Category Archives: Real Estate

If Friendly Neighbors Are So Important, Why Not Ask About Them When Buying?

An impressive 50% of prospective homebuyers say their top priority when it comes to neighborhood features is having friendly neighbors, says a recent Berkshire Hathaway HomeServices Homeowner Sentiment Survey.

This feature ranked higher for survey respondents than school district (at 41%), financial considerations (39%), and perceived investment value (37%).

The results reflect well on the common sense of today’s homebuyers. After all, a difficult or hostile neighbor can impact your personal financial considerations (for instance, if you get into a dispute over something like who pays for a damaged fence, and end up bringing or facing a lawsuit).

And a difficult neighbor can impact your home’s investment value, if a major issue makes the house harder to sell (“Pay no attention to that 12-foot spite fence, we’re suing the neighbor to take it down, tempted though we are to take a chainsaw to it.”)

At least neighbor problems don’t typically bring down an entire school district. But they can make life miserable, in the very place where you want to feel safe and relaxed.

But the question remains, why do so few people ask probing questions about a house’s neighbors before they buy? I can only report anecdotally, but as someone who visits open houses regularly, has sold a house that brought in multiple offers, and regularly talks to people about real estate, it seems that the matter of neighbor relations is often left for a post-closing surprise.

Real estate agents certainly know how important the neighbor issue is. I recently visited an open house at the property next to mine, introduced myself and was told by the agent, “Oh good! I can tell people I’ve met the neighbor!” (I guess the subtext was that I looked normal, phew.)

You now know why we included neighbor issues on the “Questions for Seller” worksheet that’s included in Nolo’s Essential Guide to Buying Your First Home. You can certainly get specific in your questioning, too, as in, “We notice the house across the street has five motorcycles parked on the front lawn. Has that led to issues with noise or anything?”

And there’s no need to stop with questions to the home seller. Try asking local friends for information, particularly those who follow any neighborhood listservs. They might tell you who the local “trolls” are, and know about other neighbor issues, disputes, or subjects of tension.

Also, as you go in and out of open houses, ask people on the street how they like living there, and how friendly the neighborhood generally. If you’re lucky enough to spot one of your prospective new home’s neighbors outdoors, perhaps weeding or walking the dog, definitely engage that person in conversation. You may be surprised at what you find out.

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.