Dear Michael: I replaced my furnace without changing the ducts. I believe that they may contain asbestos. Will I have to remove the asbestos if I decide to sell my home? The house was built in 1957. Is there a city inspection before a sale is consummated?
Answer: Most cities do not have requirements regarding ducts and there is no city inspection required when selling a home. When you decide to sell your home the buyers will do their own physical inspection and at that time, you will need to disclose any material facts that you are aware off that would affect the property. The asbestos may not be hazardous if not touched (I am not an asbestos expert) but since you are aware of it being present, you will need to disclose it. The new buyers may request at the time of sale that you change the ducts or they may change it themselves. This is all part of the buyer’s physical inspection contingency.
Dear Michael: We owe $300,000 on our house. Our interest rate is 6.5% and it is now worth about that much. Our loan rate will change in 2014 and even though we still have time, I want to plan ahead. Do you think it will appraise for $100,000 more by then? What do you think we should do?
Answer: This is one of those crystal ball questions and although I would love to give you the correct answer, there is no way that I or anyone else can. What I can do is steer you in the right direction and let you make an educated decision. It is my belief that we will not see any price appreciation by 2014. There are still too many factors affecting our economy and real estate prices. Appraisers are as conservative as they have ever been and with the market down, they will appraise your home for its current lower value.
You are two years away from your loan becoming a variable loan; with the economic uncertainty for the future, refinancing and planning ahead in this instance with no equity will be difficult. If your loan became a variable rate at today’s interest rate of 4%, your monthly payments would go from $1896 to $1,432 per month. That’s a savings of $464 each month. Rates should remain low until the economy picks up again. When the economy picks up, the price of your home will also feel this impact, causing the value to increase and, therefore, creating equity, making it easier to refinance (this is a result called inflation).
I suggest you sit tight, not panic and wait until the dust settles so you may have a clearer picture of what the future holds for you.
Dear Michael: I am trying to get homeowners insurance on my new condo. I am having a difficult time, as the previous owner had a claim in 2009. Is there a letter I can get from the previous owner showing what happened?
Answer: If the previous seller had a claim within the last five years, it would have had to be disclosed on the seller’s property questionnaire, which is one of the many disclosures from the seller. This is due to the difficulty of getting insurance on a property that had a claim in the past five years. The letter you will need from the insurance that covered the claim is a Letter of Experience, also referred to as a “Loss Letter.” This letter serves as a confirmation of the claims record and outlines type of claim and the amount paid. The insurance company will not release the letter to you because it is confidential information. You will need to contact your Realtor and ask him/her to contact the seller for the letter. You can also ask the seller directly if you are on good terms.
Michael Kayem is a Realtor with Re/max/Execs, serving Culver City and the Westside since 2001. Contact him at( 310)390-3337or homes@agentmichael.com.