Dear Pat,
Are home sales slowing dramatically in our area? It seems to take weeks, instead of days, for the "sold" sign to go up on many of the houses for sale around the neighborhood. We need to sell soon. What can we do?
-- Selling Concerned
Dear Concerned,
Yes, home sales have slowed, but not dramatically. Traditionally, because the inventory is larger in the fall, buyers feel they can afford to take their time. Feverish demand which lasted unusually long this summer-and the chill of recent affairs-contributed to your sense of a dying market, but it's really just the seasonal cycle we're experiencing.
Before we go on to your second question, Concerned, please note that current low interest rates are keeping unusually large numbers of buyers in the market this fall. I've had as many calls from prospective buyers this month as I did back in May and June. But fall sellers need to pay extra attention to details in order to make their house stand out from the competition. Three important areas:
* Remove objections before buyers see your house. Tour open houses, visit friends' houses, get a fresh perspective. Then look at your house as if you were seeing it for the first time. Funny how those pet odors and junky, filled-up rooms just felt like home, isn't it? Get to work on repairs and problems by thinking like a choosy buyer.
* Spark the imagination of potential buyers. Rip out your carpeting, sand those lovely wood floors, throw colorful rugs on them, decorate with flowers and interesting objects, paint your walls with dramatic popular colors. Store away the furniture and other stuff which makes your home useful to you but which may well make it crowded to others.
* Price your home competitively. This above all! In the fall, or at any time when the demand is less than feverish, your house should be in the top three homes on the market. This means that the price and condition together add up to make it one of the best three candidates for any given buyer in its price range.
Saturday, November 10, 2001
Monday, October 15, 2001
Good Credit Opens the Door
Dear Pat,
We're newlyweds, and anxious to buy our first home. We have good incomes, but the wedding tapped out our savings. We understand that the banks won't allow us to borrow a down payment. Is there an answer for us, or do we just have to wait?
--Itching but No Scratch
Dear Itching,
Relax. No-scratch relief is available in these times of plentiful money. But first, here's a simple primer on mortgage lending requirements. The bank looks at three factors when considering your loan: your income, the size of your downpayment, and your credit history. If you are strong in two of the three you can generally get a loan, but good credit is by far the most important.
A great option for people like you, with high incomes but little cash, is a combination of two loans that make it possible for you to buy with zero down. Here's how it works: the lender arranges a traditional first mortgage at 80% loan-to-value and a 20% equity line simultaneously. This eliminates the need for private mortgage insurance (PMI), which is required with down payments of 20% or less. With this program you'll need to have excellent credit. And plan to pay a somewhat higher interest rate on that second mortgage—most equity lines are running a few points above standard mortgage rates—but your blended rate should still be better than most of us were paying just a year or two ago.
For anyone with the opposite problem-lots of cash, but an income too low to qualify for a given monthly payment-lenders now have available a "stated income" loan. By virtue of your substantial down payment (20% or more) and your excellent credit it will accept your "stated" income without verification. Expect to pay about ½% above market rates for the privilege. Higher, yes, but it still looks like a giveaway to those of us who struggled for the requisite cash, income and credit during the tight money years-to get a 12% mortgage!
We're newlyweds, and anxious to buy our first home. We have good incomes, but the wedding tapped out our savings. We understand that the banks won't allow us to borrow a down payment. Is there an answer for us, or do we just have to wait?
--Itching but No Scratch
Dear Itching,
Relax. No-scratch relief is available in these times of plentiful money. But first, here's a simple primer on mortgage lending requirements. The bank looks at three factors when considering your loan: your income, the size of your downpayment, and your credit history. If you are strong in two of the three you can generally get a loan, but good credit is by far the most important.
A great option for people like you, with high incomes but little cash, is a combination of two loans that make it possible for you to buy with zero down. Here's how it works: the lender arranges a traditional first mortgage at 80% loan-to-value and a 20% equity line simultaneously. This eliminates the need for private mortgage insurance (PMI), which is required with down payments of 20% or less. With this program you'll need to have excellent credit. And plan to pay a somewhat higher interest rate on that second mortgage—most equity lines are running a few points above standard mortgage rates—but your blended rate should still be better than most of us were paying just a year or two ago.
For anyone with the opposite problem-lots of cash, but an income too low to qualify for a given monthly payment-lenders now have available a "stated income" loan. By virtue of your substantial down payment (20% or more) and your excellent credit it will accept your "stated" income without verification. Expect to pay about ½% above market rates for the privilege. Higher, yes, but it still looks like a giveaway to those of us who struggled for the requisite cash, income and credit during the tight money years-to get a 12% mortgage!
Sunday, September 2, 2001
Fall Chores for the Winter Market
Dear Pat,
We are thinking about selling our home sometime in the next year. We are trying to get our house ready for sale but are overwhelmed by what to do next. What are the most essential tasks for us to do before we sell? How many houses sell in the winter or should we plan to wait until spring? We want to find a new home before we sell.
--Too Much To Do
Dear Too Much,
You have asked some really important questions. There is still time to complete small exterior repairs which will make a big difference if you end up selling your home in the winter months. We expect the market to be brisk all through the year: last January, for example, was extremely busy. Your dream home could come on the market any time, so you're smart to be prepared. Here's a list of chores to do before the snow falls:
--Scrape and paint as much of the exterior as necessary or feasible, but especially the front entry and threshold.
--Repair cement steps if cracked.
--Tuckpoint brick trim and foundation.
--Since you may sell in April, plant a few spring bulbs in front, get rid of scrub trees and weeds from garden.
--Clean garage and yard now (you don't want to be seen trying to chisel the kids' trikes out of the yard as the buyers are walking up to your house in January!).
--Clean gutters after the leaves fall (during the 30 seconds before the ice storm).
--Check the roof and make repairs now. Roofers work all year, but delays caused by snow cover or ice can be a problem during a transaction.
My list is far from complete, and I'm sure you can think of many other pre-selling chores that you'd rather do now, while the temperature is still above freezing. And, yes, we haven't covered anything on the all-important interior-that's another topic. But by getting started as soon as possible on the outside tasks, you'll gain an advantage over many other sellers if you go on the market in the winter.
We are thinking about selling our home sometime in the next year. We are trying to get our house ready for sale but are overwhelmed by what to do next. What are the most essential tasks for us to do before we sell? How many houses sell in the winter or should we plan to wait until spring? We want to find a new home before we sell.
--Too Much To Do
Dear Too Much,
You have asked some really important questions. There is still time to complete small exterior repairs which will make a big difference if you end up selling your home in the winter months. We expect the market to be brisk all through the year: last January, for example, was extremely busy. Your dream home could come on the market any time, so you're smart to be prepared. Here's a list of chores to do before the snow falls:
--Scrape and paint as much of the exterior as necessary or feasible, but especially the front entry and threshold.
--Repair cement steps if cracked.
--Tuckpoint brick trim and foundation.
--Since you may sell in April, plant a few spring bulbs in front, get rid of scrub trees and weeds from garden.
--Clean garage and yard now (you don't want to be seen trying to chisel the kids' trikes out of the yard as the buyers are walking up to your house in January!).
--Clean gutters after the leaves fall (during the 30 seconds before the ice storm).
--Check the roof and make repairs now. Roofers work all year, but delays caused by snow cover or ice can be a problem during a transaction.
My list is far from complete, and I'm sure you can think of many other pre-selling chores that you'd rather do now, while the temperature is still above freezing. And, yes, we haven't covered anything on the all-important interior-that's another topic. But by getting started as soon as possible on the outside tasks, you'll gain an advantage over many other sellers if you go on the market in the winter.
Wednesday, August 1, 2001
Landscaping: Digging for Gold
Dear Pat,
My husband and I just bought our first house, which needs lots of work inside and out. We don't expect to live here more than five years, and naturally we want to use our resources to get the best price when we sell. My husband wants to start with wall and ceiling repair, but I want to work on the yard right away. I say the neighbors have waited long enough. Can you settle this?
--First Things First
Dear First,
Your concern for your neighbors is admirable, and you may be rewarded at the closing table as well as in heaven: I know of no home improvement with a better return than landscaping. I don't have hard data to support this, but I have seen that a $1000 landscaping investment can add perhaps $10,000 to value in just a few years. It's important to start planting trees and bushes right away-every year you wait can make a big difference in how mature and impressive your yard will look to a buyer.
Start with a top view of the house and yard, and lay out the design of how you want the yard to look eventually. Now is the time to plan for a future patio or deck-you'll want to plant complementary shade or light-filtering trees right away, even if you build the structure years from now. Flower gardens add charm and value as well, of course, but they can be planted at any time in the future. Trees and shrubs should be planted immediately, although the fastest-growing varieties will not always be your best choice-nurseries, books, landscape designers and grateful neighbors can help you make the right decisions.
So get your husband to put aside the trowel for a while, First, and hand him a shovel-think of it as digging for gold. May your backs be strong, and your ground soft!
My husband and I just bought our first house, which needs lots of work inside and out. We don't expect to live here more than five years, and naturally we want to use our resources to get the best price when we sell. My husband wants to start with wall and ceiling repair, but I want to work on the yard right away. I say the neighbors have waited long enough. Can you settle this?
--First Things First
Dear First,
Your concern for your neighbors is admirable, and you may be rewarded at the closing table as well as in heaven: I know of no home improvement with a better return than landscaping. I don't have hard data to support this, but I have seen that a $1000 landscaping investment can add perhaps $10,000 to value in just a few years. It's important to start planting trees and bushes right away-every year you wait can make a big difference in how mature and impressive your yard will look to a buyer.
Start with a top view of the house and yard, and lay out the design of how you want the yard to look eventually. Now is the time to plan for a future patio or deck-you'll want to plant complementary shade or light-filtering trees right away, even if you build the structure years from now. Flower gardens add charm and value as well, of course, but they can be planted at any time in the future. Trees and shrubs should be planted immediately, although the fastest-growing varieties will not always be your best choice-nurseries, books, landscape designers and grateful neighbors can help you make the right decisions.
So get your husband to put aside the trowel for a while, First, and hand him a shovel-think of it as digging for gold. May your backs be strong, and your ground soft!
Friday, July 6, 2001
Open Wide . . . Now Close!
Dear Pat,
After months of looking we finally found a house that's a good fit for us, but it still needs work and of course it didn't come cheap. We're especially galled by the seller's stubborn insistence on an early closing date, nearly 5 weeks before our lease is up. This will cost us an extra $800, and it hurts to waste any of our limited fix-up money to pay for two places at once. Is there any way to deal with this?
--Bitter Pill to Swallow
Dear Bitter Pill,
Small comfort, I know, but you're not alone as you gulp an unwelcome demand from a seller in today's hot market. Here are a few drops of nectar that might help sweeten the experience:
* It may be too late to reopen this transaction, but adding to the selling price with the seller paying a portion of your closing costs can free up cash for repairs and renovation.
* Remember that interest is always paid in arrears except for the partial month paid ahead at closing. So your first full payment won't be due until the first day of the second month following closing. This grace period allows you to actually make only one payment at a time (although of course you still owe the month's interest, as you'll discover when you sell the house).
* You'll have the luxury of being able to work on the new space and still be able to return to a clean and organized home. Most first-time buyers don't realize just how consuming and stressful home renovation can be. Floor sanding, especially, can now be done with a minimum of disruption to your lives. Enjoy your chance to get away from the "job site," just like a contractor does-you'll be better rested and more efficient when you work.
* Finally, try to maintain your perspective on the whole transaction: if you think of the $800 as an additional closing cost imposed by the lender, for example, disclosed when you were pre-approved for a loan-would that have kept you from house-shopping? When you consider the appreciation to be gained in today's fast-rising market, a month's rent lost can be viewed as a relatively minor business expense.
After months of looking we finally found a house that's a good fit for us, but it still needs work and of course it didn't come cheap. We're especially galled by the seller's stubborn insistence on an early closing date, nearly 5 weeks before our lease is up. This will cost us an extra $800, and it hurts to waste any of our limited fix-up money to pay for two places at once. Is there any way to deal with this?
--Bitter Pill to Swallow
Dear Bitter Pill,
Small comfort, I know, but you're not alone as you gulp an unwelcome demand from a seller in today's hot market. Here are a few drops of nectar that might help sweeten the experience:
* It may be too late to reopen this transaction, but adding to the selling price with the seller paying a portion of your closing costs can free up cash for repairs and renovation.
* Remember that interest is always paid in arrears except for the partial month paid ahead at closing. So your first full payment won't be due until the first day of the second month following closing. This grace period allows you to actually make only one payment at a time (although of course you still owe the month's interest, as you'll discover when you sell the house).
* You'll have the luxury of being able to work on the new space and still be able to return to a clean and organized home. Most first-time buyers don't realize just how consuming and stressful home renovation can be. Floor sanding, especially, can now be done with a minimum of disruption to your lives. Enjoy your chance to get away from the "job site," just like a contractor does-you'll be better rested and more efficient when you work.
* Finally, try to maintain your perspective on the whole transaction: if you think of the $800 as an additional closing cost imposed by the lender, for example, disclosed when you were pre-approved for a loan-would that have kept you from house-shopping? When you consider the appreciation to be gained in today's fast-rising market, a month's rent lost can be viewed as a relatively minor business expense.
Friday, June 1, 2001
Are Prices Falling?
Dear Pat,
Is it just my perception, or is the recent home buying frenzy beginning to die out? Our friends finally got an offer, not quite up to their asking price, after 8 days on the market. What happened to multiple offers? We're going on the market soon, and we're concerned that it may be . . .
--Too Late For Us
Dear Too Late,
Not to worry, house prices in Seward/Longfellow are alive and well. The "frenzy" you long for (a sentiment not shared by frustrated buyers, or their agents) occurs most often in the first quarter of the year. For some mysterious reason the months of January and February feel like Spring to buyers, while still chilling sellers to the bone. Thus every winter we experience a rush of buyers searching furiously through a relatively small selection of available houses, and competing with offers often far above the asking price. Later, in the Spring, inventory begins to catch up to demand and fewer multiple offer situations occur.
But the law of supply and demand isn't the only factor affecting your perception, Too Late. Equally important is the way we price homes in the first place: no one knows how high the market will rise in the new year until the houses start selling, so early-year prices are based on the past year, with a little added in anticipation of high demand. It's not unlike an auction, when bidding from buyers ultimately determines value. Realtors carefully watch the final prices of these early-year sales, as they perform market evaluations for sellers in the Spring. So a house placed on the market in May is likely to be listed at a price equal to what multiple offers brought a similar home in February. If multiples occur less often after the first quarter it's simply because the price increase has already been established-in other words, your friends probably sold their home for more money than any of us thought possible in January, before the first homes sold this year.
Is it just my perception, or is the recent home buying frenzy beginning to die out? Our friends finally got an offer, not quite up to their asking price, after 8 days on the market. What happened to multiple offers? We're going on the market soon, and we're concerned that it may be . . .
--Too Late For Us
Dear Too Late,
Not to worry, house prices in Seward/Longfellow are alive and well. The "frenzy" you long for (a sentiment not shared by frustrated buyers, or their agents) occurs most often in the first quarter of the year. For some mysterious reason the months of January and February feel like Spring to buyers, while still chilling sellers to the bone. Thus every winter we experience a rush of buyers searching furiously through a relatively small selection of available houses, and competing with offers often far above the asking price. Later, in the Spring, inventory begins to catch up to demand and fewer multiple offer situations occur.
But the law of supply and demand isn't the only factor affecting your perception, Too Late. Equally important is the way we price homes in the first place: no one knows how high the market will rise in the new year until the houses start selling, so early-year prices are based on the past year, with a little added in anticipation of high demand. It's not unlike an auction, when bidding from buyers ultimately determines value. Realtors carefully watch the final prices of these early-year sales, as they perform market evaluations for sellers in the Spring. So a house placed on the market in May is likely to be listed at a price equal to what multiple offers brought a similar home in February. If multiples occur less often after the first quarter it's simply because the price increase has already been established-in other words, your friends probably sold their home for more money than any of us thought possible in January, before the first homes sold this year.
Thursday, May 3, 2001
Refinancing? Home Equity Loan? Borrower Beware!
Dear Readers,
You may have read lately in the national press about unscrupulous practices by some lenders for refinance or home equity loans. These types of loans are typically solicited by a lender via mail or phone, and are almost never subject to third-party scrutiny (such as a Realtor) because there is no real estate transaction involved. Thus a perfect opportunity is created to legally bilk millions of dollars from an unsuspecting public, in the form of "broker's fees" and other hidden charges, often accompanied by preposterous interest rates and draconian pre-payment penalties.
Like so many of you, I've been aware of the problem-although it has always been easy to think of these abuses as occurring far away, in more lawless places such as Florida! But the most recent, and the worst, story I've heard is all too local; it comes from clients I worked with several years ago:
Needing a larger home for their growing family, they decided to borrow about $10,000 last fall to make needed improvements to their current home, with plans to sell this year. (Good so far, but I wish they had called me at this point.) A seemingly well-timed phone solicitation from an unnamed suburban mortgage broker eventually led them into an utterly unnecessary refinance of their first mortgage, far above the market rate, with an extra 4% broker's fee nestled in the well-padded closing costs. And it gets worse: the outrageous closing costs, plus the smaller debt payoffs required by this lender in order to make the loan, left only $1000 proceeds for the borrowers!
The lender's solution? An accompanying home equity loan (their specialty) at 13%. The mortgage also contains a pre-payment penalty (almost unheard of these past 20 years), making it terribly expensive for my clients to sell their house at all.
Space doesn't permit a full retelling of this cautionary tale-suffice it to say the lawyers are on the case, and we wish them well. Of course, most mortgage brokers are ethical, and devoted to bettering the lot of their clients-but how do we sort them out, in the daily flood of solicitations we receive from reputable-sounding companies? My suggestion: don't try. Refinancing or equity loans don't have to be do-it-yourself projects. Your Realtor knows good and honest loan people; she (or he) works with them every day, from the largest banks to the small independent mortgage brokers. For refinance, start with the mortgage banker who obtained your first mortgage. For equity loans, start with the institution that handles your checking and savings accounts. Equity loans shouldn't cost more than the price of an appraisal. Talk to more than one lender, crunch the numbers carefully, and don't be afraid to ask "dumb" questions. Good luck!
You may have read lately in the national press about unscrupulous practices by some lenders for refinance or home equity loans. These types of loans are typically solicited by a lender via mail or phone, and are almost never subject to third-party scrutiny (such as a Realtor) because there is no real estate transaction involved. Thus a perfect opportunity is created to legally bilk millions of dollars from an unsuspecting public, in the form of "broker's fees" and other hidden charges, often accompanied by preposterous interest rates and draconian pre-payment penalties.
Like so many of you, I've been aware of the problem-although it has always been easy to think of these abuses as occurring far away, in more lawless places such as Florida! But the most recent, and the worst, story I've heard is all too local; it comes from clients I worked with several years ago:
Needing a larger home for their growing family, they decided to borrow about $10,000 last fall to make needed improvements to their current home, with plans to sell this year. (Good so far, but I wish they had called me at this point.) A seemingly well-timed phone solicitation from an unnamed suburban mortgage broker eventually led them into an utterly unnecessary refinance of their first mortgage, far above the market rate, with an extra 4% broker's fee nestled in the well-padded closing costs. And it gets worse: the outrageous closing costs, plus the smaller debt payoffs required by this lender in order to make the loan, left only $1000 proceeds for the borrowers!
The lender's solution? An accompanying home equity loan (their specialty) at 13%. The mortgage also contains a pre-payment penalty (almost unheard of these past 20 years), making it terribly expensive for my clients to sell their house at all.
Space doesn't permit a full retelling of this cautionary tale-suffice it to say the lawyers are on the case, and we wish them well. Of course, most mortgage brokers are ethical, and devoted to bettering the lot of their clients-but how do we sort them out, in the daily flood of solicitations we receive from reputable-sounding companies? My suggestion: don't try. Refinancing or equity loans don't have to be do-it-yourself projects. Your Realtor knows good and honest loan people; she (or he) works with them every day, from the largest banks to the small independent mortgage brokers. For refinance, start with the mortgage banker who obtained your first mortgage. For equity loans, start with the institution that handles your checking and savings accounts. Equity loans shouldn't cost more than the price of an appraisal. Talk to more than one lender, crunch the numbers carefully, and don't be afraid to ask "dumb" questions. Good luck!
Sunday, April 1, 2001
Bear Market Jitters
Dear Pat,
How will the big stock market drop affect our property value? It seems to me that a poor stock market means less money for down payments and more cautious house shoppers.
---Not Crash Proof
Dear Crash,
You can take your helmet off, since history is on the side of the Seward/Longfellow homeowner. It's true that dramatic price increases in recent years have a parallel in the mid-to-late 1970's, but when the economy cooled in the early 80's local house prices held steady--although the rate of appreciation did slow to a crawl. Prices continued to rise following the 1987 stock market crash (favorable interest rates had far more influence on housing demand than did stock market worries). Nor were our prices affected by the early 90's economic slowdown. We need to remember that our housing stock in the city is constant, unlike newer suburbs or commercial developments, where supply is always anticipating demand. And let's note the fly-over factor: since the Midwest has not experienced the wild inflationary price gains seen on both Coasts, our fast-rising values remain relatively realistic, albeit painful to buyers (and their Realtors!). Even in California, say the experts, only the move-up market is likely to see prices flatten or fall as the dot.coms evaporate.
How will the big stock market drop affect our property value? It seems to me that a poor stock market means less money for down payments and more cautious house shoppers.
---Not Crash Proof
Dear Crash,
You can take your helmet off, since history is on the side of the Seward/Longfellow homeowner. It's true that dramatic price increases in recent years have a parallel in the mid-to-late 1970's, but when the economy cooled in the early 80's local house prices held steady--although the rate of appreciation did slow to a crawl. Prices continued to rise following the 1987 stock market crash (favorable interest rates had far more influence on housing demand than did stock market worries). Nor were our prices affected by the early 90's economic slowdown. We need to remember that our housing stock in the city is constant, unlike newer suburbs or commercial developments, where supply is always anticipating demand. And let's note the fly-over factor: since the Midwest has not experienced the wild inflationary price gains seen on both Coasts, our fast-rising values remain relatively realistic, albeit painful to buyers (and their Realtors!). Even in California, say the experts, only the move-up market is likely to see prices flatten or fall as the dot.coms evaporate.
Monday, January 1, 2001
To Have and to Hold…But When?
Dear Pat,
My sister recently made an offer to buy a house in South Minneapolis. She is supposed to close January 26th but she can't move in until the 28th. Can this be right? I think she should be able to move into her new house as soon as she signs the papers, just like we did. What if the sellers damage the house or leave a lot of junk? ---Big Sister
Dear Big Sister,
Your sisterly concern is admirable, but probably unnecessary. Date of possession is typically negotiated at the time of the offer, and is usually determined by the date the sellers can move into their next home. Sellers normally need their proceeds to close on their next home, and time-consuming tasks of moving, cleaning, and last-minute repair often require extra time. For example, a chain of 3 or 4 transactions can close in one day, but this chain of buyers and sellers certainly cannot move into each other's houses on the same day. Thus it has become a customary buyer courtesy to allow the sellers as much as 2 days to move, depending on the situation.
For many reasons, sellers sometimes ask to stay in the home for a longer period. In these cases, they typically sign a rent-back agreement for a daily rental equal to the buyers' daily mortgage cost, plus insurance and utilities. A damage deposit can ease a buyer's mind in these situations, especially if the buyer feels the sellers are likely to leave any unwanted junk behind. But buyers should use common sense and discretion in these situations: a damage deposit requirement can seem insulting to sellers who have cared for their property for years, and who may well pride themselves on leaving the place "clean as a whistle." I personally don't advise my clients to insist on a damage deposit unless the sellers seem to be obviously poor risks. Most of the time it's not worth risking an otherwise amicable buyer-seller relationship. I've seen happy sellers offer to leave useful items for new buyers, such as dehumidifiers, window air conditioners, yard equipment and furniture. Plus, many Realtors (myself included) will offer to guarantee that junk and debris will be removed, or pay to have it removed if the sellers fail to perform.
So everything's probably all right, Big Sister. Now, show her how to pack!
My sister recently made an offer to buy a house in South Minneapolis. She is supposed to close January 26th but she can't move in until the 28th. Can this be right? I think she should be able to move into her new house as soon as she signs the papers, just like we did. What if the sellers damage the house or leave a lot of junk? ---Big Sister
Dear Big Sister,
Your sisterly concern is admirable, but probably unnecessary. Date of possession is typically negotiated at the time of the offer, and is usually determined by the date the sellers can move into their next home. Sellers normally need their proceeds to close on their next home, and time-consuming tasks of moving, cleaning, and last-minute repair often require extra time. For example, a chain of 3 or 4 transactions can close in one day, but this chain of buyers and sellers certainly cannot move into each other's houses on the same day. Thus it has become a customary buyer courtesy to allow the sellers as much as 2 days to move, depending on the situation.
For many reasons, sellers sometimes ask to stay in the home for a longer period. In these cases, they typically sign a rent-back agreement for a daily rental equal to the buyers' daily mortgage cost, plus insurance and utilities. A damage deposit can ease a buyer's mind in these situations, especially if the buyer feels the sellers are likely to leave any unwanted junk behind. But buyers should use common sense and discretion in these situations: a damage deposit requirement can seem insulting to sellers who have cared for their property for years, and who may well pride themselves on leaving the place "clean as a whistle." I personally don't advise my clients to insist on a damage deposit unless the sellers seem to be obviously poor risks. Most of the time it's not worth risking an otherwise amicable buyer-seller relationship. I've seen happy sellers offer to leave useful items for new buyers, such as dehumidifiers, window air conditioners, yard equipment and furniture. Plus, many Realtors (myself included) will offer to guarantee that junk and debris will be removed, or pay to have it removed if the sellers fail to perform.
So everything's probably all right, Big Sister. Now, show her how to pack!
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