MONEY home buying

Buying a House Together Before Marriage? Read This First

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Love may be blind, but don't go into a real estate purchase with your eyes closed.

Serious young couples used to mark their commitment to each other with an engagement ring, but now they’re in the market for a bigger asset: a set of shiny new house keys.

One in four couples between the ages of 18 and 34 bought a house together before they were married, according to a study by Coldwell Banker Real Estate. MONEY found in our own poll of 500 millennials’ financial attitudes that 40% think it’s a good idea for a couple to buy a home together before marriage, while 37% think the purchase should take place prior to the wedding.

Low-rate mortgages, rising rental costs, and the ability to deduct mortgage interest from income taxes all make being a homeowner now rather than later seem like an attractive option. And while making that move first can work out well, as it did for Seattle couple Katy Klein and Charles Hagman, not every story has that same happy ending.

In fact, many financial planners advise against it. That’s because buying a home is often the biggest and most financially complicated move a couple makes, and unwinding it can be especially difficult for unmarried partners if the relationship ends. So if you’re buying a home with your beloved before getting hitched, spare yourself any potential financial heartbreak by following these tips.

Compare Credit Scores

You and your partner have probably already shared details about your income and savings when determining if you could afford to buy. But another piece of information you’ll need to share well in advance of closing is your credit report.

“If a couple is entering into a business deal, which is what a home purchase between two nonmarried people is, they should know the creditworthiness of their business partner. A person’s credit score will impact your ability to obtain a mortgage and the interest rate you will pay,” says Pewaukee, Wisc.-based financial adviser Kevin Reardon.

If you or your mate has a poor score, it could influence how you decide to title the property and who takes responsibility for the loan. Married couples are generally viewed by creditors as a single unit, but unmarried couples are assessed as individuals, even if applying for the loan together.

“This can work to your advantage if you have the person with stronger credit purchase the home,” says Sandra O’Connor, regional vice president with the National Association of Realtors. By eliminating the poorer score from consideration, you can secure better rates. On the flip side, with only one person applying for the loan, and thus one income on record, the amount you qualify for could be lower than what you could get with two incomes. And, of course, only one person’s name will be on the loan and deed, leaving the other partner vulnerable in the event of a breakup.

Open a Joint Account

Consider setting up a joint bank account, if you don’t already have one, that can be used to pay the mortgage, property taxes, insurance, and maintenance, Reardon suggests. Each of you can set up automatic monthly deposits into the account from individual bank accounts; this way neither party can forget. You can further simplify bill paying and budget tracking by having home expenses automatically deducted from the account each month.

Decide How to Manage Costs

When you cosign on a mortgage, you are 100% liable for the debt, which means if the relationship turns sour and your partner stops paying, you must assume the entire obligation. For this reason, financial planner Alan Moore, co-founder of the XY Planning Network, recommends choosing a home with a mortgage you can swing on one income. That can also be a huge help down the road in the event of unexpected illness or injury, since you’ll still be able to afford the monthly payments.

Before setting a housing budget, both partners need to have an honest conversation about the amount of debt they’re comfortable living with. Just because you can borrow the maximum amount doesn’t mean it’s a good idea. Stretch your combined budget too far, and any unexpected expense will likely have one of you coming up short when the monthly payments are due.

Put Your Agreement in Writing

Contact a real estate lawyer to prepare a written document, such as a property, partnership, or cohabitation agreement, that clearly outlines the full details of your arrangement, including what percentage of the home’s equity each partner is entitled to, especially if you contributed different sums to the down payment or mortgage balance, and what will happen to the property if you split up.

“The contract should specify whose name will be on the deed or lease, one or both, who will pay for what—I pay the utility bill, you pay the cable bill—etc.,” says Reardon. “It would be productive to note what happens if one party can’t pay. Will both parties move out? Will one party take over the payments for the other, if they are able to, then create a note receivable from the partner who can’t pay to the partner who can? Will this note be collateralized? It’s great to iron out these details in advance because it removes any doubt or emotions in the event things turn out badly.”

Title It Right

You and your partner must decide how you will own the home or take title. You have three options: One person can hold the title as sole owner, both of you can hold title as “joint tenants,” or you can share title as “tenants in common.”

Typically, you would want both parties to hold title, as putting the property in only one partner’s name leaves the other partner without equity in his own investment. (You’ll certainly want that separate written contract mentioned above if you go this route.)

If both partners sign the title as tenants in common, then each owns a specified percentage of the property. One person may own a 60% interest, while the other owns 40%, for example. This split is specified in the deed. If one partner dies, ownership will not automatically transfer to the other homeowner unless that person is named in the will; instead the deceased owner’s heirs will inherit his or her share.

When you hold title as joint tenants with right of survivorship, you are considered equal owners, and if one of you were to die, the other would automatically inherit the other’s stake and own the entire property.

Bottom line: No matter how you hold title, it is important that you and your partner enter this agreement with a complete picture of each other’s finances and a written contract outlining your desires for the property’s division should the relationship end.

MONEY home improvement

4 Deceptively-Easy Home Improvements You Can Do in a Day

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Bruce Laurance—Getty Images

Spiffing up your home doesn't have to be a neverending chore.

To the uninitiated, home renovations sound daunting and conjure painful images of burning cash. But don’t let that scare you. Many projects can be done in a day, and if you’re smart about it, says Kerrie Kelly, founder of Kerrie Kelly Home Design Lab, they’ll boost curb appeal without breaking your budget.

“Whether it’s something you leave on a list for a handyman to do or you do it yourself, which is always gratifying,” she says. Here are few of her favorites.

1. Switch the Hardware

Sometimes it’s easiest to begin with the front of the house rather than what’s inside, Kelly says, especially if you’re on a tight budget. To that end, changing the front doorknob and lock is a quick update that only takes a few minutes and can compliment the style of the house. Add a kick plate for a touch of glam or go gold for a traditional feel.

2. Brighten the Lights

Another quick, simple way to brighten your home is by changing the lights in the front yard. Feel free to purchase new ones, or better yet, clean the ones you already have. Your home will look far less spooky at night and you’ll actually see where you’re walking.

3. Paint the Door

If scrubbing bug-infested front yard lights isn’t your thing, put a new coat of paint on your front door to freshen it up. Go for something that complements the house’s exterior or be bold and opt for a pop of color, Kelly says, which will set the right tone.

4. Upgrade Your House Numbers

House numbers and address plaques are another quick update that can make a big difference. With the proper placement, they can make your house easier to find — not a bad thing when trying to sell — and the right style of numbers can help play up its architecture.

Need more inspiration? Read on for other Home Improvement Projects You Can Do in a Day.

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MONEY buying a home

Should You Ever Pay Cash for a Home?

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Consider what paying in cash will do to your savings — emergency, retirement and otherwise — in the short term.

While some of us may be struggling just to afford a down payment, there are people out there who are paying for their homes in full in cash. Finding a great property and forgoing all the bank paperwork and loan repayments may seem like a dream, but it can, in fact, be a mixed blessing. So, if you are looking to buy a home and could afford to pay all cash for it, should you?

Running the Numbers

A great place to start in this process is figuring out how much money you would save buying a home in an all-cash payout versus with time-based loan payments. Compare the sticker price to the eventual price tag of your home if paid for with a 15- or 30-year fixed mortgage with a down payment of around 20%. You will save money on interest, but it’s a good idea to factor in the loss of the mortgage interest deduction when it comes to tax time. Also, consider what paying in cash will do to your savings — emergency, retirement and otherwise — in the short term.

Pros

If you truly have the money available immediately and it won’t put you in jeopardy of going into debt if an emergency were to come up, you will most likely save money by not paying interest on a loan. You will also avoid all of the paperwork that comes with securing a loan, pesky closing costs and the often-frustrating loan process.

Your credit history also will not come into play, which may be beneficial if you have a shaky credit past or have run into trouble before while still having considerable savings. You will also have available equity in your home that you could likely tap in case you hit tough financial times. Furthermore, you can only lose the amount of money you have put in because you are not leveraged, meaning you do not need to get as concerned about market fluctuations.

Another benefit is mostly psychological — you actually own your house, giving you a sense of security and pride. Probably most importantly, you are a very attractive buyer to motivated sellers, giving you an edge over other buyers. The deal will be simpler and faster for both sides and buying in cash may even put you in a position you to get a better deal. After all, time is money.

Cons

Paying cash for your home likely means most of your savings or at least a lot of your money will be tied in one asset, leaving less money to invest in other, diversified assets. Also, real estate has a historically lower return on investment than stocks or bonds, meaning you could be losing out overall if other investments would have outperformed the interest on a mortgage.

Additionally, you are sacrificing liquidity, so it’s probably only a good idea to buy a house with cash only if you can afford it without emptying your emergency fund. A home can take months to sell, and borrowing against your home’s equity brings fees and borrowing limits into the equation. You further lose the financial leverage a mortgage provides because your payment is locked in and hopefully received a favorable interest rate. Lastly, you will not qualify for the tax deductions mortgage payers receive, which often total over $10,000 when itemized.

How you pay for your home is a very personal decision and paying in all cash will likely work for some people but not for others. This generally makes sense if the home’s price does not subtract a significant portion of your liquid assets and/or the interest rate you would pay on a mortgage is higher than what you could earn on other investments. It’s important to properly assess your financial situation and long-term investment strategies, the drawbacks as well as the benefits.

Read next: How Much Rent Can You Afford?

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MONEY

How Much Rent Can You Afford?

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It all depends on your other expenses.

When with one of my friends recently, I walked past a building covered in “for rent” signs from a property management group in Chicago, where we live. “Oh, hey, it’s the company that robs me blind every month,” my friend muttered as she saw the logo.

A lot of people feel that way when it comes to cutting a rent check (and Chicago isn’t even that bad, as far as housing costs in big cities go). A new report from the Joint Center for Housing Studies at Harvard University says more than half of people who live in the highest-cost metro areas put more than 30% of their income toward rent (aka cost-burdened renters). Nationwide, nearly half of renters shell out more than 30% of their pay for housing, and roughly a quarter pay more than 50% of their income toward rent.

For a large number of people, that’s the reality of renting in the U.S.: It’s really expensive, and finding a way to make it work can be very difficult. But if you’re living in a place like San Francisco, where the average rent price increased 14.9% from 2014 to 2015, according to Zillow, how exactly are you supposed to find affordable housing at all? The first step is to figure out what “affordable” means for you. Everyone’s priorities and circumstances are different, but math can be a harsh, yet helpful, equalizer. I put the topic to members of the Financial Planning Association, and most of them insist on putting no more than 30% (or even less) of your annual income toward annual rent expenses.

Still, there’s a lot more to consider than the equation of (annual income) x .30 = maximum annual rent. Here are some things you need to do in order to figure out how much rent you can afford.

Make a List

What are your major financial goals? Because for every dollar you put toward rent, that’s a dollar you’ll never get to put toward traveling, homeownership, retirement or anything else you need money to accomplish. Even things that aren’t as easy to quantify monetarily — how much you value living in a certain area, your ideal commute time, access to certain transportation methods — need to go on your priority list, too.

“It may not be that we can have everything we want right now,” said Eric Roberge, a certified financial planner in Boston. “It’s about prioritizing your goals and building up to living in the place of your dreams, especially when you’re graduating you have plenty of time to spend in the city — you don’t have to be there immediately.”

Roberge said that’s a frequent dilemma he sees among his clients (he works with 20- and 30-somethings in Boston): Young people want to live in high-rent areas before they can really afford to.

Do Some Math

You have to look at more than just the advertised rent pricing on a living space, because you’ll have many more regular expenses associated with your house or apartment. FPA members recommended keeping the rent portion ideally at less than 25% of your income, to allow room for costs like insurance and utilities.

You may need to think of transportation as part of your rent costs, too, especially if you have to pay for a parking permit or parking space because of where you choose to live. The more of these add-on expenses you have (for example, are the utilities included in your rent payment?), the less you should try to spend on your base rent.

What About Your Other Expenses?

If you’re like many Americans, you have debt. This is especially prevalent among young college grads. That has to be a factor in deciding what you can afford in housing costs.

“The conventional statistic is that no more than 28% of gross salary be spent on housing and no more than 36% on consumer debt. However, that does not at all take into account other obligations in people’s budgets,” said Kristi C. Sullivan, a CFP in Denver, in an email. “Student loans are a large bill for many and if that’s the case, you can’t afford to spend 28% on housing because then you’ll have nothing left for food. Rent is not the fixed expense people think it is. You can lower this cost by living in a less desirable area of town, having roommates, or living in a smaller place.”

Roberge said a common mindset he sees is that people will find a place, decide to move in and figure they’ll make everything else work afterward. To improve your chances at financial success and stability, you need to plan more carefully. Be honest with yourself about where your priorities lie (not just those that give you instant gratification, like a sweet apartment), and you’re less likely to find yourself in trouble with debt or a savings shortage. Keep in mind that paying down your debt and making payments on time will help you build credit, which will come in handy later on when you’re looking for that dream apartment or home. You can track your progress by checking your credit scores regularly.

Read next: How to Be a Dream Tenant and Snag Any Rental You Choose

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MONEY home financing

The Layperson’s List of Mortgage Application Junk Fees

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You should challenge fees that make no sense.

From time to time we bring you posts from our partners that may not be new but contain advice that bears repeating. Look for these classics on the weekends.

Thanks to two home purchases and refinancing my mortgage five times, I’ve become very familiar with that eternal home loan enigma known as the mortgage junk fee. As a result, I always challenge the more questionable junk fees — and you should too.

So what is a junk fee? Well, it refers to dubious lender or broker fees designed purely for increasing their profits. Yes, some fees are legitimate; after all, lenders and brokers have to make their money too, but in many cases junk fees are 100% profit.

So how can the layman know whether or not the fees listed on the itemization statement are legitimate? Well, here are three tips — and a junk fee glossary — that should keep you from overpaying at closing time:

1. Comparison Shop

The best way to fight excessive junk fees is to comparison shop your loan and make sure that you try to negotiate each one down to, at the very least, the lowest price you receive.

2. Challenge Questionable Fees As Early As Possible

It’s important to understand that the time to challenge these fees is not when you’re at the settlement table signing papers. Instead, do it after you’ve got several estimates in hand from which you can compare fees.

3. Understand What You’re Being Charged For

It’s a cliche, but it’s true nevertheless: knowledge is power. So here’s a junk fee glossary that will shine a light on some of the more common charges:

Where applicable, at the end of each description I’ve included the percentage of institutions charging each of these junk fees based upon a survey conducted by Bankrate.com; the lower the number, the more negotiating leverage you should have to get the fee removed or lowered.

Administration. A pure junk fee that’s supposedly used to cover the cost of managing the loan during the closing process; it’s outrageous and ripe for negotiation. (14%)

Application Fee. This fee is shameful. No lender that wants your business should ever charge this fee. Imagine paying money to simply fill out the application to buy a service. This is equivalent to a hamburger stand charging you money to place your order for a cheeseburger. (18%)

Appraisal Fee. Lenders need to know the value of your home. But in times of rising home prices this is usually unnecessary if you refinanced or bought your home within the previous year. (83%)

Closing Costs / Settlement Fees. These fees cover services that must be performed to process and close your loan application such as title fees, recording fees, appraisal fees, credit report fees, pest inspection, attorney’s fees, taxes, and surveying fees. Watch for double-dipping with other junk fees. (93%)

Commitment Fee. This odd fee is supposedly the cost of processing the loan terms-and-conditions paperwork. Completely bogus. (2%)

Credit Report. This is exactly what it says. Credit reports are extremely cheap; they’re generally free to individuals at least once per year. While they aren’t necessarily free to the lenders, it is highly doubtful they are paying even $100 for it. This is usually a big profit maker for the lender. (81%)

Document Prep. This is a classic junk fee that nobody should ever pay. The process of preparing paperwork is an inherent part of the lender’s job. This is tantamount to a burger joint tacking on an additional Burger Preparation fee on top of their advertised menu price. (34%)

Discount Points. This fee is used to buy down the interest rate. (47%)

Express Mail Fee. Again, another junk fee that should be inherent to the lender’s job. This is also sometimes listed as a Postage or Courier Fee. Despite the high number shown in the bank rate survey, I’ve successfully got this charge removed all but one time. Don’t feel bad for the lender — they aren’t losing any money here. (81%)

Fee. That’s right. “Fee.” If you see this garbage charge, immediately call your lender to get a detailed explanation of this. As she stammers and stutters, be ready to pounce on any instances of double dipping that crop up.

Flood Check/Certification Fee. In order to comply with federal regulations and secondary mortgage requirements, lenders are required to obtain a certification from a surveyor indicating whether the property is within a flood hazard area. (95%)

Funding Fee. This is similar to a wire transfer fee, so watch for double-dipping. (14%)

Lender Fee. These fees are borne by the lender during the closing process and may include attorney fees, application fees, recording fees, courier fees, etc. If this number appears excessive to you, ask for a detailed breakdown of all costs involved with this fee. Then after you get the breakdown, make sure the lender is not double-dipping by charging you a Lender Fee and a Courier Fee. Due diligence on your part usually makes this one of the more negotiable fees. (46%)

Origination Fee. This is a payment associated with the establishment of an account with the lender.

Processing Fee. This fee is fairly common and covers the cost of processing the loan. (45%)

Reconveyance Verification Fee. A fee — if not an outright scam — charged to have someone verify that the bank holding the seller’s loan actually reconveys the title, or clears the loan. Pure poppycock.

Tax Service Fee. This is a fee to cover a third party the lender hires to monitor and/or pay the property tax bills. (82%)

Title Fees. These fees may include escrow fees, document prep fees, messenger service fees and recording fees for recording the title onto the deed. Watch for double-dipping here. (29%)

Title Insurance. This fee covers the costs of assuring the lender that you own the home and the lender’s mortgage is a valid lien. It also protects the owner in the event someone challenges ownership of the home. (83%)

Underwriting Fee. A lender charges mortgage underwriting fees to cover the cost of evaluating your total loan application package, including your ability to pay the loan back. This should include your credit report, employment history, financial documents and appraisal. Again, watch for double-dipping; there should be no credit report fee if there is also an underwriting fee. If you’re working with a broker, he shouldn’t be charging you for a separate underwriting fee, as this is handled solely by the lender. (40%)

VA Funding Fee. This is required by law and is intended to enable veterans who obtains a VA home loan to contribute toward the cost of this benefit, thereby reducing the cost to taxpayers. It is usually in the vicinity of 2% – 3% of the loan. If you aren’t getting a VA loan, then you shouldn’t be charged this fee.

Warehouse Fee. A lender will tell you this is his cost of temporarily holding the loan before it’s sold on the secondary mortgage market. Utter garbage.

Wire Transfer Fee. This fee covers the cost of transmitting cash via the inter-bank wire transfer system to you, your prior lender or the company closing the loan. Similar to the Funding Fee, so watch for double dipping. (50%)

Remember, federal law prohibits lenders from charging fees for nonexistent goods or services, as well as markups of settlement expenses when no additional services are rendered. But the good faith estimates that the lenders hand out have very minimal legal backing, so in the end it is up to you to make sure that you are not being taken for a ride at closing time. Knowing the make-up of your junk fees is a great place to start.

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MONEY

How We Paid Off Our Mortgage in 7 Years

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Andrea Stewart and Jerimiah Honer bought their house on a 0.10-acre lot in Sacramento for nearly $300,000 in 2008.

The idea behind paying off a loan faster than scheduled is pretty simple: It saves you money. That’s a huge part of the reason Andrea Stewart and Jerimiah Honer decided to repay their 30-year mortgage in just seven years — by doing so, they saved more than $130,000 in interest. Now the couple has an opportunity to achieve other goals, like invest beyond their property and existing retirement funds, travel and maybe do a little shopping. The frugal pair hasn’t done a lot of that in the last several years.

Stewart, 32, and Honer, 36, worked hard to save money as they tried to accelerate their loan repayment, but they acknowledge they also had a lot of luck. Paying off debt is a different journey for everyone, but here’s how they quickly achieved their dream of owning their own home.

The Details

Stewart and Honer bought their house on a 0.10-acre lot in Sacramento for nearly $300,000 in 2008. Their combined annual income from their full-time jobs amounts to roughly $150,000, but they received supplemental income from a variety of sources along the way to repaying the mortgage. They made a 10% down payment and received a 30-year mortgage with a 6.75% interest rate, but they refinanced twice, to 5.25% and then to 3.875%. Honer calculated their estimated savings of $130,000 using the lowest rate. The couple had some student loan debt when they took out the mortgage, but by paying an additional $200 a month toward their education debt, those loans were paid off by the end of their first year in the house.

That’s when they switched their attention to the mortgage.

How They Paid Off a 30-Year Mortgage in 7 Years

The property itself had a huge impact on the couple’s ability to put a lot of money toward their home loan. The house is close to downtown Sacramento, allowing them to easily commute by bicycle and sell their second car. Honer and Stewart also grow most of their own food.

“It’s actually easier to go into your backyard and pick things than go to the grocery store,” Honer said. “We like the organic element as well as it’s a huge bill cut.”

Not only did they save a lot on gas, vehicle expenses and grocery bills, they also budgeted as if they made less money in the first place. Honer crunched the numbers, and even though both he and Stewart have full-time jobs, they figured out they could manage under one income. The second income went toward the mortgage, and Honer made his own amortization schedule to determine how much they could afford to pay (and eventually save).

Much of their success stems from their mindset toward money.

“I think we were always frugal to begin with — we’re both savers,” Stewart said. “One of the things we asked ourselves when we made a purchase was, ‘Is this really going to make us happy?’ … We try to have experiences like traveling and things like that, yeah, but I don’t think [we like] a lot of stuff.”

Or, as Honer puts it: “We don’t know how to spend money anymore. We kind of forgot.” He also said that they’re not “big credit people,” and even though a mortgage is a helpful credit instrument, it was important to them to be out of debt as soon as possible.

Tips for Paying Off Debt Fast

For anyone interested in trying to replicate their success, there are a few things to know. First, they paid off their other debt obligations (student loans). In addition to cutting out expenses and keeping to a strict budget, Honer and Stewart received some money besides their regular income, which they put toward the loan. The two are aspiring writers and made some money from side gigs, but they also received personal-injury settlements from two separate times a car hit one of them while riding a bicycle. Getting hit by a car isn’t exactly good fortune, but the settlements amounted to $37,000, which helped cut down the debt. Inspired by a friend’s successful pregnancy through egg donation, Stewart twice donated eggs and received about $6,000 each time.

Their story is a combination of hard work, a solid financial situation and luck, but a lot of their success comes down to decision-making: They could have done a lot with their regular income and the additional money they came into, but they chose to put it toward a specific goal. That means their home cost them thousands of dollars less than it could have if they paid for it on schedule.

There’s not much they would have done differently, though they admit they could have saved more, rather than just pay off the home loan and contribute to their retirement accounts. Honer and Stewart don’t see themselves changing their spending habits now that this huge loan is behind them, and they plan to stay in the home for a long time. Now they’re interested in exploring other investments and maybe even retiring early some day.

“I hope it helps some people,” Stewart said of her decision to share their story. She posted about it on Reddit, where it generated a lot of conversation. Her advice? “I would say just think about what makes you happy.” That’s what drove their decisions, and it kept them on track for years.

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MONEY selling a home

5 Ways to Deal With the Eyesore Next Door

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Stephan Zabel—Getty Images

Don’t let the neighborhood eyesore put your home sale at risk — take action with these 5 tips.

You’re almost ready to put your house on the market when you realize it: The neighborhood eyesore is going to pose a problem.

Sure, we know some people might view any attempts to hide an eyesore from view as being underhanded, sneaky, and designed to fool unsuspecting buyers. They might envision unscrupulous sellers and agents who keep their fingers crossed, just hoping no one spots the eyesore next door.

If you feel that way, by all means, point out the junkyard behind you that’s worthy of American Pickers, the yard next door that looks more like a prairie than a lawn, or the bail bonds sign spray-painted on the wall across the street.

For the rest of us, here are five ways to resolve these eyesore neighbor homes so that would-be buyers won’t be scared off. And who knows? Maybe if you tackle these unsavory sights, you’ll decide not to sell your home after all.

1. Ask your neighbor to fix the problem

This solution can be tricky. There’s really no easy way to tell someone that his or her house is the neighborhood eyesore. But there are some methods that might help.

“Just writing a friendly note (dropped off with a bottle of wine or another small gift) can sometimes do the trick,” says Ross Anthony, a San Diego real estate agent.

It also can’t hurt to mention to your neighbor that the more your home sells for, the more his or her home will be worth.

2. Be neighborly

You know how people can become desensitized to certain smells? (“How did you know I had a cat?”) Well, people can become so accustomed to the condition of their house that they don’t notice when it looks run-down.

This sometimes happens with elderly homeowners: either they haven’t realized the condition of their home or they simply can’t manage the upkeep. You might think a condo or townhouse situation might better suit your overwhelmed neighbor, but steer clear of that suggestion.

Instead, offer to spruce up the house yourself. “If it is an elderly person, I offer to help,” says Sarah Bentley Pearson, an Atlanta real estate agent.

But it’s not just elderly neighbors with houses that could benefit from a little TLC — just think of all the work you did to get your house in selling shape!

Alexander Ruggie of 911 Restoration in Los Angeles says that if the next-door neighbor has a poor paint job, a wobbly fence, or a caved-in garage, there’s no reason you can’t offer to help fix the problem. “Most people would be surprised how much they can convince people to do when they offer to help do it.”

3. Notify your HOA

If you live in a community with a homeowners’ association (HOA), let it know about the unkempt house near you. One of the main reasons HOAs exist is to prevent homes in the neighborhood from becoming eyesores that could drive down the value of your home.

Your HOA might send a letter to the offending neighbor warning him or her to fix the problem or face fines. Or the HOA might take care of the problem and then bill the homeowner.

4. Call the city

If your neighbor won’t mow his or her lawn, get rid of the junk outside, or let you help tidy up, you can always call your local government.

“If there is a really bad problem, like the grass is a foot tall and there are junk cars on the front lawn, your neighbors are probably in violation of local codes and can be forced to clean up,” says John Z. Wetmore, producer of the TV show Perils for Pedestrians.

Do this well in advance of putting your house on the market. The city could give your neighbor up to 90 days to meet housing codes.

Wetmore also suggests that you “walk around the block and pick up any litter along the public streets and sidewalks.”

If the house is a bank-owned foreclosure, find out which bank owns the property by checking county title records. Insist the bank maintain the property.

5. Plant view-blocking trees or install a fence

It might be worth the investment to block an unsavory view. If you plant trees, choose ones that are at least 6 feet tall to give you an immediate sense of privacy. Privacy fences should also be 6 feet high.

If your neighbors are noisy, putting in a small waterfall can drown out the racket.

“You only have one first impression,” says Ross Anthony. “You want potential buyers to fall in love with your home before writing it off due to an unkempt neighboring property.”

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MONEY home ownership

Homeownership Hits Another Record Low

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Still can't afford a home? You've got company

For millions of young Americans the dream of ownership may be farther away than ever.

A decade after the housing bubble collapsed, America’s home ownership rate is still dropping, according to a new survey by Harvard University’s Joint Center for Housing Studies. Just 63.7% of American households owned their own homes in the first quarter, researchers found. That ratio is the result of 10 consecutive years of declines since nearly 70% of Americans called themselves homeowners in 2004.

What gives? Despite a bull market and improving jobs picture, many of America’s would-be home buyers—Gen Xers in their 30s and 40s and twenty-something millennials—are still trying to get out from under the financial burdens imposed by the recession.

Most Gen Xers were just buying their first homes or getting ready to trade up when housing prices peaked in 2006. As a result, they had the smallest financial cushion when the recession hit. Unable to make mortgage payments, many were forced to rent again. Today homeownership rates for this age group has fallen to a level “not seen since the 1960s,” the study found.

While Millennials didn’t fall into that trap, they’ve faced their own hurdles. The influx of older renters has pushed up what landlords can charge, making it harder for would-be first time home buyers to scrape together money for a down payment. Over the past decade, the percentage of young renters age 25 to 34 facing a “cost burden”—meaning they spend more than 30% of their income on housing—has jumped to 46% from 40%.

What can improve the situation? On a policy level the researchers call for loosening lending standards, such as offering loans to borrowers with smaller down payments or lower credit scores. Of course, given that was a big part of what got us into the housing mess in the first place, that seems like a ticklish proposition.

A better bet may be that the economy will bail us out, with a slowly improving employment situation boosting incomes. One thing that hasn’t changed: Young Americans still want to own homes. Among renters in their 20s and 30s, more than 90% hope to buy a home eventually, according to a Fannie Mae survey cited by the authors.

 

 

 

 

 

MONEY sharing economy

Airbnb Says Renting Your Place Is Like Getting a Big Raise

airbnb-raise-income-report
Steve Lewis Stock—Getty Images

A new company report claims being a host nets you about $7,500 a year.

Airbnb is busting out big guns in its latest PR move. The lodging rental business has hired former White House National Economic Advisor Gene Sperling (now a consultant) to report on the impact of Airbnb-style home sharing on middle class incomes.

Unsurprisingly, Sperling’s new report comes to sunny conclusions: He claims “the typical single-property host makes an extra $7,530 annually” by renting his or her primary residence for about two or three months each year—the equivalent of a 14% raise for a household that pulls in the median income of $52,800 a year.

The paper—which surveys Airbnb earnings in New York, Boston, San Francisco, Los Angeles, and Portland, Oregon—goes on to say that the extra cash earned via Airbnb can help offset the fall in real income for middle class Americans over the past 15 years.

Of course, not everyone might see Airbnb as a boon to the middle class. For example, some long-term tenants claim they’ve been evicted by landlords looking to profit from more lucrative short-term rentals.

And New York’s state attorney general has claimed that about 70% of Airbnb’s New York City listings are illegal, with most of the money going to landlords who are essentially operating unregulated hotels. That could mean lost tax revenue—and higher rents and housing costs for the city as a whole.

Even the statistics in the Airbnb report suggest the site’s customer base is not overwhelmingly middle class: 45% of Boston Airbnb hosts reported household incomes of more than $100,000 in 2013.

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