A Home Inspector’s Weblog by Frank Schulte-Ladbeck

exploring homes and the lives in them around Houston

Archive for Real Estate Issues

Houston Architects: O Russell Worley, AIA

Looking at homes comes naturally for an inspector. My walks through Houston neighborhoods leads me to analyze these structures out of professional curiosity. However, I love the design of the buildings as well. I began to realize that I really do not know the names of some of the architects working around our community though, so I decided to take a journey to discover some of the people working in this medium around town.

An internet search brought up several names. The first person on the list was O. Russell Worley. When looking through his portfolio, I recognized some of the homes. In fact, I had observed some of the work on them. Since I had this connection, I delved further into the portfolio. There were elegant touches in his homes that brought out some features in a striking way. I would love to look more at his interiors, because they seem the most intriguing.

I wanted you to see this lay out. There is a thoughtful element in this building which greatly appeals to me. If you notice, there is a lawn courtyard surrounded by the edifice before heading to the pool and backyard. I think that looking at this landscaped feature from the windows would be so much nicer than the pool. Pools are nice, but they are not as visually dramatic as this space could be.

Most home designs seem to focus on the interior in recent years. No one really wants to differ from their neighbors by too much. This interior uses an alignment to bring your intention all the way to the end of the room. The ceiling beams help with this effect. From a few other photographs in his portfolio, you can see where Mr. Worley has an expertise in creating these visual elements in his work.

I will have to pay more attention on my journey around town to see if I can spot more of his work. Look through his work, and you may find that there are features that you may be able to incorporate into your home. Well, he does do additions. Sometimes architects are worth it; even for our more simple homes.

Your Houston home inspector,

Frank Schulte-Ladbeck

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Realtors are a Quarter of a Penny a Dozen?

I wish that I could fathom the human mind better. I do not understand an aspect of human behavior where others need to show disdain for those around them. Ego or a power trip? I feel that there are good and bad practitioners of every profession, including my own, but Realtors seem to take offense at this idea.

There is one Realtor in my area who writes posts on Active Rain. I wish that I could have provided you with a link, but he makes his posts members only. I guess this is a wise move, since he is always complaining about clients or those who work in other real estate professions. Yesterday was my profession’s turn to be the target for Mr. Nino’s little pout. An inspector that he was dealing with wrote estimates for repairs in his report, so the buyer asked for the price to be reduced to cover these costs. According to this esteemed Realtor, this practice is against the Standards of Practice in Texas. It is not. I have lost jobs because Realtors have wanted me to do this, but I prefer to provide a better estimate by making an informed decision than giving off the cuff prices, so I provide this estimate the next day. What the inspector did was his business decision to meet a need of his clients. Mr. Nino stomped around his playground like a boy who had his toy taken from him, since these deductions were asked for during negotiations. The seller could have accepted or declined at that point, which would have meant an end to the deal or re-negotiating.

I then looked over the comments to this fine post to find Realtors criticizing inspectors. There were all the typical complaints. Mainly that we inspectors kill deals by being to thorough. If we are hired by a buyer or a seller, should we not provide them with the most complete information? Apparently not according to these Realtors. Most Realtors that I know personally are very good at their jobs, and they appreciate me being good at mine; however, I run into Realtors every so often who have a complex that they are wiser than everyone else. They end up showing disrespect for their clients and others, and I wonder how they can manage to perform a good job for their clients with this attitude.

One comment stated that inspectors are a dime a dozen. Based upon the number of Realtors compared to the number of inspectors in Houston, this would mean that Realtors are only a quarter of a penny a dozen, so worth far less than an inspector. In fact, inspectors are required to go through many more hours of training than a Realtor to obtain our license (in Texas). However, I would not adhere to any statement that puts Realtors down. I respect the abilities of the people that I work alongside, and I understand that purchasing a home will be the greatest expense/investment that a person can make, so being condescending is no way to behave. Realtors are starting to leave the industry since it is a very difficult time for the market right now. I would hope that these bad apples would leave first.

Your Houston home inspector,

Frank Schulte-Ladbeck

She isn’t wearing anything: an adventure in a smaller home

As I am working on an article at my office desk, I hear my wife call out yet again: “Look, look, she isn’t wearing anything!” Alright, I am a male of the species in the end, so I stop my work to turn around to see what my wife is referring to. I give myself credit that I did not look the first few time, but I do not see anything at all. “Oh, you missed it. You should’ve seen it, she was almost nude.” I put my head down onto my desk in exasperation. How I am going to finish while these exclamation continue.

My family does not live in such a big house, so we have our rooms perform double duty. My daytime office becomes the family room at night. The dining room serves for special projects, when we are not eating. The living room becomes laundry central when no friends have dropped by. In the scene above from the other night, I was working at my desk as my wife watched her favorite Latin stars on a video channel. I could be making an argument against the idea of rooms serving more than one function with that scenario, but I like having her around when I am working. I could do without some of the outbursts, but the conversation is nice.

I was driving through a neighborhood in transition this morning. The older homes, which were a little bigger in square footage than mine, are being replaced with units that fill up the lot. I have seen these behemoths from the inside, and they certainly are gorgeous. My son considers them the ultimate in living. Oh, what a twelve year old will think. Space abounds, but the amount of energy used for such creatures is incredible. Yes, they are made with many energy saving features, but appliances left on still use energy. If my wife and I were in separate rooms, would we not use the lights in both rooms? Would we not need the lights in the hallways between us? Would we not need more air conditioning for all of that space?

When I asked one family why they wanted more space, now that their son was moving out, the reply came that they wanted to have the biggest home on the block. I think at the heart of the matter, this honest answer is why these spacious homes are being built. It is not just keeping up with the Jonses; it is surpassing them. I enjoy my yard too much to give it over to a space that I will not use.

I offer this thought to you, so that you might consider how spaces in your home can be converted into dual use spaces. If you are planning on buying or constructing a home, give a thought to the costs that will come with unused space. American homes are now averaging at 2400 square feet, which is quite a lot if you look at it, but there are places where new homes are now averaging 6400 square feet. Maybe this economic downturn will remind us that we do not need to surpass the Jonses; we do not even need to have what they have; we just need to find contentment on our own.

Future Developments Due to the Current Real Estate Situation

I am not sure what to write about today on the topic of real estate or home staging, which are my subjects of choice on Tuesdays. I was just informed that an article written by me has become quite popular over the past week. It dealt with ten things you should know about before buying a home. I was asked to write about ten things that your Realtor does not want you to know, but I think that might be shooting myself in the foot, since a part of my business comes from Realtors. This article has led to a few requests from other sites that I should write on real estate or living in your neighborhood or information for homeowners.

Real Estate is the hot news item for the latter part of this year, but should it be? People are concerned now because they might lose their homes, or their home’s value could be lowered. The percentage of people who may lose their home is small in comparison to the total number of owners. Certain markets had rapid increases in values, which were not justified, so eventually the market will correct itself. Buy and hold owners, wether of stocks or homes, will always win out in the end. My intention is to lead you to the conclusion that your home’s value goes up over time.

An interesting turn of events for me is that as a society we may become less mobile. I entered the real estate profession because the company that I worked for wanted me to move from city to city every two years with no promotion or raise. I felt that this was an imposition on my family life. If employees are having a hard time selling their homes, or if they will loose money on their homes, they may not accept changes of location for a job. Telecommuting will be a better alternative for corporations, and with broad band technologies becoming more prevalent, telecommuting is more feasible.

Telecommuting may put an emphasis on Google’s cloud computing ideas, but certainly it will also spawn improved technologies to be used over the internet for employees to do their job. Businesses may see an added benefit to telecommuting, since they will not have to deal with the physical presence of the individual in their buildings: less space needed; less energy use; and less water use.

Another fact stemming out of our current situation is the quality of good that we will receive. Affordable housing is built to a higher energy efficiency standard than a home for a middle class family. With many in the middle class losing good jobs because of the housing meltdown, home builders will have to consider how to make all of the homes that they make contain more value for the customer. Oddly enough, as we become concerned with global warning, the housing market problems may have put us on our way to reducing greenhouse gases by being more efficient.

I think that recent history has shown us though that firms will continue to find ways to part with our money, while finding ways to give us less. Even though I make the argument for quality coming back into products as a way to induce us to spend, it may take a further shock to the economy for the government to realize that they need to protect the consumer just as much as the firms who donate to their campaigns. I think there is a good chance for recession and inflation troubles to cause this issue to remain in the spotlight throughout 2008, and therefore something the next president will have to deal with.

My guesses may come about for other reasons, but I think that some good in unexpected places may come of our current crisis.

Winter Home Staging for Your Exterior

I raked the leaves from my front yard on Friday, and by Sunday you would not have known that fact, except for the pile of leaf bags by the side of the house. In Houston, we never have a true winter, but we do get a steady stream of leaves falling from late autumn till well into winter. I looked over at my neighbors yards to see how they are faring, and the only house that does not have to deal with these leaves belongs to a couple they will not have trees in their yard because of this fact. I picked my house because of the trees. It was one of the first features that attracted me to it.

As I was raking yet again, I thought about two homes which I pass by on a consistent basis. The homes have been up for sale for some time now, and they are not looking to well cared for. It is mainly the gardens which make this impression. The ornamental grasses are brown, and the slight frost has left its mark on some of the annuals. The trees have dropped much of their leaf canopy. The interiors have been taken care of, but buyers walking through the yard are just reminded of the yard work that will be in store for them, once they move in. Houston’s fickle climate places the vibrant plants against their dull counter parts in most gardens, but for the home that is for sale, the contrast dispels the fantasy of the new home for the buyer.

In climates like Houston where plants cannot seem to make up their mind, and the leaves drop to the ground at their own pace and whim, keeping the garden clean is a priority for the seller. Buyers know that they will have to work in the garden, but reminding them of that work before they move in does not sit well in their minds when deciding which home to purchase.

A View of the Real Estate Market of 2008

The new year is not to far off, and I thought it would be good to look at what it might hold. This is the time of year when many professionals, particularly in real estate, are networking, since it is a slower time for business in our industry, so many are making their plans for the coming year, based upon what they are hearing in these meetings. With the subprime mess looming large over our ventures, you may think that the real estate industry does not have much to look forward to, but you would be wrong.

All businesses go through cycles, and difficult times do not kill the industry. You will find real estate professionals leaving the field, but those of us remaining are just better at our craft. This fact bodes well for the consumer, but the industry will not fare well with few practitioners. The real estate professionals left standing are the individuals who are knowledgeable and resourceful, which are good qualities for our customers. The loss of workers in this field could mean greater unemployment, which is not good for the economy, since many people are already worried about expenditures. Consumer spending on holiday gifts has not been bad though. Spending on large financial purchases like homes or cars is being put off till a better understanding of the financial sector is obtained by the general consumer. New investors appear to be entering the real estate market, and many real estate professionals have seen them as their main business. Early 2008 will find this group as the prominent consumer for many in the real estate industry. Banks are focusing on their retail side, so loans at good rates are out there.

Realtor associations are arranging their marketing campaigns, with a message about real estate being local. The message is that your local area may not be suffering from the set backs that some markets have seen. The problem is that national news still effects local markets, so it will take a lot to change this perception. Realtors are focusing in on appropriately pricing homes. There is an education effort under way to make the seller realize that some sale prices just do not fit market conditions. Although buyers have not completely left the market place, you will not see a good return to home buying until late spring of 2008. By this time, people will realize that their bank is offering them a good deal on a loan, and sellers who have had their homes on the market for a while will price their homes reasonably. The National Association of Realtors has forecasted that 2008 will be a great year for home sales, continuing the upward trend that the real estate market has seen in recent years. The buzz word in the industry seems to be “Latino”. There is more focus on this group to become homeowners, and it is felt that marketing campaigns directed towards Hispanics will bring them into the market. Currently, most Hispanics in Houston are renters, but with growing families, a home makes sense.

The three major trends involved with new homes will be telecommunications, energy efficiency, and the environment. Broadband is sweeping the nation, as sites like YouTube become more popular. Affordable homes are already being pre-wired with cabling for broadband technologies, and we will see telecommunications companies move more into marketing this technology for the homes of middle class America. Energy efficiency and the environment are tied together in the housing market. As the energy costs increase, the consumer will be hit with more marketing for goods and services that produce better, energy efficient homes. In my specific industry, there is a push towards inspecting homes for their efficiency, and many are taking the time to be certified for energy code inspections. It will take a while for this to catch on with the general public, but you will see this service advertised more next year. Manufacturers are jumping onto the bandwagon of the environmental movement by making products which they claim has some right to be called eco-friendly. Many of these claims are questionable. With housing sales down, manufacturers have to find a way to have existing homeowners to become excited enough to buy their product, and being concerned about the environment is the way that they hope to go after your dollars.

By the end of 2008, we should have seen a return to normalcy in consumer spending and the housing market, if many economists are to be believed. Housing prices will come down in some markets, but most markets will probably see modest gains. Houston’s median home price is around $155,000 for a roughly 2000 square foot home, which is lower price than in many areas, so a steady increase is likely.

A Buyer’s Market?

Realtor associations are coming out with campaigns to encourage people to realize that all real estate is local. Banks and financial institutions that are still standing are refocusing on their retail side of providing mortgages. (Much of the mortgage problems banks are having come from the investment side of the banks. The retail side sells loans directly to the consumer, while the investment side bought loans bundled as investments from primarily predatory lenders.) Housing prices are coming down in many parts of the country (however, here in Houston, prices have had a slight gain). Lastly, the news seems grim for the American consumer (although sales reports from Black Friday appear good). Should we declare it a buyer’s market in the real estate industry?

The reason that I pose the question is that one Realtor association said the evidence still points to it being a seller’s market, because of the slight gain in home prices for their area. The fact remains that buyer’s seem to be staying away from the market. This is a traditionally slow period in real estate sales. Who wants to move before the holidays or during winter? Sales for homes have dramatically decreased all over the nation. Buyers are considering their finances, and consumers have expressed fear over their mounting credit debt. This has led many to wait and see what will become of this situation, before feeling secure enough to buy.

The number of foreclosures is taking an upturn, which we should be prepared to see continuing. Many who face foreclosure do not seem to realize that there are steps that they can take to prevent it from happening, but they need to act early instead of waiting till the last moment. It would be nice to see the media placing this message into the public forum more often, because those people in trouble do not seem to be receiving or comprehending it. The foreclosure crisis is starting to effect urban redevelopment, which is a shame for our nation’s major cities. I think one of the great trends of this past real estate boom was the fact that individuals were looking back to city centers, instead of moving further out. These revitalized centers were also benefiting the poor to a degree.

The interesting fact is that our mobile society may become more settled. Employees may request compensation from large corporations that want to move them about. We also might not pick up to move somewhere with the hope of finding a better life. We may just want to stick close to family. With rising fuel costs, we probably will also want to live nearer to work or to the activity that dominates our life. Both facts bode badly for the building industry, unless they specialize in revitalizing urban areas, like a CDC.

What does all of this mean to the buyer? In most of the country it is a good time to purchase a home. You should go through a bank, and you should take your time to look for the property that appeals to you as well as fit your needs. Investors will find many opportunities coming along the horizon, but I would suggest that you do your homework on how you we handle the property. For sellers, this may be the time for you to cut your loses; the future does not seem bright for you, but Realtor associations around the nation are still predicting a good year for home sales next year. Maybe they are right.