A quick primer on what stays or goes with the sale
When a homeseller sells and moves out from their property, it’s expected that certain things are taken with them, like their clothing and household decor. And some things are left behind, such as the air conditioning unit and the dishwasher.
Thankfully, the California Residential Purchase Agreement addresses what you can and can’t take with you when your house is sold. It’s worth reviewing the purchase agreement with your agent, whether you’re buying or selling; doing so can give you some helpful clarity.
With regard to what you can and can’t take with you when you sell, there are some basic rules to keep in mind. A few words of caution. If a Seller take things they’re not supposed to you may face a lawsuit after the sale.
So first and foremost, remember that you can’t take anything that’s legally considered to be part of the property. This includes shrubs and plants. You may have a favorite rose bush that you’d like to dig up and replant at the new place, but it’s actually illegal to do so unless you expressly excluded it from the sale of your listing or in your negotiations with the buyer.
Along similar lines, buyers and sellers sometimes have misunderstandings about backyard items, such as patio tables, basketball hoops, and playground equipment. The rule of thumb here is that, if it’s anchored to the ground, it’s supposed to stay with the property; if it’s not anchored, you’re free to take it. Again, if you need an exception to this rule, you have to clear it with the buyer and negotiate accordingly.
So, with regard to the basketball hoop: If it’s a kiddie-sized one with an inflatable base, you’re free to take it. But if you’ve placed it into a hole in the ground and poured concrete all around it, then it counts as part of the property, and needs to stay.
Picnic tables and outdoor furniture will usually be able to go with you… again, unless you’ve somehow anchored them to the ground.
As far as inside home decor is concerned, buyers and sellers can often get into disagreements about lighting fixtures. You may have a beloved chandelier, but the rule of thumb is that lighting fixtures are part of the home and thus can’t be taken, unless you specify in your listing that they are excluded from the sale and will be replaced prior to close or a credit to the Buyer.
Helpful Tip: Simply remove those lighting fixtures before you list and replace them with something a little less ornate. If they’re not actually installed at the time of listing, then there shouldn’t be any confusion about whether or not you’re taking them with you.)
And what about window treatments? Rods and blinds are considered to be part of the house, and you’re not supposed to remove them. Though again, if you have window fixtures you’re really attached to, you can remove them and replace them before you list and avert the problem altogether.
Flat screen wall mounted TVs are often thought to be part of the sale. In the California Purchase Agreement they are excluded from the sale, but the wall mounts remain. Now a prospective Buyer can negotiate for the Flat Screen TV to be included with the sale. Again a Seller can remove the TV and mount prior to the listing to avoid the issue. (I recommend to repair the drywall from the Flat Screen TV mount, the purchase agreement simplifies the issue by allowing the mount to remain.
If you or someone you know recently purchased a home with a septic system, or are considering purchasing a home that uses a septic system, there are a number of things you need to know and consider in advance. Here’s a quick overview on septic systems, how they work, and what maintenance a homeowner needs to know:
Rural Properties Typically Use Septic Systems
In South Placer looking at rural homes for sale it isn’t unusual to find a septic system to be used to dispose of the liquid waste. A well designed and running septic is nothing that should concern a future homeowner. Just make sure you get the information you need and proper inspections to make sure its in good operating condition before you buy the home.
How It Works
Here’s the short version: A pipe drains all of the wastewater from your home and deposits it in a watertight underground tank. This is where solids (called sludge) settle to the bottom, and floatable materials (called scum) rise to the top. Both sludge and scum remain in the tank and are periodically pumped out by a professional septic service technician.
There is also a middle layer made up of liquid wastewater (called effluent), that drains from the tank into a buried drainfield in your yard, which helps the wastewater disperse into the soil. The soil in your yard filters out any contaminants, and the beneficial bacteria in the soil break down organics in the wastewater to use as plant food.
Here is a deeper dive into how aseptic system work:
Bacteria are what makes a septic system work. They break down waste, leaving water clean enough to safely percolate down into the earth. The whole system is designed to keep bacteria healthy and busy. Some live in the tank, but most do their work in the drain field.
1. All waste flows to the septic tank. 2. Watery waste, called “effluent,” fills most of the tank. Anaerobic bacteria begin breaking down the organic material in the effluent. 3. A layer of sludge falls to the bottom. Sludge is composed of inorganic solids and the byproducts of bacterial digestion. 4. A layer of scum floats to the top. Scum is primarily composed of fats, greases and oils.
The septic tank acts like a settling pond. Greases and oils float to the top. Heavier solids sink to the bottom. 5. A filter prevents most solids from entering the outlet pipe. 6. Effluent flows to the drain field.
The drain septic field provides a large area where bacteria can thrive and treated water can seep into the ground. 7. Holes in the drain septic field pipe allow effluent to seep into surrounding gravel.
Gravel around pipes allows water to flow into soil and oxygen to reach bacteria. 8. Aerobic bacteria in gravel and soil complete decomposition of the waste. 9. Clean water seeps down into the groundwater and aquifer.
The Septic System is Completely Separate
Both the potable water source for your home (a well, city line, etc.) and your septic system are completely separate from each other. The septic system is intended to disperse contaminated water back into the ground as a means of filtering it, but that effluent water does not come in contact at any point in time with your drinking water.
Types of Septic Systems
The only difference between types of septic systems is the size of the drain field and the soil in a home’s yard. For example, liquid waste sometimes encounters difficulty in dispersal when it is drained into clay-rich soil as opposed to sandy soil. When that occurs, the drain field will need to be large enough to handle the volume of effluent the average family generates. To prevent the possible clogging of a septic system, it is essential not to use toilets or sinks as a disposal for dental floss, coffee grounds, cat litter, paint, chemicals, or other non-biodegradable materials. However you should be aware that septic systems that need to be more “engineered” because of soil conditions are more expensive to maintain, repair or replace.
What Maintenance do I need to do with a Septic System?
The system system tank will need to be pumped every so often. The periodic pumping of a septic tank must be handled by professionals to remove the accumulated sludge and scum. How often the tank needs to be pumped depends largely on how large the tank is and how much wastewater the household generates. A three-bedroom house will most likely have a 1500-gallon septic tank that needs to be drained every three to five years, though depending on the waste generation and soil conditions, it may need to be done annually.
In addition to pumping, the tank should be regularly inspected for any leaks or clogs. The telltale signs that the system may be clogged include bad smells and slowly draining or gurgling fixtures. Also, it is very important to avoid the use of septic tank additives, which claim to break down sludge and scum within a septic tank to reduce for pumping. Studies have shown these additives can actually damage your septic system, resulting in a costly repair.
How Much Does It Cost?
There are several factors that go into determining the cost of draining your septic system, including tank size, drainfield size, and distance for hauling away waste. Pumping a 1500-gallon tank might cost somewhere in the $400+ range depending on the specific circumstances of the job based on your home’s tank size, location, and access to pump.
Before Buying a Home with a Septic Tank and System
You need to understand the septic system for the home you are purchasing.
You should inquire and ask for what the Seller knows about the system including the last time it was pumped and if any repairs were made to the septic system.You should go to the county or county website to research what septic system was installed at the property.
You should go to the county or county website to research what septic system was installed at the property. Make sure you get the complete design including the location of the septic field and any reserve field. Septic tanks are sized based upon bedrooms in the home. Also note the age and type of septic system design. Please note the distance from the home and the well if there is one.
You should schedule an septic tank pumping and inspection. On the contract to purchase your agent can request that the Seller perform this pumping and inspection. I recommend that this step be done prior to the close of escrow and unless its is available as a pre-sale inspection report you should not accept a report over 6 months old.
Inspections can give you important details about the condition of the home’s septic system but is often limited to the tank, You should walk the leach field and make sure there are no shrubs, trees, or pasture animals on the leach field.
Quick Tip: Adding a bedroom to the home? Adding a bedroom may require you to increase the capacity of the septic system. Planning to put in a pool, garage, granny flat, etc?... Its critical to understand the septic system design or you may be faced with an expensive cost to move the tanks and or leach field to accommodate the pool or garage you were hoping to add.
An Old Septic System or one Needing Repair can be a Big Expense
Even a well-designed and installed system can need replacement after 25 to 30 years, and replacement costs can vary widely. Most experts state a basic gravity-feed septic system can cost as little as $4,000 to replace, but if your system requires electrical or mechanical parts of function correctly, the replacement cost can range anywhere from $15,000 to $35,000. Replacing a Septic Tank
If you are looking at rural property it makes sense to make sure your real estate agent can help you understand buying a home with a septic. A septic system can be a big issue if you don’t do your homework before you complete the purchase of the home.
In South Placer, wells are the water supply to the residence found in rural and off-grid properties. Newer subdivisions in South Placer rural areas more often than not will have a public or private water agency provide treated water for the homes. In Loomis for example, Cambridge Estates, Sierra De Montserrat, MOnte Claire, etc the Placer County Water Agency (PCWA) provided service so the new homes built could connect to the local public water system. Let’s help you get the information you need when evaluating a Loomis or South Placer rural property with a well.
If you’re looking to buy or found a rural and or new home off-grid or in an area that isn’t served by the public water system, you’ll need to know a bit about wells. Although this subject can seem intimidating for those who are unfamiliar with well-water systems, there are only a few points you need to keep in mind to ensure you’re making a well-informed (agent humor) purchase. I also recommend working with an experienced real estate agent who buys rural or off-grid properties to help you decide if a home with a well is not an issue.
Water Wells Need to be Tested
Well Water Needs to Be Tested for Drinkability
The most pressing issue a buyer needs to investigate is the safety and purity of their future home’s water. Since the same water source (aquifer) could be accessed by many homes spanning a wide distance, what affects a nearby home may affect your home as well. Its important to note the animals, farming, and commercial business near your property with a well.
However the real validation of your well is a production and potability test of the well on the property your considering to purchase. If you are luck the Seller will have done a pre sale well test for you to look for. Again you shouldn’t rely on any tests older than 30 days or you see a holding water tank on the property (water tanks are usually an indicator of a well that cannot produce over 1200 gallons in a 4 hour period. In Placer County, the water is tested for potability (bacteria). Wells can also be tested for PH, hardness, turbidity, minerals, metals, radon, and volatile organic compounds but it is usually optional. Again your agent should be able to help you device which tests you need.
Test the Output and Production of the Well
Even if the well water itself is deemed safe for drinking, there can be issues that will affect its usability in your new home: namely low storage capacity and low flow rate.
Luckily, testing for these is simple. In general, wells store about 1.5 gallons of water per foot, so if you find out the well depth, pump depth, and water level, you’ll be able to figure out what the capacity of your well is.
Flow rate, the measure of how much water per minute is being pumped from the well, can be calculated based on the number of gallons the pressure tank stores before the pump starts and how long it takes the pump to turn on and off. Regulations require homes to have a flow rate of between 3 to 5 gallons per minute, but it’s best to find a home with 6 to 12 gallons per minute.
Verify Your Well is a Safe Distance from Septic Tank and Leachfield
Homes that require or use a well for water for the property usually will also make use of a septic tank for waste storage and disposal. Placer County requires a minimum distance of 100 feet distance all wells need to be in relation to any septic system. This prevents septic water effluent or a septic system failure from reaching the well and contaminating the water supply with harmful materials. The Placer County Building Department or the Seller should be able to identify both where the well and any septic system is located. Checking the original well permit for the properly is another key piece of information since there is a well drillers report and a potability (drinkability) test done after the well was drilled and capped.
Avoid Hand Dug or Shallow Wells
The two major types of wells are drilled and bored wells. Most shallow and hand dug wells don’t penetrate bedrock or granite and are more susceptible to groundwater and soil contamination As a buyer you may have to manage and maintain the potability of the water. Also the production of the well may be inadequate in the future and you might be facing the expense of putting in a new well for your water supply.
There is More Than Just the Well to Look At When Buying a Home
The average well will last for about 30 to 50 years, but if the well is producing water satisfactorily you can proceed with the purchase. From my experince wells may start experiencing issues anytime, most likely the pieces and parts of the system that gets the water into your house. Be aware of the age of the well pump, the motor relay, pressure switch, and pressurized water tank. Check out the condition of the water lines to the house from the well, as well as the electrical power from the house to the well. When the test is being done for the well test and potability, have the well testing company inspect the rest of the system and give you a bid to replace it. I’ve lived in Loomis for 17 years on a well and I’ve replaced the entire system that supplies the water to the house. The only thing I haven’t replaced is the well itself.
Quick tip: Another consideration with rural property is irrigating the property. Is your well for the water to the house also used to irrigate the property? Used to supply water to livestock or animals? Most wells aren’t going to have the size and capacity to pump the water you need to supply water to a 1+ acre property. They may however have the production or output but you might need the well tester to test the production with his pump rather than the well pump.
Final Thoughts on Buying a Home with a Well
Wells on rural properties are a proven way for getting potable drinking water to the house. It shouldn’t be a deal breaker if you take your time and get the time to understand how water is supplied to the property and the home(s). Its critical to also inquire about how the property is irrigated since in South Placer and Placer County we have irrigation water available from the Placer County Water Agency and Nevada Irrigation District which may be already at the property or there is availability of irrigation water being brought to the property (this isn’t simple and might be expensive, but in general it’s a good thing if irrigation water is available).
Water is one of the biggest issues t understand when buying rural property in South Placer. I recommend you make sure to get all the information you need about how water is deliver to the property, how much, and if to you house is it safe to drink. Again I can’t recommend this enough, about working with an experienced real estate agent who buys rural or off-grid properties to help you decide if a home with a well is not an issue for purchase.
Wondering how to get your house ready to sell? If you’re looking to sell your home during primetime which is during the first six months of the year in South Placer (we’ve got great weather!). Learn more about getting your home ready to sell.
How to get your house ready to sell
Unfortunately, getting a house ready to sell is not as easy as posting an add on Facebook. If you want your home sweet home to stand out from the competition, you need to make it shine. So, here’s how to whip your place into shape by discovering any problems and upgrading the eyesores. Because like it or not, your home has sustained some wear and tear over the years. Here’s how to assess the work you should do and find out which if any updates will pay off to help you sell.
1. Look at the big ticket items in your home, are they old?
No matter how great your home looks at first glance, any savvy buyer will point to various parts and pop the question: How old? And since guesstimates won’t cut it, you will need to gather some paperwork to get your house ready to sell. If you’ve purchased your home in the past few years, check your home records or seller’s disclosure for the age or last repair of big items (namely your roof, HVAC system, water heater, and gutters), or dig up copies of your own maintenance records or receipts.
Pro Tip: How long items last depends on a lot of factors such as the model and how well it’s been maintained, but you can get a general idea of average lifespan. For example:
Wood shingle and shake roof: 15 to 30 years
Central air-conditioning unit: 15 years
Electric water heater: 14 years
Gutters: 30 years
2. Do your own walk-through
Be a “buyer” and go through your home, room by room. Look for signs of damage that might drag down its value. Need inspiration? Think about these types of issues looking at your home:
Wood rot around outside door frames, window ledges, and garage doors. Condensation and rain can cause these areas to weaken and rot.
Water stains on the ceiling or near doors and windows. This can indicate a leaky roof or rain seeping in from outside.
Leaks under sinks or around toilets.
Bulges under carpet or discoloration on hardwood floors, which can indicate flooding problems or an uneven foundation.
Next, test what’s called the “liveability” in every room. For example: Cracks visible in the walls and floor, doors that don’t shut right, broken handles on cabinets, basically anything that doesn’t work perfectly should be repaired. And don’t forget to inspect the outside.
3. Bring in the pros to streamline the fixing
Once you’ve done your own walk-through, you may want to have a pro take a second look before you decide you’re ready to sell. These people can spot flaws you overlooked, because either you’re used to them or you didn’t realize they could cause trouble. My recommendation is to get a pre sale inspection for your home. There are companies specializing in a comprehensive home inspection. While your at it get the roof and order a wood pest inspection as well.
Pro Tip: While the cost varies, people pay $300+ for a home inspection. Go to the American Societyof Home Inspectors to find an inspector in your area. It may cost a bit, but it will buy you the peace of mind of knowing you’re not in for any surprises down the road. In fact, having a home inspection report handy to show buyers can inspire confidence that they (and you by association) aren’t in for any nasty surprises as you move toward a deal.
4. Decide what needs renovating or not
Once you know what in your house could stand for repairs, it’s time to decide what to fix. Don’t worry, not everything needs to be done before your home is ready to sell. And while you’re probably not thrilled at the idea of renovating a property you’re going to sell, certain fixes will give you an edge over the competition, which means more/better offers. Remember, to think like a buyer when selling your home. Fix what matters and you’ll get better results selling.
But don’t just obsess over the obvious—e.g., your kitchen could stand for new cabinets. After all, many buyers will want to tweak cosmetic details to their own tastes, so you could be throwing money down the drain. Instead, focus on fix-its that are more relevant to living in the home, buyers like to know are in good shape.
Pro Tip: If you are going to make the home shine. A recent study by the National Association of Realtors® found that upgrading hardwood floors reaps an estimated 100% return on investment, essentially paying for itself. Upgrading your insulation can net you a 95% ROI, a new roof a whopping 105%! Because what buyers don’t like to know they’ve got a solid roof over their heads?
Your home is listed, and you did your list price homework with your agent. It’s on the market, but is it the right price? There was all the pricing tactics and strategy ad nauseum of setting the right listing price. Now it’s showtime, and decisiveness based upon showing activity of your home, goes a long way to ensuring a successful sale of your home. Here is the infamous fair market pricing pyramid for selling a home.
The Right Price Maybe…
A good real estate agent has a process for setting the market price. Unfortunately, most of the time real estate agents ultimately defer to the seller’s wants and specifically the price the seller wants to sell the home for. If the agent doesn’t see the price the same as the seller, the Seller will find an agent who will list the home at the seller’s price. This seller price is often influenced upon a nearby sale, or home pending, or just a feeling that the seller’s home is worth more. In the end the right price is validated by an offer. In order to sell any home, a listed home needs showing, the more showings, the more validation that the pricing is often right. Sellers are often faced with the big challenge in a hot market of the extremes of no showings or plenty of showings but no offer or. These all are major indicators of the interest and willingness to make an offer on your home. However, please be aware that the only showing that matters are the one that makes an offer.
Indicators of the Incorrect List Price
A “hot” seller’s market is often thought of as multiple offers over listing price. This is not necessarily true. It’s often too many buyers and too little inventory driving the activity. In real estate agents talk about the “pricing” pyramid. Another pricing concept is the higher the price the fewer the buyers. Right now, a home priced under $620,000 (This is driven by conventional loan limits) will have an accepted offer/pending sale in less than 15 days. The 30-day in contract is the key metric Seller’s should be aware of. For the next pricing tier, $620,000 to $1,000,00 the Seller should have an accepted offer in 30 Days. For homes over $1,000,000 the home should be in contract in 45 days. If you’ve missed these metrics, not only have the buyers passed on your house. You are now chasing the market.
Days on Market for an Accepted Offer Based Upon List Price
Pending Sale Within
$620,000 to $1,000,000
$1,000,000 and Over
No Showings after 5 Days or Open House
This is a red flag you have missed the price in a hot market. As a seller you need to talk ASAP to your real estate agent and discuss a price reduction or incentives to sell your home (pay for closing costs, repairs, Seller credit). If your home is being sold “as-is” you may want to temporarily take it off market and address issues that you think are hurting buyers from viewing your home.
Too Many Showings With no Offers
If you receive over 3 viewings without an offer by qualified buyers in the current market in South placer, you have missed on the price. If you had an open house with great turnout (5-10 groups of buyers per day the house was open) your listing price is too high. What is a qualified buyer? Your agent should be asking buyers agents or perspective buyers their qualification to buy a home in your price range (are they approved, how will they purchase), why the interest in your home (number of bedrooms/features are a match), and timeframe to buy (ready buyer).
Too Many Offers on Your Home
If you have more than two multiple offers over the listing price in the first week of being on market you have “underpriced” the home. Granted that homes under $300,000 in South Placer will more often than not receive multiple offers are they over asking the asking price? The challenge with multiple offers is who is the best buyer? If often not who offered the most in price. Your real estate professional should be able to help you determine who the best buyer is looking at the terms and conditions for the purchase. Verification of funds, and other qualifications of the buyer matter. Contingencies also have to be carefully considered. Choose carefully and be aware too many offers especially above listing price is not necessarily the “right” price for your home.
Contingent offers are often made on homes that are not priced correctly of have been on the market for thirty days without an accepted offer (pending sale). These offers in general are not necessarily bad offers but the contingency if accepted may keep your home off the market too long (60 or more days) and if the Buyer doesn’t perform you may have fewer buyer available if the home goes back on market. In general, if the contingency is over 30 days, it’s an offer that may not perform (the contingency to sell a home is often this big issue for performing). Again, a good real estate agent should be able to help you make the right decision.
Incorrect Listing Price Impact – Chasing the Market
Chasing the market is when a home’s days on market is greater than the pending sale status, i.e. overpriced. Now the seller is competing with every new listing and being compared to every sale for a house that was on the market too long. This will often result in offers that are 10s of thousands of dollars less than the list price. In the age of the internet, the homebuyer is updated within minutes of a new listing being available. These buyers are willing and able to purchase your home. Don’t disregard this important metric, at this point, the best buyers have passed on your home. Price is the now the only factor that will drive the activity and an offer. You should be seriously considering a pricing reduction strategy to incrementally lower the price until you receive an offer. Accepting this strategy is extremely painful to do, but the “watchers” of your home online will eventually see the price as an opportunity to view and make an offer.
Hope is the 4 Letter Word ….
That should never be used in conjunction for selling your home. Sellers and their agents shouldn’t hope that it sells. The goal is to get your home on market and to get the best ready willing and able buyer to make an offer and complete the purchase. In a hot seller’s market like South Placer, showing activity leads to offers. The buyers are there especially in the bottom third of the home pricing pyramid (Under $620,000 list price), and the right price is the one that receives an offer. Just be sure to realize that a hot market only means that a home will sell in a more reasonable amount of time. It doesn’t mean multiple offers, over list price, and a seller can place conditions to sell the home than creates a long escrow. If you have questions reach out to your real estate professionals and guide you selling in any real estate market.
Buyers are facing an uphill battle to buy a home in this current market. Having a plan to succeed is critical and knowing what to do to create an offer that makes you the early favorite in the current multiple offer market.
Its really important to understand that the best offer is a combination of things and not necessarily the highest price. Also your offer can be amended after its is sent to make it more appealing as you understand more about what the seller needs to sell are.
How To Make A Winning Offer:
Here are steps that help.
Learn the market. It’s important to understand the inventory of the homes you want to buy. What are the recent sales? How many offers were made? Did the sales price over the list price?. Your agent should be able to guide you about the local sales.
Find out the seller’s motivations. This is key and really important. If you’re working with an agent, you can request that they try to find out why the seller is looking to move from the seller’s agent. If the seller’s agent is facing a lot of time pressure and needs to get the place sold ASAP, that puts you in a much better position to push for a better price. Don;t be afraid to pick up the phone and call if you don’t know.
Make a good, strong offer. Even when you’re making a winning offer, you want your offer as appealing and reasonable as it can be. The information you found out from the seller or seller’s agent can help. Use that information in your offer to make your offer better. For example, you might waive certain repairs, or shorten the contingency period. Quick Tip for a Seller’s Market: A quick close (21 days) and a seller can remain in possession for a period of time at no cost can often save you money or get a favorable counter offer.
Don’t count on a “Multiple Buyer” counter offer. Your first offer is highly unlikely to be accepted by the seller in a Seller’s market but may be accepted by modifying the terms of your initial offer or more importantly trying to convince the seller’s agent to make an acceptable offer work with your offer. Make sure you work closely with your agent to again understand the issue with your offer when you receive a counter offer from the seller. From my experience little things that are not necessarily related to the offer price can be worked out when time is taken to understand the counter offer or addendum. Time isn’t your friend when negotiating so you should try to complete any negotiation within 24 hours if possible.
The Listing Agent is the Key. If you have hired the right agent, he should be able to understand the seller’s motivations, get the information on the pricing the selling agent recommended for the house Bottomline, the listing agent is the gateway for your offer to be accepted. In the end selling your offer to the listing agent. Do your homework on the Listing agent for success.
Making an Winning Offer: What is effective and works
Having a pre-approval letter that is 10% more than your offer price. If the home comes down to negotiating a higher price and your approval letter can;t support the higher price, you won’t win the house.
Buying the home as-is, and not requesting repairs. If the seller knows that their bottomline isn;t going to change after they are in contract that is helpful for them to decide to choose your offer..
“Clean Offer” Making the deal more complicated isn;t helpful. Stick within the current time periods for getting things done. Unless you have information that the seller wants inspection times shortened or, keep the offer “clean.”
One Last Thought
A winning offer is more than the price. More importantly make sure you have an agent who will aggressively sell you as the best buyer and is equally focused on helping buyers as well as sellers.
Renting After Selling? Things to consider and realities for renting
When I talk to clients selling, renting is typically thought of as a viable option. “If nothing else, I can always rent,” I often hear many sellers say this, only to be sticker-shocked and frustrated when the available choices are underwhelming and cost more than what they wanted to spend.
Let’s take a look at the other challenges about renting a home in today’s market. Here are things you need to consider when choosing renting as a temporary solution for housing once you sell.
Renting costs are high
It’s going to be more expensive than you think. When home prices are high so are the price for rentals as well. The demand for housing extends for rentals as well. My advice is for go to Zillow.com and look at the current rental costs.
Find A Rental May Take Time
Finding a rental property may not be as easy as you think. Not everything you see online is really available. This is especially true with rental websites, where you’ll likely see something marked as available — when, in fact, it was rented out several weeks ago.
Then when you find something it may be too late to rent it. That’s because applications may have been submitted, and the owners might be in the process of evaluating them. Or maybe they’re waiting on a renter to submit a deposit.
Move-In or Turnkey Might Not Be An Option
Do not expect move-in ready. “It’s a rental.” Most rentals are not in the condition most of us want or expect. Many rentals are really in need of new flooring, paint, appliances and bathroom and kitchen remodeling or at least substantial updates. Most rentals will be rented “as-is” and you shouldn’t expect anything to be replaced or addressed prior to move-in.
Viewing Rentals Are Challenging
Even if you can find a rental getting in to see it might be problematic. If the rental is occupied, you may have to wait 24-48 hours to see it. The rental may not look its best when you do. The tenants might be packing, and condition of the rental might be not what you expect. You also need to ask the Landlord for what will be done to make it ready for the next renter. The time to get the place ready could be a problem if you need to move quickly.
The rental market is much like buying a home with multiple offers, be prepared for being one of many multiple rental applications for the prospective rental. Just like homes for sale, the rentals that are in the best locations, are the best condition, have a yard, a view and/or ample parking space will go super-fast.
Be ready and be prepared to fill out a complete application and supply all requested information down to the last detail. Incomplete applications or pieces of information that cannot be verified on your application may cause it to get passed over for one that is 100 percent complete.
In addition to a rental application, you’ll need to supply a copy of your driver’s license (or other official photo identification), agree to a credit and criminal background checks, and provide two to three months’ proof of income or bank statements.
If you are self-employed or working as independent contractor, you should have a statement prepared about how your income is derived.
There is typically an application fee per applicant as well as a fee for running a credit report and possibly a lease preparation fee.
Also, each landlord or property management company will have their requirements with respect to a security deposit, and some may want the first and last month’s rent.
Rentals That Allow Pets
No matter what kind of pet you have and have happily co-existed with over the years, what you think isn’t an issue might be a big deal to a landlord. Do not assume that every landlord will accept pets, and if they do, there are often restrictions on what they will agree to take.
Large dogs, cats and pets that fall outside the scope of normal household animals may simply not be allowed.
As renters, you are not in control of these decisions, and the landlord will often require a significant pet deposit for bringing in a furry friend.
In addition, many communities, particularly condominium and townhomes have restrictions on the size, kind and number of pets allowed. If a landlord will work with your pets, you most likely will have to pay a hefty — and often nonrefundable — pet deposit. They might also have to provide a photo of the pet along with an immunization record.
Pets are often a challenging part of finding a rental and usually a very expensive add on cost for renting a home.
What Appliances Are Included
Double check the appliances that are provided with the rental. Not all rentals come with a refrigerator, or a washer and dryer. If you are selling your home and have included those appliances with the sale, you might end up having to buy or rent those items — even though they may not potentially work in the next home you plan to buy.
Working With The Landlord
When you have an issue with the rental, who do you call? Most people don’t think twice about this when submitting an application for rent. However, it’s important to understand whether the property is managed by an owner or a property manager. You should ask and know who to contact when something on the property needs attention.
As potential renters you should ask before renting: Is the owner local or out of the area? What kind of response time can you expect from them or the property manager? Will you be authorized to take care of repairs directly up to a certain amount and ask for reimbursement or?
Understand The Lease
The lease is a contract — just like a real estate purchase agreement — to buy or to sell property. You should fully understand what the terms and conditions of the lease are especially in terms of notice and costs for terminating the lease before it expires.
If the intent to lease a home was to use this time to shop for a home or decide if the area is right for you, you should keep in mind that if you find something you want to buy or move, it might not be as simple as notifying their landlord that you want to move out.
Leases typically spell out the costs of breaking the term — you just don’t get out of them for free. They could also prevent you from being able to sublease to someone else unless you’ve negotiated it as a condition of the lease.
A landlord could enforce your ability to continue to pay on the lease until it runs out if they choose to, so proceed carefully. You also need to be aware that the lease you sign will tend to be more in favor of the landlord. It’ll have all sorts of rules, regulations and requirements tenants are expected to abide by.
Don’t anticipate or plan on being able to negotiate or amend the lease. In a competitive rental market, the landlord is often wanting a long-term lease to minimize the cost of having to prepare the property in between tenants or missing rental income. Make sure you understand the implication and possible additional costs for a short-term lease if they are available.
Understand the other costs in the lease like late fees or utilities that are included. There is typically a late fee is for not paying rent on time, and the landlord or property manager could report this to the credit bureaus. Also inquire whether sewer, water, gas, and electricity are included or not.
Need Help? Just Ask
While renting may seem like a viable option, and market dynamics may dictate that necessity, there will be a substantial amount of planning and logistics involved to secure a rental. It’s important for you to stay flexible in order to find what will be best for what your short-term housing goals are.
I’m more than happy to discuss and share with you the short-term rental market is in the area. I’m also willing to share with you a good property manager or management company you can work with. Much like an agent a good property manager who understands your needs can go a long way to making a short term housing need a reality.