Monthly Archives: January 2009

Buying Real Estate In Rhode Island Today: Rates Low, Prices Low, Listing Agents Often Uninformed

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With Rhode Island home prices now at the lowest in years and with interest rates on RI mortgages now achievable at under 5%, there has not been as good a time to buy real estate in Rhode Island in many years. But be careful.

There are some misconceptions out there with regard to financing: First: One does not need 20% down payment to gain a mortgage… one needs a minimum of 3.5%… that is much less. Second: credit scores do indeed need to be good, but at 650 or above, loans can be had. 700 is better of course. Third: Foreclosed properties are not necessarily the best buys out there. Many are damaged in expensive ways, such as having all the copper removed. Next, banks are attempting to sell the properties sat market prices in order to preserve their investments. Short sales may be better deals, but then, they are difficult, with many listing agents unfamiliar with how to deal with a short sale. Fourth: Inventory is high, which drives prices down, and motivates sellers. A reasonable offer stands a good chance of being accepted.

Advice: Find thee a qualified buyer agent to represent your interests in the face of often unqualified listing agents dealing with banks, and stick with them. They are perhaps the greatest resource that can be found in markets where conditions are chaotic, and where listing agents are pressed for cash, and unfortunately do not understand the market they are in, or how to deal with short sales or foreclosed properties. Remember, many agents entered the market during the boom years, and have never had to negotiate a price, deal with a buyers needs, or even properly advertise the listings they have. Find a good buyer agent and keep with them, they will save you time, energy, aggravation, and most of all, money.

For more info about buyer agency, take a look at our Buyer section, especially the agency page.

Water Damage from Burst Pipes, Take 2

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Burst pipes are a real pain in the you know what.

Had to rip out all wet sheet rock, repair 8 sections of burst pipes, rework electrical circuits, and then get the inspectors in, both electrical and general, to approve all before we can replace the sheet rock and paint the place.

It turns out that the manufactured home is warranty protected for 10 years, and the house is now only 4 years old. So we will go after the warranty, since the builder altered the design of the heating and hot water unit layout. The result, exposed pipes in an uninsulated attic space which is sealed off from any heat source. Bad idea.

As for insurance, we will go for the liability coverage the tenants parents have, which will cover the kids while they are in school.

So now we wait for the inspectors to allow us to complete the work. Should have all the water damage control equipment out of the house by Tomorrow.

Let’s keep our fingers crossed.

Burst Pipes and Homeowners Coverage: Insurance

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I previously posted this on Active Rain, but thought it should be posted here as well:

This is a preliminary post regarding a rental property we manage, which is rented to students. The tenants left the property for 2 weeks over the Christmas and New Year holidays, after telling our manager that they would not be leaving, since they were taking interim courses. Of course, the lease clearly states that they must notify us if they leave for an extended period, and that they should not turn the heat below 50 degrees in the Winter.

When one tenant came back to the property on Tuesday, they turned on the heat, which they had shut off while away. After about 5 hours of heat, the burst pipes thawed, and water poured into the house on the second and first floors. Fortunately it was only flooding for a couple of hours before we turned the water off.

As it turns out, in RI, it was not possible to get burst pipe insurance until July 07, and against advice, the owner did not opt for that added coverage (D3 coverage) — I should say, against our advice, but he did take his insurance agents advice, which was not to extend the coverage.

New Year’s eve in RI near the water had temperatures below 20 degrees, and winds up to gusting 50 miles an hour. This particular property sites on the bay, exposed to the wind off the bay in a big way.

Needless to say, the damage is extensive, but not as bad as it could have been had it warmed up enough to thaw the pipes earlier.

Just a note to RI homeowners: MAKE SURE YOU HAVE BURST PIPE COVERAGE IN YOUR HOMEOWNERS POLICY, if you think you have even limited risk. The premium is substantially higher, but much less than the cost of damages to the property.

For us, recourse now goes to the tenants parents’ homeowners policy, and to a warranty on the manufactured modular home builder.

We shall see how it goes. I will keep you posted.