Creating a watertight, bulletproof, ironclad or (insert repellent metaphor) agreement

In this day and age of contracts falling through on the day before closing and endless stipulations tacked on the end of purchase contracts, it's vital to know that you have done everything in your power to fortify the contract against a frivolous technicality that could bring the whole deal to a crashing halt. This goes for any contract, whether you are entering into an agreement to buy your first house or you're signing a work scope with a contractor who will be turning your basement into a fourth bedroom. The following 10 guidelines will save you untold amounts of stress, money, time, money, extra work, and most importantly, money.

1. Get it on paper - It doesn't have to look like F. Lee Bailey wrote the language in a contract. Just get it in plain language that both parties can understand, and number your paragraphs, so that in the off chance that the contract goes for 20 pages or more, you'll have reference points.

2. You can't be detailed enough - If you spell out the responsibilities of each party in clear but very focused detail, there'll be none of that, "Well, you didn't say I had to do all of that" B.S. that always seems to manifest when the time draws close to project completion.

3. Simplify the language - There is a thin line between being specific and detailed in each party's responsibilities and getting bogged down in murky language trying to spell out these duties. Keep the explanations conversational, as if you were speaking to someone about them. Sure, it's a contract, but it's still being read by other human beings.

4. Get the right signature - This should go without saying, but make sure the principle decision maker for each party adds their John Hancock to the contract. If it's an agreement between a contractor and a homeowner, those are the two that should sign, not the contractor's apprentice and the homeowner's wife. If it's a purchase contract for a property, the property owner and the buyer should ink the signatures. And each party will be clearly identified in the opening paragraph of the contract.

5. Identify the parties correctly - The last line of tip #4 is important enough to be its own tip. Make a point of clearly laying out the groups or individuals pertinent to the contract at hand. That is, identify each side of the thing, and then have a parenthetical following that identification that generalizes the party, like "(hereafter referred to as CUSTOMER), or (hereafter referred to as CONTRACTOR)." It'll save you a lot of confusion and printer ink.

6. Lay out the payment schedule - If you're buying or selling a house, the terms will be pretty cut and dry. This tip refers more to when you're contracting work, and a really good contractor won't need any draw, even for material costs. He or she will need payment, in full, after the final walkthrough, and you sign off on their work. But occasionally there'll be a contractor that needs a draw before project delivery, and if so, they should say so before signing into a contractual agreement. Then, you'll clearly lay out exactly what you'll pay them on that draw and which duties will have to be complete in order to remit that payment. And hold tight to it, through the seemingly identical sob stories and country songs some contractors will give you.

7. Agree on mediation - A contract is simply an official agreement, nothing more. And agreements often go wrong. Don't think that because everyone is all smiles when you first meet that it'll stay that way through the entire project period. There'll more than likely be at least one disagreement, and you need to highlight an agreeable way to settle such disputes. Arbitration or going to court are the two options, should it be a serious enough disagreement. Both are expensive and should be avoided at all costs.

8. Leave yourself a backdoor - A cancellation policy - a 30-day stipulation is good for independent contractor agreements as well as purchase and sale agreements - can be your golden parachute if you discover in your due diligence period that something is amiss and can't be remediated without terminating the contract altogether.

9. Pick a state law that will govern the contract - Should you need arbitration or judicial remediation of a contract, the state that you're doing business in will be the state whose laws govern the contract. But, if you're on a border between two states (Augusta, where Auben Homes is located, is just on the border of Georgia and South Carolina) clearly specifying a state will keep you from getting caught in a tug-of-war if the contractor is located in one state and the work is being performed in another state. The project location's state is the best way to go.

10. Keep it confident - If an IC (independent contractor) goes off the wire after a disagreement, a confidentiality agreement will be the only thing to keep him or her from sullying your good reputation all over town. Especially if you live in a town like Augusta, where word travels fast and everyone knows everyone. If you treat someone fairly and with respect while protecting your own assets, a contractor will have no reason to say anything bad about you or your company. But they do sometimes, anyway. Put some bite into this part of the contract, so that you will curb any sinister instincts on the other side.

The main ingredient to any enforceable agreement is that it is actually on paper. I've heard a story of a wedding prenuptual that was written on a napkin at the reception. Not sure if that actually held up in court or not, or if it even came to that. The point is that anything on paper is infinitely more enforceable than a verbal or handshake agreement. Then, you can tweak the print agreement to your specific needs with these 10 tips.

--Auben Homes

Top 10 overlooked items in a renovated house

One of the last things you should have to worry about - or ever want to catch sight of - when you move into that seemingly pristine, sparkling new home, is any inkling that the renovators overlooked, either on purpose or mistakenly, any necessary maintenance to the house. So, with that nightmare in mind, here are the 10 most commonly overlooked (and not coincidentally some of the most expensive) items in a house renovation.

1. Roof - A roof beyond its service life is one of those things like a car's fan belt: you don't know it needs replacing until it's way too late. In the roof's case, those telltale brown spots on your ceiling are the way in which you'll likely find out about it, along with a faint overhead "tap" whenever it rains.

How to spot it - Fortunately, those little brown rings on the ceiling are also the way to tell if the roof leaks long before you buy the house. Just look up when you're walking through the first time, and not necessarily only on the house's top floor is this important. Stray water takes a strange path through a house - it can end up on a two-story house's bottom floor sometimes, too. Other signs to look for are: buckling shingles, especially on the edges of the roof, and if you have a keen eye, little flecks of asphalt from the shingles can be spotted on the ground below a roof that's taken a beating from heavy storms, hail or those random once-every-80-years meteor showers.

2. Other water leaks - The roof isn't the only place water can get in, unfortunately. Old or improperly installed plumbing, improperly sealed foundations or standing moisture in the house's crawlspace are like the Trojan horse that can destroy your home from the inside out. And though remediation companies like Servepro can work wonders on a flooded house, it's best not to use them if you don't have to. 

How to spot it - Much like a roof leak, you will want to look around the house for water stains, but water coming in at ground level will also appeal to another of your senses: smell. Take a whiff in the basement, if the house has one, and anything rotten will smell accordingly. If there's not a basement, hire an inspector that you trust, and that actually likes crawling under a house. Strange, we know, but they are out there. A good inspector will provide a thousand-fold return on his inpection fees by saving you untold amounts of repair money (not to mention grief).

3. Lead paint, asbestos, aluminum wiring or radon gas leaks - It's hard to believe that there was a day, long ago, that people actually thought these were safe building materials (except for radon gas, of course). These items are like the architectural version of bell-bottom jeans, except that bad fashion rarely kills people. The scariest factor of all of these items is that you can't see them, and wouldn't be able to even if you knew what to look for. 

How to spot it - Any inspector worth his salt will be on the lookout for these items, and state and federal regulations have been enacted to remediate lead paint. But, if you have any doubts, consult these resources:

- Lead paint: http://www.epa.gov/lead/

- Asbestos (which was used in ceilings, drywall, flooring, insulation and exterior siding):  http://www.epa.gov/asbestos/

- Aluminum wiring: http://www.inspect-ny.com/aluminum/aluminum.htm

- Radon gas: http://www.epa.gov/radon/pubs/citguide.html

4. Structural issues - When people get old, they start to bulge and sag, but a house that's even 100 or more years old, if built and maintained properly, should only have minimal settlement. Oddly enough, though, you can come across foundation issues just as commonly in 20 year-old houses as in those that were built when Lincoln was alive. Buy a house with structural issues and it'll still be moving as you're moving out. You'll go insane trying to pinpoint the causes, or you'll go insane trying to figure out which kidney you're going to sell to have it remediated. It's better just to find it and have it taken care of (or run like hell from it) before you sign the purchase contract.

How to spot it: Look for vertical cracks on the interior walls, or excessive sagging along the house's main axis. Step on a weak spot in the floor? Dig deeper. You won't have to look terribly hard to spot foundation issues, and your inspector will probably notice them before he even gets out of his truck.

5. Heating/air-conditioning - It's a good idea to have an HVAC technician that you're good friends with. Why? Because they'll accompany you on one of these walkthroughs before you buy, and they can inspect ductwork, the furnace, the fan, every component of the heating and air system in a house. Give him a Macaroni Grill gift certificate every now and then and he'll immediately tell you if the unit is large enough to heat and cool the house without straining your power bill, and whether there is any energy loss in any room in the house. If the unit is not dead yet but is starting to have "senior HVAC moments," he'll spot those too. A really good HVAC tech will tell you when the unit is past its service life and what will be under warranty or what won't. And all of this should be translated out of HVAC language and into humanspeak.

How to spot it: Leave the details to a trusted expert, but if the outside unit is rusty enough that even Fred Sanford wouldn't salvage it, you might be in for an overhaul.

6. Plumbing system - Probably a great idea to bring a plumbing contractor along as you grow more serious about buying the house. Not one of those guys with dollar signs in their eyes, either. Everyone knows someone who knows a plumber they recommend in good faith, and they usually have a "this guy saved me thousands of dollars" story to accompany the recommendation. 

How to spot it: The saying is that, like the house's electrical system, a standard walk through a house will only reveal 1% of a house's plumbing. The rest, those lengths of supply and waste pipe, are behind the walls and under the house. A plumber will test for leaks and pressure by cutting on the water with a plumber's key and walk through and crawl under a house to see how things are working. Old galvanized steel or lead pipes, should the house be old enough to have either, can be a dealbreaker, should they need replacing.

7. Electrical system - If a house has cloth or tube-and-knob wiring, or if whatever it has is frayed or improperly wired to begin with, this house may kill you. Wiring is often the cause of house fires, and they don't always wait until you go to work to flare up. That's the worst of it, but that's not all. Some electrical panels weren't enough to carry the house's electrical load when they were put in. Strain a house's electrical capacity and you'll also put yourself and your family in harm's way.

How to spot it: An inspector will pick up on it right away. Indicators like burnt wire around outlets, a panel that's full of fuses (with no space for any more), outlets without third-prong grounds, or a service wire (the one that connects at the outside from the utility poles from the road) that looks like it has some age - these are signs that the house's wiring will need another look. Personally, I look at plate covers - those little plastic screw-on covers for the light switches and electrical outlets. If they look pretty old, then what's underneath them is likely equally ancient.

8. Outdated windows and/or doors - It sounds elemental to fix this, but you'd be shocked to find out how many people fixing up their house will spend $40,000 on their kitchen cabinets or $10,000 laying new, exotic hardwoods, only to leave single-pane windows on the house that don't form a tight seal and let out hundreds of dollars in energy each year. Most doors can be brought up to date with an inexpensive roll of weather stripping, but it'll cost more than a visit to Starbucks to replace a rotten wood window.

How to spot it: Just as easy as you think. An old window just looks old, and holding your hand up to a window or door, you'll feel a temperature difference. Even a slight one. If you see light around the seal of a door, it's got gaps.

9. Wood-boring insects - Foundation issues are one thing, but termites can sometimes elicit an emotional response. These are living things with an agenda, and it's like they are personally out to make your life miserable. But they aren't. Your line of work might be preparing taxes or cutting hair, but termites exist just to devour the 2x4's that hold a roof above your head. It's just what they do.

How to spot it: A termite letter from a qualified, reputable and highly recommended company is a good start. If you see those in-ground sentricon systems in the dirt around the house (they look like sprinkler heads, really close to the foundation), they might've been put in proactively, but it could be a reaction to an existing infestation. And wood that runs from the house all the way to the ground, as opposed to a brick foundation, is like a welcome mat to termites. Wood-to-earth contact = major lure to termites.

10. Zoning/easements - It's important to ask the right questions on the front end. "Are there trains that run nearby?" "Are there commercial developments planned for right around the corner?" "Isn't this where that sacred Indian burial ground was?" There are forces larger than you at work in your city, and while the path of progress is great, trying to hear Seinfeld over the recently-constructed Interstate a block away, well, that sucks.

How to spot it: Neighbors are put on this earth to tell such tales. Ask around. And as a backup, you may want to pull a professional survey or even such measures as a zoning opinion letter, flood plain classification or environmental certification letter (all from the US Department of Housing and Urban Development) to ensure that you aren't buying the house that hundreds have passed on because the local nuclear plant buries their radioactive waste next to what will be your herb garden.

Happy hunting!

--Auben Homes

What we look for in renters

We manage a lot of rental properties. They are all over the CSRA, and no two are alike in terms of size, location, architectural style, and hundreds of other distinguishing characteristics. Every one of them tells a story. And much like those properties, there is no one "ideal renter" that we have in mind when we are fixing up a property.

Take a recent Old Towne renovation we recently completed. Old Towne is Augusta's oldest community, and the house itself is easily over 100 years old. When we were renovating this 3 bedroom, 1 bathroom house, we didn't know if it would be for a group of college students or a family with children. As it turns out, it best fit the needs of a single family that moved in soon after. But it was more about our house fitting their needs than the renter fitting ours. What I mean by that is that, while we look at the following criteria when deciding to lease, one single blemish won't knock you out of the running entirely:

• Credit score - Many think that this is the one factor that can pass or fail a potential tenant's chance of getting into a lease. We do pull credit. We do pay attention to what is on a credit report. But we also understand that these are tough times, and no one is perfect. So while it is important that a credit score is satisfactory, it's not the only character witness testifying on your behalf.
  
• Rental history - This is perhaps the most important factor of all. Paying rent on time in the past, not packing up and moving away in the middle of the night a day before rent is due, having had a good relationship with past landlords - these are things that we like to hear when we call references.
• Job verification - Steady income to you means that you are more likely to pay your rent on time, to put it bluntly. Don't worry if you aren't a CEO of a Fortune 500 company or something like that. If you were, you'd probably be buying a million dollar house in a country club somewhere, not renting one!

Those are the main areas we take into account.

--Auben Homes

Tips on selling your house, Part I.

Today I thought that while we're hammering out the details on our upcoming properties, I would go over some tips on how to make sure you've got every base covered when putting your house on the market to sell. In this economy of declining home values, sometimes you don't have the room in your asking price to afford listing it under a real estate agent or Realtor. Thus, you don't have a guiding voice over your shoulder telling you where your time and money would most effectively be put to use. So here are the major points to consider when selling your home. Some may seem minor, but trust us, it can make the difference between selling a home for full asking and not selling one at all.

1. Landscaping, and in general, cleaning up the area from street to steps, is arguably the most important factor in selling your house. First impressions are everything, and even if there are stainless steel appliances, granite countertops, clawfoot bathtubs and twelve fireplaces in your house, if the potential buyer has already soured on the property because of bare patches in the lawn, weeds coming up through the beds or, (gasp!) litter in the yard, it won't matter what's inside. A strong curb appeal is the equivalent of a good, firm handshake that doesn't let go until the other guy does.

2. Ridding clutter on the inside as well as the aforementioned front yard is vital. It should go without saying, but you'd be alarmed to know how many sellers haven't done the bare minimum of picking up their personal possesssions and vacuuming/mopping before their house is shown. Go one step beyond that: steam clean the entire house. It's cheap and you'll get your money back out of the steam cleaner rental fee when the buyer offers you a full asking price for your house.

3. Smell, or more specifically, a good smell, such as that coming from a reed diffuser, candle or plug-in deodorizer, is the hidden weapon of all effective house sellers. Just as the scent of a dead skunk or rotting food will send you running out of a house, making someone think that you've been baking sugar cookies or having your bathrooms smell clothesline fresh (what is clothesline fresh, anyway?) will start to trigger positive emotions and memories, and make someone feel like they're walking through a place that's comfortable to them, that they'd like to call home. Scent is the sense most strongly tied to memory. Proven scientific fact.

4. Staging is a strong finish to a house that's already been cleaned and prepped for the open market. Obviously, if your house is still being lived in, effective arrangement of the furniture and accessories will help. Think spatiality, think symmetry, and think flow. A perfect example of good staging is in a store like Rooms-to-Go or Ashley Furniture. There are people who get paid a lot of money just to design those layouts for those stores. If you've already moved out of the house and it's completely empty, spend a day and a hundred bucks or so at Pier One, looking for sale items, paying special attention to things that can go on bathroom or kitchen countertops, or medium-sized vases that can fit in corners. Simply put, a well-staged home has a 50% greater chance of selling than one that isn't staged.

5. Wise pricing, that is, pricing that fits the current market trends (like sales records of comparable properties), is another vital factor to getting a property sold. Ever hear the phrase, "An item is only worth what someone is willing to pay for it"? Well, that's especially true in real estate. That's because anyone looking to buy in your neighborhood, even the moderately savvy buyer, won't even drive beyond the entrance to your subdivision without knowing what houses are selling for in there. If they're represented by an agent, and they probably are, that agent has already looked at several items: three very recent sales in the area, three actively listed properties in the area, how many bedrooms, bathrooms, any upgrades, etc. Read more about the specifics of "comping" an area here.

Coming soon: Part II of Tips on Selling Your House

--Auben Homes