Starting from Scratch

To build or not to build and buy turn-key. That seems to be the question these days. Second home buyers looking for that deal in today’s environment are increasingly inquiring about land to design and build their dream vacation home.

Although the idea seems romantic, you may want to think about the costs involved…not just the financial cost but the stress that may accompany new construction. Take into consideration the following when it comes to new construction:

1. Once you identify a lot of land ask your realtor about setbacks, basically how close to the boundary are you allowed to build and….. facilities…this being electricity, potable water supply and title v capability.
   
2. Hire an attorney who is versed in new construction. They will guide you through homeowners association covenants, growth management by laws and other issues that will arise.
   
3. Hire a good architect to design the house. Make sure they can work well with town officials for your application with the planning and zoning boards and building department.
   
4. Plan on spending an estimated $200 to $250 per square foot on construction depending on your finishes. Count on delays.
   
5. And finally, it may be more challenging to acquire financing for the purchase of land.

A Helpful Tip

I was stopped on the street last week and asked the following question: “Mike, should I extend a gratuity to carpet installers?” This triggered memories of the same question being asked in regards to plumbers, carpenters, painters and other contractors who come to your house to do work. In my 15 years of real estate management, as a rule of thumb, the following usually apply:

Contractors who come to your house for a one time project such as carpet installation, window installation, hardwood flooring or appliance delivery, usually do not expect a tip. Some companies forbid their workers from accepting gratuity.

When contractors renovate or do minor electrical, plumbing or painting jobs you do not need to tip them. If the service is outstanding the biggest tip you can provide is positive word of mouth or the referral of a paying customer.

When it comes to service-related contractors that offer repeat services at your house such as cleaners, landscapers, meal preparers and paper deliverers, you may want to give them a bonus at the end of the year. But generally you do not pay a tip at time of service.

By all means, if the service provided by anyone is exemplary, use your best judgement as to what reward is suitable. Sometimes the biggest gratuity extended can be a compliment. 

A Snapshot of Section 8

This week, I’d like to tell you a short story about Section 8. Section 8 is a state subsidized rental housing assistance program. Most landlords are afraid of Section 8 because instead of program success stories, we hear more about program abuse and the myth that the participants are just too lazy to work. When used for its intent, it does work and can transition former participants into the workforce to contribute to our economy. 

Flash back 15 years ago. I was a leasing agent when a woman named Flavia and her two young daughters walked into my office. She was a single mother who was working full time nights and going to school to get her college degree. She wanted to rent a two bedroom apartment.

While showing her an apartment, she disclosed that she would use Section 8 to help pay her rent. At first my own prejudice came up and I was irritated that she didn’t tell me earlier. However, I realized that here was a single mother with two girls, working full time and going to school. She was no slouch. She needed a break. I rented the apartment to her much to the dismay of the complex owners. Their own objections, mainly image for the complex, were hard to overcome, however, my response to them was that section 8 is guaranteed rent…which it is.
So Flavia moved in with her daughters and her rent was paid every month on time by the program. The amount just slightly less than market rent.

Three years later I ran into Flavia. I learned that she was no longer on Section 8 or assistance of any kind. She had earned her degree, was making a respectable salary and was renting a house in a nearby town. She was pursuing her masters degree and saving money for her daughters’ educations.

I know that there are people who do abuse the program. I’ve been exposed to this element throughout my career and its not always who you think. However, landlords, please remember that there are people who genuinely need it and can get ahead by properly using it. Landlords, you may want to get the whole story before dismissing a Section 8 participant next time one inquires about renting your apartment. 

A Talk on Title V

There has been a lot of talk about Title V lately. Title V refers to the state regulation of the type of septic system your house or condo association has in order to dispose of waste. Many homes on the outer Cape have cesspools or a version of a septic system. However, these systems do not pass as Title v systems.

When selling your home or condo, you must be sure that the health department for the town where your property is located, has a passing Title V report. This means that your system has been tested by a licensed inspector and filed with the town. Your system should be tested every two years to keep the report current. If you are not selling your property there is no need to test, but proper maintenance by pumping should be done occasionally. If you are not aware of the type of system you have and you are planning to sell your home, make sure your realtor gets a copy of the Title V report prior to listing your home for sale. You should know what type of system you have and whether or not it passes. 

Effective February 1, 2005, all homes and condo associations in Provincetown and most other communities in the state, must have a passing Title V when selling property. Sellers who offer town approved engineering plans are on the right track, however, it is difficult for a buyer to obtain financing with competitive interest rates when a property does not have a passing Title V. Seller beware, considering the current market conditions, this could make your property a challenge to sell.