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Mission Statement The North Peninsula Building Association represents builders and associates of the building industry. We advocate constant improvement of building and business practices to provide quality construction in our community.

Vol. 4, Issue 11

www.npba.info

360-452-8160

PO Box 748 • 3430 E. Highway 101, Ste. #1, Port Angeles, WA 98362

November 2011

You are invited to the

NPBA’s Big Holiday n o ti c u A t n e il S d n a h s Ba Estes Builders Sponsored by Eagle Home Mortgage and

Port Angeles d, oa R ch ee B . N 0 51 l, ul -B N Sit6 p.m. Dec. 10

ed Oysters, Hot Buttered Clams, Barbecu Crudite with Dip Crackers and Fresh Vegetable Seafood Chowder Salad and Leonard’s Famous asted Potatoes Sliced Beef Tenderloin and Ro d Cranberries Green Beans with Almonds an dish Sauce ra Dinner Rolls, Au jus and Horse Festive Desserts ing. Let us know if you have ter Ca od afo Se y Ba ry ste My Food provided by accommodated. dietary concerns as they can be

Menu

0 or e-mail to the NPBA office at 452-816 VP RS . son per per 5 $2 is st ’s website Co o can be printed off the NPBA als on ati istr reg A fo. .in ba np faleana@ fax to 452-8197. at NPBA.info and returned by

Reserve your space at the

_____________

_____________________

_____________________

_______________ Name(s): ____________

_____________________

_

e:__ _________________Phon NPBA _____________________ Company: _____________ ______________ Holiday Bash Mailing address for credit card: __________________________________________________ r Cash or Check at the doo & Silent MasterCard VISA ): one cle (Cir t men Pay Method of ______________ Auction e: ____________ Total $: _____________ Exp Dat Make reservations no later than Tuesday, Dec. 6 by 5 p.m.

Reservations not canceled 24 hours in advance of the event will be billed.

____________ Card Number: _________ _________________ _____________________ _____________________ ___ ___ ___ d: Car dit Cre Address for _ Date:____________ _____________________ ______ Signature: ______ ___ : card of k bac on # 3-digit “V”

t. ll be installed at this even wi o als s tor rec Di of d ar The 2012 NPBA Bo

Sandy Haley places a big on Silent Auction items.

Silent Auction items sought On Dec. 10, NPBA will have its Silent Auction and Holiday Bash at the Sit-N-Bull in Port Angeles. Silent Auction chairman Donna Knifsend hopes you can help the NPBA reach its goal of $2,500 for the community support fund. All donations are welcome! Ornaments, flowers, tools, books, CDs and homemade items such as scarves, hats, mittens, candies, baked goods and whatever you are willing to donate are greatly appreciated. No donated item is too small or too large. If you would like to donate, contact Donna Knifsend at 360-670-9406 or the NPBA office. All proceeds from the auction are designated for local community programs such as Project Homeless Connect, Clallam County food banks and Healthy Families of Clallam County.

Salvation Army Angel Tree Stop by the NPBA office at 3430 East Highway 101 to pick up your Salvation Army Angel starting the week of Nov, 21! Or watch your e-mail for the opportunity to select an angel tag and provide a gift for a child. Angel tags also can be picked up at the NPBA’s Silent Auction and Holiday Bash on Dec. 10 at the Sit-N-Bull. Gifts will be collected through Dec. 16.


Vol. 4, Issue 11

November 2011

Planning for Expo Part 2 Last month we provided tips on preparing for Expo 2012. The article covered booth format, before and after photos, enlisting personnel early, establishing a budget and talking to your vendors for literature and/or financial assistance. When a company puts time and money into a project, there is an expectation of a positive return on investment. So it is the same with being an Expo exhibitor. What do you get for your expenditure on Expo? Here is a sample of what the NPBA does for you to ensure your time at Expo is worthwhile. Advertising for Expo starts months in advance. Reminders and updates appear in the NPBA monthly newsletter, the weekly Building Bulletin and at our membership networking events. Save the date advertising occurs in the fall in the Sequim Gazette’s special sections advertising and with print advertising occurring two weeks out from the event in the Peninsula Daily News. We also run an ad campaign on both KONP and KSQM radio stations prior to Expo. Rack cards are inserted into the Chamber of Commerce newsletters in Sequim, Port Angeles and Forks

Dear Donna Donna L. Knifsend

Dear Donna:

as well as are distributed by local businesses in their monthly statements. There also are commercials that run on WAVE cable stations. The advertising culminates in the Official Program Guide which is produced by the Sequim Gazette and distributed and direct-mailed to more 16,000 households in Clallam County. All this advertising and more is done for you, the exhibitor, to ensure success. And it pays you dividends when people attend and visit your booth! If you would like to register for Expo, please visit NPBA.info to download a registration form or give us a calll a 452-8160. Early registration specials expire on November 23, so don't delay.

I have a written contract that I make clients sign before starting each project. I recently was advised that I could not lien the property when I was not paid because I failed to provide a disclosure to the homeowner. Is this correct? Answer: Yes, if your contract was (a) for the repair, alteration or construction of four or fewer residential units or accessory structures on such residential property when the bid or contract price totals $1,000 or more; or (b) for the repair, alteration or construction of a commercial building when the bid or contract price totals $1,000 or more but less than $60,000 (RCW 18.27.114), you must provide a disclosure notice to the customer. This disclosure is in addition to any

other consumer notices that are required to be given. Furthermore, contractors must get the disclosure notice signed by the customer and retain a copy for at least three years. Sample forms are available on the Labor and Industry website.

Dear Donna: I would like my staff to solve problems without running to me every time there is a disagreement in the company. It feels like I am a referee rather than a contractor. Any suggestions? Answer: Yes. I suggest that you download the free 71-page pdf e-book on my website www.lawsuit-prevention.com which includes tips and techniques for dispute resolution and conflict management. To start your employees in the right direction, consider the following steps to problem solving: 1. Identify/define the problem. 2. Clarify the desired outcomes. 3. Gather the necessary information. 4. Generate all ideas for possible solutions. 5. Select mutual options geared toward the desired outcome. 6. Implement mutually agreed upon solutions. 7. Evaluate the results.


Thanks!

Vol. 4, Issue 11

November 2011

NPBA would like to thank the following companies for their continued support:

NAHB continues to make headway on fixing broken new-home appraisal system On improving the residential appraisal process — an issue that continues to hold major implications for the nation’s housing markets — NAHB has been working hard behind the scenes on several fronts and has been able to make significant headway. Deficiencies in the current system for evaluating homes have become glaringly evident in the unprecedented housing downturn of the past few years. Faced with declining home prices, rising foreclosures and plunging new-home sales, builders have had to contend with inaccurate appraisals that have further undermined the health of their businesses and the housing market. Widely reported around the country, poor appraisals have reduced home sales, taken a vicious swipe at the profitability of builders and have made it difficult for them to project whether they will be able to attain the prices they need to cover the construction costs of their new homes. “Too often, due to faulty appraisal practices, the builder’s house winds up getting appraised at less than the cost of construction,” said NAHB chairman Bob Nielsen. “This is not only unfair and unreasonable but it perpetuates the cycle of declining home values, drives more homeowners underwater, negatively affects housing demand and acts as an obstacle to the recovery of the housing market,” he said. “Major reforms in appraisal practices and oversight are needed to ensure that appraisals accurately reflect true market values and don’t contribute to price volatility,” he said. An ongoing series of surveys of builders by NAHB’s Economics and Housing Policy Group shows that appraisal problems persist today. In the latest survey in October, a full 60 percent of the respondents reported that they were experiencing appraisals coming in below their contract sales price. Of those reporting that they had encountered this problem, 53 percent said that the appraisal they received was lower than the cost of producing the home. One-third of the builders responding said that they had lost sales during the preceding six months as the result of an appraisal that was less than the contract sales price. The inappropriate use of distressed proper-

ties as comparables; confusion over the ability of builders to convey relevant information to appraisers; a shortage of local appraisers with the experience and knowledge needed to recognize the value of green and other home features to arrive at good evaluations; and the complexity and fragmentation of the appraisal system all have contributed to the faulty process. The good news is that by working with representatives of federal banking regulators, the appraisal industry, the housing finance industry, the real estate and housing sectors and others, NAHB has scored considerable progress in finding remedies for what seriously ails the appraisal system. Several milestones center around the four appraisal summits that NAHB has held in Washington, commencing in 2009, with the latest held last month. A timeline of events tracing the problem and its solutions can be found at http://bit.ly/uVkdFZ. To read an overview of the fourth summit, as well as information about the first three meetings, visit http://bit.ly/tn7cr3. With the decline in home prices appearing to have ended or to be coming to an end in most parts of the country, improving housing market conditions themselves are expected to gradually alleviate some of the negative impact of appraisals. However, those within the appraisal industry itself recognize that today’s system is outmoded and to be truly effective will require a major overhaul that will take years to accomplish. A white paper in this issue by Joan Trice — who is working with NAHB to provide resources that association members can use to get the best results from a malfunctioning appraisal system — describes in detail the major undertaking that will be needed to re-engineer the appraisal process. Resources have been collected on NAHB’s website to assist builders on the appraisal issue (some of the links below are available to NAHB members only). Following are specific issues where builders have gained ground and are working to make further strides in the year ahead:

Communication between the builder and the appraiser

NAHB worked extensively with Fannie Mae

and Freddie Mac to clarify that neither the Home Valuation Code of Conduct nor Fannie Mae prevents a builder from communicating with an appraisal management company or appraiser to provide additional information or explanation on the basis for a valuation or to correct objective factual errors in an appraisal report. Guidance released by Fannie Mae on June 30, 2010, addressed this issue. It also addressed many other issues that NAHB had been working on with Fannie Mae, such as requiring appraisers to identify the differences between the home being appraised and a distressed property being used as a comparable sale; requiring lenders to continued Page 4

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Vol. 4, Issue 11

Building news, continued from Page 3

only use appraisers who are knowledgeable and experienced in appraising specific property types located in a given market; allowing sales of the builder to be used as comparable properties; and barring lenders from making unilateral changes to appraisal reports. NAHB developed a two-page summary for members on how to build stronger and more productive relationships with appraisers. Builder communication with lenders and appraisers should include: market and absorption information, sales information, all relevant data, specifications of the property, details on the materials that were chosen and buyers’ reactions to the products selected.

The Federal Reserve Board’s interim final rule on appraisal independence

Provisions in the Dodd-Frank Act, which was signed into law on July 21, 2010, prohibit appraiser coercion and required rule making by the federal financial regulators on the independence of appraisers. The guidance is headed in the right direction and is aligned with many of the concerns discussed at NAHB’s summits, including open communication and the need for a process to contest an inaccurate appraisal. There has been general agreement among industry stakeholders participating in the summits that a sales contract contains critical information about the real estate transaction, such as the

November 2011 scope of work, upgrades and more, and should be made available so the appraiser can use it. The interim final rule does not preclude the sharing of the sales contract with the appraiser.

Appraiser qualifications

NAHB discussions have increased awareness of the need for appraisers of new homes to have sufficient education and experience. In a letter to the Appraisal Qualifications Board commenting on proposed revisions to appraiser qualifications that are expected to become effective around the start of 2015, NAHB wrote that, “It is necessary that an appraiser of new construction make every effort to obtain comprehensive information on the subject property, including lot values, custom features, upgrades and energy efficiency data. A new construction appraisal requires the appraiser to have the ability to read plans, review the materials description lists and evaluate the builder’s contract and any other special additions.” NAHB said that minimum educational requirements for appraisers should be set for lot values and building costs, including those for green building and other evolving new construction techniques.

Appraisal workout guidance In both federal banking regulation and HR 1755, the Home Construction Lending Regulatory Improvement Act of 2011, NAHB has focused on the importance of appraisals in enabling creditworthy borrowers of acquisition, development and construction loans to have their loans

CODE CORNER

Dungeness Instream Flow Rule update

The 2009 Washington State Energy Code (WSEC) requires an “energy credit” in addition to meeting the basic energy code requirements. How does this work when one proposes an addition to an existing structure? When adding on to an existing structure, the addition needs to comply with the WSEC and an energy credit is required. There is a Small Dwelling Unit credit which allows additions up to 750 square feet of heated floor area to fulfill this requirement. If the addition is greater than 750 square feet in size, Option 6 is not available and another credit option must be chosen. See Chapter 9 of the WSEC.

Ecology is restarting rule-making on the Water Resources Management Program for the Dungeness Portion of the Elwha-Dungeness Water Resource Inventory Area (WRIA 18) – Chapter 173-518 WAC. A copy of the rule will be posted on Ecology’s website in January with the rule being officially filed in March. The rule will go into effect in August 2012. If you have not put your well to beneficial use prior to this date, you will be subject to the new rule. For more information about the rule, visit DOE’s website at www.ecy. wa.gov/programs/wr/instream-flows/dungeness.html.

Clallam and Jefferson County, Port Angeles, Port Townsend, Sequim, Juan de Fuca Chapter of ICC

renewed or restructured. NAHB has been working on the regulatory front so that builders can benefit from guidance that enables commercial property lenders in their collateral assessment for credit risk grading to utilize an “as stabilized” market value or prospective market value if there are plans to provide the resources to complete the project, instead of an “as is” market value.

Limitations on new-home sales information Because new-home sales are not reported to local multiple listing services in many areas, NAHB has encouraged builders and home builders associations to maintain records on new-home sales in a format provided by NAHB that appraisers easily can use as comparables. The format suggested by NAHB would capture information similar to what is in the “comparables” section on Page 2 of the Uniform Residential Appraisal Report, Form 1004. With the goal of improving the accuracy of new-home appraisals to achieve greater longterm stability in home valuations, NAHB is pursuing a multi-faceted work plan through the end of 2012. As part of that agenda, the association plans to meet with key appraisal and lending organizations; pursue stronger appraiser qualifications and licensing requirements; assist in the development of data collection on new homes, including Fannie Mae and Freddie Mac’s Uniform Appraisal Dataset; and improve the licensing, oversight and appeals processes of the states.

2011 Officers and Board of Directors President: Rick Gross, Estes Builders, LLC Immediate Past President: Tracy Gudgel, Zenovic and Associates Secretary: Donna Knifsend, Lawsuit Prevention & Management Life Director: Bill Roberds, Excel Utility Construction Treasurer: Teri Ward, First Federal 1st Vice President: Garrett DelaBarre, DelaBarre Construction 2nd Vice President: Bill Feeley, Feeley Construction Builder Directors: Alex Anderson, Alex Anderson Concrete; Bill Feeley, Feeley Construction; Larry Hanna, L.P. Hanna Construction; Jac Osborn, by Design Group Associate Directors: Roger Wheeler, RJ Services; Dan Donovan, Allform Welding; Jim Strong State Directors: Mark Smith; Kevin Russell, Clawson Construction; Garrett DelaBarre, DelaBarre Construction; Scott Schwagler, J&J Construction of PA; Rick Gross, Estes Builders, LLC Executive Officer: FaLeana Wech Future Builders Construction Superintendent: Troy Belbin

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NPBA November Newsletter  

November newsletter for the North Peninsula Building Association

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