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QandA WITH PETER G. MILLER

There’s a Problem with the

House – Can We Get Our
Deposit Back?
Q: After putting down a $2,000
deposit and offering the seller the
full asking price, we found severe
water damage and fungus under
all the siding of the home during
the professional investigation
process. Now we feel the price is
way too much. The seller won’t lower the price
and we don’t want to continue with the deal.
How do we get the $2,000 deposit back?

A: A real estate purchase involves more than price

and your situation proves this point.You had a right to
inspect the property after the purchase offer was
accepted. However, did you also have a right to
demand repairs up to a certain dollar amount? If the
owner declined to pay could you then withdraw from
the agreement without penalty? Alternatively, did you
have a home inspection clause that said the examina- Not your parents’ prefab home: a series of interior courtyards, flexible walls and ecology-minded features distinguishes Sunset
tion had to be “satisfactory” to you or the transaction
Breezehouse, a modular home designed by Michelle Kaufmann Designs.The house is delivered on flatbed truck, 90 percent complete.
was finished and your deposit would be returned?
Please see an attorney immediately.Ask for your
deposit back. If it is not returned have the lawyer
review the agreement language and any seller disclo-
sure forms you received.
‘Pre-Fabulous’: New Generation of
Q: I am selling my home by myself. What is
typically fair courtesy to a buyer’s agent?
Prefabs Rises Above Modest Origins
BY PAUL
ROGERS looking for a new home in North Carolina. and convinced Nathan to go into the housing
A: A buyer broker represents a purchaser.Your goal Content That Works Like many young homebuyers, high prices, development business, focusing on prefab.
is to sell the property thus it makes sense to allow bro- small lots and cookie-cutter designs quickly Recently,Wieler purchased 100 acres of
kers to see the home. The word “prefab” conjures up all kinds of discouraged the couple.Then he talked to a land in Henley, N.C., that he is dividing into
The buyer, in turn, is responsible for the payment of negative connotations: cheap, trailer parks, builder friend of his who told him about pre- 20 lots for Rapson Greenbelt prefab homes.
the buyer brokerage fee. However, when purchasers shoddy construction, poor quality materials fab. Architect Ralph Rapson designed the
make an offer they may have a variety of stipulations. and dull, boring design.Well, some of those “He said prefab quality was just as good if Greenbelt in 1945 for the groundbreaking
may have applied 25 years ago, but these not better than site-built homes, and actually Case Study House Program, a project of Arts
They could say they will buy your home if you will pay days,“manufactured housing” oftentimes offered some advantages in terms of cost and and Architecture magazine that sought to
the first x percent of their closing costs, if you will meets or exceeds on-site construction in timing,” says Wieler. develop alternatives to tract housing. Rapson
reduce the price, if you paint the living room, etc. One terms of quality, durability and cutting-edge The conversation ultimately spawned a then submitted the design to the Dwell con-
possible part of an offer is a requirement that you pay design while still boasting construction time prefab design contest in conjunction with test last year, and it caught Wieler’s eye.
some or all of their brokerage costs. and cost advantages. Dwell magazine, put the Wielers in the win- The Greenbelt’s distinctive design feature
You have the right to accept, reject or counter any Skeptical? Talk to Nathan Wieler. ning home, the Dwell Home designed by
In 2002,Wieler and his wife Ingrid were New York-based Resolution 4:Architecture, See PRE-FABS, Page 2
buyer offer. However, in this circumstance you are at a
disadvantage because the purchaser has a professional
advocate. For this reason you should engage a broker
or attorney before signing any offer to make sure that a
host of costly “gotcha” clauses are not hidden in the
Once is Not Enough to Consider Insurance Needs
fine print. BY CHARLES SCUTT lock brakes that prevent skidding Apparently, many Americans 2,568 respondents have home-
Content That Works on a wet road. Like umbrellas forget about homeowner’s insur- owner’s insurance.
and anti-lock brakes, homeown- ance altogether.According to “Having appropriate coverage
Q: I purchased a house from my sister. Who It’s easy to take for granted er’s insurance often goes under- results of a nationwide survey in place will protect the single
should inform our Homeowners Association the tools we rely on to protect appreciated. Once it’s in place, released in May 2005 by New largest investment that most peo-
See ASK OUR BROKER, Page 2 ourselves, from an umbrella to we often forget about it unless a York City-based advertising
fend off a rain shower to anti- misfortune happens. agency JWT, only 53 percent of See Insurance, Page 2

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© 2005 Content That Works – All Rights Reserved • contact us at 866-6CONTENT or CONTENTTHATWORKS.com for licensing information.

PRE-FAB
CONTINUED FROM PAGE 1
is a glass atrium spanning the
center of the home, but it also
boasts floor-to-ceiling windows,
indoor/outdoor fireplaces and 9-
foot ceilings.And it comes in a
variety of designs: one-story, two-
story, walkouts, townhomes,
courtyards and others, ranging in
size from 576 to 2,660 square
feet.
A far cry from trailer parks
and cookie-cutter boxes – as are
the 90-percent prefab
Glidehouse and the Sunset
Breezehouse (the latter built in
conjunction with Sunset maga-
zine) from Michelle Kaufmann
Tom Story – Sunset / Michelle Kaufmann Designs
Designs, Oakland, Calif.The gene-
sis of Kaufmann’s prefab designs
was similar to the Wielers’: She
and her husband Kevin Cullen
were looking for a new home
but were unable to find a place
they liked and could afford. So
architect Kaufmann designed
her own.
True to its name, the
Glidehouse features gliding glass
doors, gliding glass walls and
clerestory windows that allow
the homeowner to maximize
breezes, and gliding wood doors
in front of an area that trans-
forms from solid wall to storage
bar. Glidehouse floor plans range
from 672 to 2,016 square feet.
A major feature of Kaufmann’s
designs and prefab in general is
the environmental friendliness.
The Glidehouse utilizes bamboo
flooring; indirect lighting to min-
imize electrical usage; a propri-
etary energy recovery system;
and countertops made with recy-
cled paper, fly ash (a byproduct
of coal combustion) and low-
VOC (volatile organic com-
pounds) finishes.
“Buildings built in the con-
trolled environment of the facto-
ry like the Sunset Breezehouse
have much more quality control,
more accuracy, less waste and
result in a stronger building that
is built in a lot less time than
site-built buildings,” says
Kaufmann.“It takes less fuel and
electricity to create a building in
24 days vs. seven months.”
INSURANCE
CONTINUED FROM PAGE 1
ple make: their homes,” says Tom
Milana, chief executive officer of
Boca Raton, Fla.-based Milana
Real Estate Investment Group.
“Without sufficient homeown-
ers insurance a person can lose
everything they have, says Diana
Brodman Summers, author of
How To Buy Your First Home
(Sourcebooks, 2005).
“Considering the small premium
paid for most policies, insurance
is a great buy for the dollar.”
Most people want the peace
of mind that their insurance will
“put them back” to the same stan-
dard they enjoyed before suffer-
ing a loss, says John Luttrell, agri-
culture account executive with
Smith-Feike-Minton Insurance,
Wilmington, Ohio.“This not
always a guarantee,” says Luttrell.
“Insurance coverages change
over the years, so updating your
policy is also a good idea.”
Whether you’re shopping for
your first policy or haven’t
reviewed your coverage in years,
it’s important to scrutinize your
homeowner’s insurance carefully,
say the experts.
FIND THE RIGHT COMPANY
According to Milana, the single
most important step in shopping
for homeowner’s insurance is
selecting an agency or direct car-
rier that offers you a wide variety
of choices and one that is respon-
© 2005 Content That Works – All Rights Reserved • contact us at 866-6CONTENT or CONTENTTHATWORKS.com for licensing information.
Glass doors in the prefab Breezehouse fold to one side to open the central
living and dining space to the terraces and deck on the front and rear.
Homes like the Greenbelt, the
Glidehouse and the Sunset
Breezehouse provide the bene-
fits of mass production with indi-
vidual design. Kaufmann is find-
ing that the greatest advantages
to her clients are in the process:
“Predictability in costs, short-
ened timeframe and reduced
hassles,” she says.
Some of the main target mar-
kets for modern prefab are
“younger people with a good
eye but either insufficient finan-
cial resources or insufficient
time” for a site-built home, says
Kaufmann, or middle-age chil-
dren looking for a cost-effective
home for their parents.
Prefab eliminates most design
service fees.Architectural servic-
es usually account for 8-15 per-
cent of construction costs, says
Wieler.“And houses tend to be
over budget when you’re work-
ing from scratch.”
sive to your service and claims
needs.
Compare prices among several
companies. Remember that price
is important, but so is reputation
and speed and quality of service
if you ever need to make a claim.
Opt for a reputable, well-known
insurer.Ask friends and family
members for a referral.
The agency should be able to
share with you the financial
standings of the carriers and
underwriters it represents and
supply ratings when applicable,
says Milana. Company ratings
should be at least a B+ or higher
and be an admitted carrier.AM
Best, Standard & Poor, Demotech,
and Weiss are well-known rating
services.
WHAT TO COVER?
One of the first choices you’ll
need to make is deciding if you
want an insurance policy that
pays losses based on actual cash
value or on replacement cost,
says Summers.
“If you select actual cash value
then you will be paid the depre-
ciated value of the damaged
property for any loss. If you
select replacement cost, you will
be reimbursed the amount need-
ed to replace the property with
something of similar type and
quality at the current market
price,” she says.
To properly evaluate a home’s
replacement cost,“you first must
be working from a recent
Tom Story – Sunset / Michelle Kaufmann Designs
Ask our broker
CONTINUED FROM PAGE 1
about the new owner?
A: Most likely either the buyer or seller is fine. Check
your Homeowner Association (HOA) rules to see if
there is a form to fill out or some other requirement.
The HOA secretary is probably your best source of
information.
Q: What is a mortgage broker and what, exact-
ly, do they do for a person? Are they salaried or
do they work strictly on commission?
A: Mortgage brokers provide two-thirds of the
nation’s residential mortgages, according to the
National Association of Mortgage Brokers, the industry
trade association. In his book The Language of Real
Estate (Dearborn Real Estate Education, 2000), John W.
Reilly defines a mortgage broker is “a person or firm
that acts as an intermediary between borrower and
lender; one who, for compensation or gain, negotiates,
sells or arranges loans and sometimes continues to
service the loans; also called a loan broker.”
A mortgage broker scouts the loan market and looks
for the best possible rate and terms. Mortgage brokers
are generally paid by wholesale lenders rather than by
borrowers – but they are not paid at all unless loans
close and that brings us to an important point.As a bor-
Oregon Yurtworks Inc., rower you are best served by shopping around, speak-
Eugene, Ore., offers custom pre- ing with a number of local lenders and letting them
fab designs ranging from about fight for your business.
$90-$115 a square foot, while the
standard Glidehouse plan runs
about $130 per square foot. Q: My home was built in 1979 and now needs
Neither includes the land. new siding and other repairs. I am wondering if
Depending on the choice of it would be more feasible for me to sell this
design and lot,Wieler’s Rapson house and put my monthly payments into a new
Greenbelt homes run between house instead.
$150,000 and $600,000, includ-
ing land.
Wieler and Kaufmann both A: Before going further, have a few local brokers esti-
see prefab taking an even bigger mate the market value of your home – “as is” and also
role in the housing market in with new siding and other repairs. Have them also
years to come. Now is the time show you how much cash you would likely receive at
for non-traditional homebuyers, closing in both situations.Then look at the cost of
people looking for something
economical but different, or sim-
replacement properties and see if the purchase of a
ply people looking to live a new home makes sense in your situation. Be sure to
“greener” life to get in on the consider such issues as the cost of moving, the pros
ground floor. and cons of your current location and your long-term
© Content That Works financial goals.
Is there an alternative rather than new siding? Could
you paint or otherwise repair what you have at less
cost? There may be a more cost-effective solution if the
issue is simply cosmetic, and not a physical problem
with the siding.
© Content That Works
Do you have a question or a quandary about buying, sell-
ing or renting? Peter G. Miller, author of The Common-Sense
Mortgage, specializes in providing real solutions to real estate
dilemmas. E-mail your questions to
peter@contentthatworks.com.
appraisal,” Milana says.“Taking rebuild,” Summers says. He rec-
the home’s value, less the land ommends that homeowners
value, will give you the apprais- review their insurance annually.
er’s estimate of the building Homeowners can choose to
costs.This helps the agent vali- pay more for special coverage for
date his or her calculations as to events such as floods or earth-
the estimate of value.” quakes (usually not included in a
Another key decision is basic policy) and additional per-
between an “all risks” insurance sonal property insurance: jewel-
policy or a “named perils” insur- ry, garage contents, computer
ance policy.All risks policies equipment and any other posses-
cover losses due to any peril sion that is not a permanent part
except those specifically exclud- of your dwelling.
ed in the insurance policy.
Named perils policies cover loss- MONEY-SAVING TIPS
es due only to the perils listed in If you’re on a tight budget,
the insurance policy. consider increasing your insur-
A homeowner also must deter- ance deductible, which will
mine the amount of policy limits reduce your premium, says
for insurance coverage.Your poli- Luttrell.
cy limit “should not be less than One of the best ways to get a
80 percent of the replacement low quote and decent coverage
cost of your home,” says in homeowners insurance is to
Summers. qualify for available discounts
Many homeowners mistakenly offered by the insurance compa-
believe that they should ensure ny, suggests Summers. Discounts
for the amount they paid to pur- may be available if you have your
chase their home.“This is usually car or another structure insured
too much coverage and too much with the same company. Other
cost to the client,” says Milana. reductions can hinge on certain
“The carrier wants to ensure the safety devices in the home, such
cost to rebuild, not the market as deadbolt locks, smoke detec-
value, which includes land, land- tors, alarm systems or exterior
scaping, amenities from the fire retardant materials.
development, etc.” If you smoke, consider quit-
Too little coverage could leave ting. Smoking leads to thousands
the client a ‘co-insurer’ at the of residential fires every year, and
time of a claim, Milana notes. many insurers will reduce insur-
“Because property values con- ance premiums for non-smokers.
tinue to rise, it is easy to not © Content That Works
maintain sufficient coverage on
your home to replace damage or