Category Archives: Real Estate

Fewer First-Time Buyers Than Ever Entering U.S. Housing Market

htbh5_1_1The latest Profile of Home Buyers and Sellers (2015) from the National Association of Realtors® (NAR) contains a stark statistical representation of how difficult it is for young (and possibly not so young) people to buy their first home: only 32% of buyers were first-timers last year. That’s the lowest share since 1987, when it came in at 30%.

The reasons are widely known and discussed: high home prices (and therefore needed down payments), low inventory of homes for sale, underemployment, and high (in many cases crushing) student debt loads.

Is it really so impossible to enter the U.S. real estate market? True, with median home prices across the United States at over $200,000—with some areas of the U.S. far, far above that (such as California, where the median is over $400,000)—we’re talking some serious dollars no matter who you are.

But it may also be that some people have simply been scared out of the market.

For example, Lisa Shaffer, Loan Advisor at RPM Mortgage in Alamo, California, told Nolo that one of the most satisfying things about her work is “when I can help get someone get into a home who doubted they could afford one at all. Some clients of ours have had a good income but not much saved up for a down payment, and we’ve been able to find them first-time buyer programs (either through the government or through niche programs offered by banks) to help them buy a home sooner than they’d thought possible.”

Another hopeful thing about the current housing market is that, while a 20% down payment is widely referred to as the norm, most first-time buyers don’t actually pay that much. The same NAR survey found that first-time buyers are putting an average of 6% down.

For help with the challenges of breaking into the real estate market, see Nolo’s Essential Guide to Buying Your First Home.

Halloween Décor Spending at Odds With Tiny House Trend!

hallwThe pumpkins, plastic gravestones, oddly placed fake spiderwebbing, and other home and yard decorations are making their yearly appearance.

In fact, according to the National Retail Federation’s annual study, 70% of Americans plan to decorate their home for Halloween in 2016, spending a collective $2.4 billion to do so.

For anyone with a practical bent, the truly scary thing is having to store all those items after Halloween is over. (With the exception of the carved pumpkins, of course, which will rot nicely in one’s compost bin.) Their closets might already be full of Halloween costumes, which 67% of Americans plan to buy this year, spending a collective $3.1 billion.

Meanwhile, fascination with tiny homes is big in the real estate world, particularly among millennials. The topic has given rise to blogs, books, websites, and even television programs.

What’s “tiny,” exactly? It’s a home that’s smaller than some people’s living room, at around 400 square feet.

Tiny homes are a good way to remain debt-free—but the closets don’t offer much space for, say, plastic gravestones. Perhaps that’s why the actual number of people purchasing tiny homes to live in remains in the thousands, according to a USA TODAY report.

If you can limit your Halloween décor to compostables, and are intrigued by tiny homes, be sure to check out attorney Will Van Vactor’s series of articles on laws concerning tiny homes in various U.S. states.

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.