Jerry Bronstrup

A guy I knew from the mortgage industry died last night... from a massive heart attack. We got the news this morning via text message. Both my wife and I considered "Bob", (not his real name), a good friend. My wife had worked with both he and his wife at a major wholesale mortgage bank back when there was still mortgage banks, and had become close. In fact we just attended his wedding a few years back. July 7th, 2007. They chose to be married that day for the lucky numbers; "triple sevens", surely luck would be on his side, and on that day he married his beautiful wife. Today he not only leaves his bride, he leaves behind a three year old son.

Someone dying from a massive heart attack is nothing new, people across America die from them every day, so why blog about it now? Well for starters, he was only 45. The other reason? He's like me..and you, man or woman...it doesn't make a difference, in the real estate industry. It has made me think long and hard about what are the real important things in my life.

Like so many of us in the real estate industry, we are working two to three times as hard just to maintain the same financial pace we were on just a few years ago. "Bob" was no different. Today, it is not unusual for me to work from 5:00 AM till 8:00 PM six days per week. My wife Gigi does the same, and then pulls double duty raising our eleven year old daughter. She's our last and we're doing our best to provide her a balanced life as we both work our tails off to get ahead. No doubt, many of you reading this are doing exactly the same thing. Life is harder today. There was no bail-out for our industry. Work harder or fall victim to the economy like so many have done. Not me!

Ever since the "crash", most of us still making a full time living in the real estate industry are working longer hours and far harder than ever before to make ends meet. Twice as many hours as before, six, maybe seven days per week. We're taking less time off and fewer vacations. Even if we take a vacation at all, it's a working vacation. We spend as much time on our cell phones as we do enjoying the sights. We work weekends, work during dinner, work during soccer practice, and their games, Saturday nights out, and Sunday during the sermon or with the kids at the beach. We leave the office every night and spend another three to four hours in front of the computer returning emails or writing blogs in efforts to expand our coverage, in the efforts just to keep afloat. Sound familiar?

Well, that's what happened to "Bob". I know him well enough to know this. Yes he was a "type-A" personality, like so many of us in the "industry". Yes he had a propensity for heart disease......and yes, he was like many of us, slightly overweight or malnourished from the daily regiment we have become accustomed to, including working through lunch or eating who-knows-what on the fly. "No time for the gym, I gotta get to the office early and get a jump on the stuff I didn't have time to complete yesterday."

So...

a guy just like me, twenty pounds heavier than his college days fighting weight, working his tail off to provide a good life for his wife and child, has a massive heart attack...and dies, last night at 3:00 AM. He didn't even get the chance to say goodbye to his beautiful new bride. He didn't have a chance to hold his son in his arms and tell him he loves him one more time. He didn't have a chance to ask for a second chance, rethink his plan, start taking more walks, eat smarter, maybe spend a little more time at home with the people he was working so hard for. "Bob's" heart went into overdrive from stress and the life he had been living for the past four years and just quit without giving him the chance to do anything else... no more nothing's! Last night a friend of mine died. So tonight, I will hold my wife closely and tell her how much I love her. I will hug my daughter and tell her the same. Tomorrow, I will rethink my priorities, and spend a little more time with the ones I love. I will call my family and friends more often. I will take a walk, and continue to take a walk every day. I will bring my lunch to the office. It will be healthier than the ones I buy. I will drink more water and less coffee, yes, I'm a "type-A" too. I won't sit at my desk for twelve hours at a time working through the night. And...when soccer season starts for my daughter, I'll be there cheering and shouting from the sidelines every single game. (I'm still a" type-A", and this year she going to play club). That's another stress test waiting to come...

Today's lesson- Rust, or in the case of real estate, rusty pipes.

Rust is scientifically called oxidation, which occurs when oxygen comes in long-term contact with certain metals. Over time, the oxygen combines with the metal at an atomic level, forming a new compound called an oxide and weakening the bonds of the metal itself. If the base metal is iron or steel, the resulting rust is properly called iron oxide. Rusted aluminum would be called aluminum oxide, copper forms copper oxide and so on.

The main catalyst for the rusting process is dihydrogen oxide, (Formed from an extremely energetic chemical reaction between its constituent elements), but we know it better as water mixed with air or oxygen. Iron or steel structures and pipes may appear solid, but water molecules can easily penetrate the microscopic pits and cracks in any exposed metal. The hydrogen atoms present in water can combine with other elements to form acids, which will eventually cause more metal to be exposed. If sodium is present, as is the case with saltwater, corrosion will likely occur more quickly. Meanwhile, the oxygen atoms combine with metallic atoms to form the destructive oxide compound. As the atoms combine they weaken the metal, making the structure brittle and crumbly.

Galvanized pipes

Galvanized pipes are made of iron with a coating up of zinc. Galvanizing involves the application of molten zinc to pre-formed steel pipes to provide a corrosion resistant coating. However many galvanized pipes in old buildings were manufactured using Zinc that contained lead. Galvanized pipes are still common in older homes and many commercial buildings. Galvanized pipes will corrode over time, as indicated by the following corrosion symptoms:

High levels of zinc or iron in tap water

A "metallic" taste in the water

Poor water flow due to blockage from mineral buildup

Discolored water (brown, red or yellow water)

Slight discoloration of the exterior of the grey galvanized pipe

It was not until 1986 that the Wheatland Tube Company became the first galvanized pipe manufacturer to be certified to ANSI/NSF Standard 61 for its hot dip galvanized pipe. 100% of all residences built before 1986 have or had galvanized pipes installed from the curb throughout the structure. Over 70% of homes in Southern California were built with galvanized pipes up until 1995. Over 60% of homes that were "copper re-piped" still have a percentage of galvanized pipes left due to homeowner installations and shoddy contractors replacing only what the owner could see. This leaves a large percentage of the properties you will eventually sell with galvanized pipes in the home.

So now you know a little about rust. So what you say. Why do I need to know this as a Realtor? Listen Grasshopper and you will soon learn.

Today, there are many homes on the market that still have galvanized pipes. With luck, most will survive for a few more years. If the property is continually occupied, the signs of failure are quickly noticed and can be remedied before a major disaster. In today's foreclosure market, the utilities are turned off on most if not all bank owned properties usually by the former owner or tenant. That includes the water which you quickly determine as you drive by the now dead vegetation, the usual tell-tale sign of a distressed property. The water is generally off for a few months, sometimes as much as a year or more. This in itself is a recipe for a disaster. A science experiment in the making.

"GALVANIZED PIPE FOUND IN TYPICAL RESIDENTIAL PROPERTY- LOOKS OK ON THE OUTSIDE"

You have just learned how water mixed with oxygen creates oxidation or "rust" over time in galvanized pipes. There is a measurable amount of oxygen present in a pressurized residential water system, H₂O, meaning two parts hydrogen, one part oxygen, creating that slow process of oxidation or rusting of the interior of the pipes. This has been going on since the first amount of water was introduced through the pressurized water system of the property in question. Now, the water is turned off, effectively introducing one hundred times the oxygen molecules to an already rusting pipe interior. Water is still present for a few months until it finally evaporates and dries completely. Sometimes it never will, speeding up the oxidation (rusting) process tenfold. Science taking place before your very eyes, but you can't see it! The rust builds within the pipe and soon corrodes right through the side of the pipes creating "pinholes" and eventually the pressurized system fails completely. Still you know nothing. Why? So much oxidation has built up within the pipes that they have now coated as much as 60% of the pipe interior with a "sandstone like" consistency of iron oxide, common rust plugging the recently created pinholes.

"LOOKS CAN BE DECEIVING"

Disaster averted, right? Wrong young grasshopper! As soon as the water is turned on the system is pressurized and the oxidation begins anew. So what? Well the moment water is coursing through the pipes providing our daily dose of wet stuff, the iron oxide, "rust" wears off quickly, ( in as little as a few days, or over a month or two), and disaster strikes. The pinholes are no longer pinholes but nice pressurized exits for the water to leak into the walls and cause untold damage to your recent buyers "new" home....and where do you thing all that nice gritty rust goes? How about into the new water washing machine, and dishwasher, completely ruining them. The water heater? Well if you didn't have it replaced, it's lined with a steel tank. Empty the water and you have created the exact same scenario. It worked fine for a few days but will quickly begin to leak. Failure is generally within thirty days after the reintroduction of water pressure. If you replaced the unit due to a previous failure, guaranteed premature failure due to 10-20 pounds of iron oxide sediment filling the tank with in the first week.

Think this doesn't happen too much? Unfortunately you're quite wrong. Water system failures happen on eight out of ten foreclosure properties even when the fresh water pipes are copper, (the copper lines don't fail but the water heater always fails, sometimes catastrophically causing thousands in "liquid-dated" damages). If the property has any galvanized pipes, you can be assured of a disaster waiting to happen.

And that grasshoppers; is you science lesson for the day. Test on Friday. Now go out and prosper.

Next week: That pesky "discoloration" under the kitchen sinks otherwise known as mold.

This house might need be worth the fight... 15 days into escrow and you found out the house does not meet FHA conditions. Sound familiar, well, it is in these neck our the woods of Southern California.

It seems more than ever we are getting agents and homeowners in the Los Angeles area coming to us with FHA compliance concerns over the houses they are listing and selling. The sellers have made all known "repairs" in the house, upgrades galore, and even had their "handyman" copper re-pipe. All good for FHA? Not quite. The buyers are qualified for FHA financing, but the homes they are writing offers are are not compliance to to FHA guidelines, often finding out well into escrow, despite what they "feel" will pass FHA. Of the 7,000 houses we serviced in the last 4 years, 60% do not meet FHA guidelines. Fortunately, 90% of the time the solution is an easy and a quick fix. The other 10% of the time, there is still a solution, but the cost and time in repair might not be worth the effort to bring the house into compliance.

The real problem is not that houses on the market do not meet FHA guidelines. They can be fixed, escrows can close, and everyone walks away happy with a closed transaction. Here is the real problem. Agents and homeowners do not know the solution when faced with the problem of houses not qualifying for FHA. The problem is "not knowing"; Not knowing what is considered non compliant with FHA property guidelines, not knowing the costs to repair, not knowing financing options for repairs such as 203K, 203K streamline, and Title-1 loans. Not knowing THE PRODUCT that is being sold and how to effectively market THE PRODUCT.

Unfortunately, it does not get any clearer when you are told that FHA comliance is at the discretion of the FHA inspector. Buyers want to know what is approved for them to buy, what is not, and what it is going to take get them approved for what they want without delays. FHA approved buyers do not want to find out 20 days into escrow if the house passes FHA or not.

Solution: Agents can become more educated about the product being sold and how to effectively market it for sale.

How would you answer these questions if you were at a house with a client....

Are appliances required for FHA financing?

What if the dishwasher does not work?

How many layers of roof can exist before we need an entire tear off?

We have cold water, but no hot water. Is that okay?

A/C runs perfect. No heater, but since we live in Los Angeles and really do not need one, is that okay?

We drained the pool for safety precautions. Is that okay?

Two cracked windows, none broken. Will this pass FHA?

Missing screens, are we okay with FHA guidelines?

We are fortunate enough to have some great agents that include us on their team. We tell them regarding FHA approval that it is always subject to the appraiser, BUT we train them to spot potential issues before the appraiser is ever called. They use this information to prepare their offers and negotiate throughout the transaction. Bottom line, they represent the best interest of their clients because they understand that the product they sell is a HOUSE and they have taken the time to understand how to market and sell the product relevant to the current conditions and needs of the clients.

If you have questions on FHA guidelines, here are some helpful links;

PassFHA.com- contact with immediate questions, repair requests.

HUD Property Guidelines- Detailed list straight from HUD

Are you in the Los Angeles area and want help with with minimum FHA compliance repairs. Call us 866.775.8169!

100% guarantee that if we do the repairs, it will pass FHA... for less than you might think!

There's a new law the real estate industry needs to be aware of, and it has a HUGE bite to it! $32,500 fines (and that's even for the first offense), licenses revoked and suspended, lawsuits, neighborhood watchdogs on the prowl, OUCH! We are not talking about slaps on the wrist. You think the EPA is serious when they passed the new law concerning renovations on pre-1978 properties which took effect on April 22, 2010? How does this affect the real estate industry including Realtors, buyers, sellers, investors, homeowners, contractors, etc.?

Well, in case you have not heard, the EPA is now enforcing a new law concerning the renovation, repair, and disturbance of properties with potential lead based paint (pre-1978 houses). There are specifics to the law you can find on the EPA site, but basically, the law requires that anyone compensated for repair or renovation on pre-1978 houses needs to be a certified lead based paint renovator. Bristol Restoration went through the certification courses earlier this month. We did not think twice about getting the certification. It's a $32,500 fine if we are hired to work on a pre-1978 house and are not certified. Not only do we avoid the fine, but in reality, the procedures now required to renovate lead based paint surfaces correctly are in the best interest of the public.

Why pass the law? Apparently, the EPA feels lead is extremely harmful and wants to assure public safety in this matter. You think $32,500 fine is a random number? The EPA spun the Price is Right wheel and it landed on $32,500? The EPA is serious about this one. The EPA backs up their concern in detail on their website about the health effects of lead. Read the rest of this article, then check out the links below if you want more background on lead.

Real estate "professionals" are already finding ways around the law. I actually heard a Broker at a meeting tell her agents to inform their clients that they are free from liability if they are not "compensating" anyone for the work. In other words, "pay someone under the table" or "do it yourself" (head turned to the side). Ummm, excuse me. Really? Keep in mind, we are talking about renovation (windows, structural repairs, etc). What percentage of homeowners are qualified to do their own work? Also, the homeowner is STILL liable and responsible to prove that the house is free from lead with an acceptable test. How easy is it to pass if procedures are not followed precisely? Why would a licensed contractor, a fully qualified construction specialist, be mandated by law to attend classes and training on how to properly repair lead based paint surfaces, but a homeowner who's training consists of "move that truck" and "design on a dime" be trusted to provide a safe working environment and acceptable workmanship that meets all safety and code guidelines?

Why are people trying to find ways around the law? The same reason why people would hire an unlicensed handyman. Money. It costs more to renovate under the strict guidelines set forth by the EPA in regards to lead based paint. The lead area has to be contained under very specific procedures and materials have to be disposed of properly. It simply costs more, and there is really no way around that.... unless, you "hire" someone not certified to do the work and they do the repair not according to proper procedures.

Is there a legal way around the necessity in hiring a certified renovator? Yes, perform a test on your house and check levels of lead prior to the renovation. Areas where you will most likely find lead will be around windows and doors. If you don't have elevated levels, then that information can be disclosed to the buyers and might help in marketing the house. BUT, if the house does have elevated levels, full disclosure is still required and proper renovation procedures (if performed) must be adhered to.

We should all do our job by doing the right thing when having work performed on homes with lead based paint. There are serious ramifications for skirting the law, both ethically and legally.

Want more info: Here are some good videos for Realtors put together by the EPA.

If you have any questions about lead based paint renovations, call us directly at 866.755.8169 or visit our site at bristolrestoration.com. Will be happy to talk with you!

DON'T BE FOOLED. Just because your buyer is FHA qualified does not mean your house is. Just because the MLS states, "MAY qualify for FHA financing" does not mean the house actually will either! If you are a real estate professional, you would know "FHA qualified" does not just refer to the buyer but also the house on the market.

What is the significance in knowing FHA propertyconditions as a real estate professional? Well, imagine dragging your client around from listing to listing writing multiple offers. You finally get one accepted, but everything comes to a screeching halt when you find out the house does not qualify for FHA because the inspector found 3 layers of roof and repairs that totaled over $9,000 in order for the roof to be FHA compliant. The seller did not concede on repairs and your buyer could not close. So now your buyer asked you why you did not consider this when writing an offer. You respond with, "I am not inspector." True, your not an inspector, but you are a professional SALES agent that is selling a PRODUCT. Know the product, know the customer, know the business.

There are very basic FHA property conditions that a real estate professional should check BEFORE taking a listing AND SHOWING HOMES. These conditions determine how you market the home, what to fix in the house, how and if to write the offer, etc. You don't want to get your FHA buyer's hopes up on a house that will only qualify for FHA when pigs MAY grow wings, nor do you want to limit your sellers marketability with pending FHA conditions that could easily be corrected.

Here is a five minute walk through you can take on any property (This is not a comprehensive list, this is to give you a basic metal list of what to look for. PASS FHA GUIDELINES):

OUTSIDE

ROOF: Roof cert needed if missing shingles or looks worn. TIP: Check for 3 layers or more. Any repair done on 3 layers or more, expect to pay $$.

POOL: Make sure it is clean, full, and equipment working.

WINDOWS: No broken windows. Cracked OK.

PAINT: No chipping or barewood (watch out for pre-1978 houses; new law states you must use certified lead based pant renovator if hiring contractor. This means more $$ for repairs. Good videos on lead based paint and how it affects Realtors straight from the EPA site.

TRASH and DEBRIS: must be removed from premises, inlcuding hazardous waste (outside and inside)

WALLS: no holes in firewall (wall between garage and house).

INSIDE

PLUMBING: Adequate water flow; must have hot water.

ELECTRICAL: look for GFCI plugs (must be working, don't be fooled by just seeing GFCI switches). You should not see any exposed wiring.

WATER HEATER: Strapped properly, PRV valve installed correctly, proper ventilation.

SMOKE ALARMS: Look on ceilings in bedrooms and hallways near doorways.

UTILITIES: must be on and working (gas, electrical, water)