
Modern Design
Barcelona style chairs were re-designed in 1950 to feature stainless steel frame instead of the bolted one. Instead of the expensive pig skin, Barcelona chair now features bovine leather for the commercial production. Recently various styles that are not designed by Mies like Barcelona Ottoman, Barcelona stools, Barcelona Lounges, Barcelona Daybed, Barcelona Coffee Table and Barcelona sofas also came into existence.
Knoll, which owns the original trademark rights of Barcelona chairs, made many changes to the original specification of the Barcelona chair. New materials like stainless steel and chrome steel has came into use. Though the trademark rights of Barcelona chairs belongs to Knoll, unauthorized designs of cheap Barcelona chairs are now produced and marketed worldwide by various manufacturers. Barcelona style chairs are now available in various countries including Italy, Germany, Argentina, Brazil, China, Russia, Korea, and Turkey.
Friday, February 6, 2009
Monday, December 24, 2007
New-home defects often missed
Some readers may wonder why this subject, in varying forms, is recurrent in this column. It is because questions about inspecting new homes are asked so frequently and because the answer is vital to anyone who plans to buy a new home.
Experienced home inspectors have learned that all new homes have defects of one kind or another, regardless of the quality of construction or the integrity of the builder. This is because human imperfection prevents anything as large and as complex as a home from being constructed flawlessly.
A commonly held fallacy is that all construction defects will be discovered by municipal building inspectors. This view is highly mistaken, but not because of professional shortcomings on the part of those inspectors. The purpose, scope, time allotment and procedures for municipal inspections are not the same as for home inspections.
Municipal inspectors inspect primarily for code compliance, not for quality of workmanship. They can cite a builder for improper structural framing or for noncomplying drain connections, but a poorly fitted door, an uneven tile countertop and slipshod finish work are not included in the list of concerns.
Municipal inspectors rarely inspect an attic or a subarea crawl space. They come to the job site with a clipboard and a codebook, not with a ladder and overalls. Construction defects in such areas can escape discovery.
Municipal inspectors typically inspect a roof from the ground or possibly from the builder's ladder. From these perspectives, roof defects are not always apparent. And final inspections are performed before the utilities are turned on, so municipal inspectors cannot determine if or how well the appliances and fixtures truly work. They don't test outlets for ground and polarity because this can be done only after the power supply is turned on. Nor, without power, can they test the performance of GFCI or AFCI safety breakers.
The lack of utilities also prevents the testing of plumbing fixtures such as sinks, showers, tubs and dishwashers, and of gas fixtures such as furnaces, fireplaces and water heaters.
As repeatedly expressed in this column, those who buy new homes should not forego the benefits of a thorough home inspection. Just be sure to find an inspector with years of experience and a reputation for thoroughness.
Dear Barry,
Our home was built in 1978 and, until recently, had acoustic "cottage cheese" ceilings. My friend helped to scrape off the ceiling texture and a week later developed a sore throat. Now he fears that he has been adversely affected by breathing asbestos. Is this a valid concern? --Amy
Dear Amy,
Scraping a 1978 ceiling without having it tested for asbestos was not a wise course of action. However, there are no short-term health effects associated with asbestos exposure. The only documented cases of asbestos-related disease involve people who were subject to repeated, long-term exposure. The damaging effects attributed to asbestos are lung cancer, asbestosis and mesothelioma.
source: lodinews.com
Experienced home inspectors have learned that all new homes have defects of one kind or another, regardless of the quality of construction or the integrity of the builder. This is because human imperfection prevents anything as large and as complex as a home from being constructed flawlessly.
A commonly held fallacy is that all construction defects will be discovered by municipal building inspectors. This view is highly mistaken, but not because of professional shortcomings on the part of those inspectors. The purpose, scope, time allotment and procedures for municipal inspections are not the same as for home inspections.
Municipal inspectors inspect primarily for code compliance, not for quality of workmanship. They can cite a builder for improper structural framing or for noncomplying drain connections, but a poorly fitted door, an uneven tile countertop and slipshod finish work are not included in the list of concerns.
Municipal inspectors rarely inspect an attic or a subarea crawl space. They come to the job site with a clipboard and a codebook, not with a ladder and overalls. Construction defects in such areas can escape discovery.
Municipal inspectors typically inspect a roof from the ground or possibly from the builder's ladder. From these perspectives, roof defects are not always apparent. And final inspections are performed before the utilities are turned on, so municipal inspectors cannot determine if or how well the appliances and fixtures truly work. They don't test outlets for ground and polarity because this can be done only after the power supply is turned on. Nor, without power, can they test the performance of GFCI or AFCI safety breakers.
The lack of utilities also prevents the testing of plumbing fixtures such as sinks, showers, tubs and dishwashers, and of gas fixtures such as furnaces, fireplaces and water heaters.
As repeatedly expressed in this column, those who buy new homes should not forego the benefits of a thorough home inspection. Just be sure to find an inspector with years of experience and a reputation for thoroughness.
Dear Barry,
Our home was built in 1978 and, until recently, had acoustic "cottage cheese" ceilings. My friend helped to scrape off the ceiling texture and a week later developed a sore throat. Now he fears that he has been adversely affected by breathing asbestos. Is this a valid concern? --Amy
Dear Amy,
Scraping a 1978 ceiling without having it tested for asbestos was not a wise course of action. However, there are no short-term health effects associated with asbestos exposure. The only documented cases of asbestos-related disease involve people who were subject to repeated, long-term exposure. The damaging effects attributed to asbestos are lung cancer, asbestosis and mesothelioma.
source: lodinews.com
Goodbye shingles, hello stucco
Q: We have cedar shingles on our home and love them. We had a difficult time finding someone to restore them until I mentioned it to a retired contractor. He had leftover oil preservative, which his son-in-law used to paint the shingles for $800. Now it's time to do it again.
However, our daughter and son-in-law are buying our home, and their friends said the ugliest thing about this house is the wood shingles. They think they will take the shingles down and put up stucco. Is that possible?
A: Beauty is in the eye of the beholder, and these friends seem to want to indulge their sense of beauty at significant expense to your daughter and son-in-law.
Replacing cedar shingles with stucco is certainly possible, but be prepared to part with a large chunk of change for the gargantuan job it will be to make the switch. We're always amused to see "friends" try to spend someone else's money. Although we're sure the intentions are good, the money sunk into stuccoing the house could be better used in other places.
You got the deal of the century with your $800 shingle treatment. Expect to pay more to do it again -- but replacing the shingles with stucco is exponentially more expensive.
The extra cost is in the increased number of steps and expert labor required in the stucco process versus the relatively few steps and less skilled labor required to treat the shingles.
Assuming the shingles are in good shape, the job is pretty simple. Clean the shingles with a pressure washer to remove any dirt and debris. Let them dry. Then spray or brush on another coat of preservative. That's it.
On the other hand, replacing the shingles with stucco is a multistep process requiring skilled labor.
Removing the shingles isn't rocket science, but once the shingles are off, the rest of the job should be left to the pros.
Each shingle must be pried off with a bar -- a flat shovel works well. Once off, the split shingles should be dispatched to the landfill. When all of the shingles are gone, the many thousands of nails and any building paper that remains stuck on the wood sheathing must be removed.
Start wrapping the entire house in 15-pound building felt. Make sure to overlap the courses so that any water that penetrates the stucco will be wicked away from the sheathing. Next, apply the lath. Stucco lath is steel mesh that is nailed to the sides of the house, over the building felt. If the lath looks like chicken wire, special nails equipped with a cardboard spacer are used to hold the lath away from the wall.
A perforated metal strip known as a weep screed is attached at the bottom of the wall. The weep screed performs two functions: It acts as a base for the wet stucco, and when the stucco is dry, allows any moisture to drain away from the wall.
Once the lath is on, it's time for the first coat of stucco, known as the scratch coat. Stucco consists of sand, lime, Portland cement and water mixed either by hand or in a mixer to the consistency of thick mud. A job this size requires a mixer.
The scratch coat is applied by trowel, which forces the wet stucco into the lath, forming "keys." The scratch coat should be approximately 3/8 inch thick. Once the scratch coat sets up, it's important to spray the surface intermittently with water so the surface doesn't dry too quickly. Slowing the curing process makes for a stronger job that is resistant to cracks.
Let the scratch coat cure for a day or two and repeat the process by applying a second coat of stucco, known as the brown coat. The brown coat should also be about 3/8 inch thick. The brown coat provides a flat uniform layer to apply the finish coat.
Allow the brown coat to cure for a couple of days, again spritzing it regularly, and then apply the finish coat. Color can be added to the finish coat and it can also be textured. When complete, the stucco should be about an inch thick.
A large stucco job is a messy process. Count on vegetation being damaged by dropped stucco, workman's feet and scaffolding. In addition, the wood shingle molding around windows and doors should be replaced with wood stucco molding. Stucco molding is milled with a groove to allow the wet stucco to "key" into the molding.
source: lodinews.com
However, our daughter and son-in-law are buying our home, and their friends said the ugliest thing about this house is the wood shingles. They think they will take the shingles down and put up stucco. Is that possible?
A: Beauty is in the eye of the beholder, and these friends seem to want to indulge their sense of beauty at significant expense to your daughter and son-in-law.
Replacing cedar shingles with stucco is certainly possible, but be prepared to part with a large chunk of change for the gargantuan job it will be to make the switch. We're always amused to see "friends" try to spend someone else's money. Although we're sure the intentions are good, the money sunk into stuccoing the house could be better used in other places.
You got the deal of the century with your $800 shingle treatment. Expect to pay more to do it again -- but replacing the shingles with stucco is exponentially more expensive.
The extra cost is in the increased number of steps and expert labor required in the stucco process versus the relatively few steps and less skilled labor required to treat the shingles.
Assuming the shingles are in good shape, the job is pretty simple. Clean the shingles with a pressure washer to remove any dirt and debris. Let them dry. Then spray or brush on another coat of preservative. That's it.
On the other hand, replacing the shingles with stucco is a multistep process requiring skilled labor.
Removing the shingles isn't rocket science, but once the shingles are off, the rest of the job should be left to the pros.
Each shingle must be pried off with a bar -- a flat shovel works well. Once off, the split shingles should be dispatched to the landfill. When all of the shingles are gone, the many thousands of nails and any building paper that remains stuck on the wood sheathing must be removed.
Start wrapping the entire house in 15-pound building felt. Make sure to overlap the courses so that any water that penetrates the stucco will be wicked away from the sheathing. Next, apply the lath. Stucco lath is steel mesh that is nailed to the sides of the house, over the building felt. If the lath looks like chicken wire, special nails equipped with a cardboard spacer are used to hold the lath away from the wall.
A perforated metal strip known as a weep screed is attached at the bottom of the wall. The weep screed performs two functions: It acts as a base for the wet stucco, and when the stucco is dry, allows any moisture to drain away from the wall.
Once the lath is on, it's time for the first coat of stucco, known as the scratch coat. Stucco consists of sand, lime, Portland cement and water mixed either by hand or in a mixer to the consistency of thick mud. A job this size requires a mixer.
The scratch coat is applied by trowel, which forces the wet stucco into the lath, forming "keys." The scratch coat should be approximately 3/8 inch thick. Once the scratch coat sets up, it's important to spray the surface intermittently with water so the surface doesn't dry too quickly. Slowing the curing process makes for a stronger job that is resistant to cracks.
Let the scratch coat cure for a day or two and repeat the process by applying a second coat of stucco, known as the brown coat. The brown coat should also be about 3/8 inch thick. The brown coat provides a flat uniform layer to apply the finish coat.
Allow the brown coat to cure for a couple of days, again spritzing it regularly, and then apply the finish coat. Color can be added to the finish coat and it can also be textured. When complete, the stucco should be about an inch thick.
A large stucco job is a messy process. Count on vegetation being damaged by dropped stucco, workman's feet and scaffolding. In addition, the wood shingle molding around windows and doors should be replaced with wood stucco molding. Stucco molding is milled with a groove to allow the wet stucco to "key" into the molding.
source: lodinews.com
House bill may worsen climate for subprime borrowers
In the wake of the subprime crisis, the market has turned against all except "cream-puff borrowers" -- those with no weaknesses. The cream-puffs can borrow today on pretty much the same terms as before the crisis. But borrowers with blemishes on their applications are paying much higher prices and face a much higher risk of being turned down altogether.
As if that is not bad enough, The Mortgage Reform and Anti-Predatory lending Act of 2007 (HR 3915), now winding its way through Congress, would worsen their plight. That is not the intention, of course, but the law of unintended consequences has a home in the home loan market.
Blemished borrowers have one or more of the following risk factors: They can make only a very small or no down payment; they cannot fully document their income and assets; their property is something other than a single-family home; their loan is intended to raise cash or to purchase an investment property; they have low credit scores; their income is low relative to their expected total obligations; and their mortgage carries an adjustable rate that will result in substantially higher payments in a few years.
During the go-go years (2000-2005), the mortgage market was extraordinarily tolerant of risk factors. It was not unusual to see five of them present in an accepted mortgage, a phenomenon termed "risk layering." Lending to a borrower who had no money for a down payment, who could not document adequate income and had a poor credit history was a kind of market insanity associated with the rapid run-up in house prices. Inflation of house prices converts even the worst loans into good loans. When the housing bubble burst in 2006, the chickens came home to roost in the form of mortgage defaults, which are rising to levels not seen since the depression of the 1930s.
Markets tend to overreact. Just as the housing bubble was accommodated by insanely liberal lending terms, the pendulum has now swung toward Scrooge-like stringency. The price increments associated with risk factors are now two to three times as high as they were a year ago, and risk layering has gone way down. Roughly speaking, if you have two risk factors, the price is substantially higher, and if you have three, the deal is rejected.
A major provision of HR 3915 establishes "minimum standards for mortgages," which include requirements that borrowers have an "ability to repay" and that they receive a "net tangible benefit" from a refinancing. What these rules have in common, in addition to their discriminatory impact on borrowers already victimized by misfortune, is their vagueness and lack of specific operational guidelines. In an article I wrote recently on the net-tangible-benefit rule, I gave example after example where the ultimate determinant of whether or not there was a net benefit to the borrower could not be known by the lender without reading the mind of the borrower.
The inability to know whether or not they are in compliance creates risk for lenders, which must translate into higher costs for borrowers. But HR 3915 also provides a way to avoid this risk. It offers a "safe harbor," which is a presumption that the standards have been met, provided that the loan at issue is a "qualified mortgage" or a "qualified safe harbor mortgage."
A "qualified mortgage" is one with an interest rate that does not exceed the rate on Treasury securities or an average mortgage rate by more than 3 percent or 1.75 percent, respectively. On second mortgages, the maximum spreads are 5 percent and 3.75 percent.
A "qualified safe harbor mortgage" is a loan that is fully documented, is not a negative amortization ARM, and either meets an income adequacy test, has a fixed payment for at least five years or is an ARM with a margin of less than 3 percent. The overlap between a qualified mortgage and a qualified safe harbor mortgage will be very high.
The combination of vague standards and a safe harbor means that lenders will classify loans with regard to whether or not they belong to the safe harbor. Loans that do not belong will pay a higher price or not be made. Loans that won't qualify for the safe harbor are those with the most significant blemishes.
The safe harbor removes some of the sting from the imposition of vague standards, because most loans will qualify for the safe harbor. But not all will qualify -- a new subclass of mortgages will be created that will either be priced even worse than they are now or will disappear. These are mortgages with multiple blemishes. Already clobbered by the market, they will get the coup de grace from Congress.
source:
As if that is not bad enough, The Mortgage Reform and Anti-Predatory lending Act of 2007 (HR 3915), now winding its way through Congress, would worsen their plight. That is not the intention, of course, but the law of unintended consequences has a home in the home loan market.
Blemished borrowers have one or more of the following risk factors: They can make only a very small or no down payment; they cannot fully document their income and assets; their property is something other than a single-family home; their loan is intended to raise cash or to purchase an investment property; they have low credit scores; their income is low relative to their expected total obligations; and their mortgage carries an adjustable rate that will result in substantially higher payments in a few years.
During the go-go years (2000-2005), the mortgage market was extraordinarily tolerant of risk factors. It was not unusual to see five of them present in an accepted mortgage, a phenomenon termed "risk layering." Lending to a borrower who had no money for a down payment, who could not document adequate income and had a poor credit history was a kind of market insanity associated with the rapid run-up in house prices. Inflation of house prices converts even the worst loans into good loans. When the housing bubble burst in 2006, the chickens came home to roost in the form of mortgage defaults, which are rising to levels not seen since the depression of the 1930s.
Markets tend to overreact. Just as the housing bubble was accommodated by insanely liberal lending terms, the pendulum has now swung toward Scrooge-like stringency. The price increments associated with risk factors are now two to three times as high as they were a year ago, and risk layering has gone way down. Roughly speaking, if you have two risk factors, the price is substantially higher, and if you have three, the deal is rejected.
A major provision of HR 3915 establishes "minimum standards for mortgages," which include requirements that borrowers have an "ability to repay" and that they receive a "net tangible benefit" from a refinancing. What these rules have in common, in addition to their discriminatory impact on borrowers already victimized by misfortune, is their vagueness and lack of specific operational guidelines. In an article I wrote recently on the net-tangible-benefit rule, I gave example after example where the ultimate determinant of whether or not there was a net benefit to the borrower could not be known by the lender without reading the mind of the borrower.
The inability to know whether or not they are in compliance creates risk for lenders, which must translate into higher costs for borrowers. But HR 3915 also provides a way to avoid this risk. It offers a "safe harbor," which is a presumption that the standards have been met, provided that the loan at issue is a "qualified mortgage" or a "qualified safe harbor mortgage."
A "qualified mortgage" is one with an interest rate that does not exceed the rate on Treasury securities or an average mortgage rate by more than 3 percent or 1.75 percent, respectively. On second mortgages, the maximum spreads are 5 percent and 3.75 percent.
A "qualified safe harbor mortgage" is a loan that is fully documented, is not a negative amortization ARM, and either meets an income adequacy test, has a fixed payment for at least five years or is an ARM with a margin of less than 3 percent. The overlap between a qualified mortgage and a qualified safe harbor mortgage will be very high.
The combination of vague standards and a safe harbor means that lenders will classify loans with regard to whether or not they belong to the safe harbor. Loans that do not belong will pay a higher price or not be made. Loans that won't qualify for the safe harbor are those with the most significant blemishes.
The safe harbor removes some of the sting from the imposition of vague standards, because most loans will qualify for the safe harbor. But not all will qualify -- a new subclass of mortgages will be created that will either be priced even worse than they are now or will disappear. These are mortgages with multiple blemishes. Already clobbered by the market, they will get the coup de grace from Congress.
source:
Seller-financing nightmare
: Back in 2003, my husband and I put $5,000 down on a house. We bought it for $65,000, and the owner set up an owner-financed mortgage for $60,000.
We made all of our payments on time in 2003, 2004 and 2005. But last year, our payments got a little off schedule. Then this year, in 2007, I bounced a check and we got behind.
The owner came to my house, and very rudely told me that we had to pay $200 per week, or $800 per month. I did it for a month. Then, I made nine more payments of $200, a payment of $185, two payments of $150, and a payment of $185.
Our regular payments were just $450 per month, so going then, to $800 per month was really tough for us. We then had another meeting with our seller who told us that even though we were caught up, he wanted us to keep paying that much each month.
We told him we couldn't afford it, so we settled on $500 per month. I said I'd still pay weekly, but then I missed a few weeks, although I made sure the $500 was getting paid within that month.
The seller got mad, and said paying once a month is not good enough. He told us that the interest rate on our loan is 8 percent, and the interest on our loan is $13 per day.
Now he wants us to pay $700 per month. I don't understand how he can do this. He owns a real estate company and is very wealthy. We heard he messed up two other families who live near us, but we didn't listen to him.
Since we got behind in our payments, he said he wanted the property back. Does that mean he is not going by the land contract we signed? Does that mean we are renting now?
I don't understand what's going on anymore. We hate to say goodbye to the $5,000 we put down, but we can't keep letting him raise our payments.
A: If I understand you correctly, your seller seems to be taking advantage of you. There are some important questions you need to answer: Did you rent the property or buy it? And, is your credit good enough to refinance with a conventional lender? If your seller is a very wealthy real estate investor, he probably has some expert firepower backing him up, such as an accountant or an attorney.
While you don't have much money, you need to hire a competent real estate attorney who can review your document and figure out if you even own this property. I can tell from your letter that your grasp of what you paid and what you still owe is rather loose. How much of each payments is interest and how much pays down the principal? Did the seller give you an amortization schedule showing you how quickly you'd pay down the loan? And, what interest rate was the loan set at?
Just so you understand, if you got a $60,000 loan today at 8 percent, you'd pay only $440 per month for a 30-year amortization payment. It sounds as though you've been paying this off a lot faster. If you paid an extra $200 per month, you'd pay off the entire loan in 13 years.
So, yes, it does seem that your seller is taking advantage of you and you need to hire someone who can discuss the situation with him in terms he understands. You also need to find out how much he says you owe, and you need to look into obtaining conventional financing to close out your deal with your seller as quickly as possible -- and the financing should not be from your seller, but with a legitimate mortgage company.
Q: My aunt sold my brother and me her house for $1 some eight years ago. She is now moving out of state to a relative's house and we are planning to sell the house. Will we have to pay capital gain tax?
A: The short answer is: Yes. You will have to pay long-term capital gains tax on the difference between the purchase price and the sales price, minus the broker's commission, transfer stamps, advertising costs, any other costs of sale and the cost of capital improvements you've made to the home, such as a new roof or new furnace.
If your aunt had held onto the property, and lived in it for two of the past five years as her primary residence, she would have been able to keep up to $250,000 in profits tax-free. Since the property is essentially an investment property for you and your brother, you'll have to pay long-term capital gains tax of up to 15 percent plus state tax on the profits.
Please talk to an accountant or your tax preparer for more details.
To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.
source: lodinews.com
We made all of our payments on time in 2003, 2004 and 2005. But last year, our payments got a little off schedule. Then this year, in 2007, I bounced a check and we got behind.
The owner came to my house, and very rudely told me that we had to pay $200 per week, or $800 per month. I did it for a month. Then, I made nine more payments of $200, a payment of $185, two payments of $150, and a payment of $185.
Our regular payments were just $450 per month, so going then, to $800 per month was really tough for us. We then had another meeting with our seller who told us that even though we were caught up, he wanted us to keep paying that much each month.
We told him we couldn't afford it, so we settled on $500 per month. I said I'd still pay weekly, but then I missed a few weeks, although I made sure the $500 was getting paid within that month.
The seller got mad, and said paying once a month is not good enough. He told us that the interest rate on our loan is 8 percent, and the interest on our loan is $13 per day.
Now he wants us to pay $700 per month. I don't understand how he can do this. He owns a real estate company and is very wealthy. We heard he messed up two other families who live near us, but we didn't listen to him.
Since we got behind in our payments, he said he wanted the property back. Does that mean he is not going by the land contract we signed? Does that mean we are renting now?
I don't understand what's going on anymore. We hate to say goodbye to the $5,000 we put down, but we can't keep letting him raise our payments.
A: If I understand you correctly, your seller seems to be taking advantage of you. There are some important questions you need to answer: Did you rent the property or buy it? And, is your credit good enough to refinance with a conventional lender? If your seller is a very wealthy real estate investor, he probably has some expert firepower backing him up, such as an accountant or an attorney.
While you don't have much money, you need to hire a competent real estate attorney who can review your document and figure out if you even own this property. I can tell from your letter that your grasp of what you paid and what you still owe is rather loose. How much of each payments is interest and how much pays down the principal? Did the seller give you an amortization schedule showing you how quickly you'd pay down the loan? And, what interest rate was the loan set at?
Just so you understand, if you got a $60,000 loan today at 8 percent, you'd pay only $440 per month for a 30-year amortization payment. It sounds as though you've been paying this off a lot faster. If you paid an extra $200 per month, you'd pay off the entire loan in 13 years.
So, yes, it does seem that your seller is taking advantage of you and you need to hire someone who can discuss the situation with him in terms he understands. You also need to find out how much he says you owe, and you need to look into obtaining conventional financing to close out your deal with your seller as quickly as possible -- and the financing should not be from your seller, but with a legitimate mortgage company.
Q: My aunt sold my brother and me her house for $1 some eight years ago. She is now moving out of state to a relative's house and we are planning to sell the house. Will we have to pay capital gain tax?
A: The short answer is: Yes. You will have to pay long-term capital gains tax on the difference between the purchase price and the sales price, minus the broker's commission, transfer stamps, advertising costs, any other costs of sale and the cost of capital improvements you've made to the home, such as a new roof or new furnace.
If your aunt had held onto the property, and lived in it for two of the past five years as her primary residence, she would have been able to keep up to $250,000 in profits tax-free. Since the property is essentially an investment property for you and your brother, you'll have to pay long-term capital gains tax of up to 15 percent plus state tax on the profits.
Please talk to an accountant or your tax preparer for more details.
To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.
source: lodinews.com
Two years on market, no offers: Time to take action
Q: We purchased a single-family residence for investment with another couple in California in early 2005. Our intent was to hold the property short term, then sell it. We took out a standard adjustable-rate mortgage (ARM) to purchase the property, and we are all co-borrowers on the loan.
Unfortunately, we purchased this home at the peak of the market and now we can't sell it. It's been two years since we've started to sell it and we've lowered the price of the home below what we paid for it. Meanwhile, it's costing us each about $1,000 a month.
Our loan will convert to a variable-rate loan at the end of 2009.
Both couples are hurting for money, but our partners are in worse condition than we are. If they became unable to make their portion of the mortgage payments, would we have any recourse with the lender? We can handle our portion of the payments for now, but we couldn't cover theirs too for any length of time.
In a situation such as this, are lenders ever willing to work with the borrowers? We have excellent credit and I'd hate to see us lose so much because of this one mistake. Your counsel in this matter is greatly appreciated.
A: Unfortunately, your situation isn't unique. Many people became real estate investors the last several years until the market forces changed. It didn't occur to them, as it didn't occur to you, that the good times wouldn't last forever. Without planning for a worst-case scenario (which you're experiencing now), many of these people should never have become real estate investors.
source: lodinews.com
Unfortunately, we purchased this home at the peak of the market and now we can't sell it. It's been two years since we've started to sell it and we've lowered the price of the home below what we paid for it. Meanwhile, it's costing us each about $1,000 a month.
Our loan will convert to a variable-rate loan at the end of 2009.
Both couples are hurting for money, but our partners are in worse condition than we are. If they became unable to make their portion of the mortgage payments, would we have any recourse with the lender? We can handle our portion of the payments for now, but we couldn't cover theirs too for any length of time.
In a situation such as this, are lenders ever willing to work with the borrowers? We have excellent credit and I'd hate to see us lose so much because of this one mistake. Your counsel in this matter is greatly appreciated.
A: Unfortunately, your situation isn't unique. Many people became real estate investors the last several years until the market forces changed. It didn't occur to them, as it didn't occur to you, that the good times wouldn't last forever. Without planning for a worst-case scenario (which you're experiencing now), many of these people should never have become real estate investors.
source: lodinews.com
Buying cheaper fridge, floors makes financial sense
Last time, we talked about the worst places to save money when you're remodeling. Windows, roofs and exterior finishes prevailed as lousy places to cut corners. Today we'll look at some ways you can save money without sabotaging your project for the long term.
The strategy is simple: Economize on items that can be easily removed and upgraded later on, not on items that have to last the life of the house. This may mean putting off some things on your wish list until later -- but at least you'll have made sure it's still possible to get them. Here are some places to cut costs that will still allow for easy upgrades later:
* Built-in appliances. Buying less costly kitchen appliances is one of the simplest yet least exercised ways to save money -- probably because we've been conditioned to demand kitchens with huge built-in refrigerators, restaurant-style stoves, and all the other bells and whistles so beloved of appliance marketers. When you're building on a tight budget, though, mid-grade appliances will serve perfectly well -- in fact, they're often just the same high-priced units with the extraneous gimmicks deleted. What's more, since the dimensions of built-in appliances are standardized, the old units can be easily removed and replaced with fancier stuff when money becomes available.
* Kitchen and bath cabinets and countertops. Cabinets may seem very permanent, but they're actually fairly simple to remove and replace. This makes using budget cabinetry for the short term a fairly open-ended way to save money. When it's finally time to go for that fancier kitchen, the old cabinets needn't go to waste -- they can live out a second life in the garage.
As for countertops, pricey materials such as granite and its artificial knockoffs have insinuated themselves into even modest kitchens and baths of late, but there are some perfectly serviceable alternatives for the budget conscious. Ceramic tile and -- dare I say it -- plastic laminates are two time-honored standbys that can cost you thousands less than slabs. When it comes time to upgrade a kitchen or bath, the countertops and cabinets can be replaced together.
* Plumbing fixtures (except showers and tubs, which are more or less permanent) are also a good place to save a few bucks in the short term. While the price of items such as kitchen sinks, lavatories and toilets can vary by a factor of 10, for the most part they all do the job adequately. Later on, when you find that you absolutely must have that designer toilet with the hand-painted flowers on it, it'll be no problem to swap out the old one.
* Floor finishes such as carpeting and sheet vinyl, and hardware such as interior door locksets and cabinet latches are all easily replaced, allowing you to buy less expensive products in the interim while still being able to upgrade when money becomes available.
As hard as it is to put off those goodies you've had your heart set on, it helps to know that, when the time is right, you can still get exactly what you want.
source: lodinews.com/articles
The strategy is simple: Economize on items that can be easily removed and upgraded later on, not on items that have to last the life of the house. This may mean putting off some things on your wish list until later -- but at least you'll have made sure it's still possible to get them. Here are some places to cut costs that will still allow for easy upgrades later:
* Built-in appliances. Buying less costly kitchen appliances is one of the simplest yet least exercised ways to save money -- probably because we've been conditioned to demand kitchens with huge built-in refrigerators, restaurant-style stoves, and all the other bells and whistles so beloved of appliance marketers. When you're building on a tight budget, though, mid-grade appliances will serve perfectly well -- in fact, they're often just the same high-priced units with the extraneous gimmicks deleted. What's more, since the dimensions of built-in appliances are standardized, the old units can be easily removed and replaced with fancier stuff when money becomes available.
* Kitchen and bath cabinets and countertops. Cabinets may seem very permanent, but they're actually fairly simple to remove and replace. This makes using budget cabinetry for the short term a fairly open-ended way to save money. When it's finally time to go for that fancier kitchen, the old cabinets needn't go to waste -- they can live out a second life in the garage.
As for countertops, pricey materials such as granite and its artificial knockoffs have insinuated themselves into even modest kitchens and baths of late, but there are some perfectly serviceable alternatives for the budget conscious. Ceramic tile and -- dare I say it -- plastic laminates are two time-honored standbys that can cost you thousands less than slabs. When it comes time to upgrade a kitchen or bath, the countertops and cabinets can be replaced together.
* Plumbing fixtures (except showers and tubs, which are more or less permanent) are also a good place to save a few bucks in the short term. While the price of items such as kitchen sinks, lavatories and toilets can vary by a factor of 10, for the most part they all do the job adequately. Later on, when you find that you absolutely must have that designer toilet with the hand-painted flowers on it, it'll be no problem to swap out the old one.
* Floor finishes such as carpeting and sheet vinyl, and hardware such as interior door locksets and cabinet latches are all easily replaced, allowing you to buy less expensive products in the interim while still being able to upgrade when money becomes available.
As hard as it is to put off those goodies you've had your heart set on, it helps to know that, when the time is right, you can still get exactly what you want.
source: lodinews.com/articles
Subscribe to:
Posts (Atom)
