On high standards, ‘cheap’ deals

“The Brand-New Snag,” Jan. 27, left the impression that new homes are poorly built, that builders don’t care and that the best recourse for homeowners who do have construction problems is litigation.

In fact, today’s homes are built to the highest standards ever. The fact that builders utilize third-party inspectors is proof that our industry takes quality control very seriously.

If there are problems, builders want to work with their buyers to solve them, not spend years in court. That’s why our industry worked so hard to pass SB 800, the right-to-repair legislation. Too often in the past, the first time a builder would hear about a construction problem was when a trial lawyer filed suit.

SB 800 benefits consumers because working with the builder is the best way to make sure that any problems are resolved.

Is SB 800 the magic bullet? It’s still too early to say for sure. But the fact that insurers will once again insure condo and town-home building and that insurance rates continue to fall is a pretty good indicator that the new system is working as intended, which is good for the building industry and the homeowner alike.

George Dale

Los Angeles

As a heating, ventilation and air conditioning systems contractor, your article struck a nerve with me. Because of this type of litigation, my liability insurance restricts me from bidding on new condos and new projects of more than seven homes on a lot.

Shoddy construction is the fault of the developers, general contractors and homeowners.

Developers are looking for low bidders to build their projects cheaply. Some general contractors are looking for the lowest-bidding subs to make their bids look more attractive to get the work – even if it means quality is sacrificed. A great number of homeowners are looking for the lowest bid because they would rather spend the extra saved money on something fun rather than on a necessity.

When I answer homeowner calls about problems of improper installation of heating and/or air-conditioning equipment, I commonly hear they picked the cheapest bid, used an unlicensed or improperly licensed workman such as a handyman or relied on a relative or friend to get the equipment they needed through a backdoor source.

This gives all contractors a bad name and leaves homeowners saying, “I was ripped off” – all because they were shopping with the attitude of, “What can I get the cheapest?”

Ed Sandoval

Carson

Appraiser between rock, hard place

As an independent appraiser for over 40 years, I have had underwriters and lenders request, almost on a daily basis, that I “hit the mark,” with the implied reminder that if I do not appraise at the value they need to make a loan, I will be dropped from their list of approved appraisers. In fact, it has been so bad that I finally decided to refuse 90% of lender requests and concentrate on forensic appraisals (trusts, divorce, etc.).

Unless and until appraisers are not chosen by the lenders (fox guarding the chicken coop) but rather drawn at random from a list of state-licensed and qualified appraisers, there will always be the potential for abuse. When the appraiser’s livelihood depends on the lender, who wants him to meet the value needed to make a particular loan, many will risk their license to assist the lender, who in turn keeps them working.

For many years, Veterans Affairs has randomly appointed appraisers from a pool of licensed and qualified appraisers, which VA lenders must use for individual loans. This eliminates most of the intimidation of appraisers and goes a long way in developing a legitimate appraisal report.

Let’s require Fannie Mae and Freddie Mac to develop a “pool” and eliminate these appraisal problems that have helped to bring us to the mortgage crisis we have today.

Thomas O. Berge

San Gabriel

It has been very entertaining, if costly, to watch the real estate and banking businesses come apart at the seams. I thought the recent trend of blaming the people who were approved for such large or adjustable loans whose income ultimately couldn’t support them was the epitome of desperately trite finger-pointing, but new events may be strong challengers. One such challenger is outlined in “Appraiser: Enough’s Enough,” Jan. 27.

Gary T. Crabtree, a Bakersfield appraiser, is referenced as having said that 45% of current listings in the Bakersfield area are made up of repossessed homes. The article went on to say that almost all of those homes are “available at rock-bottom prices. These so-called REOs are the new comps.” Elsewhere, Florida appraiser Pamela Crowley said, “We are going to fight, and we’re going to tell everybody what’s been going on.”

One might fairly ask where the righteous indignation was during the last five years of record appreciation and income for those in the real estate and lending businesses.

I’ve already heard from agents cold-calling, trying to drum up business now that repos are the new price comparables. When I point out that a three-bedroom fixer repo that needs a lot of work really isn’t comparable at all to a four-bedroom turnkey home, they counter that appraisers have become tough and lenders won’t fund if the appraisal doesn’t match the agreed price. Apparently, reality still doesn’t enter into the business aspect of real estate.

There is no emperor watching over the flocks, just a bunch of pretenders.

Nels Norene

Camarillo

Hopes are raised, why not fears?

Katerine Chalkidou (“Don’t Raise Fears – Quell Them,” Letters, Feb. 3) complains about the “sensationalism” of comparing today’s real estate prices to those of a year ago, which she feels frightens people into feeling that things are getting “horribly worse every day,” with the end result being a recession.

I wonder how often Chalkidou, a real estate agent, complained about the sensationalism of reporting on rising prices during the previous few years, before the market’s recent turnaround. It was this unsustainable run-up in prices that inevitably led to the bubble recently busting, but one seldom hears those in the industry complaining about prices rising too rapidly or reporting on such a rapid rise.

Ed Schoch

Westchester

He’s in favor of skipping websites

Regarding “Creating a Community Website Is No LOL Matter,” Feb. 3:

Thanks for being the voice of reason and giving sound advice about this issue. Monitoring such a website turns the monitor into Big Brother. As a manager of several associations for the last several years, I believe avoiding a legal nightmare far outweighs the benefits of having such a website.

Jim Osburn

San Diego

Letters must include the writer’s name, address and daytime telephone number and should be sent to the Real Estate Editor, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012; faxed to Real Estate Editor at (213) 237-4712; or e-mailed to real.estate@latimes.com. Letters may be edited for reasons of space and clarity.