Q & A: Solution for a sinking slab

Q: In an earlier column you offered some solutions for sloping floors on an old home with a foundation, but we are unsure what to do with the sloping floors in our home.

This subdivision was built in 1955 on former orchards, and the houses all sit on poured concrete slabs with no crawl space. Our house looks like a house that a kindergartener draws, with a peak in the middle and a main beam.

Between the orchard lands settling and the occasional earthquake, the slab has started to sink on both sides, so a marble placed in the middle right under the main beam will roll easily in either direction.

We do not want to try to raise the slab, but what about leveling the floor as it is now?

Can we just pour self-leveling concrete and lose the inch or two at one end of the slope and then place a new plywood subfloor on top of that? I would love to be able to have a level dining room table.

A: We wouldn't rule out the possibility of raising the slab. In fact, it might be the best solution, and when all is said and done, it also might be the cheapest. Our first step would be to hire a structural engineer to take a hard look at the situation and suggest a possible solution.

We see nothing but trouble with your proposed solution. Raising the floor with self-leveling concrete, which is really just a soupy slurry of high-strength cement, requires removal of all the flooring, baseboards, doors, doorjambs and trim. Then they need to be replaced.

Worse, you aren't solving the underlying problem. Without dealing with the foundation problem, the house will continue to settle, and sooner or later you'll be back in the same boat.

Your diagnosis of the cause of the sinking slab is probably right. The old orchard land is laden with decomposing roots, causing the soil to compress as the wood turns to dust. Couple that with the quakes and natural wet-and-dry cycles of the seasons and the soil is going to expand and contract. That would be OK if the slab continues to sink at the same rate.

But it doesn't, and for good reason. The weight of the roof is borne on the outside walls. The dead load of the structure is transferred from the peak, down the rafters, then down the walls to the outside edges of the slab.

The front and rear walls bear comparatively little weight. The extra weight from the roof structure results in soil under the slab compressing more than the soil at the front and rear of your "kindergartener's" house.

Generally, a single-story home built in an area where the ground doesn't freeze requires a concrete footing 12 inches below grade. That's presuming the soil is compacted and stable.

A foundation footing looks like an inverted "T" measuring 12 inches on the bottom, 6 inches on each side and 6 inches on the top. The leg of the "T" is long enough to get the top 6 inches above the finished grade, usually about 18 inches.

The perimeter of a slab foundation should also extend a minimum of 12 inches below grade with the top of the slab being 6 inches above the finished grade. Both types of foundations should contain steel reinforcing bar (rebar) to militate against cracking.

Fixing your foundation might be as simple as jacking up the low points and installing a beefier perimeter foundation or concrete piers that rest on solid soil. That's where the structural engineer comes in. He or she should be able to tell you if the foundation is deep enough, how deep it should be and exactly what type of remedial measures are required.

Finally, the engineer should be able to provide some names of licensed, bonded and reputable contractors capable of doing the repair.

How to Find a Qualified Trust Deed Provider

The advantages offered by trust deed investing has finally begun to be recognized by savvy investors. Accredited individuals and companies have found that the combination of above market interest rates with a loan backed by real estate asset offers a superior financial vehicle for their investment dollars. Finding the right deal and the right borrower is not always an easy task, but with the proper due diligence, you can gain the required knowledge.

The Need for a Trusted Provider

One of the most important reasons to use a qualified trust deed provider is that these companies have the experience to identify and evaluate the borrowers and the deals. In addition, they understand the intricacies and legal requirements that must be followed in order to properly consummate one of these deals. In short, they ensure the integrity of the process from the beginning to the end.

Secondly, they can provide the resources to protect the interests of both the borrower and the lender. From title searches through property insurance and everything in between, a trust deed provider has access to a reputable group of companies that specialize in these services.

Lastly, a trust deed provider can help with the monitoring and management of the loan. Again, with a trusted partner or service company, they can help ensure that payments are collected, insurance is kept up-to-date and that taxes are paid. A qualified trust deed provider can bring far more to the table than just the deal itself.

Finding the Right One

Identifying a qualified trust deed provider requires a little work, but the effort will result in better investments and greater piece of mind. The following factors are some of the most important to consider when choosing a provider.

Ideally, a trust deed provider will have a management team that is highly experienced in the real estate development industry, as well as in finance. This experience will help them understand some of the less traditional, but still lucrative deals that are brought to them.

A broad portfolio of real estate investment opportunities that allow an investor to find the right deal for his or her needs is extremely important. It also demonstrates that they are able to attract the best borrowers and the best deals. A wide range of relationships with insurance, inspection and other real estate related companies is highly desirable as it allows all trust deed investing deals to be completed in an expeditious and affordable manner.

4 insider tips for getting multiple offers

By Tara-Nicholle Nelson
Inman News®

The market is heating up. No, really.

Coast to coast, a much higher percentage of listings are (a) selling, period (b) selling, fast and (c) selling at or above the asking price than they have during any spring in recent memory. Don't take my word for it -- fromChicago to Orange County, Calif., local papers have picked up and started to report on the phenomenon.

Yet and still, today's buyers hold in recent memory the real estate mountaintop and the depths of the recession; some have been waiting out the market for years, hoping for a deal, but unwilling to buy into a declining market. Others actually lost homes to foreclosure at the beginning of the housing recession and are on the comeback trail. And competition from short sale and foreclosure listings is still abundant.

Long story short, the days when every home on the market got multiple offers are still a thing of the past. By and large, the listings I see receiving multiple offers and selling for over asking on today's market have the following ingredients (a recipe sellers can replicate if they'd like to set the stage to receive multiple offers, too):

1. Pristine and staged. The homes that I've seen get multiple offers in my own market recently are immaculately clean -- not a whiff of anything within noseshot, so to speak -- and dressed to the nines. Their photos look like something out of a home decor catalog or design magazine -- like no one lives there, even if someone does. Their owners have often spent months in advance cleaning, decluttering, organizing, primping and otherwise sprucing their homes for sale with the intention of blowing the competition out of the water.

I won't purport to capture the art of staging in a sentence, but prepacking is a good visual to hold in mind as you prepare your home. (And anecdotally, I will say that it strikes me that a large proportion of multiple-offer homes have actually been professionally staged. I'd urge a seller who wants multiple offers to explore whether there's some level of staging service or even staging advice that is worth the investment, before dismissing it as too expensive out of hand.)

2. Low prices. The homes that get multiple offers are not priced at the top of their markets. In fact, I know that many of their listing agents and owners specifically aimed to list these homes slightly below what they believed to be the true fair market value of the property at the time they listed it. Why? What seems like it might be risky is actually a time-proven strategy for cranking up the number of buyers who come view the property.

When buyers see a beautiful home listing online for less than they'd expect for the area, they show up in droves, eager to get a great home for a great value. And the math from there is simple -- it takes more showings to drive more offers.

Once these value hunters are at the place and fall in love with it, they often become willing to offer more than the asking price if they need to, to secure it in the face of competing offers, knowing that it was priced well to start with.

3. Ample exposure to the market. Part of the effect of a low list price is that it creates an auction atmosphere, the environment that churns up bidding wars. The other half of the auction equation is ensuring that the home has ample exposure to the market, both in terms of time for buyers to come see and fall in love with the place and in terms of marketing the property aggressively to reach as many prospective buyer/bidders as possible.

Ample exposure can be achieved in several ways. Professional photography. An aggressive online marketing campaign -- most experienced local listing agents will happily brief prospective seller clients on what they do in this vein. One ample exposure method I've seen become a standard practice in my area is to create and publish an offer timeline. In my town, it's now almost universal for listing agents to list the home a day or two prior to the broker's open house, hold it open for brokers once, hold two general Sunday open houses and then take offers the Tuesday following the second Sunday open house.

By publishing this timeline as part of the listing, buyers are assured that they will have time to see the place and get their ducks in a row in order to compete for it. And sellers are assured that they will not forgo the great offer that might come tomorrow by virtue of taking a good one that comes in the day after they put the home on the market.

Now, sometimes, aggressive buyers force a seller's hand, making an offer immediately upon seeing the property, despite a preset offer timeline. In those cases, the listing agent can call up all the other agents who have expressed an interest in the place and offer them the opportunity to get in the game. For this reason, and for any other important updates or changes that might come along, it's essential that buyers and their brokers let the listing agent know if they plan to make an offer, even early in the published offer timeline.

4. Showable on demand. Hard-to-show homes just don't sell, when there's lots of competition. When buyers' brokers put their home tours together, if a particular listing requires too much notice (i.e., 48 hours) or too many calls and callbacks for appointment-setting, they're very likely just to turn to one of the other dozens of homes that's easy to show. Anything that diminishes the chances your home will be shown diminishes the chances your home will receive multiple offers.

To get multiple offers on today's market, in fact, a seller's home must be showable on demand. If you require an appointment, you should keep advance notice requirements as low as possible -- an hour or less is ideal. Even better is to be accommodating and let brokers show your home at their leisure -- ideally, stepping out or running to the market when they come by. Allowing your broker to put a lockbox on the place and let it be shown at all times while you're at work or out and about on the weekends will require that you keep the place in tiptop shape, 24/7, but it will also be well worth it.

Q & A: Steps to remedy a late-night nuisance

Q: I rent a two-bedroom apartment in a large building, and the maintenance superintendent lives next door. We have always been courteous and cordial until recently when he took over the empty basement directly underneath my unit and turned it into "party central" with a pool table, wet bar, big-screen TV and stereo system. Now every weekend there seems to be a reason for a party (including New Year's, Presidents Day, the Super Bowl, and St. Patrick's Day).

The noise is unbearable, and we can't sleep or even have a conversation in our unit without the bass vibrating our walls. The parties can go on past midnight, and the only saving grace is that they occur only on weekends.

During the week everything is very quiet so we aren't sure that the building owner even knows what is going on.

We didn't want to get the maintenance man in trouble so we tried talking to him, but he was rather abrupt and offered no apologies and essentially told us to "mind our own business." So we hoped that despite the initial response, he would try to be more neighborly knowing that we can hear the parties. But after a couple of quieter weekends, everything went back to intolerable!

So we complained to the on-site manager and the noisy situation improved (but that may also have been because we called the police).

Now the maintenance man is retaliating, and he sent us a note indicating that we can no longer park both of our cars in the property's parking lot. He says we are allowed only one car on-site and that our second car must be on the street.

We have been living here eight years and we didn't have any problem with parking, and there are several other tenants with two cars who didn't get any notice of a policy change.

We saw the maintenance man yesterday and asked him if it is a new rule; he told us to check the lease. I couldn't find anything about parking on the lease, and I know there is enough parking for each unit to have two parking spaces. I tried to contact the manager but she isn't around this week so we are going to write a letter but are not sure who to send it to or what to say. Any advice?

A: Yes. You have described a situation in which you have acted very reasonably and been tolerant but now you are simply asking for the ability to live quietly without one of the owner's employees disrupting your lives. Then when you ask politely, but get an inappropriate response. Finally, you are now being hassled by this maintenance man as retaliation. You already went to the on-site manager and while that (or the call to police) led to a temporary improvement, you can't continue to live like this.

You have been a tenant for many years and are not doing anything wrong. I suggest you contact the property management company or the owner of the property directly by phone. Ask for the property supervisor that manages this apartment community and explain the situation in a calm and professional manner being emphatic but not angry or overly emotional.

While the on-site manager may be covering for the maintenance man (or maybe is intimidated to do anything), it is unlikely that the off-site property supervisor will be complicit with this outrageous behavior and the retaliation. Clearly, if you find that the property supervisor doesn't take an interest in your complaint, then you can contact the owner.

If you have always had two cars and parked in the building lot and your lease doesn't indicate you can't have two cars, then the act of the maintenance man "taking away" one of your parking spaces is illegal and clearly retaliatory. Retaliation can be a cause for you to break your lease, but also can be a basis for a claim or lawsuit against the owner and property management company and should not be tolerated by them. If the property supervisor and owner will not correct this egregious situation, then ultimately you may have to seek legal counsel.

Start planning your 2012 tax strategy now

The tax deadline may have just passed but planning for next year can start now. Being organized and planning ahead can save you time, money and headaches in 2013. Here are six things you can do now to make next April 15 easier.

1. Adjust your estimated tax

If you're self-employed, did you receive a refund for your 2011 taxes because you paid too much in estimated tax? If so, you should make sure the same thing doesn't happen this year. When you receive a refund it means you gave the IRS a tax-free loan. You should pay the minimum estimated tax possible without incurring an underpayment penalty. You'll do so if your estimated tax payments amount to 90 percent of the tax due for 2012 or 100 percent of the tax you paid for 2011 (110 percent if your adjusted gross income is more than $150,000).

2. Store your return in a safe place

Put your 2011 tax return and supporting documents somewhere secure so you'll know exactly where to find them if you receive an IRS notice and need to refer to your return. If it is easy to find, you can also use it as a helpful guide for next year's return.

3. Organize your record-keeping

Establish a central location where everyone in your household can put tax-related records all year long. Anything from a shoebox to a file cabinet works. Just be consistent to avoid a scramble for misplaced mileage logs or charity receipts come tax time.

4. Shop for a tax professional early

If you use a tax professional to help you strategize, plan and make financial decisions throughout the year, then search now. You'll have more time when you're not up against a deadline or anxious for your refund. Choose a tax professional wisely. You are ultimately responsible for the accuracy of your own return regardless of who prepares it.

5. Prepare to itemize deductions

You should itemize deductions only if they exceed the amount of the standard deduction. For 2012 this is $5,950 for singles and $11,900 for married people filing jointly. If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions into 2012 may pay off. An early or extra mortgage payment, pre-deadline property tax payments, planned donations or strategically paid medical bills could equal some tax savings. See the Schedule A instructions for expenses you can deduct if you're itemizing and then prepare an approach that works best for you.

6. Make retirement contributions now, rather than later

Contributions to retirement accounts such as a 401(k) or IRA are one of the best tax breaks the self-employed have. Once you establish such an account, you have until the due date of your tax return for the next year (April 15 of the following year plus extensions) to contribute to the account and take a deduction. However, you'll save more in taxes if you contribute now, rather than waiting until the last minute. This is because all the income your retirement accounts earn is tax-free.

Pimco Housing Bear Kiesel Says It’s Time to Start Buying

By John Gittelsohn - May 4, 2012

Mark Kiesel, the Pacific Investment Management Co. managing director who sold his home in 2006 when he deemed the market a bubble, says it’s time to buy.

“I was one of the most negative on housing,” Kiesel said in a telephone interview. “I finally came to the conclusion housing is looking pretty decent.”

Enlarge image

Rising rents make housing an attractive purchase for investors compared with the low yields of such alternatives as U.S. Treasury bonds. Photographer: Scott Eells/Bloomberg

Kiesel said he bought a house in Newport Beach, California, where Pimco is based. Today he published a credit market note titled “Back In” on the firm’s website in which he writes, “I’m not sure U.S. housing prices have bottomed -- only time will tell -- but there are many more positives today than there were six years ago when I sold my house.”

Home prices that have fallen 35 percent from their mid-2006 peak and mortgage rates of less than 4 percent are helping make it a good time to buy, said Kiesel, who is global head of the corporate bond portfolio management group at Pimco. Other signs the housing market is turning around include foreclosure filings dropping to levels last seen in 2007 and sales of new and existing homes that have begun to increase as rising rents boost the relative affordability of purchasing, he said.

“For those of you renting or on the sidelines, I recommend you at least consider getting ‘back in’ and buying a house,” he wrote in the note. “The future is hard to predict, but U.S. housing is healing and is probably close to a bottom.”

‘More Light’

Barclays Plc (BARC) analysts also said today that a housing recovery is emerging. The industry “will contribute modestly to U.S. economic growth in the coming quarters,” Vincent Foley, Michael Gapen and Cedric Morris wrote in a note titled “More Light, Less Tunnel.”

Economists including Mark Zandi of Moody’s Analytics Inc., Bank of America Corp.’s Michelle Meyer, CoreLogic Inc.’s Mark Fleming and Chris Rupkey of Bank of Tokyo-Mitsubishi UFJ said last month that housing prices are close to a trough.

While the housing market is showing signs of recovery, many people continue to struggle. Mortgage modifications have been started for more than 5.9 million U.S. homeowners from April 2009 through the first quarter, including 19,940 who began plans in March with President Barack Obama’s Home Affordable Modification Program, the U.S. Department of Housing and Urban Development reported today.

Pimco, which oversees the world’s largest mutual fund, had $1.77 trillion in assets under management as of March 31. The company’s Total Return Fund, which had a record $258.7 billion as of April 30, increased its allocation in mortgages to 53 percent, a 5 percentage point gain, during the first quarter, according to the company’s website.

‘Had No Idea’

Kiesel declined to disclose details about his new home or how much he paid, except to say it’s in Newport Beach, a coastal community about 44 miles (70 kilometers) south of Los Angeles. The purchase price of his new home, which he’s moving into next weekend, was about one-third below what he would have paid for it at the top of the market -- about the time he sold his last property in May 2006.

“I had no idea that would end up being the peak,” he said in the telephone interview. “No one knew back then. It was basically luck.”

Kiesel sold his last home after concluding that excess construction by homebuilders and easy lending standards set the stage for a crash.

“Housing is the next Nasdaq bubble,” he said in a June 2006 interview with Bloomberg, a month before U.S. home prices reached their peak, according to the S&P/Case-Shiller index of values in 20 U.S. cities. “It’s not just houses that will be for sale. You’re going to see financial assets for sale over time, and ultimately corporate bonds.”

As recently as December, Kiesel said he would hold off buying because he expected prices to keep falling through 2013.

Unemployment Declines

The U.S. unemployment rate in April was 8.1 percent, down from 8.5 percent in December. Lenders have begun to loosen the reins on credit as bank balance sheets have improved, a trend that will boost investment throughout the economy, Kiesel said.

The U.S. manufacturing, technology, chemical, automotive and energy industries have recovered to the point that they’re driving housing demand in states including Texas and North Dakota, Kiesel said. In such cities as Miami and Phoenix, home prices have fallen so much that foreign buyers seeking bargains have bought enough property to start a price recovery, he said.

Phoenix’s median price rose 13 percent in March from a year earlier amid a shrinking supply of foreclosures and other homes priced at less than $100,000, DataQuick, a San Diego-based real estate research company, reported today.

Increase in Rent

In Kiesel’s case, buying became more attractive after the owner of the residence he was leasing wanted to raise his rent 10 percent, he said.

“I remember balking at that,” he said. “Basically, landlords finally have pricing power.”

Rising rents make housing an attractive purchase for investors compared with the low yields of such alternatives as U.S. Treasury bonds, Kiesel said. Housing “is the ultimate inflation hedge if you buy cheap,” he said.

The expectation that values will rise has reduced the inventory of homes listed for sale as owners hold off to sell at higher prices later, Kiesel said. That made it hard to find a property worth buying, he said.

“All the good stuff is taken,” he said. “What finally brought me back was finally finding a decent property.”

Interest rates are sooo low

30 Year Fixed up to $417,000	3.25% to 3.50%
30 Year Fixed “Agency” up to $625,500	3.50% to 3.75%
30 Year Fixed FHA up to $417,000	3.25% to 3.50%
30 Year Fixed FHA “Jumbo” up to $729,500	3.50% to 3.75%