VOL. 36 | NO. 35 | Friday, August 31, 2012
Make sure contractor is taking care of subs
When dealing with new construction or renovation, it is never a bad idea for the client to occasionally visit the site and ask the various tradesmen whether or not they have been paid by the contractor, especially if the client has paid the builder.
While a situation in which a contractor bills a client for services of sub-contractors and misappropriates those funds is rare, it happens.
In as many cases as not, the reputation and experience of the contractor have no bearing on the likelihood of this practice occurring.
In many custom builds or renovation, it is customary and contracted that the builder will submit invoices during certain stages of the development. In many cases, the client, or the bank, require sworn affidavits stating that the work has been completed.
If the builder is a corporation and files bankruptcy, the remedies for the jilted homeowner are few.
There could always be the possibility of the person being found guilty of fraud, but he cannot build a house from the penitentiary. And those trucks they drive do not fare well at auction.
Quotations of the Week
This quotation is from a developer recapping a meeting with the neighborhood group: “We were doing alright until the CAVE people showed up.”
When a questioned look came over the listener’s face, he responded, “CAVE people, Citizens Against Virtually Anything.”
And from a speaker at the National Association of Realtor’s conference: “Whenever someone uses the word virtually, it means whatever follows is a lie.”
Tip of the Week
Buy all the property possible in Goodlettesville, home of the best Little League Baseball team in the United States of America.
While not an expert on aging, I would say the team is the best Little League team – meaning the players are really 12 years of age or less – in the world.
The 104.5 Zone morning radio show cited figures stating that the last two games had a 19 share, meaning 200,000 people in the area watched the game.
Only two major league World Series games have surpassed those numbers, and of all the SEC televised games last year, only the LSU-Alabama and Tennessee-Florida games had more viewers.
These young men are heroes and served as exemplary ambassadors for the area. Their remarkable achievement will no doubt drive property values out of the park.
Sales of the Week
Over the past several months, the sales of the week have suggested the Nashville market is on the mend with transactions in areas such as the Icon, 12South, Hillsboro Village, Green Hills, Bellevue, Belle Meade, Inglewood, East Nashville, Crieve Hall and others reaching, even surpassing, pre-recession prices.
Yet, there are neighborhoods that have yet to recover.
For example, the Cobblestone Creek subdivision in White’s Creek had two sales last week in which the sellers were unable to recover their initial investments. In layman’s terms, they were upside down.
The first is at 5121 Ryan Allen Circle, listed by Cindy Stanton, foreclosure specialist at Crye-Leike Realtors.
Stanton listed the house for $124,500 for Fannie Mae and offered an attractive financing package through the HomePath Renovation and Mortgage Financing program, which allows the purchase the home for as little as 3 percent down.
The house has new carpet, fresh paint, 1,876 square feet with three bedrooms and two baths.
The owner who experienced the foreclosure had paid $160,000 in 2007, borrowing the entire amount. The property sold for $117,000 ($61 per square foot) last week.
Foreclosures can prove to be anomalies in some cases, but are usually accurate reflections of the market. In the case of a home on Cobblestone Court, a conventional transaction occurred on the same street last week.
The property was not distressed and sold for $145,000. It has 2,019 square feet ($72 per square foot) with a three-bedroom, two-bath configuration. The owner had paid $177,993 in 2009.
Highly-regarded veteran Carol Crowell of Fridrich and Clark’s Brentwood office listed the property, and Chris Charlton of Bob Park’s Realty represented the buyer. On the positive side, both properties sold in less than 90 days on the market.
Richard Courtney is a real estate broker with French, Christianson, Patterson, and Associates and the co-author of Come Together: the Business of the Beatles. He can be reached at Richard@richardcourtney.com.