What All Buyers and Sellers Should Know About Easements

When you buy a home, it’s exclusively yours to use, right?

Not always.

If there are specific easements on title, you may have to share the use of your property with others.

An easement is the legal right for another party to use your property for a specific reason. There are so many factors to verify when you buy a home, especially when considering how much you’re paying for it, and easements are one of them.

When you’re purchasing a property, you’ll definitely want to find out if there’s an easement on title. If there is, you’ll also want to know what type of easement it is and how it will affect your enjoyment of your property.

Types of Easements

There are several different types of easements that exist for different purposes, including the following:

Utility easements – These are very common easements and essentially give utility companies the right to use your property in order to access specific areas where work is required. Whether it’s telephone cables, hydro lines, or gas lines, utility workers will need to get access to specific parts of the lot in order to do their repair or maintenance work.

Express easements – In this case, the owner of one property would give express consent to another landowner for a specific reason. For instance, let’s say your next-door-neighbor doesn’t have the best access to a public road. You could give them consent to cross over your land to access the public roadway. If you agree to this, you’ll be providing an express easement, which needs to be in writing in order for it to be enforced.

Implied easements – Unlike an express easement, an implied easement is one that can exist without a formal contract in writing. Usually, these are involved when a larger piece of land is divided up into two or more.

In order for an implied easement to exist, it must be proven that owners of some parcels of land require access to another parcel in order to experience reasonable enjoyment of their property. Also, there must be a need for the easement to exist before the land was divided or sold.

Let’s say one large piece of land has a paved driveway leading to a public roadway. If that land is divided leaving only one parcel of land with this driveway on it, the other divided parcel may require the use of the driveway in order to access the roadway. An implied easement would exist if both owners intended to continue using the driveway when the land was divided.

Easement by necessity – Also referred to as a “right-of-way,” these are somewhat similar to implied easements in that they are necessary for the enjoyment of one landowner. The difference between the two, however, is that an easement by necessity can only be created if there is no other alternative to crossing someone else’s property. With an implied easement, there may be the option for the landowner without the driveway to construct one of their own to gain access to the public road.

For instance, if you sell part of your land to another and they don’t have any access to the public road other than by crossing your land, the courts in California could create an easement by necessity because the other landowner has no other way of gaining access. If there was a possibility for the other landowner to build a driveway of their own, an easement by necessity wouldn’t apply.

Prescriptive easement – This type of easement occurs when a person uses someone else’s land for a certain period of time without the landowner knowing about it. The key here is that even though the property owner may not have known that another party was using the property, the landowner still has the ability to be aware of such use.

Another important component to this easement is continued use. In California, the property must have been used in the same way by another party for a continuous period of five years in order for this easement to exist.

Can Easements Be Terminated?

Easements may be terminated if a judge deems that access to another property is unreasonable, particularly if it gets in the way with the landowner. These can be hashed out in court if the landowner finds that their enjoyment of their property is being compromised by other parties for reasons that are not necessary.

Some easements also have expiry dates, after which they’re no longer in effect. In other cases, both parties may agree to terminate the easement. But in most other cases, terminating an easement can be a bit more challenging and would require a judge to intervene.

You Could Be Legally Liable if You Infringe on Right-of-Ways

If you buy a home that has an easement by necessity and blocks others from accessing your property for specific reasons, you could be taken to court. Let’s say you buy a property with an easement that allows your neighbor to cross over your property to gain access to the public roadway. If you build a fence after you move in that blocks such access, you would be considered to be trespassing this right-of-way and could be taken to court as a result.

What if You Want to Build or Expand Your Home?

If you have intentions of expanding your home, renovating, or building an addition or separate structure, you’ll want to know if an easement exists on a property beforehand. If there is one, that could affect your plans for construction.

For example, you wouldn’t be able to build a shed that would block access to a roadway for your neighbor. In this case, you may have to abandon your plans for construction or come up with an alternative option.

The Bottom Line

It’s very important to know if there are any easements on a property before you sign on the dotted line. If any exist, find out exactly what type they are. Easements can definitely impact your enjoyment of your property, so it’s crucial to conduct a title search to find out if any exist. Your real estate agent will be able to help you identify any easements that there may be on title and how they may impact how you use and enjoy your new home.

10 Home Maintenance and Repair Skills All Homeowners Should Be Familiar With

It might be easy to change a light bulb or tighten a loose cabinet handle, but there are several other tasks that will need to be done around the house over time. If you constantly call in a handyman to take care of these little jobs for you, you’ll be spending a fortune.

Instead, handling these jobs yourself can help you get better acquainted with your home and save a few bucks.

Here are a few skills you may want to become familiar with in order to keep your home in proper working order.

1. Shutting Off the Main Water Source

Imagine the kitchen sink pipes bursting, or the toilet valve leaking. Such scenarios can quickly lead to flooding, which can wreak major havoc on your home. When this happens, shutting off the main water source can help to put a stop to the gushing water and minimize any damage that may occur. But what if you don’t know where this source is?

Knowing where to shut the water off can help you prevent water damage that can end up costing you dearly.

2. Turning Off the Gas

If you smell gas in your home, call the gas company right away. In the meantime, knowing how to turn off the gas can help to minimize the dangers you may be exposed to. The shut-off valve for the gas running into your home is typically located at the gas meter outside of your home. You’ll need a wrench or something similar to turn it off.

3. Fixing a Leaky Faucet

Faucets tend to drip, but you don’t necessarily have to call the plumber just yet if the issue is minor in nature. Not only is a leaky faucet annoying, it also wastes a ton of water, which you’ll quickly notice when you get your water bill.

4. Cleaning Your Gutters

The gutters outside of your home play a crucial role in protecting the structure. Namely, they’re responsible for directing any water from rain away from the home. If they’re not working properly, they can allow water to pool near the foundation of the home, which can then seep into your home and cause water damage.

Your gutters should ideally be cleaned out every year and inspected for any signs of damage. If you’re comfortable climbing a ladder, you can clean these gutters out yourself to make sure they’re free and clear of any debris that could be blocking proper drainage.

5. Powering Off the Circuit Breakers

It’s not uncommon for a fuse to blow every so often, and when this happens, it’s helpful to know where your circuit panel is and how to switch the breakers on and off. Some homeowners may mistakenly think that there’s a power outage when the power goes out in one room but not another. But if power is still on in certain parts of the home, most likely all that’s needed is a flip of a switch in the breaker box.

Sometimes all that’s required is a reset of the breakers to help power up small appliances without having to call in the electrician. Grounded outlets tend to come with reset buttons, especially those in kitchens and bathrooms where they may be exposed to water.

Be sure to check out the circuit breaker and all grounded outlets when you first move into your home to get familiar with them so that if there’s ever a problem, you’ll know how to deal with it.

6. Changing the Temperature on the Water Heater

Do you really need scalding hot water flowing out of your faucets? Probably not, but your water heater is working hard to keep the water hot, which costs money and uses energy. You can save some money by turning the temperature down. If you know how to turn the thermostat on your water heater down to a lower temperature, you can not only save money and energy, but you can also prevent any chances of scalding.

7. Changing Your Air Filters

In order to ensure high air quality in your home, your air filters will need to be changed every so often. You might notice your home being dustier than it should be, and changing the air filters can help alleviate this issue. Every three to six months should suffice, but they’ll probably have to be changed more frequently if anyone in the home suffers from allergies or respiratory issues.

8. Caulking Cracks and Air Leaks

Caulking is highly used in home construction and is used to seal up cracks and gaps that may allow air and other elements to enter or escape the home. You’ll notice caulking around your windows to prevent any cooled air from escaping or hot air from seeping in. You’ll also notice caulking around your faucets or shower heads to prevent any water from going anywhere other than out into the sink or shower stall.

But over time, the caulking can break down and loosen. When this happens, the affected areas will need to be recaulked. You can easily do this yourself with the right tools, including a caulking gun and caulk material.

9. Fixing a Running Toilet

Toilets that don’t stop running are noisy and waste water. Instead of calling a plumber, you can easily fix this yourself by getting familiar with the flush valve assembly. In order to gain access to this component, you’ll need to lift the top of the toilet tank, then simply reposition part of the assembly until the running stops.

10. Cleaning the Refrigerator Coils

Think about how hard your fridge is working to keep all of your food products chilled. After all this work, this major appliance will need a little attention once in a while, and that includes having its coils cleaned.

Filthy coils can cause the fridge to work harder than necessary, which can lead to a breakdown sooner rather than later. To clean the coils, all you need to do is pull the fridge off the wall, unplug it, and vacuum the coils (which are usually under or at the back of the fridge).

The Bottom Line

Getting acquainted with certain home maintenance and repair tasks can help ensure your home is working as smoothly as possible without constantly having to call in the repairman to deal with these issues for you. Not everyone is necessarily handy, but you can still learn a trick or two to keep your home in tip-top shape.

All About the 1031 Exchange For Avoiding Capital Gains in Real Estate Sales

Home sellers usually don’t have to pay any capital gains taxes on profits made upon the proceeds of a sale because they are typically using those proceeds to be put towards another home to move into.

But what about real estate investors who are selling for a profit without necessarily using the property as a primary residence?

In the US, capital gains taxes are applied to any profits made on real estate sales whereby the property has increased in value, with certain exceptions. The rate charged depends on the type of investment and your income tax bracket, but they cap at 25%. 

The good news is that real estate investors have an out when it comes to paying capital gains taxes: the 1031 exchange.

What is a 1031 Exchange in Real Estate Investing?

Section 1031 of the IRS states that any gains realized on the sale of real estate will not be recognized if the property is “exchanged” for a similar property. Basically, a 1031 allows investors to “defer” having to pay capital gains taxes on a property after selling it, as long as the proceeds are put towards another “like-kind” property.

That means if you’re selling an office building, you can use Section 1031 to avoid paying capital gains taxes if you purchase another office building for similar purposes, for instance.

A real estate deal that falls within the stipulations of a 1031 exchange means there will be no capital gains taxes involved or at least a limited amount. You can “exchange” like-kind properties as often as you want, and you would only be subject to paying these taxes if you finally sell for cash.

In addition, the property being sold must be considered an investment property and not a primary residence, and the exchange must take place within a certain time frame.

What is Considered a “Like-Kind” Property?

As already mentioned, one of the rules of a 1031 exchange is that the new property being purchased must be similar to the one sold. So, what exactly is classified as a “like-kind” property?

Basically, this just means that the new property must be of similar character as the old property, though they may differ in quality. The asset must be basically the same, so when it comes to real estate, just about any type of real property can be exchanged.

For instance, you would be allowed to exchange a triplex for an office building or a single detached home for an apartment building, as long as the properties are located within the US. But you wouldn’t be able to exchange your property for a vehicle, for instance, because they are fundamentally different.

Primary residences do not fall under the 1031 exchange rule, as previously mentioned.

There’s a Time Limit on 1031 Exchanges

In order to comply with the IRS’s 1031 exchange rule, you must purchase another property within a certain amount of time, namely 180 days. You can’t sell a property and wait around for as long as you want before purchasing another with the proceeds of the sale. As it stands right now, you’ve got a maximum of 180 days to find and buy another like-kind property in order to be able to defer paying capital gains taxes.

Types of 1031 Exchanges

There are a few different types of 1031 exchanges, including the following:

  • Simultaneous 1031 Exchange – This type of 1031 exchange occurs when the deals of the newly purchased property and original property close on the same day.
  • Delayed 1031 Exchange – This is the most common type of 1031 exchange and occurs when the original property is sold first and the deal for the purchase of the new property takes place after the fact.
  • Reverse 1031 Exchange – When a new property is purchased first before the original property is sold, this is known as a reverse 1031 exchange. Most of the time, such situations require all-cash purchase, as banks don’t typically extend loans for reverse exchanges.
  • Construction 1031 Exchange – These types of exchanges allow investors to improve the replacement property using the tax-deferred money while it remains in the hands of a middleman during the 180 day period.

The Bottom Line

Real estate investors can definitely save quite a bit of money thanks to the 1031 exchange rule. Considering how expensive real estate is these days, having to pay capital gains on each transaction can really eat into the profits of investors. When used properly, a 1031 exchange can help you continue to build wealth when investing in the world of real estate. Be sure to speak with a tax specialist and real estate professional to ensure you adhere to the rules in order to take advantage of this financial tool.

What is Involved in a Swimming Pool Inspection Before Buying a Home?

If you’re going to be spending the big bucks on a home purchase, you want to make sure you don’t end up with a property that’s just going to cause you problems long after you move in. That’s why it’s always recommended that buyers include a home inspection contingency in their contracts, as this will provide buyers with the opportunity to fully scope out the home and check for any issues.

But what if the home you’re planning to buy has a pool? Given the prevalence of residential pools these days – especially in hotter parts of the state – the chances of finding a home with a pool are pretty high. Should you have this component inspected too?

While home inspections in California now require inspection of drowning prevention safety devices for all pool systems according to SB 442, that doesn’t necessarily mean that all components of a pool will be looked at. The average home inspector may not necessarily be trained or certified in pool and spa inspection.

As a buyer, you can either find a home inspector who has the necessary training and credentials to thoroughly inspect a swimming pool and all of its components, or choose to hire a separate pool inspector who will conduct a more in-depth inspection.

So, what’s involved in swimming pool inspections?

Safety Features

As already mentioned, a pool inspection should include an assessment of the safety features of a pool to ensure that all precautions have been taken to prevent accidental drownings. An experienced and knowledgeable pool inspector should be very familiar with what the codes are in your local jurisdiction.

For instance, California law requires certain fencing requirements. If a pool has a fence around it that separates it from the rest of the home, it should have a gate that opens away from the pool and a latch that is 60 inches from the ground. The height of the fence itself should also be a minimum of 60 inches.

If there is no fence, the pool must have some other type of feature that protects against accidental drownings, such as an approved safety cover, alarms on doors that allow access to the pool, or removable mesh fencing with a self-closing and self-latching gate.

A knowledgeable pool inspector will check into safety features such as these to make sure the pool area is safe, especially with young children and pets around.

Condition of the Pool Structure and Surrounding Hardscape

It might be easy to spot obvious wear and tear with pools and the surrounding deck materials, but others might not be as noticeable. Signs of deterioration of materials can be spotted with the help of an experienced inspector.

Among the physical features of the pool and surrounding area include the following:

  • Interior finish of the pool – The quality of the material will be looked at, as well as signs of cracks, aging, and potential underlying structural problems that will need to be addressed.
  • Coping – Most pools have coping around the perimeter of the pool’s edge. They’re pretty much a decorative component that can be made out of all sorts of different materials and should be stable without any chipping or loose stones that could pose a hazard. Any cracks, stains, or issues with the grout will also be looked at.
  • Deck – If there is a deck surrounding the pool, that will also be inspected for issues with the materials, pitch, drainage, uneven surfaces, and gaps between stones.

Pool Equipment

The equipment installed plays a critical role in how well your pool functions and the health and safety of the pool water. More specifically, the equipment that will need to be inspected includes the following:

  • Pump – The pump helps ensure the water is properly filtered and circulated and is responsible for moving the water through the filter to be adequately cleaned and sanitized. It’s also responsible for operating pool cleaners, waterfalls, and other relevant pool features.
  • Filter – The filter is responsible for keeping the water free of debris. It will be inspected to make sure it works properly and that there are are no flaws associated with it.
  • Heater – Some owners have pool heaters, some don’t. If a heater is present, an inspector will look to see if it is properly grounded and is actually able to heat the pool to the temperature set. If the heater is gas-operated, the inspector will make sure that the size is right for the water volume of the pool.

Electrical Wiring, Plumbing, and Surrounding Structures

Pool inspectors will also look at electric panels for appropriate breaker labeling, as well as plumbing lines for any signs of leaks.

Pool inspectors might look at other factors as well, such as ensuring that the home’s gutters point away from the home and not towards the pool. They might also look at whether or not any surrounding trees drop too many leaves into the water that will require constant cleaning.

Miscellaneous Features

Any other accessories or features that a pool might have may be inspected during the appointment. These days, pools come with all sorts of different features that can fully customize the pool. Features that may be inspected can include:

  • Automatic pool covers
  • Attached hot tubs
  • Diving boards
  • Infinity edges
  • Tanning ledges
  • Lighting
  • Automatic controls
  • Sanitizing systems

The Bottom Line

Swimming pools can be a great feature to have in your own backyard, but if you’re planning to buy a home with a pool, you might want to have it inspected along with the rest of the house. After all, these components are extremely expensive to install and operate, and a pool with issues could end up costing you quite a bit of money to repair defects and replace equipment. Having the pool inspected can help you understand what will need to be done – if anything – to bring the pool back up to par if any issues are detected.

6 Tips For Choosing the Right Mortgage Lender

Most buyers need a mortgage to purchase a home, and when you finally secure financing, you’ll be stuck with it for a long time. The most common amortization period is 25 years, so that’s a long time to be tied to a mortgage. As such, you’ll want to make sure you get the best mortgage with ideal terms to best suit your situation and work with the right lender who can give you what you need.

Taking the time to shop around for the right mortgage lender can help you secure the right home loan for you, so it pays to carefully assess lenders before settling on one.

Here are a few ways to help you pick the right lender.

1. Get Your Credit Score Up to Snuff

Before you start shopping around for a lender, you’d be doing yourself a favor by making sure your credit score is strong. Lenders prefer to do business with borrowers who have a high credit score, which will make them less of a risk. Borrowers with low scores usually have a financial past that’s littered with late or missed debt payments. Lenders want to recoup the money they lend, and extending credit to people who have a tendency to miss payments will make their investment less attractive.

Pull your credit report to find out what your score is and what has influenced it to be where it’s at. If your score is less than 680 (which is what conventional lenders usually set as their minimum before approving mortgage applications), it would be in your best interests to take a few months to give it a boost. That means making all of your credit card payments on time, spending no more than 30% of your credit limit on your cards, resisting the urge to apply for additional loans, and paying down your debt.

The more you diligent you are with your finances, the higher your credit score can climb. The best time to apply for a mortgage with a lender is when your credit score is up to par, which will increase your odds of getting approved for a home loan at a favorable interest rate.

2. Understand the Different Types of Lenders Out There

Not all mortgage lenders are the same, and you’d be well advised to get familiar with the types out there. This will help you determine which type of lender will be best for your particular situation. Here are a few lenders that are available that you may want to get familiar with before choosing one to work with:

Banks – Lenders who deal directly with banks work for a specific financial institution and are only able to offer that particular bank’s mortgage products.

Credit unions – Credit unions differ from banks in that they are owned by members and are not out to make a profit for investors. They also have mortgage lenders that work with them to offer borrowers mortgage products.

Fintech lenders – These lenders have become increasingly popular over the recent past because of how easy and convenient they can be to interact with, as well as the more lax lending criteria required to get a mortgage. Fintech lenders are those who deal with borrowers directly online, such as Lending Tree, LendingHome, and Better, to name a few.

Private lenders – If you don’t have all the traditional requirements to secure a home loan – such as good credit or a sizeable down payment – private lenders may be available to help out. There are many private lenders who deal specifically with bad credit borrowers, though it should be noted that the interest rates associated with these mortgage products are usually much higher than those from conventional lenders.

Mortgage brokers – Brokers aren’t actually lenders. Instead, they do the legwork for you to find a lender who is willing to extend a mortgage to you at terms that are best suited for you. They are usually paid by the lender and charge a small percentage of the loan amount. In many cases, it makes sense to work with a mortgage broker, because these professionals will take a lot of the work off your hands and do it for you to help you find the best lender to work with.

Get to know the types of lenders out there before you start shopping for one.

3. Compare Interest Rates

When shopping around with different lenders, one of the most important things that you should compare between them is the interest rates offered. Even a fraction of a percentage point can make a big difference on the overall amount of interest that you’ll be paying over the life of the loan. Obviously, a lower rate is best, so finding a lender who’s willing to offer you the lowest rate is usually ideal.

That said, the interest rate shouldn’t be the only thing you look at. A lender who charges the lowest rate might have a bunch of hidden fees that could actually make their mortgage product more expensive when all is said and done. Also, don’t forget that the quoted rate is just a starting point. That rate could change once the lender assesses all of your financials.

4. Check Out the Little Details

There’s always fine print involved with services, and you’d be well advised to carefully review it before settling on one particular lender. Some of the details you may want to look at include:

  • Early repayment penalty fees
  • Lending fees
  • Underwriting fees
  • Application fees
  • Down payment requirements
  • Pre-approval and final approval turnaround times
  • Whether or not lending fees can be rolled into the mortgage or paid up front

Read over the contracts and ask as many questions to get the answers you need to make the right decision about which lender to work with.

5. Get Pre-Approved

It’s always a good idea to get pre-approved for a mortgage before you decide to buy a home. That way you’ll know how much house you can afford and can speed up the process after you find a home you love.

But getting pre-approved for a mortgage with a handful of lenders will also help you compare each one against the other. You can simplify this process by having a mortgage broker do this for you – this will allow you to fill out one application that can be distributed to several lenders. Either way, getting pre-approved for a mortgage can help you narrow down your choices about which lenders to work with.

This will give you the most accurate comparison because each lender will thoroughly review your finances and credit report. Be prepared to hand over a number of documents and paperwork, including pay stubs, tax returns, bank accounts, employment letters, and statement of assets and debt, among others. While this might take some time, it can give you a head start when it’s time to get final mortgage approval.

6. Ask Your Real Estate Agent

Perhaps one of the best places to start looking for a solid mortgage lender is to speak with your real estate agent and get their opinion of who to work with. These professionals typically have a network of mortgage lenders that they deal with on a regular basis, and they’ll be able to recommend someone for you. Besides, mortgage lenders who are referred to by real estate agents will make sure to take care of their customers, particularly after getting a referral. 

The Bottom Line

Your mortgage lender plays a critical role in your ability to secure financing and purchase a home. Considering this fact, it’s important to do your homework and choose one to work with who can provide you with ideal mortgage terms that best suit your financial situation. There are several ways to go about finding the right lender to work with, and in the worst case scenario, your real estate agent will be able to point you in the right direction.

INFOGRAPHIC: California Sales Report For June 2018


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Is Your Home Really Ready For the Market? 7 Ways to Tell

You might be emotionally ready to part with your home and are already on the prowl for a new place to call home, but is your house truly ready for the market? If your property is not adequately prepped before you list, you could sabotage the process.

Before you list your home on the market, ask yourself the following questions first and make any necessary adjustments.

1. What Does the Home Look Like From Outside?

Aside from photos online, the first glance that buyers will get of your home is from the exterior. When buyers pull up in front of your home, will they be “wowed” or will they want to walk away? It’s common for buyers to be so turned off by some properties simply based on the curb appeal that they refuse to go any further with the showing.

Take a good, hard look at the exterior of your home. Does the lawn need mowing? Are the trees and shrubs growing out of control? Are there dead leaves piled up on your doorstep? Is the front door paint peeling? All of these factors – and more – go into curb appeal, which is a crucial component to selling a home in a reasonable amount of time. Be sure to tackle all necessary tasks to help get your home looking spic and span from the curb so that buyers will be more enticed to walk through the front door.

2. Is There an Accumulation of Clutter?

One of the first suggestions that real estate professionals and home stagers will make to sellers is to de-clutter. You might be accustomed to toys piled up in a corner, magazines stacked on the coffee table, or an excessive collection of knickknacks, but buyers don’t necessarily want to see all of that. What they want and expect is to walk into a home that is neat, tidy, and free of clutter.

Even the closets, drawers, shed, and garage should be de-cluttered, as buyers will almost certainly go through these spaces. Stuffing your closets with all of your belongings to get them out of sight is not going to cut it. What you need to do is get rid of excess items that are adding to the clutter and taking away from buyers’ ability to visualize the space as it could be.

Whether you toss some things in the trash, put them in storage, or start packing them for the move, eliminating certain items can help create a much cleaner-looking space that flows nicely.

3. How Does Your Home Smell?

Some smells might be obvious, but others might not be. Homeowners get used to the smell in their homes, whether or not they may be pleasant or offensive to others. You might want to bring in an unbiased person who doesn’t live in your home to come in and give you an honest opinion and assessment of what the interior of your home really smells like.

It could smell like the dog, cigarette smoke, last night’s dinner, or anything else that might potentially turn buyers off. If there’s a foul odor in the air, this will need to be addressed and dealt with before the first buyer walks through the front door.

4. Are Improvements Needed?

Unless they’re specifically looking for a fixer-upper, buyers typically want to see a move-in ready home before they decide to put in an offer. If they start walking around and notice that a number of upgrades are needed, they might not be so keen to buy.

Take a look around your home – is there anything that could use an update or repair? If so, you might want to consider making the necessary improvements before listing your home. That said, there are certain upgrades that you should focus on and others you might want to leave alone. After all, you don’t want to sink more money into improvements than you’ll get back.

Upgrades that tend to bring in a decent ROI are painting, new or refaced kitchen cabinets, new countertops, new light fixtures, and even new hardwood flooring. You should also keep in mind what the competition is like and if there are any specific upgrades that other properties on the block typically have, such as granite counters in the kitchen or hardwood flooring instead of wall-to-wall carpeting. In this case,  you might want to consider keeping up with the Joneses. Your real estate agent will be able to guide you as to what upgrades should be done and the maximum amount you should spend.

5. Do You Have Renters?

If all or part of your home is being occupied by renters, you’ll want to make sure that they’re on board with helping to keep the place neat, tidy, and well-maintained. Ideally, you’ll have a good relationship with your renters and they’ll respect the fact that you’ve got your home on the market.

Unfortunately, some tenants don’t exactly live the way buyers will want to see the home. Oftentimes they’ll even be unwilling to keep the home up to a certain standard that you’d expect. If that’s the case, you may want to wait until their lease has expired before putting the property up for sale. That way you’ll have total control over how the house looks.

6. Is Your Home is Filled With Family Portraits and Religious Artifacts?

One of the goals of effective home staging is to depersonalize the space to help buyers easily see themselves living in the home and calling it their own. But if you’ve got dozens of family pictures hanging on the walls and on shelves or a bunch of religious articles on display, these might make it harder for buyers to envision the home as theirs.

When prepping your home for the market, be sure to take these down and have them packed and ready for your move.

7. Has Your Home Been Professionally Staged?

It’s one thing to clean, de-clutter, mow the lawn, and remove personal artifacts. But it’s quite another to furnish, arrange, and decorate a home to suit the tastes of buyers in an area. Not every neighborhood is the same, and neither are the buyers looking in them. Professional home stagers study the specific types of buyers in an area and understand what they’re looking for in a home.

When they stage a property, they keep these needs and wants in mind and stage a home appropriately so that buyers find them as attractive as possible. Professionally staged homes typically sell faster and for more money than homes that have not been. And the money that you would spend paying a professional stager will likely be fully recouped – and then some – when it comes time to sell. If you haven’t had your home staged by a pro, consider doing so before you list.

The Bottom Line

A lot goes into getting a home ready for the market, and the pre-listing tasks should not be skipped or rushed through. It’s important to make sure that your home is really ready for the market in order to garner as much attraction as possible and sell within a reasonable amount of time.

Signs That a Housing Market is Cooling Off

Markets across California continue to sizzle, making it difficult to even remember what a soft housing market is like. That said, things can’t continue on this path forever, and as historical patterns have dictated, things will likely start to slow down at some point. Knowing the signs of a cooling market can help you better prepare yourself and plan your strategy for either entering, exiting, or staying in the market.

Here are some tell-tale clues that may indicate that the market is cooling.

Listing Prices Are Plateauing

A strong housing market is characterized by a number of factors, and listing prices are one of them. In this type of market, you’ll usually see listing prices rise rather quickly. But when things start to slow down in the market, listing prices will typically level off.

Sometimes, prices may even dip temporarily as the market corrects itself. When demand starts to falter, sellers start reducing their listing prices to generate more interest.

Gaps Between Listing and Sale Prices Widen

In sizzling housing markets, sale prices are as close to listing prices as you can get. Homes often sell at full asking price and many times well over. Your real estate agent will be able to pull a report of similar homes that have sold in the area recently. If there’s a big discrepancy between the original asking price and the final sale price, that could be a sign of things settling down. The larger the gap in prices, the slower the housing demand is likely to be.

Houses Sit on the Market Longer

The average number of days on the market (DOM) is a good indicator of how strong the market is. Depending on the location, the average DOM will vary quite a bit, While the average DOM in one area may be 30 days, it could be as little as a week in others. The key is to know what the average is in a specific area to provide a base to compare to. If homes are taking longer than the average DOM to sell, that’s a good sign that things are starting to cool down in the housing market.

More Inventory

More houses on the market could be a sign that the market is plateauing. When a real estate market starts to cool, one of the first things you may notice is more homes for sale. The higher the supply, the lower the demand. It’s a simple and fundamental rule in economics. Hot markets are usually characterized by little inventory that flies off the shelves shortly after being listed. The opposite is true in cooling markets.

Investor Activity Slows

Generally speaking, heavy investor buying and selling are associated with a hot real estate market, but when investor activity starts to slow, that’s often a sign that the overall market is slowing too.

While many investors often make all-cash purchases, many others still leverage their money and take out loans to finance their investments. A smaller number of investors taking out financing products can be indicative of a slowing market. Your agent or mortgage broker may be able to find out what type of loan activity is taking place among investors.

Higher Mortgage Rates

Lower mortgage interest rates make borrowing money to buy a home more affordable, prompting more buyers to get into the market. But as interest rates start to climb, financing becomes a much more expensive endeavor, which can be an obstacle for many would-be buyers. Fewer borrowers taking out mortgages often means fewer buyers on the prowl for a home, reducing overall demand.

The Bottom Line

Being familiar with the real estate market in your area is an important part of being an informed buyer or seller. If you’re adequately prepared for what’s to come, you’ll be in a better position to ensure a successful real estate transaction. A cooling market might not be the best time to sell, but if you’re ready to make a home purchase, looking out for the signs of a softening market can help you buy at the perfect time.