Will a “Premiere Party” Help Sell Your Home?

mimosa iStock_000012039452XSmallThe trend-spotters at Oakland Magazine have been at work, with a recent article titled, “To Sell a Property, They Throw a Party.”

And not just any party: It’s a “premiere party” (usually for a luxury home in an affluent neighborhood), to which the real estate agent invites hundred of neighbors and other prospects.

They might serve champagne and hors d’oeuvres (will I ever be able to spell that without looking it up?) or perhaps chocolate chip cookies. They might create an art show with work from a local artist. One agent even commissioned a bagpipe player.

The odd thing is, most of the article discussed not what benefits parties like these offer the home seller, but what they can do for the selling agents, who — in the hot, hot, and already hotter Oakland market — find they’ve got to work hard to set themselves apart and attract clients. As one agent told writer Mike Rosen-Molina, “Listing agents are looking for tools that every agent might not have and ways to convince sellers to list their home with them.”

Okay, so do such parties really help sell your home? Especially given one agent’s acknowledgment that, “Buyers will see the home anyway; anyone looking won’t miss the property.”

The answer seems to be that such parties create a “buzz.” They get people talking, and create a sense that the property itself is an object of desire. And, while no agent quoted in the article came out and said this, buzz like this can lead to every seller’s dream: Offers over asking price, and possibly a bidding war.

 

 

Will This Year’s Real Estate April Fools’ Joke Be Tomorrow’s Listing Reality?

applesAnyone who didn’t read the “April 1″ dateline on Midwest Real Estate Data’s article called “MRED Makes Scents,” might have been shocked by this Illinois provider of multiple listing services’ announcement that it had “added a revolutionary new “Scent” field to all MRED property listings. The “Scent” field allows MRED agents to indicate the aromatic smell that prospective clients can anticipate when visiting their property.”

Meanwhile, just a couple of week’s ago — and not on April 1 — CNN came out with an article by Kieron Monk called, “Forget text messaging, the ‘oPhone’ lets you send smells.” That’s right, a new device (to be beta tested in July) will allow users to “mix and match aromas and then send their composition as a message, which will be recreated on a fellow user’s device.”

Just think, your real estate agent may someday send you a message saying, “You’ll love this house, just the place to bake a hot apple pie,” and then send you the corresponding aroma!

But is the oPhone going to be ready for the other most likely message? “It’s a fixer upper, but if we can pull up the cat-pee soaked carpets and give it a fresh coat of paint, I think you may have a bargain!”

Of course it will. The future is here.

They’re Tweeting About This House!

IMG_4987Well, it looks like a charming young couple was intrigued by the open house, and is moving into our “cottage.”

(When selling a house with less-than-impressive square footage, it’s important to use appealing words like “cottage” rather than “matchbox” or, God forbid, “birdhouse.”)

Like any smart homebuyers, they’ve done their looking around (two other places within sight of my kitchen window were visited and rejected) and conducted a thorough home inspection.

I believe they were then convinced by the following home features:

  • Room for a growing family. (The Oak Titmouse lays from three to nine eggs.)
  • Solid construction. This one was built by Berkeley Rustic Birdhouses, known for complying with the International Standards of Ornithology.
  • Security. Try as you might, Mr. Squirrel, you’re not getting your head in that front door.
  • Quiet neighbors. (Well, the neighbor’s dog does have it in for the postal carrier. Let’s say “relatively quiet.”)
  • Sunny location. But not too sunny.
  • Cleanliness. As is recommended, I removed the old nest last year and cleaned the inside with boiling water. Every responsible home seller should behave similarly. (With perhaps a little less of the boiling water.)
  • Proximity of restaurants, bars, and other amenities. The water in the nearby birdbath gets changed daily, and there’s an all-you-can-eat buffet of seeds on a nearby ledge. How’s that for a Walk Score?

I do notice, however, as the moving in progresses, that they occasionally have trouble getting their furniture in the front door. Next time I trust they’ll wise up and carry a tape measure.

 

 

Should Your First Home Be an Old One, or Newly Built?

Brick entryIf you’re thinking of buying your first  home. chances are you’re a member of Generation Y (born between 1977 and 1994), had a median income of around $73,600 in 2012, and are looking to buy an 1,800-square-foot home that will cost you about $180,000.

How’s the crystal ball doing so far? (Actually, those figures are based on a recent “Home Buyer and Seller Generational Trends” study by the National Association of Realtors.)

If those demographic descriptors describe you, you’ve probably already noticed that they are not, for the most part, within your control. The amount you’ll spend on a home, for example, probably depends largely on what you can afford and what’s available in your area.

But now we come to an important matter that IS within your control: Will you buy an older, previously lived-in home, or a brand-spanking new one, most likely in a development?

The differences may be larger than you realize: Older homes tend to be more solidly built, more affordable (though not always), and in established neighborhoods with grown trees and neighborhood character. Newer ones, however, offer the advantages of customizable finishes and features, adaptations to modern building codes and energy efficiency standards, and, because they’re often in communities run by a homeowners’ association, reduced maintenance responsibilities for the homeowner.

So, would you like to know what the other Gen Y homebuyers are choosing? (The drum roll, please.) The answer is: OLDER HOMES! Apparently for all the reasons just described. So if you have confidence that your fellow Gen-Yers know what they’re about, the decision has just been made for you.

But should it give you pause that the Boomers, just two generations up the line from you — who have already owned a home or two — are now mostly choosing to buy newly built homes? Apparently they got tired of all the maintenance as an older home starts to fall apart.

The real test would be, however, to ask these Boomer-buyers how they feel about their new home in a year or so. By then, they may be kvetching about how newer homes have thinner walls (“I can hear the neighbors’ TV!”), they can’t get a dog of the size they’d wish (because of homeowners’ association restrictions) and the hot tub leaks (hasty building with unqualified labor is epidemic in the new home world).

There’s just no perfect, obvious selection. To help you make that choice intelligently, see the articles on the “Choosing a House” page of Nolo’s website.

Chances Are, You’re Buying Into an Underfunded HOA

condoThe financial troubles faced by homeowners’ associations — those being the governing bodies of many new-home or condo developments — have gotten worse over the last decade, according to Association Reserves, and as reported by Sandra Block in the April, 2014 edition of Kiplingers.

A disturbing 70% of them are “underfunded.” That means they don’t have enough cash in reserve to handle a major repair or an emergency that’s not covered by insurance.

And that could be very bad news for the homeowners buying in. An HOA isn’t some remote group that’s meant to take care of the homeowners in a planned community — it IS the homeowners in the planned community. When and if a major need for cash arises, it’s the homeowners who will be asked to pitch in and cover it, in the form of “special assessments.”

Did I say “asked” to pitch in? I meant “required.”  As described by Beth Ross in Nolo’s article on “When HOA Associations Can Impose Special Assessments,” “A well-run HOA also sets aside a portion of the periodic dues in a reserve fund. This fund is meant to pay for the costs of larger, infrequent expenditures, such as replacing worn-out patio furniture around a common pool, or putting a new roof on an aging clubhouse. . . . [but if the] HOA’s reserve fund is inadequately funded, . . . the HOA won’t have enough money when it comes time to make repairs, so — you guessed it — a special assessment will probably be on its way.”

As described in the same article, HOAs don’t have unlimited power to impose these assessments. But assuming they act within their legal limits, they do have power to penalize nonpayment — for example, by placing a lien or ultimately foreclosing on the homeowner’s property.

All of which is to say that it’s important to do your research BEFORE buying a home in a development. See the articles on the “Buying a New Home or One in a Development” page of Nolo’s website for more on this.

Huge Disparity in Home Affordability Across the U.S.

SFHow can an annual salary of just over $19,000 be enough to buy you a home in Cleveland, Ohio, while you’ll need a princely income of $115,510 per year to buy a home in San Francisco, California? Let’s just say that home prices, mortgage rates, and other economic factors vary tremendously across the U.S., as evidenced by a recent study by HSH.

The HSH study put together data on mortgage rates and median home prices in 25 of the largest metropolitan areas in the U.S., and calculated how much salary you would therefore need in order to cover the mortgage payments on an average home there. (And that’s before you start worrying about other costs of living, like local private schools.)

The results should make any Californian who doesn’t already own a home want to flee to another state. Not only is San Francisco absurdly difficult to buy into, but prospective Los Angeles homebuyers will need, on average, an income of $72,127, and San Diego homebuyers will need $81,570.

Even New York City starts to look cheap by comparison: An income of $66,167 gives you a shot at buying a home there, woo-whoo! And we can blame the dot-com industry for driving up rates in San Francisco, but why is Seattle, the home of Microsoft and Amazon, still affordable for folks with an income of $59,130?

No wonder the other big story in the San Francisco Bay Area is that rental rates are the highest in the nation. But if you need to buy a house in an expensive area, you’ll find useful information in the “Affording a House” section of Nolo’s website.

 

 

 

Joining the Crowd of Newly Built Home Buyers? Do Your Homework

valentines houseA couple of years ago, finding a newly built home to buy was as hard as finding an open seat in a nice restaurant on Valentine’s Day. The builders weren’t building, knowing that the buyers weren’t looking.

But last month saw a sharp spike in sales of new homes, according to estimates by the Mortgage Bankers Association (MBA).

A whole new crop of homebuyers may, for the first time, be considering the possibility of investing in a home that, at the moment, exists only in the form of a drawing on a map. It’s an exciting process — new-home buyers can often customize the place to their own wishes, from the layout to the counter tops to various amenities.

It’s also a time for caution. First, there’s the matter of construction quality. The model house in the development, if there is one, probably looks shiny, new, and perfect. But not every builder is attentive to quality, and some are more attentive to speed and appearance than anything else — leading to horrible customer surprises down the line, as described in Nolo’s article, “Newly Built Houses: Pros and Cons of Buying.”

Then there’s the fact that many homes in development — particularly, but not always, if they’re condos or townhouses — require all owners to join a homeowners’ association (HOA). That offers many advantages, such as someone to maintain common areas and watch over community quality and uniformity.

But it also means ongoing monthly dues, the possibility of expensive special assessments, and a level of control over your life that not even a landlord could exert. (“Sorry, your dog’s too big, you can’t fly that flag, and you can’t hang your laundry outside.”) For more on that, see “Homeowners’ Associations (HOAs) and CC&Rs: Know What You’re Getting Into.”

And when you’re done with all that reading, don’t forget to make those Valentine’s Day reservations!

Now’s a Good Time for Some Homeowners to Refinance

castleMortgage rates (30-year fixed) are at around 4.25% today, according to Bankrate.com. And what with rising home values in many parts of the U.S., a whole new crop of homeowners may find that they have, at last, sufficient equity to consider refinancing.

But that doesn’t mean everyone with a mortgage rate higher than 4.25% should rush out and refinance. The upfront costs of arranging for a new mortgage can sometimes wipe out the savings to be gained.

Yes, figuring out whether a refi is right for you is going to involve some math. How nice, then, that Consumer Reports‘ January, 2014 issue offers (in its Money section) a handy guideline for today’s mortgage market. Quoting Michael Garry, a financial planner in Newtown, PA, it says, “Refinancing might be worthwhile if you’re paying more than 5 percent.”

So if you’re paying less than 5 percent on your home loan, you can probably save yourself running some numbers. If you’re paying more, however, don’t worry that you’ll have to dig out your slide rule. Some simple online calculators can help you, as described in Nolo’s article, “Make Sure You Won’t Lose Money When Refinancing.”

Good Laws Can Make for Good Fences

broke fenceI’ve heard of at least three fence disputes among friends and neighbors within the last several weeks — enough to have me rushing to the Nolo website to see what we’ve got on the matter. A lot, as it turns out (see “Neighbor Disputes“).

The various stories have been good reminders that the law covers more of our everyday lives than we sometimes realize — but also that you’ve sometimes got to do the tough work of talking matters through with a neighbor when the law seems inadequate to deal real life.

At the “That’s easy, the law has the answers” end of the spectrum, I know of a neighbor who watched a ten-foot-high fence being built on the property next to hers, right up against the sidewalk. She rightly suspected that city ordinances prohibited anything of such a height without a permit. Her first conversation with the owners (who were new to this country) produced a “Who cares?” response. But soon after she placed a call to the city,  she watched the neighbors’ workers saw the fence down by about seven feet.

Also in my neighborhood, a homeowner who shared a fence with a neighbor decided she didn’t like the fence aesthetically — even though it was in perfectly good shape — and asked the neighbor to pitch in on a new one. That neighbor was unhappy about seeing the old fence go, and refused to foot part of the bill. Indeed, there’s no law that requires neighbors to pay for a replacement fence when there’s nothing wrong with the first one. (If the fence were falling apart, it might be another matter, as described in Nolo’s FAQ, “The fence on the line between my land and my neighbor’s is in bad shape. Can I fix it or tear it down?“) But the unwilling neighbor did end up offering to help with the work, simply for the sake of maintaining neighbor relations.

In another situation, a new homeowner replaced an old, worn fence that surrounded her property — without consulting the neighbor on one side, believing that, since that neighbor had none of the same style of fencing on the remainder of his property, and the “pretty” side of the fence faced her way, it must be her fence, to do with as she would. Angry neighbor reaction ensued! In this case, the law seemed to favor the angry neighbor, since “Boundary fences are owned by both owners when both use the fence.” In any case, a batch of homemade cookies helped restore neighborly relations.

Maybe I should start offering recipes on this blog, along with law links!

Perk of Homeownership: You Can Get a Dog!

pup snowDog adoptions went up over the holidays, according to local shelters. Probably even more people would adopt if they didn’t live in rentals with “No Pets” policies. But if you’re buying a home, now may be your chance to bring a new member into the family!

Other than the basics of care, training, and feeding, there are some important things homeowners should know about dog ownership. Fortunately, Nolo’s website offers a wealth of information on such topics as:

For even more practical and legal information, see the Nolo book Every Dog’s Legal Guide, by Mary Randolph.