Category Archives: Real Estate

Put a Marble in Your Pocket Before Attending Open Houses!

Spring open house season is in full swing, with homes freshened up and blooming with as many colors as you’ll see outdoors. In all the excitement, however, there’s a home defect that’s all too easy to overlook–but requires major work to fix.

I’m talking about sloping floors. Just this weekend, I visited a beautiful Arts and Crafts style home from the 1920s, which met most of the marketing copy’s promises of having been “lovingly restored.”

But I got a funny, tipsy feeling while walking toward the corners, and no, I hadn’t had any mimosas with my brunch. The more I looked and walked, the more it became obvious that the floors sloped. Still, I would have loved a way to test how serious the problem was.

That’s where the marble comes in. Set it on the ground and see how fast it rolls in a particular direction. If you really want to plan ahead, bring a level.

A marble that speeds along at high pace is a sign of real trouble: perhaps a subsiding foundation or sagging joists or some other equally expensive-to-fix problem.

At the very least, if you love the home, you’d want to include an inspection contingency with your offer, and make sure the inspector you hire is either qualified to evaluate the situation or can tell you what sort of engineer or other professional has the right qualifications.

Immigrant Insecurity Leading to Loss of Home Sales Around U.S.

With Donald Trump’s executive orders on immigration having slammed the door on many legal entrants, not to mention the daily news stories about overzealous border officials interrogating upright U.S. citizens whose names they don’t like, it was only a matter of time before the real estate market felt the impact.

From Seattle to New York to the San Francisco Bay Area, reports are coming in about immigrants who are ceasing their home search or pulling out of actual purchase contracts.

These aren’t just immigrants from the countries blocked by Trump’s executive order, or ones who’ve been told they can’t live in the United States.

No, these are immigrants from around the world who are, as a Bay Area agent told the San Francisco Business Times, “nervous about spending that much money and maybe not staying here.”

An agent working on the Eastside in the Seattle area (where Microsoft and other tech companies are located) told the Seattle Times. “I understand the fear. I can’t tell someone, ‘Oh, don’t worry, you’ll get your visa renewed.’ Who knows? Things could change.”

(And just for the record, an immigration attorney could not, at this point, give the person any more solid reassurance. Trump has already used executive orders to fashion unprecedented sorts of change.)

Some agents say their clients worry that their country will be next on the list for an outright ban.

Will the U.S. real estate market feel the loss of these foreign buyers? Time will tell, but given that non-citizens typically invest around $100 billion per year in U.S. homes, according to Barron’s, this isn’t exactly small change.

And whether you’re a home seller or a home buyer from another country who’s worried about the long term, you might want to read about some of the legal issues involved in a canceled closing in Earnest Money: What Happens When Your Home Purchase Falls Through.

Selling a House in 2017? What to Consider

If you’ve already decided that this is your year to sell, you’ve probably been monitoring the housing market and enjoying the steady price appreciation that the last few years have brought to most parts of the United States.

That appreciation is projected to continue through 2017—albeit not as dramatically. The National Association of Realtors’ Senior Economist Joe Kirchner says that, “Nationally, home prices are forecast to slow to 3.9 percent growth year over year, from an estimated 4.9 percent in 2016.”

Part of the issue, according to Kirchner, is that interest rates will likely go up to 4.5 percent, driven by inflation.

The rising interest rates reduce the buyer pool somewhat, which isn’t good for sellers like you. On the other hand, with some homeowners changing their mind about selling (as they wait for prices to move up again), inventory may go down, and your house may become the plum that the remaining buyers are seeking.

As always, remember that in the final analysis, it’s your local market that determines how quickly and profitably your home sells—and there’s nearly always something new happening there, with or without a new calendar year.

As Las Vegas-based Realtor Rob Jensen (who contributed to the recently issued second edition of Nolo’s book Selling Your House) explains, “You’ll want to look carefully at your nearby competition including new builds.  Some people would rather buy a new home than a resale, so you are competing with new construction as well as resale homes. Comps tell the past of what has sold, but what’s for sale now? Regardless of how special or amazing your home is, buyers have choices, so do your best to look objectively at all the competition.”

Losing the Home Office Space Means Losing the Tax Deduction, Too

Overtime2A recent article in Bloomberg reported that dedicated space for a home office is “less of a selling point” than it once was for home sellers. It’s appearing less often in real estate ads and marketing, and new-home developers are shifting toward open-floor plans containing flexible spaces, workspace nooks, and lots of handy electrical outlets.

That’s all very well as a reflection of how modern connectivity allows many people to work from their sofa, in their pajamas, or at just about any time and place in their home. But if you’re operating some sort of business principally from your home, it’s worth also considering what you might lose out on when tax time rolls around if you don’t have a dedicated home office space.

The home office tax deduction lets people who meet various legal requirements deduct a percentage of their home-related costs, such as utilities, rent, insurance, depreciation, mortgage interest, real estate taxes, and certain casualty losses, repairs, and improvements.

But here’s the key thing to remember: the deduction applies only if you regularly use part of your home exclusively for your trade or business. The IRS can be a stickler on this point–if, for instance, your office is also the family TV room, an auditor who notices that might not allow the deduction.

Any shared use of a room or equipment can be problematic. So if it gets to the point where you can’t point to ANY part of your home that’s solely used to run your business, say bye bye to the deduction.

Check out Nolo’s articles on Home Deductions for more on the exact rules and benefits of the home office tax deduction.

 

Holiday Season Great for Home Deals—If You Can Cope With the Downsides

holiday lightsA recent, informal survey by the National Association of Exclusive Buyer Agents (NAEBA) asked its members—real estate brokerages that only represent home buyers—to report in on the challenges of shopping for a home during the holiday season.

The responses are in most cases either entertaining—“Aftermath of a New Year’s Eve party including passed out guests complete with open and spilled adult beverages”—or daunting—“Sellers reluctant to show because house is a wreck or too much company in house” and “difficulties in meeting deadlines when financial institutions or other offices are closed or industry personnel (loan officer, inspector, etc.) take time off.”

Difficulties aside, however, the NAEBA agents noted a silver lining to home shopping while everyone else is gift shopping: “Since we know anyone whose home is on the market during the holidays is highly motivated, we can be more aggressive in offering price and terms of the contract.”

Translated, that means that no seller in their right mind would put a home on the market during this cold, dreary, and distracted time of year—and therefore anyone who does so probably has a pressing reason.

Divorce, job change, or other change in life circumstances might be among the reasons. The seller basically needs to move, and move now.

That puts the prospective home buyer in a strong negotiating position. For help, see Nolo’s articles on Buying a House or Property.  Just step carefully on those frozen front steps, and don’t close the purchase until you have a chance to persuade a home inspector to put down the eggnog and come check the roof for leaks.