This is the best Q and A I've seen on the highs and lows of buying bank-owned properties. This article appeared in The Georgia Real Estate Report, November 2008.
BUYING BANK-OWNED PROPERTIES PAINFULLY SLOW BUT POSSIBLY REWARDING
By John Adams
Last week we talked about the flood of bank-owned homes that have clogged up the residential resale market both nationally and locally. These "post-foreclosure" houses are the harvest of the exotic financing instruments and the loose lending guidelines of recent years.In many cases, the buyers intended to make the payments, but were overwhelmed by dramatic jumps in interest rates as their adjustable loans reset. Unable to pay the required sums monthly, these owners may have tried to sell. But with little or no equity in the homes, their efforts were to be in vain.
After a meaningless foreclosure auction where no investors even attended, these homes were deeded back to the lenders, who list them with local real estate professionals for sale. Banks call these houses REO properties, which stands for "real estate owned."
Yes, the savvy real estate buyer can pick up a bargain, but it's important to be cautious when shopping for these "bank-owned" homes.Here are some questions I am often asked:
Q: What's the difference between making an offer on a "bank-owned" house as opposed to a typical resale home? A: The primary difference involves recognizing the challenges of dealing with an institutional seller.For starters, a traditional seller would first get their house in clean, ready to sell condition. Only then would they open the doors to the public. Further more, most sellers expect a buyer to request a comprehensive inspection, and are not surprised when a buyer requests compensation for needed repairs.In contrast, banks expect to sell their REO properties "as-is," and they almost never agree to make repairs or put the property in any condition other than the way it is. The bank will likely grant your request for an inspection, but will almost certainly decline any request for improvements.
Q: Are all these REO houses in extremely poor condition? A: Some are in almost perfect condition, while others are completely unfit for human habitation.In addition to being poor sellers of real estate, banks have a bad habit of being poor property managers during their period of ownership.Because the house is vacant, it attracts vagrants and homeless people who move in and semi-occupy the house. In cold weather, these occupants may build fires in the fireplace to keep warm, and they sometimes break up kitchen cabinets to use as firewood.In addition, as time goes by, these homes often sink into much worse condition. Thieves steal copper pipes and copper wiring to sell for recycling, and air conditioning compressors disappear overnight. Even so, the banks hope to sell these homes "as-is."
Q: How do I go about making an offer on one of these houses? A: Here is the next hurdle. When looking at a typical resale house, you can expect the seller to respond to your written offer in hours. They may counter, but today's seller takes every offer seriously, hoping for an eventual meeting of the minds.Banks do things differently.When you submit a written offer to a bank, they frequently demand proof from your bank that you have sufficient funds on hand to close the transaction. This must be submitted before the bank will even look at your offer.Another frequent requirement is acceptance of multi-page addendums freeing the bank from any liability for the condition of the property involved.Even after all that, my experience is that most banks have trouble finding anyone with the actual authority to make a decision on selling the house. While some lenders are better than others, it is not unusual for offers to sit on the table for a week or more before someone at the bank gets around to responding.
Q: Any other pitfalls to watch out for when buying from lenders? A: First, know that this seller is unwilling to give you a General Warranty Deed for the property when you buy. They will insist on delivering title by Limited Warranty Deed, thus preventing you from involving the bank in future title problems. To remedy this shortcoming, it is especially important that you purchase the optional Owners Title Insurance policy from the closing attorney. Also, when selling REO houses, most lenders insist that you pay for settlement costs, and further require that the closing take place in the office of the seller's attorney. If you want legal representation (and you do), you will have to pay for your own attorney to review all your documents and advise you directly. In my opinion, that is money well spent.
Q: It would seem that the banks would be anxious to sell these properties, and would want to streamline the process, making it easy for buyers. Why all the roadblocks? A: Banks and lending institutions are heavily regulated, and have internal rules and regulations that must be followed. In addition, its part of a corporate culture permeating the world of banking. Banks just aren't set up to sell real estate. They protect our savings and process our checks and loan us the money we need most of the time, but marketing real estate is just not one of their strengths.
Q: What about buying government-owned houses from HUD? Is that any easier? A: Unfortunately, it's worse. The government has its own procedure for selling, involving a prioritized bid period during which only owner-occupants may bid. And even if you intend to live in the house, you must accept it in as-is condition.The bottom line in buying any foreclosed property is to make sure you protect yourself at every step, and have your attorney review all documents with you carefully before you sign anything.
Monday, November 3, 2008
Thursday, October 30, 2008
What's the scoop?
There's a lot of weird information flying around! In the same day last week I read in Business Week that Atlanta is the 10th fastest selling market in the country, AND then in the AJC I saw that the average home in Atlanta is taking 8 months to sell. How do you weed out the truth and what it means for you?
First, be careful about any news that isn't directly related to sales of properties comparable to your home. National statistics, and even local statistics, can be completely innapropriate for your home's unique situation.
Second, call me. I promise to be honest about what your home will sell for, and what it will take to get your home sold. I don't want either of us wasting our time trying to sell it if we can't get what you want for it. On the other hand, there's is absolutely no way to tell what your home will sell for until I look at comparable home SALES.
Third, read this article from the cheif ecomomist for the National Association of Realtors. Is he biased? Probably. Realtor's are naturally optimistic people! But, there's a lot of truth here, even if he's looking for the silver lining. He's debunking 10 real estate myths, and each myth is followed by a tip from frontdoor.com.
Lawrence Yun, chief economist of the National Association of Realtors, debunks 10 commonly held beliefs about the current housing market, and FrontDoor.com offers 10 related tips.
1. Peak-to-trough home price declines to date have been about 20%. Wrong. Measurements of home price declines can be skewed depending on which homes in which markets are being measured. For instance, the Case-Shiller Index, which indicates that home prices are down 20%, is heavily skewed towards homes with subprime loans and other distressed home sales. These troubled homes have experienced a steeper decline than home prices in general, says Yun, adding that both government data based on loans backed by Fannie Mae and Freddie Mac and data from the National Association of Realtors suggest much more modest price declines. TIP: If you’re selling your home, the best thing to do is price your home right.
2. The much smaller number of new homes now under construction indicates the dismal outlook for the housing market. Wrong. The inventory of homes on the market is very high, so the last thing we need now is more new homes being built. Home builders have cut back sharply on production, which will help lower inventories and stabilize prices. The builders have done exactly what market forces are dictating under current conditions, Yun says. TIP: With many new homes completed but not sold, you can find great opportunities.
3. Even when the housing market recovers, home price growth will be only 4 to 6% per year — much less than historical average returns for the stock market. Most buyers put less than 20% of their own money into a home purchase; this borrowing power can translate to a greater rate of return. This is how Yun explains it: Home price appreciation historically has been about 1 to 2 percentage points higher than consumer price inflation, which translates into about 4 to 6% per year. But this growth rate cannot be viewed as a rate of return like the stock market. The reason is that most people do not buy a home for all cash, instead making a cash down payment and borrowing the rest. The leverage this borrowing creates can magnify returns — and losses. If price growth returns to historic norm, the price growth of 4% can easily turn into 20 to 30% rate of return if the home buyer makes a down payment of 10 or 20%. TIP: Get the fundamentals right when investing in real estate.
4. Impending baby boomer retirements and moves to small homes will cause a glut of homes on the market. Wrong. The first edge of the baby boomers has reached 60 years of age and the massive bulk of that generation will soon go into retirement, but far from trading down, many of these older homeowners are keeping their homes or moving to ones of comparable size. And even if more boomers do sell their larger homes in the years ahead, Yun points out, the rapidly growing U.S. population should absorb the inventory of existing homes on the market. TIP: Active seniors can find a retirement community that caters to their needs and interests.
5. The federal government takeover of secondary mortgage companies Fannie Mae and Freddie Mac is a bailout that will cost taxpayers bundles. Too soon to tell, says Yun. It’s conceivable that taxpayers may have to cover some losses. It’s also possible that the government takeover will result in no loss of taxpayer dollars. Even if taxpayer funds are used, the bailout would be preferable to the global economic problems that would have occurred if Fannie and Freddie had gone belly up. TIP: Uncle Sam is “bailing out” homeowners facing foreclosure. Find out more about the Hope for Homeowners plan.
6. The Federal Reserve controls mortgage rates. Wrong. Yun explains: The Fed’s activities influence mortgage rates but don’t directly control them. What the Fed sets is a very short-term interest rate called the Federal Funds Rate. Mortgage rates are determined by global savings as well as credit spreads and inflationary pressures. Over the past two years, the Fed has raised the Fed Funds Rate to 5.5%, and then cut it deeply to around 2%. All the while, the 30-year mortgage rate has averaged in the 6 to 6.5% range. TIP: Today’s rates don’t look bad compared to the 10% we saw in the early ’90s and 17% in the ’80s.
7. It’s the wrong time to buy. Wrong. All real estate is local. For those who are financially and mentally ready to buy, there has never been a better time to be a buyer in many markets. An abundant selection of homes and historically low interest rates give buyers an edge over sellers. The recently passed $7,500 federal tax credit for first-time home buyers creates an added incentive. For someone with a long-time horizon, Yun says, there is very little worry about home values since homes have historically provided a solid foundation for wealth accumulation. TIP: Compare the pros and cons of renting vs. buying to see what makes sense for you.
8. It’s the right time for everyone to buy. No. All real estate is local, and everyone is unique. Someone who is not emotionally or financially ready should not be forced or induced to join the rank of homeowners, even when a market presents good buying opportunities. Potential homeowners clearly need to understand that the decision to move up to ownership requires sacrifices, like saving up for down payment and elevating their credit scores. Homeowners who lose their home to foreclosure serve no one’s interest, Yun adds. TIP: Take a good hard look at your financial status and create a homeowner’s budget to see if you’re ready to buy a home.
9. It’s a terrible time to sell. Wrong. In markets where home sales are picking up strongly, a seller can easily get an offer if the property is priced correctly. Also, Yun says, for those looking to trade-up, selling low on an existing home is more than offset by buying the new move-up home at a lower price. When the market recovers, home price appreciation on the traded-up home will bring bigger bang for the buck. TIP: Homebuyers want bargains in this market. If you price your home much lower than your competition, you might end up with a bidding war.
10. With the advent of the Internet, more and more homes are being sold by owners (FSBOs), and real estate practitioners are becoming obsolete. Nope. According to Yun, the share of home sellers who choose to go it alone when selling their home has actually decreased from about 20% in the late 1980s to about 12% today. Even after these sellers successfully complete a transaction, only 4 in 10 say they would sell their next home without the assistance of a real estate professional. TIP: You don’t have to sign a listing contract to talk to a Realtor. Ask family and friends for referrals and interview a few. You might even get some free advice.
First, be careful about any news that isn't directly related to sales of properties comparable to your home. National statistics, and even local statistics, can be completely innapropriate for your home's unique situation.
Second, call me. I promise to be honest about what your home will sell for, and what it will take to get your home sold. I don't want either of us wasting our time trying to sell it if we can't get what you want for it. On the other hand, there's is absolutely no way to tell what your home will sell for until I look at comparable home SALES.
Third, read this article from the cheif ecomomist for the National Association of Realtors. Is he biased? Probably. Realtor's are naturally optimistic people! But, there's a lot of truth here, even if he's looking for the silver lining. He's debunking 10 real estate myths, and each myth is followed by a tip from frontdoor.com.
Lawrence Yun, chief economist of the National Association of Realtors, debunks 10 commonly held beliefs about the current housing market, and FrontDoor.com offers 10 related tips.
1. Peak-to-trough home price declines to date have been about 20%. Wrong. Measurements of home price declines can be skewed depending on which homes in which markets are being measured. For instance, the Case-Shiller Index, which indicates that home prices are down 20%, is heavily skewed towards homes with subprime loans and other distressed home sales. These troubled homes have experienced a steeper decline than home prices in general, says Yun, adding that both government data based on loans backed by Fannie Mae and Freddie Mac and data from the National Association of Realtors suggest much more modest price declines. TIP: If you’re selling your home, the best thing to do is price your home right.
2. The much smaller number of new homes now under construction indicates the dismal outlook for the housing market. Wrong. The inventory of homes on the market is very high, so the last thing we need now is more new homes being built. Home builders have cut back sharply on production, which will help lower inventories and stabilize prices. The builders have done exactly what market forces are dictating under current conditions, Yun says. TIP: With many new homes completed but not sold, you can find great opportunities.
3. Even when the housing market recovers, home price growth will be only 4 to 6% per year — much less than historical average returns for the stock market. Most buyers put less than 20% of their own money into a home purchase; this borrowing power can translate to a greater rate of return. This is how Yun explains it: Home price appreciation historically has been about 1 to 2 percentage points higher than consumer price inflation, which translates into about 4 to 6% per year. But this growth rate cannot be viewed as a rate of return like the stock market. The reason is that most people do not buy a home for all cash, instead making a cash down payment and borrowing the rest. The leverage this borrowing creates can magnify returns — and losses. If price growth returns to historic norm, the price growth of 4% can easily turn into 20 to 30% rate of return if the home buyer makes a down payment of 10 or 20%. TIP: Get the fundamentals right when investing in real estate.
4. Impending baby boomer retirements and moves to small homes will cause a glut of homes on the market. Wrong. The first edge of the baby boomers has reached 60 years of age and the massive bulk of that generation will soon go into retirement, but far from trading down, many of these older homeowners are keeping their homes or moving to ones of comparable size. And even if more boomers do sell their larger homes in the years ahead, Yun points out, the rapidly growing U.S. population should absorb the inventory of existing homes on the market. TIP: Active seniors can find a retirement community that caters to their needs and interests.
5. The federal government takeover of secondary mortgage companies Fannie Mae and Freddie Mac is a bailout that will cost taxpayers bundles. Too soon to tell, says Yun. It’s conceivable that taxpayers may have to cover some losses. It’s also possible that the government takeover will result in no loss of taxpayer dollars. Even if taxpayer funds are used, the bailout would be preferable to the global economic problems that would have occurred if Fannie and Freddie had gone belly up. TIP: Uncle Sam is “bailing out” homeowners facing foreclosure. Find out more about the Hope for Homeowners plan.
6. The Federal Reserve controls mortgage rates. Wrong. Yun explains: The Fed’s activities influence mortgage rates but don’t directly control them. What the Fed sets is a very short-term interest rate called the Federal Funds Rate. Mortgage rates are determined by global savings as well as credit spreads and inflationary pressures. Over the past two years, the Fed has raised the Fed Funds Rate to 5.5%, and then cut it deeply to around 2%. All the while, the 30-year mortgage rate has averaged in the 6 to 6.5% range. TIP: Today’s rates don’t look bad compared to the 10% we saw in the early ’90s and 17% in the ’80s.
7. It’s the wrong time to buy. Wrong. All real estate is local. For those who are financially and mentally ready to buy, there has never been a better time to be a buyer in many markets. An abundant selection of homes and historically low interest rates give buyers an edge over sellers. The recently passed $7,500 federal tax credit for first-time home buyers creates an added incentive. For someone with a long-time horizon, Yun says, there is very little worry about home values since homes have historically provided a solid foundation for wealth accumulation. TIP: Compare the pros and cons of renting vs. buying to see what makes sense for you.
8. It’s the right time for everyone to buy. No. All real estate is local, and everyone is unique. Someone who is not emotionally or financially ready should not be forced or induced to join the rank of homeowners, even when a market presents good buying opportunities. Potential homeowners clearly need to understand that the decision to move up to ownership requires sacrifices, like saving up for down payment and elevating their credit scores. Homeowners who lose their home to foreclosure serve no one’s interest, Yun adds. TIP: Take a good hard look at your financial status and create a homeowner’s budget to see if you’re ready to buy a home.
9. It’s a terrible time to sell. Wrong. In markets where home sales are picking up strongly, a seller can easily get an offer if the property is priced correctly. Also, Yun says, for those looking to trade-up, selling low on an existing home is more than offset by buying the new move-up home at a lower price. When the market recovers, home price appreciation on the traded-up home will bring bigger bang for the buck. TIP: Homebuyers want bargains in this market. If you price your home much lower than your competition, you might end up with a bidding war.
10. With the advent of the Internet, more and more homes are being sold by owners (FSBOs), and real estate practitioners are becoming obsolete. Nope. According to Yun, the share of home sellers who choose to go it alone when selling their home has actually decreased from about 20% in the late 1980s to about 12% today. Even after these sellers successfully complete a transaction, only 4 in 10 say they would sell their next home without the assistance of a real estate professional. TIP: You don’t have to sign a listing contract to talk to a Realtor. Ask family and friends for referrals and interview a few. You might even get some free advice.
Thursday, October 23, 2008
What's the problem?
Interesting article. Every lender I talk to says, "I can still make loans! Have your buyers call me!" So if you're thinking about real estate but don't think you can buy now, please let me put you in touch with one of my favorite lenders so you'll know for sure.
Survey Shows Consumers Still Believe Real Estate Is a Good Investment
RISMEDIA, Oct. 22, 2008-OptHomeTM, an online resource for empowering homeowners, buyers and sellers to make smart decisions for all their homeowner needs, released comparison findings from consumer confidence surveys, conducted during Q2 and Q3 2008, that indicate the majority of consumers still believe in the value of real estate as an investment.
Fielding several hundred responses by homeowners in mid-June 2008, one-third (74%) of all respondents said they felt real estate was still a good investment. Comparatively, even with the collapse of Wall Street and the economic crisis making headline news, when the same group of consumers was surveyed again this month, results remained unchanged.
With the nation teetering towards recession, one thing remains clear-consumers still hold a fundamental belief in the importance of home ownership and the American dream which cannot be dampened by the greed of Wall Street. What is at issue for the consumer are the logistics of how to make that happen in today’s economy.
The OptHome survey also revealed that 74% of all buyers and sellers believe the number one challenge facing a home buyer today is obtaining a mortgage, compared to 61% in June-indicating a correlation between the 13% slide in consumer confidence and the global financial crisis as it relates to home ownership. Conversely, 41% of consumers believe the biggest challenge facing a home seller today is setting a realistic price for their home, down from 53% in June — followed by a growing concern they will have to sell their home for less than they owe on their mortgage (25% vs. 21%).
“Consumers are starting to come to grips with the challenges they’re facing, but there are some very bright spots in the real estate industry” said Dave Sears, OptHome co-founder and chief strategist. “Thanks to the Housing Bill, there are incentives for first time buyers - including a sizeable tax credit. And mortgage rates are expected to remain low to help resuscitate the industry, making it a good time for financially sound consumers to take advantage of the market’s surplus and very affordable prices.”
For more information, visit www.opthome.com.
Survey Shows Consumers Still Believe Real Estate Is a Good Investment
RISMEDIA, Oct. 22, 2008-OptHomeTM, an online resource for empowering homeowners, buyers and sellers to make smart decisions for all their homeowner needs, released comparison findings from consumer confidence surveys, conducted during Q2 and Q3 2008, that indicate the majority of consumers still believe in the value of real estate as an investment.
Fielding several hundred responses by homeowners in mid-June 2008, one-third (74%) of all respondents said they felt real estate was still a good investment. Comparatively, even with the collapse of Wall Street and the economic crisis making headline news, when the same group of consumers was surveyed again this month, results remained unchanged.
With the nation teetering towards recession, one thing remains clear-consumers still hold a fundamental belief in the importance of home ownership and the American dream which cannot be dampened by the greed of Wall Street. What is at issue for the consumer are the logistics of how to make that happen in today’s economy.
The OptHome survey also revealed that 74% of all buyers and sellers believe the number one challenge facing a home buyer today is obtaining a mortgage, compared to 61% in June-indicating a correlation between the 13% slide in consumer confidence and the global financial crisis as it relates to home ownership. Conversely, 41% of consumers believe the biggest challenge facing a home seller today is setting a realistic price for their home, down from 53% in June — followed by a growing concern they will have to sell their home for less than they owe on their mortgage (25% vs. 21%).
“Consumers are starting to come to grips with the challenges they’re facing, but there are some very bright spots in the real estate industry” said Dave Sears, OptHome co-founder and chief strategist. “Thanks to the Housing Bill, there are incentives for first time buyers - including a sizeable tax credit. And mortgage rates are expected to remain low to help resuscitate the industry, making it a good time for financially sound consumers to take advantage of the market’s surplus and very affordable prices.”
For more information, visit www.opthome.com.
Wednesday, October 15, 2008
What's up with this tax credit?
Thanks to James Williamson of Fairfield Mortgage for this summary of the Tax Credit program for 1st time home buyers*. To get in touch with James, click on the Fairfield Mortgage link in the upper left hand corner of my blog.
Time Is Running Out on the $7500 Tax Credit Created as part of the Housing and Economic Recovery Act of 2008, the tax credit was enacted in July of this year to encourage home buying. It is only temporary. Retroactive to homes bought on or after April 9, 2008, the tax credit will expire in July, 2009. Here are the nuts and bolts you need to know about the credit:
How does it work?
The tax credit is actually a 15 year interest-free loan where the buyer will repay 1/15th of the loan each year via a tax credit against any Federal income taxes owed. Thus, with a $7500 limit, the maximum payment each year would be $500. The repayment begins two years after the credit is taken. Furthermore, if the homeowner sells the home during the 15 year period, he/she has to repay the balance of the loan from the profit of the home sale (if there is insufficient profit, then the remaining payback would be forgiven).
What's so great about a tax credit?
A tax credit is more valuable than a tax deduction, but most people don't know there's even a difference. A tax credit reduces the actual amount of tax due. A tax deduction only reduces the amount of taxable income. For example, if your client owed $3,000 in taxes for 2008, but qualified for the full $7,500 tax credit, it would cancel the entire amount he owes and still leave $4,500 which he would receive as a tax refund!
*Who qualifies for the tax credit? The credit is for first-time home buyers as well as anyone who hasn't owned a home in the past three years that can meet the income requirements. Single taxpayers can claim the full credit with incomes up to $75,000 and married couples up to $150,000. This credit is available for owner-occupied U.S. properties.
How much is the tax credit? The tax credit goes up to 10% of the purchase price of a new or existing home up to a limit of $7,500.
Time Is Running Out on the $7500 Tax Credit Created as part of the Housing and Economic Recovery Act of 2008, the tax credit was enacted in July of this year to encourage home buying. It is only temporary. Retroactive to homes bought on or after April 9, 2008, the tax credit will expire in July, 2009. Here are the nuts and bolts you need to know about the credit:
How does it work?
The tax credit is actually a 15 year interest-free loan where the buyer will repay 1/15th of the loan each year via a tax credit against any Federal income taxes owed. Thus, with a $7500 limit, the maximum payment each year would be $500. The repayment begins two years after the credit is taken. Furthermore, if the homeowner sells the home during the 15 year period, he/she has to repay the balance of the loan from the profit of the home sale (if there is insufficient profit, then the remaining payback would be forgiven).
What's so great about a tax credit?
A tax credit is more valuable than a tax deduction, but most people don't know there's even a difference. A tax credit reduces the actual amount of tax due. A tax deduction only reduces the amount of taxable income. For example, if your client owed $3,000 in taxes for 2008, but qualified for the full $7,500 tax credit, it would cancel the entire amount he owes and still leave $4,500 which he would receive as a tax refund!
*Who qualifies for the tax credit? The credit is for first-time home buyers as well as anyone who hasn't owned a home in the past three years that can meet the income requirements. Single taxpayers can claim the full credit with incomes up to $75,000 and married couples up to $150,000. This credit is available for owner-occupied U.S. properties.
How much is the tax credit? The tax credit goes up to 10% of the purchase price of a new or existing home up to a limit of $7,500.
Thursday, September 25, 2008
What's Wrong With My Carpet?
Mystery Solved! Bill Garwood, home inspector extraordinaire, writes a weekly article for the AJC. I get this question a lot when I'm helping home-owners get ready to sell. Thanks for clearing this up, Bill!
Ask the Inspector: Ghosting? It’s a dirty problem, but don’t let it spook you
Air circulation is culprit of mysterious carpet-stains.
By Bill Garwood
For the Atlanta Journal-Constitution
Sunday, September 21, 2008
If you have light-colored carpets in your home, you may have experienced dark areas along the baseboards or even under doors. Perhaps you have noticed dark spots on your bathroom ceiling above the vanity lights. You may have even noticed that there appear to be dark streaks on your walls or ceilings.
Don’t panic, these stains do not mean you are a poor housekeeper, although eliminating them may require a lifestyle change.
The stains are known as ghosting. For ghosting to occur there must be a source of dirt or soot in the house. In many cases the dirt or soot simply enters the house from outside.
Since most houses experience some imbalance of pressures between the interior and exterior, a negative interior pressure will naturally draw dirt into the house through windows, doors or any other crack in the envelope of the house. Dirt and soot can also be created by the occupants of a house. Cigarette smoking, burning candles or incense, and the pilot lights on gas burning appliances all produce a certain amount of soot.
The most common area of ghosting is on light-colored carpets. In this case, an imbalance of pressures between the interior and exterior of the house results in an imperceptible airflow through walls. The air carries some of the dirt and soot with it.
When the air passes into or out of the bottom of a wall, the carpet acts like a filter and catches the dirt and soot resulting in the dark areas. Imbalances or even poor design of a heating and cooling system can result in air pressure differences between rooms and the areas outside them.
When this pressure imbalance occurs, air passes under the doors and is captured by the carpet. Streaking on walls typically occurs on exterior walls and is a result of a difference in temperature between the wall studs and the spaces between the studs.
In winter the wood studs will tend to be colder than the insulated spaces between them. This minor difference in temperature allows some imperceptible condensation of water vapor along the stud. This condensed water vapor traps the soot and dirt particles, leaving relatively dark, dirty streaks on the wall.
In bathroom ceilings the cause of ghosting is a little simpler. The heated air from the lights over the sink rises and carries the dirt and soot in the air with it. The dirt and soot collect on the ceiling above the lights.
Cleaning tips
Ghosting can be difficult to get rid of. It may require replacement of carpets and/or repainting of walls and ceilings. For less severe ghosting on carpets, a professional deep cleaning of the stains using an enzyme-based powder has been somewhat successful.
The following is a list of things that a homeowner can do to help minimize or eliminate ghosting:
Ask the Inspector: Ghosting? It’s a dirty problem, but don’t let it spook you
Air circulation is culprit of mysterious carpet-stains.
By Bill Garwood
For the Atlanta Journal-Constitution
Sunday, September 21, 2008
If you have light-colored carpets in your home, you may have experienced dark areas along the baseboards or even under doors. Perhaps you have noticed dark spots on your bathroom ceiling above the vanity lights. You may have even noticed that there appear to be dark streaks on your walls or ceilings.
Don’t panic, these stains do not mean you are a poor housekeeper, although eliminating them may require a lifestyle change.
The stains are known as ghosting. For ghosting to occur there must be a source of dirt or soot in the house. In many cases the dirt or soot simply enters the house from outside.
Since most houses experience some imbalance of pressures between the interior and exterior, a negative interior pressure will naturally draw dirt into the house through windows, doors or any other crack in the envelope of the house. Dirt and soot can also be created by the occupants of a house. Cigarette smoking, burning candles or incense, and the pilot lights on gas burning appliances all produce a certain amount of soot.
The most common area of ghosting is on light-colored carpets. In this case, an imbalance of pressures between the interior and exterior of the house results in an imperceptible airflow through walls. The air carries some of the dirt and soot with it.
When the air passes into or out of the bottom of a wall, the carpet acts like a filter and catches the dirt and soot resulting in the dark areas. Imbalances or even poor design of a heating and cooling system can result in air pressure differences between rooms and the areas outside them.
When this pressure imbalance occurs, air passes under the doors and is captured by the carpet. Streaking on walls typically occurs on exterior walls and is a result of a difference in temperature between the wall studs and the spaces between the studs.
In winter the wood studs will tend to be colder than the insulated spaces between them. This minor difference in temperature allows some imperceptible condensation of water vapor along the stud. This condensed water vapor traps the soot and dirt particles, leaving relatively dark, dirty streaks on the wall.
In bathroom ceilings the cause of ghosting is a little simpler. The heated air from the lights over the sink rises and carries the dirt and soot in the air with it. The dirt and soot collect on the ceiling above the lights.
Cleaning tips
Ghosting can be difficult to get rid of. It may require replacement of carpets and/or repainting of walls and ceilings. For less severe ghosting on carpets, a professional deep cleaning of the stains using an enzyme-based powder has been somewhat successful.
The following is a list of things that a homeowner can do to help minimize or eliminate ghosting:
- Eliminate or reduce tobacco smoking in your house.
- Eliminate or reduce candle burning in the house.
- Have pilot lights on furnaces, water heaters and gas logs properly adjusted by a licensed heating and cooling contractor.
- Replace your furnace filters regularly. Every couple of months is advisable.
- Clean and vacuum regularly using a crevice tool to clean around baseboards.
- Check your vacuum cleaner. If it is not clean, it may produce more dirt than it collects.
- Have your heating duct system professionally inspected to ensure against leaks.
- Undercut doors to allow passage of more air under them.
- Properly weather-strip doors between the house and the garage.
- Pull back carpets and caulk the gap between the floor and the baseboards.
- Consider installing darker carpets that will show the ghosting less.
Tuesday, September 16, 2008
When is Electronics Recycling Day?
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Monday, August 18, 2008
I'm going to try to sell it myself. Any advice?
You bet I do! Why would I give you free advice to sell your home without me? I'm nice to a fault. That, plus, if you give it your very best shot and you still can't sell it on your own, you should call the agent who tried to help you out, don't you think?
Okay, quickly,
1. Don't just put a sign in the yard, get online - craigslist, AJC, Creative Loafing, etc.
2. Be ready to work with a buyer's agent. Go ahead and put in your ad that you'll pay a buyer's agent's commission, that's the best way to get serious buyers in the door.
3. Keep your ad short and sweet - no one is going to read about your wall paper, how big each closet is, or how great the schools are. They already know about the schools, I assure you. And if the hard numbers look right - # of beds, # of baths, and price - then they will probably want to see your house. Don't waste time or money on lots of words.
4. Act quickly - the market is changing so fast that even full time professionals have to work to keep up with things. If you don't have any serious lookers in the first 35 days, you need to re-think either your price or your willingness to work with an agent.
Okay, quickly,
1. Don't just put a sign in the yard, get online - craigslist, AJC, Creative Loafing, etc.
2. Be ready to work with a buyer's agent. Go ahead and put in your ad that you'll pay a buyer's agent's commission, that's the best way to get serious buyers in the door.
3. Keep your ad short and sweet - no one is going to read about your wall paper, how big each closet is, or how great the schools are. They already know about the schools, I assure you. And if the hard numbers look right - # of beds, # of baths, and price - then they will probably want to see your house. Don't waste time or money on lots of words.
4. Act quickly - the market is changing so fast that even full time professionals have to work to keep up with things. If you don't have any serious lookers in the first 35 days, you need to re-think either your price or your willingness to work with an agent.
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