Steamatic of Sacramento Healthy Home Blog

Real Estate Issues

A recent call from a prospective client reveals the extent of potential issues in purchasing a renovated, foreclosed property.  The home inspector was unable to complete his inspection due to standing water in the crawl space.  The remodeling contractor indicated the problem was caused by the gutters and informed the buyer that the problem was fixed.  The caller noted that the home was on a hillside, built in 1969 and they were interested in a third party inspection to insure that there were no structural or environmental problems before culminating the sale. 

I have advised others, prior to completing the sale of a previously owned home to consider issues - expensive issues - before completing the purchase.  Some listen, some ignore the advice.  This caller obviously did their homework and was prepared to move foward with my recommendations before the purchase was finalized.

Here is what I told him:

1.  Gutter issues will not solve water in the crawl space; sloped grading away from the home, elimination of planters and irrigation against the home and exterior drainage systems that prevent water from entering the crawl space (most are below grade) is required.  These are expensive measures but cost a fraction of what it cost to repair structural deterioration and interior enviornmental issues related to moisture intrusion in the crawl space. Building science fact: as much as 30% of the make-up air in a structure comes from the crawl space.  Moisture laden air (a gas) will rot wood, encourage fungal and biological growth and penetrate into the home's interior environment.  The World Health Organization (WHO) indicates that excessive moisture (65%+) is the single largest health issue in building envelopes.

2.  Since the home was built in 1969, the presence of asbestos materials and lead based paint is more probable than not.  Want to immediately kill a real estate deal?  Ask for the results of asbestos and lead testig on the property - it appears that no one is paying attention to the federal, state or local mandates for testing, abatement and quality control testing of these verified health issuues.  Most home inspectors will advise the home buyer of these issues but surveys and testing is expensive so caveat emptor (let the buyer beware) is mandated.

3.  If the buyer approached the seller with these issues, it would most likely kill the sale.

The result of my telephone consultation was that this well-informed buyer spoke with the seller about fixing the water in the crawl space and the seller refused any responsibility for this issue; the buyer wisely walked away from the deal.

So how much would my recommendaitons cost a potential buyer?

• Crawl space inspection with photo documentation $125.00
• Formal report of findings $175.00
• Asbestos and lead survey and testing $400 - $600.00 or more
• Interior Environmental Testing - moisture related problems, mold - $400 - $600.00 or more

Approximately $1500 or more is substantial but not unreasonable for a $225,000.00 investment.  On the flip side, fixes for the above matters $2500 - $25,000.00.

Seems like cheap insurance to me but given our current economy, most would fore-go the data, information and expense.

Feel free to contact me if you would like more informaiton regarding the listed services and costs.

Charles E. Cassani, CR

Steamatic of Sacramento dba: SOS Consulting Services

P.O. Box 293660

Sacramento, CA 95829

916.386.8191 Main

916.689.5532 Fax

916.997.3755 Cellular

Email: ccassani@soshhs.com

Web: https://sites.google.com/site/sosconsultservice/

 

 

Doing "Right" With Health Insurance When Everyting Else is "Wrong" . . . .

I believe that every employer should offer health insurance to employees but it is costly.  Without our Kaiser coverage, we would add an additional $3000.00 - $4000.00 (3-4% on $100,000.00 monthly revenue), depending on the number of employees on active coverage.  Add to that, the recently enacted Cobra extension of benefits for laid off or individuals who quit and one can easily add another $700-2000.00 to the monthly bill for an every growing number of additional months.  This is a true commitment on the part of the employer to do the right thing but in today's economy it is difficult to do "right" when everything else seems to be going "wrong."

We all have our economic worries today but those of a small business owner are onerous: risk everything or lose everything - bad choices.  I've learned not to worry excessively over this reality after 40 years of practice but sometimes that first waking thought gets me out of bed quickly - getting up helps but the daily routine normally deadens the worry and the cycle continues, day-to-day with hope and blind anticipation.

I have mixed emotions about the health care debate that currently grips this country.  Anyone can see the need but when I look at my bi-weekly pay stub, as a single person with no dependents who actually declares such, I receive 59% of my modest salary (below 75K per year) with 8% dedicated to health insurance premiums.  If it weren’t for the write-offs afforded me for my risk taking, I would be crazy to continue such madness for my efforts.  The real rub is that the government, at all levels, does not manage my dollars as well as I can and yet they want more for the sake of a more equitable distribution of wealth – to provide the less privileged with more of what most of us earn to have. 

Ultimately, a free society needs a division of labor based on education, skill sets and ambition.  What to do with those who choose to skate is the issue.  There are many history lessons on this subject, none of them too enticing beyond what we have created in this country.  To the victor go the spoils and everyone should be afforded the opportunity to be a victor.  If they choose not, then they live the life they earned as well.  In the final analysis, a flat-tax seems to be the best choice for all citizens of a free country to embrace today's issues.

Insurance Claims Practices Raise Concerns

Sacramento Bee, Chuck McFadden and Bargara McFadden: From the Ashes: Rules for recovering, Tuesday, July 3, 2007.  Advice following the Angora Fire in South Lake Tahoe.

  "We were among the thousands of Oakland Hills homeowners who faced that question in October 1991, after a firestorm destroyed nearly 3,000 homes, including ours. From that, we learned several lessons that maybe useful to those who are starting to pick up the pieces. 

Insurance companies are not your friends. They spend millions on reassuring commercials to make you think they are, but they are not. They don't have to be your enemy, either, but realize the money they pay you doesn't help their bottom line. Sure, that's obvious, but it may be hard to remember faced with a sympathetic claims adjuster who presents you with a large initial check to begin the settlement process.  What will the company pay for a rental home while yours is being rebuilt? What about furniture rental?"  What is "replacement" value? You want what you are entitled to, and the company wants to minimize losses. It is not a win-win situation.

Attorney General files lawsuit against six large insurance companies alleging price-fixing (January 2008):

Attorney General Charles Foti filed a lawsuit in Orleans Parish Civil District Court late Wednesday alleging collusion, price-fixing and anti-trust violations by six major insurance companies - including Allstate and State Farm - as well as the firms that manufacture their claims-processing software, and the companies that offer them advice or collect their data.

Charles Foti says that these groups conspired to manipulate commerce for their own enrichment "by rigging the value of policyholder claims and raiding the premiums held in trust by their companies" and that companies "coerced their policyholders into settling their claims of damages for less than their value by editing engineering reports, by delaying payment and by forcing policyholders to litigate claims to receive full value."

By using claims processing software manufactured by Marshall & Swift/Boeckh and Xactware, the industry has been able to standardize its tactics for low-balling claims, and create a "tainted" database of claims settlements figures which the industry uses to further depress estimates for what people need to repair their homes, according to the lawsuit.. Meanwhile, all of this data is centralized by Xactware's parent company, Insurance Services Office, better known as ISO, allowing companies to collude.

By using these outside vendors to unify "power and control," insurers systematically reduced the percentage of premium dollars that companies return to policyholders in the form of claims payments "under a shroud of secrecy." While the industry has historically paid 70 cents on every premium dollar collected back to policyholders in claims payments, in Katrina, they paid 50 cents for every premium dollar, the suit says.” 

Following the storms that caused major property damage in Northern California, Homeowners and others who have a contract of insurance should be aware of the current claims practices in settling claims.  The full articles are attached.  Caveat Emptor!

Download rules_for_recovery.pdf

Download attorney_general_files_lawsuit_against_six_large_insurance_companies.doc