Category Archives: Real Estate

Trouble Selling Your Luxury Home? At Least You’re Not a Celebrity!

clock and faceAre Americans less starry-eyed about celebrities than they used to be? (Hard to believe, with a reality-TV star a nominee for the U.S. presidency.)

Or is there some other explanation for the fact that, according to a widely reported Redfin study, celeb-owned properties sit on the market for “about 36 days longer than other homes and they usually sell for less than the original asking price,” and in some cases for less than the amount they purchased it for?

One theory posited by Redfin is that, during their period of homeownership, celebrities tend to think less about resale value than about satisfying their own, possibly unusual, tastes. If they want a basketball court in the basement, so be it.

Another theory is that the privacy that major stars in the world of sports, movies, music, and so on must maintain–and the fear of being overrun by curious “looky-lous”–makes it difficult to open the house up to visitors. (Agents for buyers must convince the selling agent that the buyers are serious, and sometimes put them through a screening process.)

It’s bad enough to be an ordinary homeowner wondering about whether the open-house visitors will steal your prescription pills: Imagine worrying about whether visitors will not only steal the pills, but go to the media about what meds you’re on! (See “Theft During House Showing: What Can We Do?” for more on this issue.)

Still, bemoaning the inability to hold open houses is rather ironic, when you consider how much ink the real estate industry has spilled about whether open houses are actually worth the time and effort. So if you’re a nobody, you might as well revel in your nobody-ness, open your house to the public, and enjoy the benefits of having a stream of visitors.

For more tips and strategies, see Selling Your Home: Nolo’s Essential Guide.

Adult Kid Living at Home? You’re Not Alone, And It’s Not Forever

Paper house attached to yellow blank price tag on blue background

Pricey rental markets, low housing inventory and high home costs, crushing student debt loads, and difficulty finding jobs are adding up to an unmistakable U.S. trend: kids moving back in with mom and dad after graduating from a college or university.

If you live in New Jersey, Connecticut, New York, Florida, or California, the odds of having a child living at home are especially high, according to an August 18, 2016 analysis from Stateline.

Feel better now that you know it’s not just your kid? Great. But if you’re still hoping that the situation doesn’t last forever, you might want to point junior to a couple of Nolo’s free online articles:

Oops, yes, that latter one means your son or daughter may be coming to you requesting help with the down payment or more. But you wouldn’t be alone in that, either–it’s the only way that many young people today can afford to break into the real estate market.

If providing such help is financially impossible, here’s another prospect for you to consider: Do I Need a Building Permit to Construct a Tiny House in My Backyard? It could be a way to put some space between you and your returnee!

Yes, Home Seller, You Should Mention the Snakes!

snakeSometimes the law and ethics match up nicely, other times, not so much. That’s one of the reasons “The Ethicist” column in The New York Times can be both an entertaining and a frustrating read.

A recent column, “You’re Going to Sell Your Home. Should You Mention the Snakes?” provides an example of when the law and ethics line do match up; yet it reflects a total lack of awareness on the questioner’s part that the matter at hand is primarily a legal one.

The basic situation is that the prospective home sellers live in an area with a “snake problem.” About three times a year, they encounter poisonous copperheads, and have been bitten. They worry that if they reveal the snake issue to prospective home buyers, said buyers will go running in another direction.

The Ethicist basically advised speaking up. Otherwise, he explained, the homeowners will have to live with their conscience if the home’s new owners get bitten; and by speaking up, the sellers can help prepare the new owners to avoid snake contact, and thus minimize the risks. Sensible advice.

The Ethicist also got it right when he said, “Your lawyer or real estate agent would be able to tell you whether you have a legal duty in your state to reveal the facts that you have told me.”

But The Ethicist veered a little off course with the statement that, “Scruples like yours help explain why real estate agents don’t like to have the sellers around when they bring in prospective buyers.” The fact of the matter is that, in most U.S. states, both home sellers AND their real estate agents have an obligation to be forthcoming with any known “material” facts that would affect the value or salability of the property.

Most states have created lengthy, detailed disclosure forms that home sellers, and in some cases their real estate agents as well, must fill out. These forms advise prospective buyers of everything from a leak in the roof to a refrigerator with a wiring problem to a crack in the foundation. Few of these forms actually mention snakes; but no matter, most of them have an “other” clause.

Not only that, but it’s often the real estate agent who explains to the home seller that, far from giving in to the urge to hide problems, being forthcoming is a way to inspire trust and to ease negotiations. The buyer is going to be a lot less inclined to close the deal if, while touring the property, he or she runs into a snake or hears about the problem from a neighbor.

Moreover, full and complete disclosures are an important way to avoid later lawsuits. Failing to provide them is its very own “cause of action” (basis upon which to sue) in many states.

That doesn’t mean there aren’t unscrupulous sellers out there. That keeps lawyers and judges busy, with ongoing lawsuits about what the sellers should have disclosed. But for any seller curious about his or her obligations, and wanting to avoid such lawsuits, a good starting point is Nolo’s state-by-state series of articles on what disclosures are legally required.

Check Out the Writing-Award Winners From the 2016 National Association of Real Estate Editors’ Conference!

The Annual National Association of Real Estate Editors (NAREE) Conference just concluded in New Orleans, bringing together real estate writers, journalists, and industry experts from around the United States.

As always, the announcements of NAREE’s 2015 journalism and book award winners were event highlights.

Here’s a sampler of the writings that caught the judges’ eyes:

  • Josh Salman, of the Sarasota Herald Tribune, discussed flaws in administration and oversight of the EB-5 investor visa program, which many non-citizens use as a way to get a U.S. green card, in many cases by buying into sometimes dubious real estate investments.
  • Ken Harney, Washington Post Writers Group, revealed “Why an agent might refuse to show a house (the low commission).”
  • Jonathan O’Connell of The Washington Post examined the idyllic plans to upgrade Washington for the 2024 Olympics, and explained why, even without having won, the effort could still transform the city.
  • Emilie Rusch, Denver Post, looked into how legalization of marijuana has gobbled up empty commercial real estate in Denver, Colorado.

sell1_1_1And Nolo picked up an award as well: The book “Selling Your House: Nolo’s Essential Guide,” by Ilona Bray won gold in the annual Robert Bruss competition, which recognizes excellence in books covering the field of real estate.

NAREE’s judges commented that the book is a “clear, thorough handbook on selling a house” and noted that the helpful tips serve as “good preparation for those who may not have been in the market for a while.”

Beware the Downside Risks of Tidying Up Your Finances in Preparation for Getting a Mortgage Loan

city illusIf you’re hoping to buy a home and finance it with a mortgage (as do 86% of homebuyers, according to the National Association of Realtors’ 2015 Profile of Buyers and Sellers), getting your finances in order is a good start. You’ll want to understand how much debt, income, and assets you really have, pay off minor debts at high interest that might be harming your ability to take on more credit, and be able to show that you’re a good risk for the hefty loan you’re about to apply for.

But don’t go too far! You can, according to mortgage banker Ken McCoy of Petaluma Home Loans, actually oversimplify your finances to the point that it hurts your credit rating and your ability to qualify for a mortgage at the lowest interest rate and on the most advantageous terms.

Let’s start with your job. If the pay isn’t great, you might be inclined to look for something better before buying a home. But, warns McCoy, “Changing your job can be a bad thing if it’s in a different line of work. The lender wants to see at least two years’ history in the same occupation, basically as a sign that you’re going to stay in that job for the long haul.”

Next, there’s the matter of your assets. Like many people, you may have a checking account at one bank, a savings account at another, and a CD somewhere else. Consolidation would certainly make it easier to know what you’ve got; but, says Ken, “You’ll be creating more, not less paperwork. Lenders want to be able to trace where all the money you’re using to buy a home came from, and you’ll end up having to supply statements from the accounts you closed, just to show the paper trail.”

Finally, there’s the all-important matter of your existing debt, including credit cards. McCoy says, “Prospective homebuyers tend to think about paying off their credit cards or getting rid of debt altogether. But realize that you may qualify for a mortgage with some existing debt; and if you pay it all off, you’ve just taken valuable money you needed for the home purchase transaction. What’s more, you can actually hurt your credit score by having no existing credit, or by closing credit cards you’ve had for years.”

Of course, nothing is cut and dried in this arena. There are certainly circumstances in which, for instance, taking a new job that pays much more would make sense. But how are you to know for sure? “Six months before you want to start looking for a home, sitting down with a mortgage professional would be smart,” says McCoy. And for more tips, check out the Affording a House section of Nolo’s website.