7 Things That Are Left Behind When You Sell

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When it’s time for you to move out of your old home and into your new one, there’s a lot of packing and hauling to do. But while you’ll obviously want to take all your clothes and furniture with you, there are certain items that you should leave behind.

Certain things are just assumed to remain with the property when sellers move. And if buyers find that these things have been taken on move-in day, there could be trouble.

As a general rule of thumb, the following items should be left behind when you move out.

1. Light Fixtures

When buyers scope out a new house to buy, they usually assume that the light fixtures they see in the home will stay when they move in. Unless you specifically state in the contract that you want to take the light fixtures with you, they should stay with the home.

If you do take them, it’s customary to replace them with something else so the buyers aren’t left with dangling wires and gaping holes in the ceilings and walls.

2. Anything Secured to the Ground

If it’s stuck to the ground, odds are it should stay with the property when you move. This can include any of the following:

  • Mailboxes
  • Fences
  • Lights
  • Fountains
  • Water features
  • Fire Pits
  • Gazebos

Hot tubs should also stay even though they might not necessarily be affixed to the ground. There are still plumbing pipes and electrical wiring that are typically installed in hot tubs and run in-ground, so technically these structures should probably stay with the home too.

Items like these that are secured to the ground are technically classified as real estate as opposed to personal property, so they should remain on the premises when you vacate. If you have your heart set on taking a certain item with you, clearly detail its exclusion in the contract and make sure both you and the buyer initial it (if the buyer agrees).

3. Outdoor Plants

Along the same lines as the items listed above are outdoor plants, shrubs, flowers, and trees. Basically, any greenery that you have planted outside is considered to be part of the property and should remain there when the buyers move in. Buyers would be unpleasantly surprised to show up on moving day only to find large holes where plants once were.

Any greenery that has established deep roots would likely die after being ripped out of the ground and planted elsewhere anyway, so you would be better off leaving them where they are.

4. Anything Affixed to the House

Any items that are affixed to your home are also considered part of the property. This includes things such as:

  • Hot water heaters
  • Radiators
  • Bathtubs
  • Plugs
  • Built-in shelves
  • Cupboards

While it might sound silly to even try to rip any one of these items out and take them with you, it can and does happen. In these cases, buyers are left annoyed at the situation and sellers often wind up in legal trouble. As a general rule of thumb for sellers to follow, anything that is affixed to the home usually stays.

5. Fittings

Certain items might not necessarily be affixed to the property, but they should probably stay with the home anyway. This includes things such as the following:

  • Carpets
  • Curtains
  • Curtain rods
  • Free-standing appliances, such as refrigerators, ovens, and washing machines
  • Satellite dishes

6. Manuals

Certain items in the home usually come with manuals when you first buy them. These manuals contain details needed for proper set-up when you first buy or install them as well as troubleshooting tips in case there’s ever a problem.

Having these manuals handy is important not just for you, but for buyers who may be taking over your home. Things such as refrigerators, ovens, hot water heaters, dishwashers, or any other item that is remaining on the premises will likely have manuals. Make sure to leave these behind for the buyer, and keep them in plain sight so they don’t have to go searching for them when they need them.

7. Extra Paint

When buyers first move into a new home, they may want to do some touch-ups on the walls here and there if there are any scuff marks that need to be covered. They may even need to do that from time to time long after having moved in. When that happens, having the exact paint handy can really help.

It can be nearly impossible to match the exact paint color on your walls with paint purchased in-store without knowing the precise one that was used. While you could always leave the exact brand name and paint color model number behind for the buyers, it would be much easier for them if you just left any leftover paint cans that you might still have.

The Bottom Line

If there are any items that you really want to take with you that would otherwise be left behind, make sure you take care of these details during the actual negotiation process so there are no surprises. Make sure everything is in writing. But in general, anything that is bolted, mounted, nailed, or planted into the home or ground should probably stay.

How to Use Your Home Equity to Consolidate Debt

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There are plenty of benefits to owning a home. For starters, you have full control over your property as an owner compared renting. Owning a home also provides you with a way to invest your money and take advantage of appreciation in value over time.

But as it turns out, owning a home might even provide you with a way to effectively deal with your mounting debt. If you’ve got a certain amount of equity built up in your home, you might be able to access it to consolidate your debt.

Why Consolidate Debt?

If you’ve got a lot of different loan payments to make every month, you know how much of a challenge it can be to manage them all and make sure they’re paid on time. It can be a real nuisance to constantly find a new bill in the mail every few days after you thought you tackled the last one for the month.

Not only that, but some of those bills can come with sky-high interest rates. The higher the rate, the more expensive your debt will be. Credit cards, in particular, are notorious for charging super high rates. If you only make minimum payments every month, that outstanding balance will just grow, making it increasingly difficult to pay that debt down.

If you’re finding yourself drowning in mounting debt, consolidating it might be a great option. By consolidating your debt, you can essentially combine it all into one larger, easier-to-manage debt. And with a lower interest rate, that debt can be more affordable, which will allow you to pay it down faster.

As a homeowner, you have the unique ability to borrow against the equity in your home to be used for all sorts of things, including consolidating your debt. So, how exactly is this done?

Home Equity Loans For Debt Consolidation

Through a home equity loan, you can use the equity you’ve built up on your home to be used to consolidate your high-interest debt. With timely mortgage payments, appreciation in value, or a combination of the two, you might have more equity in your home than you think.

A home equity loan is basically a loan that’s secured against the equity in your home. You’ll receive a lump-sum amount that you can use to consolidate your debts.

Home equity is defined as the difference between the value of your home and the amount that you still owe on your mortgage. So, let’s say your home is currently valued at $600,000. If you still owe $400,000 on your mortgage, that means you have $200,000 in equity. While this is a simplified calculation, it gives you an idea of what home equity is.

Lenders usually require that borrowers have at least 80% equity in their homes before approving a home equity loan. So, in the example above, you would have more than enough equity to qualify for this requirement. That said, there are other criteria that you’ll need to meet, including having a decent credit score (at least 680) and a sufficient income to support additional loan payments.

If you are approved, you can use the money from your home equity loan to pay off all your creditors and lenders. Then, you’ll be left with just your home equity loan payments.

If you can secure a home equity loan with an interest rate that is significantly lower than some of the rates you were being charged on your other debts that you paid off, you can save money and make it easier to pay down your debt sooner.

The Bottom Line

A home equity loan can be a great way to get your hands on the money needed to pay off all your current lenders and creditors and end up with only one, lower-interest debt payment. If you own a home and have some equity accumulated, this financial arrangement might be suitable for you.

Just make sure that you are financially comfortable with making these payments. If you default on your home equity loan payments, you risk losing your most valuable asset – your home – since this loan is collateralized by your house. As such, be sure to take the time to verify whether or not your current finances can support these monthly payments.

INFOGRAPHIC: NAR’s Existing Home Sales Report For December 2018

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Buying and Selling at the Same Time? Follow These Tips

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If moving is on the horizon for you sometime soon, then you’ve got plenty of decisions to make. And one of these important decisions is whether to sell or buy first.

Should you list your home first and look for a willing buyer before committing to another home? Or should you find something first to make sure you’ve got a place to go if you happen to sell faster than you initially thought?

Many homeowners are usually torn when it comes to making this decision, so the typical solution is to simply buy and list at the same time. The thing is, coordinating closing dates on both the sale of your current property and the move-in date of your new home can be a real challenge.

So, how can you make sure that buying and selling at the same time works out for the best? Consider following these tips.

Determine the Market You’re in

The temperature of the housing market in your area will determine how to proceed with your move. In fact, this is perhaps the most important factor to consider when timing your purchase and sale perfectly. The amount of time it takes to sell versus how much time it will take you to find the right home to buy will need to be considered when timing it correctly.

Is it a buyer’s market? If so, that means there are plenty of sellers out there and lots of inventory for buyers to choose from with fewer buyers to compete with. In this market, finding a home at a good price shouldn’t take long at all, though selling might take a little longer.

Is it a seller’s market? Then that means there are tons of buyers to compete with and not much inventory, which could take you longer to find the right property. But as a seller, you have a better chance of finding a buyer quickly and sealing a deal on your current home in a short time frame.

If you decide to list your current home and look for a new property at the same time, make sure you take the current market into consideration. Your listing strategy and house-hunting tactics should be tweaked accordingly to try and get the timing right.

Get Pre-Approved For a Mortgage

It’s always a good idea for buyers to get pre-approved for a home loan before they start house hunting. This will help them get an idea of how much they can afford in a home purchase. A pre-approval letter will also help get the ball rolling with mortgage approval so the mortgage can close faster after a deal is reached. This is important if you’ve sealed a deal on your current home and need to close faster.

A pre-approval is particularly important if you’re a buyer in a seller’s market, as you’ll be competing with many other buyers for fewer homes. In this case, you’ll want to do whatever you can to bring a purchase deal into fruition without any hiccups, and being pre-approved for a mortgage can help.

Have an Appraisal and Inspection Done on Your Current Home

Getting your home appraised before you list will help you determine the best listing price for your home. Inflated listing prices can end up causing listings to linger on the market for longer than necessary, causing them to go stale. An appraisal will provide you with some great insight into what your home is actually worth according to market conditions and will help you price accordingly.

Having your own home inspection done before buyers first make their way into your home to scope it out will help you identify any issues that may need some attention. Knowing about any potential defects with your home will give you the opportunity to fix them before your property is listed. You can be sure that such defects will be identified in a buyer’s home inspection, so uncovering them before an offer is agreed on can make the sale go much smoother.

Both an appraisal and a pre-listing home inspection can help you get your home ready for the market and price it accordingly, which can both prove to be extremely helpful in ensuring a seamless transaction.

Consider Including a Contingency to Sell Your Home First

If you find yourself in a buyer’s market, buying a new house shouldn’t be an issue. But selling might take a bit longer. In this case, you could find yourself with two mortgages to pay if you can’t sell your home after committing to buying a new one. In this case, you may want to consider including a contingency in your offer on a new home that states that you’ll only buy the home if you’re able to sell your existing property.

Just keep in mind that many sellers might not be too keen on such a contingency and may reject it.

Hire an Experienced Real Estate Agent

Your best bet when trying to time the purchase of a new home and the sale of your current property correctly is to hire a seasoned real estate agent who’s experienced with these situations. Trying to time these two transactions can be a complicated endeavor, so working with an experienced agent can prove to be extremely helpful.

An agent who is well-versed in these situations can help you come up with a sound strategy, negotiate appropriately, and price right to ensure that the timing of both transactions is as seamless as possible.

The Bottom Line

Lining up the closing dates on the sale of your current home and the purchase of a new one can be a real challenge. When you’re ready to make a move, make sure you go into this situation with a sound plan of action and a seasoned real estate agent in your corner.

What Exactly Do Your Condo Fees Cover?

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Condo living is pretty popular among buyers who are looking for something more affordable than traditional freehold homes. Plus, there are a bunch of other perks to living in a condo beside their more affordable purchase prices, including their amenities, low maintenance, and 24-hour security.

But your mortgage isn’t the only monthly payment you’ll have to make when you own a condo. Unlike a traditional freehold house, condos also come with monthly condo fees that every owner in a complex must pay.

The amount that each owner is responsible for paying is based on a specific rate multiplied by the square footage of their respective unit. You could pay as little as $200 to as much as $1,000+ in condo fees every month, depending on where your condo is located, the type of building it is (ie. luxury condos usually charge higher fees), and the type and number of amenities offered.

The question is, what exactly do monthly condo fees cover?

Security

Most condo buildings staff a 24-hour concierge who will serve as security, as well as a point of contact for things like visitors, mail, minor issues, and so forth. The concierge or security guard’s paycheck is typically covered by funds collected from monthly condo fees.

Maintenance of Common Areas

Every owner is responsible for maintaining their own individual units. But the maintenance, cleanliness, and repair of all other common areas of the building are paid for via condo fees. This includes the maintenance of things such as:

  • Landscaping
  • Parking garage and lot
  • Elevators
  • Hallways
  • Fences
  • Walls
  • Gates
  • Windows
  • Rain gutters
  • Heating and cooling systems
  • Gas pipes
  • Electrical systems

Maintenance of Amenities

In addition to the common areas and systems just mentioned, condo fees also cover the maintenance of the building’ amenities, which differ from one condo complex to another. That said, common amenities in condominiums may include:

  • Game rooms
  • Fitness rooms
  • Saunas
  • Swimming pools
  • Party rooms
  • Rooftop gardens
  • Guest suites

Insurance

Not every condo complex includes insurance as part of what their condo fees cover but must do. The insurance policies that condos take out cover building exteriors and shared common areas. Sometimes they might extend to cover things like damage done by floods, fires, and earthquakes. Given this, unit owners are only responsible for taking out an insurance policy to cover the interior of their own units and their personal belongings.

Reserve Fund

A reserve fund is an emergency fund, so to speak, that is saved up to cover the cost of occasional and unexpected repairs. For instance, a new roof or a newly paved parking lot are not things that must be done every year. Instead, they occur on occasion, and the money in a reserve fund can then be applied to cover these costs.

Ideally, there will be enough money in the reserve fund to adequately cover these costs. If not, each unit owner will be forced to fork over a lot of money in order to make up the difference between what’s in the reserve fund and how much needs to be spent.

A condo board that is well-run will charge each owner a small amount every month to be put towards keeping the reserve fund well-padded. That way, when the money is needed, there will be no need for owners to have to pay much more than they’re already responsible for paying every month.

Utilities

The majority of condo fees cover the cost of certain utilities of the building, including (cold) water, garbage collection, and sewers. Some may go so far as to cover heat, electricity, and hot water, and some may cover everything. Every building is different, so you’d need to check with your specific condo to find out exactly what your fees cover.

The Bottom Line

There are plenty of things that you have at your disposal when you live in a condo. But such things aren’t free; instead, you’re paying for them through monthly condo fees. If you’re in the market to buy a condo, make sure to find out exactly how much the condo fees are and what they cover before you sign on the dotted line.

6 Tips to Choosing the Best Mortgage Lender

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The purchase price of the home you agree to buy will obviously have a direct impact on your mortgage payment.  But the actual mortgage product itself will heavily influence these payments as well.

Different terms, interest rates, fees, and insurance premiums can make your mortgage more or less expensive. That’s why it’s important that you work with a lender who can offer you the most affordable and convenient mortgage product.

When you’re on the prowl for a mortgage lender, keep the following tips in mind to help you choose the right one.

1. Understand What Type of Professional You Want to Work With

When it comes to mortgages, there are different professionals involved in this sphere. It’s in your best interests to understand the various types of experts involved in mortgages and determine which one you’d prefer to work with.

Banks and credit unions: This is the more common source for mortgages. After all, everyone has their bank that they hold their checking or savings account with, so banks and credit unions are typically the obvious first option. But banks and credit unions are only able to offer their own products, so you could be limiting yourself to what they have available to offer you.

Mortgage brokers: These specialists don’t work for a bank or credit union, so they don’t have any of their own products to sell. Instead, mortgage brokers work on behalf of the buyer to find the best mortgage product available to meet the buyer’s needs.

These professionals do all the leg work on behalf of buyers and negotiate with various lenders. As such, you don’t need to do any of the comparison shopping yourself. This can save you a ton of time and money at the end of the day.

Alternative lenders: More and more online lenders and “bad credit” lenders are popping up, giving buyers a much larger pool of options in terms of where to get their mortgages.

Online lenders make the process convenient by allowing borrowers to apply for mortgages completely online without having to visit a bank in person. And private lenders provide borrowers with bad credit options when banks turn them down for a mortgage. It should be noted that it’s always important to be vigilant about potential predatory lenders who may not have borrowers’ best interests at heart.

2. Find the Lowest Rate

Lenders who offer the lowest interest rate are obviously going to get the most attention among borrowers, and rightfully so. Ideally, you want to lock in at the lowest possible rate. Doing so can help you save tens of thousands of dollars over the life of your loan.

Lenders often compete with each other for your business, and that often means offering the best rate they can possibly offer. However, it’s important to make sure that all other aspects of the mortgage are looked at in great detail to make sure you’re not inadvertently paying more at the end of the day because of exorbitant fees, which we’ll get into later.

3. Find the Best Terms

The interest rate of a mortgage is certainly an important aspect to look at. But the terms of the mortgage are just as important, as they will dictate how well you’ll be able to manage your mortgage. Consider the following mortgage terms:

  • Early repayment penalties
  • Late payment fees
  • Payment frequency
  • Ability to convert from an adjustable- to a fixed-rate mortgage
  • Flexibility to make occasional lump sum payments towards the principal
  • Ability to apply the mortgage to another property if you sell

4. Identify All the Fees That Are Charged

As if the mortgage itself wasn’t already a hefty payment to make every month, there are fees that lenders charge that you will be responsible to pay as well. Different lenders have their own sets of fees that borrowers have to pay, so you’ll definitely want to get a run-down of what these fees are and how much it will cost you.

The types of fees you may find on a lender’s contract include the following:

  • Origination fees – This fee covers a mortgage broker’s time spent helping you find and process your mortgage.
  • Application fees – The administration required to pull your credit report and collect all necessary paperwork is paid for through an application fee.
  • Rate lock fees – If you find a great interest rate and want to make sure it doesn’t increase by the time your mortgage approval is finalized, you can lock it in. But there will typically be a fee associated with this service.
  • Underwriting fees – This fee covers the cost of closing and funding the mortgage.
  • Appraisal fees – Lenders send professional appraisers out to verify the value of a property before they agree to extend a loan. Buyers are usually responsible for paying for appraisals.

5. Comparison Shop

Different mortgage lenders will have their own mortgage products to offer home buyers, each of which will come with its own terms, fees, and interest rates.

It’s always important to compare different lenders and their respective products to find the one that best suits your situation. Much like you would comparison shop when buying any other product to find the best deal, the same theory applies to shopping for a mortgage.

You can save some time by checking online, as most lenders will have pertinent information about their product posted via the web. Just keep in mind that the information may be changed based on your credit health, assets, debt, and all other factors that influence your financial situation.

You can also work with a mortgage broker who can comparison shop for you rather than you having to do it yourself, as mentioned earlier.

6. Ask Your Agent

Your real estate agent is probably the best person to ask if you’re looking for a mortgage lender to work with. These professionals usually deal with a large network of other industry-related experts, including mortgage specialists. Odds are your agent probably knows someone who would be a good fit for you, so make sure to ask before you start looking.

The Bottom Line

You don’t have to settle for your regular banker when it comes time to get a mortgage. Instead, there are plenty of different mortgage products and lenders out there for you to peruse. Make sure to do your due diligence and compare different lenders and their products to find the best, most affordable mortgage that you can qualify for.

What Does it Mean to ‘Sublet’ Your Rental Unit?

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Many homeowners rent out a part of their home in an effort to make a little side cash for space that they’re not using. Whether it’s a room in the home or a completely separate floor, homeowners can choose to open up part of their home to a tenant who then pays them a monthly rental fee in exchange for a roof over their heads.

But can renters do the same? If you currently rent and are out of town every so often, why should your unit be left vacant while you’re paying for it? Can’t you bring someone in

to rent out your place temporarily while you’re not there?

Or what if you want to bring in a roommate after you’ve already signed a lease, whether to help with the rent or simply to have some company?

That would be called ‘subletting’, and it’s an arrangement that you’ll need to work out with your landlord before you allow anyone into your home and charge them rent. If you don’t, you could find yourself in some trouble.

So, what exactly is subletting, and how do you go about it the legal way?

What is Subletting?

Basically, subletting involves a current renter leasing out their property to someone else. Not only can this arrangement be beneficial for people who are just looking for short-term rental units, but it can also help renters cover the cost of their long-term lease, especially when they’re not using the place 52 weeks out of the year.

Are You Allowed to Sublet?

When you rent out a unit, you typically have to sign a lease contract with your landlord. This lease will not only stipulate the term of your lease and how much your monthly rent will be, but it will also outline a number of details and terms about how you can and can’t use the property, as well as what your responsibilities and obligations are.

One of the terms that may be found in your lease if you ever intend to rent part or all of your unit out to another party at any time is a ‘sublet’ clause.

In California, you’re allowed to sublet, but only if you have written consent from your landlord before doing so. If your landlord doesn’t agree to it, then there’s no point in looking for someone to sublet from you. If you do, and you get caught, you could find yourself in breach of your lease.

This is especially true if there is no clause that specifically states that subletting is allowed or if there is a clause that actually says “no subletting.”

Landlords usually include this clause in leases in an effort to have control over who resides in their properties. Since there is no actual legal relationship between a landlord and a person who sublets, there’s little control for the landlord, compared to someone who actually has a signed lease. 

It should be noted that the rules across the state of California may differ when it comes to subletting. For instance, the rules on subletting tend to be a little laxer in San Francisco where subletting is more common and supported.

Be sure to check your lease to see if there is anything that discusses subletting. Whatever is stipulated in your lease speaks volumes. While in some states it is illegal for landlords to specifically include a clause that prohibits subletting, California is a little different with this issue.

In the Golden State, landlords have the freedom to add such a clause if they do not want anyone other than the original tenant on the lease to live in the unit and pay a separate rent fee.

How to Handle a Sublet Arrangement

If you have explicit consent from your landlord to sublet your rental unit, you’ll need to go about it the right way. Ideally, you should draft up a contract or written statement that both of you sign which will outline the terms of the arrangement. The documentation should clearly detail the following:

  • Term of the sublet
  • Name, permanent address, and signature of the subtenant

This letter should be mailed to the landlord through certified mail, requesting a return receipt. This will provide you with proof that the letter was delivered in case the situation is ever taken to court. The copy should then be saved for your own records.

You and the subtenant should both be familiar and up-to-date on the laws surrounding subleases and understand what your responsibilities are to uphold the terms of the lease agreement. 

The Bottom Line

Subletting can be a great way to supplement your rent, especially if you’re not there a few times out of the year. But at the end of the day, you’re ultimately responsible for the full rent amount as per your original lease. Even if your subtenant doesn’t pay up, you’re still required to pay. Just make sure that you choose your subtenant wisely and get written consent from your landlord before you take this route.

Bad Signs to Look For Before Buying a Home

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Buying a home is a big commitment, so you obviously want to make sure that your purchase is a sound one. That’s the reason why you might go back a second time – or even a third – before putting in an offer, then maybe even return once or twice more before sealing the deal. You want to make sure the home and the surrounding neighborhood justify the money you’re spending on the property.

When you’re scoping out homes, you might have some items on your must-have list that you’ll be keeping an eye out for. But there are also some negative things that you should look out for that may be signs that the home or the neighborhood is not up to par, including the following.

Cracks in the Exterior

While fine cracks in the foundation wall might be OK, large ones that are at least a half-inch wide or are uneven might be cause for concern. Out of all issues with a home that can be the most cumbersome and expensive to fix, structural issues would be it.

If you notice any large cracks, that might be a red flag that the foundation is faulty. This could be a result of shifting or sinking soil underneath, grading issues, or other reasons. You may want to call in a structural engineer to check out the cracks to make sure there’s no serious underlying issue with the structure or foundation that will end up costing you a lot more than what you had intended to spend.

Paint Covering Up Water Damage

Some homeowners may try to conceal any water damage done to their ceilings or walls by painting over it. What homeowners might not know is not only are they not fully covering up the damage, they may also be allowing mold to fester, which can become a health hazard.

Pay close attention to any uneven patches of paint. If it seems as though certain areas were painted over, take a closer look. There just may be signs of water damage underneath.

Lots of Room Fresheners and Scented Candles

While it’s perfectly fine to freshen up the smell in a home when it’s on the market – and even recommended – overdoing it with the fresh smells might be a cover-up for something lurking. Find out if there is something that may be releasing a foul odor in the home, such as mold, pet urine, sewage, or a leaky pipe.

No Permits For Improvements Made

If it’s obvious that some work was done on the home – such as a room addition or a new deck, for instance – ask to see the permits for the work done. If the seller can’t produce them, the work may have been done without a permit. This could spell trouble for you if the building inspector in your area catches wind of the work done.

If that happens, you’ll need to not only pay for the permit yourself but even possibly go through the motions of having to apply for it and get it approved. The inspector could even go so far as to force you to take down whatever work was done.

Uneven Floors

Floors that are obviously uneven could be a sign of structural issues. As already mentioned, this can be a costly problem to fix. In addition to floors that are not level, look for doors and windows that stick when you try to open and close them or bubbling on the floors. 

Lots of For Sale Signs

So far, we’ve been talking about the home itself. But in reality, you’re buying into the neighborhood, too. As far as the area itself is concerned, there are a few things to look for, and one of them is an overabundance of For Sale signs. If you notice that there are plenty of homes for sale in the area or on your street, find out why.

While it may just be that the demographics are changing – such as empty nesters downsizing and making room for younger families – there could be more serious issues at the hub of all the for sale signs. Tanking property values or an increase in crime are issues you’ll definitely want to know about before you put an offer on a home.

Plenty of Empty Storefronts

Like the For Sale signs on residential properties, too many vacancies in commercial units could also be a sign that a particular neighborhood is not doing so well. Bustling businesses is a good sign in neighborhoods, but entities that are either going out of business or are bailing on the area for a better one is not a good sign of a healthy neighborhood.

All the Homes Look the Same

If you’re considering buying in an HOA community, take a look at how uniform all the houses are. While HOAs typically have restrictions about what homeowners can do to their exteriors, too much uniformity might be a sign that there is little wiggle room to deck out your home the way you’d like to.

Music is Playing in All Rooms

Having music played during showings or open houses might be fine, but it could also be used to mask any noise pollution in the area, such as a nearby train, planes flying overhead, or the neighbor’s dog barking.

Neighbors’ Homes Are Poorly Maintained

Speaking of the neighbors, look at how they maintain their properties. If they’re unkempt, that could affect the value of the property you intend to buy.

The Bottom Line

Buying a house is a big deal, so make sure you take your time scoping out different properties and the neighborhoods they’re located in before you make an offer. There’s a lot of money at stake, so you want to make sure that the house and the area you buy into are exactly what you’re hoping for without any unpleasant surprises down the line.

INFOGRAPHIC: Median Home Prices Across California

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How to Help Your Adult Children Buy a House

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With the price of homes as expensive as they are these days, it can be tough for anyone to get into the housing market. Young adults who are just venturing out of their parents’ homes in hopes of getting a place of their own typically face sky-high real estate prices. And those who are graduating college typically have a huge student debt loan to pay off on top of all other living expenses.

It can be a big challenge to save up enough money for a down payment on a home, let alone all the closing costs associated with buying a house, the furniture needed to outfit the place, and the ongoing operating fees.

Let’s face it: being financially capable of buying a home when moving out of a parent’s home can be a major financial feat.

In many cases, young adults need their parents’ help to secure a home and a mortgage. Doing so can give them a big head start in life. An increase in housing prices and mounting student loan debt can be major obstacles that parents can help overcome.

But how can parents help their grown children buy a home when they’re trying to juggle their own mortgage and daily expenses? Of course, helping adult children buy a house is no simple feat. You’ll definitely want to carefully plan your strategy to assist your kids when they’re ready to fly the coop.

Here are some suggestions to follow to help your kids get into the housing market.

Buy a Home and Let Your Child Rent it From You

Many young adults end up renting when they leave their parents’ homes simply because they do not have the financial resources or credit history to secure or afford a mortgage. But rather than them paying rent to a stranger, they can rent from you instead.

If your current finances permit, consider buying a home for your child in your name and renting it out to them. While this is certainly a huge financial undertaking for you, you may be eligible to deduct your mortgage interest, property taxes, repairs, and certain home improvements come tax time on your “rental” property. Plus, the rent that your child pays you can cover the mortgage.

Buy a Home Together

If your adult child is working and has some level of credit established, consider buying the home together. Two working parties should have an easier time securing a mortgage for a home than a single working individual. If you take this route, you’d each share a certain stake in the home, depending on how you divide the equity. 

If at some point, your child is ready to take over the house on their own, you’d sell them the share that you had in it. Just make sure that your child is financially capable of holding up their end of the bargain in terms of paying their share of the mortgage and all other operating expenses.

Co-Sign the Loan

Your adult child might have a steady job and the money to comfortably cover the mortgage as well as a hefty down payment, but that doesn’t necessarily guarantee mortgage approval. Lenders will want to check out their credit history, and if your child doesn’t have any credit built up yet – or has bad credit – it might be tough or even impossible to secure a mortgage.

If that’s the case, you may have the option to co-sign on the loan. In this situation, you would sign your name on the mortgage along with your child’s. As a co-signer, you would be responsible for making the mortgage payments in the event that your child defaults on the loan.

You’ll want to make sure that your child is responsible enough to make the payments on time and in full every month and that you have the finances available in case you ever have to step in to take over the home loan.

Cover Closing Costs

On average, buyers spend about 2% to 5% of the purchase price of their home in closing costs. This can amount to a hefty bill. If you can afford it, consider helping your child come up with the money needed to cover these costs, which typically includes appraisal fees, mortgage application fees, home inspections, homeowner’s insurance, and property taxes.

Give a Down Payment as a Gift

If you have access to cash – or have sources that will allow you to liquidate your money – consider gifting your child the down payment for a new home.

According to the National Association of Realtors, nearly one-quarter of millennials used a monetary gift from their family or friends as part of their down payment.

But giving your child money to cover their down payment is not as clear-cut as handing them a wad of cash. There are rules that need to be followed in order to provide a paper trail proving that the money being provided is indeed a gift to be used towards a down payment and not a loan. Such rules may vary from one lender or mortgage product to the next.

If the money being provided is classified as a loan, your child will have to pay taxes on it. On the other hand, taxes on gift money can be deferred up to $15,000 per child (or $30,000 for couples gifting their adult children). Be sure to speak with a tax specialist to determine whether or not any taxes apply in your situation.

Ideally, the gift should be made at least a couple of months in advance of the mortgage application. There might also be some paperwork to sign verifying that the money is a gift and does not need to be paid back.

The Bottom Line

If you can swing it financially, you’d be doing your adult children a huge favor by helping them out when it comes time to buy their first home. While renting is always an option, buying and owning property comes with its own unique benefits. Getting into the market sooner rather than later can help your children start building equity and can even help them establish strong credit with every mortgage payment they make.