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.

 

 

Putting Your House on a Clutter Diet for the New Year?

Garage_01Are you among the many people I know (or pretend to know, on Facebook) who spent a goodly part of New Year’s Day going through closets and basements, figuring out what stuff can be gotten rid of?  I’ve now got a trunkload of stuff waiting to go to the Salvation Army, and more boxes yet to be examined.

It seems that bigger homes don’t always lead to more living space — they sometimes just become bigger repositories in which to pile stuff up!

One of the best articles I’ve found online for tips on how to sell, donate, or otherwise get rid of stuff is this one, “Declutter Your Life,” from last May’s Kiplinger.

An important point not to skip over with regards to donating goods to charity is where the article says, “be sure to get a receipt.” In my experience, charities that take donated goods are very casual about this — I often have to ask for a receipt, and they don’t fill in the blanks to say what you’ve donated. (Do it yourself before you forget!) You won’t need to actually send these receipts with your tax returns, but you will need to show them to any IRS agent who might show up to audit you.

What to keep around the house is also an important consideration for homeowners. Here are some Nolo articles to help with this:

Nolo’s also got a helpful product: “Get It Together: Organize Your Records So Your Family Won’t Have To,” by Shae Irving, J.D., and Melanie Cullen. Happy New Year, and happy decluttering!

Underwater No More, for Over Three Million Homeowners

floodJournalist Ken Harney calls the gains in homeowner equity the “biggest story in American real estate in 2013,” and I’m inclined to agree. For the past several years now, millions of Americans have felt trapped by owing more on their mortgage than the house was worth — thus making it nigh on financially impossible to sell, refinance, take out home equity loans, and so on.

But over the past year, more than three million have pulled themselves up above the water line, or watched as their homes’ values rose along with the economy. They have, according to Harney, added a total of $2.2 trillion to their net equity (from late 2012 to late 2013).

Let’s hope that news provides a glimmer of light to the 6.4 million homeowners who remain underwater on their homes . . .

Need a Real Estate Theme in Your Holiday Movie Viewing?

holiday lightsLook no farther than White Reindeer.” An indie hit described as a “dark comedy,” the movie features a lonely, pretty real estate agent (“Suzanne”) grieving after the death of her husband. No ordinary death, this one — he was murdered in their home while she was out buying the Christmas tree, in a robbery gone awry, which as she likely knows, makes it a stigmatized property and hard to sell.

Suzanne is falling apart: Christmas was her favorite holiday, and she’s getting nothing but further grief from family and friends. She forms an unlikely connection with the stripper with whom her husband was having an affair. She takes up drinking, cocaine, excessive online shopping (to a degree that will make any home seller resent having paid their agent a 5% commission), and other practices that you hope your real estate agent stays far away from.

The important question is, of course, whether you will learn anything about real estate from this movie? Well, the fact that the agent is pretty is already a lesson — studies have shown that houses sell for more if the selling agent is physically attractive. Beyond that, I don’t know — I’ll have to see it. Or you can see it first and tell me about it.

There WILL Be “Yes” Answers on the Disclosure Form

iStock_000000433950XSmallHas an entirely clean seller’s disclosure form — free of reports of home defects, environmental hazards, local nuisances, and so on — ever been accurately presented in a real estate transaction?

Notice that I said, “accurately.” We’re not talking about how a few misguided sellers, filling out the standard form that is required in residential home sales transaction in most states in the U.S., may think, “This place will sell better if I pretend it’s perfect.” I don’t think anyone is keeping statistics on how often that happens.

According to a recent column by real estate agents Tarpoff and Talbert (who write for various California local papers), what happens in a normal transaction is that, “There are always ‘yes’ answers” to questions on the disclosure forms about whether the home has various issues or defects.

That’s not a surprise to anyone familiar with the real estate world. A home starts deteriorating the minute someone sets foot in it, or even without the presence of humans. A seller would have to be utterly oblivious to overlook the cracked window, the door that doesn’t close, the in-law unit that the previous seller didn’t pull a permit for, and so on. Any seller with any sense of responsibility, or who is working with a real estate agent who explains that transactions go better (and are less likely to lead to later lawsuits) if sellers are forthcoming with the truth, will come up with numerous items worthy of disclosure.

But to anyone new to the process of buying or selling a home, it’s worth reflecting on the importance of (if you’re a seller) filling out the disclosure form accurately and completely and (if you’re a buyer) reading the form carefully, asking follow-up questions, and not panicking when you see some of those inevitable “yes” answers.

The disclosure form is, after all, an outgrowth of a shift in various states’ laws away from the old doctrine of “caveat emptor,” or buyer beware. That doctrine put the onus on buyers to investigate the home’s condition, and not to come crying back to the seller if it turned out that the basement floods every winter. (Just as it had for the last 35 years.)

That doctrine may have offered seeming simplicity, but what a mess for buyers trying to accurately gauge the value of the home they were buying. Not to mention the fact that neither buyers and sellers could be sure they wouldn’t meet again in a courtroom, with buyers alleging that sellers had gone beyond the confines of the doctrine and committed outright fraud.

Today’s laws and forms requiring seller disclosures make for a far better chance that the home-sale transaction will wrap up with everyone feeling well-informed and relatively unworried about later disputes. And now’s a good time to mention that Nolo’s website has extensive online information about the seller disclosure laws in various U.S. states.

You’re Not on TV: Look at More Than Three Homes!

Family TVAccording to real estate agent Jason Crouch (of Austin Texas Homes, LLC), real-estate-related cable shows like “House Hunters” “My First House,” and so on have had a noticeable effect on his home-buying clients’ expectations.

Not that he’s entirely complaining — he wittily titles his blog post on the topic, “I Should Probably Send Thank-You Notes to HGTV and TLC.”

The reason? These shows have managed to convince some buyers that they should make a decision after visiting three, or at least a small handful, of homes. Says Crouch, “Needless to say, I appreciate the idea that we don’t have to visit a virtually endless number of homes to make a solid decision.”

Indeed, some home buyers — pre-HGTV at least — are known for driving their real estate agents crazy with their “This one’s too big,” “This one’s too small” syndrome. They never manage to find (or, if it’s a couple, agree on) a home that’s “Just right.”

But visiting only three homes? That’s got to be a sign that TV is rotting people’s brains.

After so small a number, you’re only just starting to get to know your local market; to get a sense of what’s available at what price. You’re only looking at a small slice of what might be available within your time window. Ask your real estate agent — he or she probably already knows of homes that will be coming onto the market within the next six or so weeks. You’re putting on blinders with regard to the biggest financial decision you might ever make.

So rest assured, the cameras aren’t rolling, and your real estate agent will happily visit more than three homes with you. (And by the way, how often have you watched “House Hunters” and thought, “Gee, I wouldn’t have wanted any of those homes!”)

 

Reasons to Spend Longer at an Open House

IMG_4113If you’re a recreational open house visitor (as I am) or a serious buyer who can tell at first glance that you don’t like the place, walking through an open house can take as few as five minutes.

If, however, you’re seriously interested in a house that you’re touring while it’s open to the public, there are ample reasons to stay for a good long time — longer even than your instincts might tell you.

You may, for example:

  • Overhear what other visitors are saying. A second, third, and additional set of eyes is always useful in forming your own judgments. Other visitors may notice flaws that you hadn’t, or open a door that leads to space you wouldn’t have otherwise noticed.
  • Overhear the real estate agent answering visitors’ questions. Information that isn’t on the listing or advertising materials may be relevant and important — perhaps regarding an upcoming change in the neighborhood, indications of how many offers have come in so far, or the history and scope of remodeling work. Some agents will even unwittingly reveal aspects of the sellers’ personalities.
  • Pick up on the “buzz.” You don’t even have to hover too near other lookers to get a sense of whether they’re excited by the place or not. Are they looking bored, plugging their noses, and leaving quickly? Or pulling out tape measures and cell phones? Such information is highly relevant in setting your own offer price, if any — too much excitement, and you’d better be planning to bid over the list price.
  • Notice things that won’t necessarily appear within five minutes. For example, if a neighborhood fire station discharges regular vehicles with blaring sirens, or a train passes by every 15 minutes, it will help to know exactly how loud they are.

By the end of all this, you yourself may have some good questions to put to the listing agent! Just make sure to be clear on whether you’re already represented by an agent of your own. Otherwise you could find yourself facing a hard sell, as the agent makes a pitch to represent you as well as the buyer (a dual agency arrangement that we don’t recommend).

Unpermitted Construction by Former Homeowner May Affect Current Owner

outhouseRemember last week’s blog post, “Of Mice and Moss: Tales of Unexpected Homeowner Expenses“? A significant number of people contributed tales of — to quote one of them — “stupid repairs and improvements of previous owners.”

This of course raises the question, why weren’t the issues revealed during the home buying process? My guess is that they’re precisely the types of issue sellers are least likely mention on the disclosure form mandated in most states. After all, the sellers think of disclosures as where they list and describe problems with the property,  such as an aging roof or a crack in the basement floor slab.

But that beautiful new tile that they installed in the kitchen? That’s not a problem, it’s a handmade masterpiece! (Never mind that it ripples in a few places.) And the new bathroom that Cousin Ed created where the back porch used to be? Perfection itself! So perfect that they didn’t bother taking out a permit for it! (The inspector might not have understood Cousin Ed’s avant garde pipe installation style.)

If the former owner could live with some slapdash construction, the current owner sometimes can, too. However, complications arise when it comes time to sell the place yourself. What do you tell the buyers? Do you have to fix the problems? To shed some legal light on these issues, we’ve posted a new article to the Nolo website, “Discovering Unpermitted Construction When Selling Your Home,” by attorney Allison Nash.

Hide Prescription Drugs Before the Open House!

pillsAll of our Nolo real estate products warn home sellers of the perils of leaving anything valuable in an accessible place during your open house. However, a recent headline from Washington State, “Real estate agent helps catch prescription drug thief posing as potential home buyer,” reminds us how relevant this advice remains.

The thief in question was ignoring cash, jewelry, and other valuables, and heading straight for the medicine cabinet in search of prescription narcotics.

When you think about how many people have some Vicodin left over from a past surgery — pills that they’ve probably forgotten are even there — you can see why a thief would figure this was a good bet, and might even reasonably hope that the homeowners wouldn’t notice the loss.

The sale of prescription drugs is apparently a big enough deal for the FBI to dedicate a separate reporting line to it: 877-RxAbuse (877-792-2873).

What can you do to avoid contributing to this trade? Clear out your medicine cabinets of all but the low-cost basics before an open house, and put any prescription meds in a locked area or even the trunk of your car. (Prevention is a far better approach than being suspicious of every house visitor who asks to use your bathroom!)

Not Buying a House Is Okay, Too

mens roomsEvery once in a while, a journalist asks me to make the “case” for homebuying. That shouldn’t surprise me: I write books about homebuying, I own a home, and I love walking neighborhoods and looking at homes. I even have a little collection of tin houses sitting on my office shelf.

But let’s get one thing straight: Loving houses doesn’t mean I’m an “advocate” for buying one. It’s a lifestyle choice, and the financial outcome is anything but guaranteed. Some people can (with the right landlord) be perfectly happy renting their whole lives. They’re mobile, they can enjoy weekends free of home repair obligations, and if the place gets seriously damaged, they won’t be the one calling the insurance company.

Why am I bringing this up now? Because panic levels seem to be rising right along with interest rates, additionally fueled by headlines like, “Families Blocked by Investors From Buying U.S. Homes.” (This article makes the point that, with rising demand for rentals, investors are moving in with all-cash offers that individual buyers can’t match.)

So let’s refocus on other voices in the media, such as that of Kelly Phillips Erb, in Forbes, with “11 Reasons Why I Never Want To Own A House Again” and Carl Richards for The New York Times, in, “It’s Not Everyone’s Time to Buy a Home.” They discuss varied reasons not to buy, from the amount of interest you’ll plunk down to the fact that you are the only true expert when it comes to your own life.

If you decide to keep renting (and I’m not advocating for that, either!), the most important thing to do is understand your rights as a tenant.