November 2007 Archives

November 20, 2007

Top Ten Holiday Gifts for New Homeowners

Shopping for friends or family who just bought their first home? Here are some holiday gift ideas that are sure to be appreciated.

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  1. Gift certificate for Target, Home Depot, or a favorite hardware or home improvement store. First-timers love to buy things for their new house or condo, but are often strapped for cash. Your gift certificate can help finance that weed whacker or new drill they've been lusting after -- or even be used to sign up for a home improvement class.

  2. New plants, pots, or tools for the garden. For many people, one of the best things about buying a home is the space to start a garden (even if it's just a deck or patio for container gardening). Check out a local nursery, Smith and Hawken or The Gardener's Supply Company, for lots of gift ideas. If you're buying plants, be sure to read the plant labels carefully - you don't want to give someone a shrub that will take over their entire yard, or a flower that needs constant watering and attention.

  3. A local guidebook. Even if someone is not new to the area, it's always nice to have an up-to-date guide to local hiking trails, restaurants, or bargain shopping.

  4. Home-related books and magazine subscriptions--whether decorating, cooking, entertaining, or home repairs--are sure to be a big hit. There are hundreds of options (depending on the particular homeowner's tastes), including books and magazines by Martha Stewart such as Martha Stewart's Homekeeping Handbook: The Essential Guide to Caring for Everything in Your Home; Real Simple magazine (especially good for people who love to organize); Sunset Magazine and Sunset Books ; ReadyMade Magazine for creative do-it-yourselfers; Food & Wine magazine, cookbook or club; or Elle Décor or Architectural Digest (for more sophisticated tastes). If in doubt, buy a gift certificate from your local bookstore, Amazon, Barnes & Noble, or Borders.

  5. Functional, but beautiful items, such as a decorative nightlight, candles, soap, or a throw for the living room are great gifts (just make sure they match the décor and color scheme). Forget anything for the kitchen, such as new wine glasses, unless you know for sure they are on the holiday gift wish list. If in doubt, go the gift certificate route again--whether it's a local store or a big chain like Target, Bed Bath and Beyond, Crate and Barrel, or Sur La Table.

  6. A framed photo or drawing of the house (if you're artistic) is a wonderful gift (assuming the real estate agent hasn't already thought of the idea).

  7. Entertaining items for nesting (new home buyers will probably be doing a lot more cocooning than pricy nights out). A subscription to Netflix or a board game (there are dozens of versions of Monopoly available, from the classic to a Boston Red Sox special edition) are just a few ideas for at-home entertainment.

  8. Food basket. Anyone on a tight budget will appreciate getting luxury edibles that they won't be buying on their own for a while (whether special vinegars, chocolates, chutneys, or pastas). Trader Joe's and Whole Foods both carry lots of good items for a tasty food basket.

  9. A house-related Christmas tree ornament (for those who celebrate Christmas), with the date and street address of the new home. Sounds schmaltzy but is bound to please.

  10. The gift of time. This is the best gift yet for new homebuyers. Make up your own coupon or gift certificate offering a set number of hours of your time helping with a home project (painting, weeding the garden, grouting, or pulling up old carpet). Or offer to bring dinner over one night, babysit the kids, or walk the dog.


If none of these ideas strike your fancy, get online and start looking. Gifts.com has lots of great ideas. Check their recommendations for housewarming gifts -- such as household key racks, family fridge magnets, personalized garden stakes or doormats, whimsical bird feeders, unique bookends, or a feng shui kit.

And if you're looking for a gift for friends who are looking for their first home, don't forget our book, Nolo's Essential Guide to Buying Your First Home, by Ilona Bray, Alayna Schroeder, and Marcia Stewart.

Marcia Stewart

November 15, 2007

Should U.S. Buyers Worry About Gazumping and Gazundering?

As if homebuyers around the world didn't have enough to worry about, and enoughHouse in England vocabulary to learn: Those in the U.K. (especially, England, Ireland, and Wales), may encounter "gazumping," where the seller can accept another (better) offer at the last minute, even after having said yes to the original buyer's offer long ago; and "gazundering," where the buyer can wait until the last minute to say "I won't go through with the sale unless you lower the price."

(I'm not making this up! Here's an example from Ireland of overseas media coverage of this issue.) Like so many colorful words, gazumping and gazundering are reputedly of Yiddish origin.

And now, with Thanksgiving coming, let's all take a moment to give thanks to U.S. real estate laws. The reason gazumping and gazundering can happen in the U.K. is that the seller's acceptance of the buyer's offer is done orally, and doesn't make the deal legally binding. They wait to sign a written contract until the end of what we think of as the escrow or closing period - after they've performed all the usual tasks like examining the property and its title. That can take several weeks no matter where you live, during which time either party can pull out of the deal for any reason. Though they're expected to honor their oral deal, it obviously doesn't always work that way.

Here in the U.S., you normally sign the contract early on, but pack it with "contingencies," to give you an out - or grounds for renegotiation - if circumstances change as you prepare to close the deal. For example, if you're the buyer, you'll want to make sure your contract contains an inspection contingency, letting you pull out if you find that the house contains physical defects that you weren't originally aware of. The seller may also put contingencies into the contract -- for example, making the house sale conditional on finding another house to buy. We've said it before, but we'll say it again: Don't give up your chance to add self-protective contingencies to your contract!

Still, this look across the pond is a good reminder that, in any house sale, it ain't over till it's over. Sellers and buyers, ethically or not, may try to mold the agreement to their interests and pull last-minute surprises. Usually the surprises are minor, and easy to negotiate around (another reason to choose a real estate agent who's a good negotiator). But in case of major surprises, realize that even with a binding contract, you may need to make a trip to the courthouse to enforce your agreement.

To learn more about the escrow process here in the good ol' U.S. of A., read Nolo's Essential Guide to Buying Your First Home (Nolo), by the authors of this blog, or go to our good friend Sandy Gadow's website at www.escrowhelp.com.

Ilona Bray

November 6, 2007

Not All Home Sellers Are Desperate -- Know Your Market!

A two-bedroom, modest home in my neighborhood just sold for $55,000 over the asking price, after receiving several bids. And yes, I did write this in November 2007, when the national headlines were full of nothing but doom and gloom about the housing market.

I can't help wondering whether some of the people who were outbid were relying on those national headlines. I know for a fact that at least one of them bid at the asking price. Perhaps they hadn't really done their homework about the local market, where competing bids at far over asking price continue to be a common (and frustrating) feature of homebuying.

Home prices have actually risen over the past year in five of the 20 cities studied by the widely followed S&P/Case-Shiller Index. These include Atlanta, Charlotte, Dallas, Portland, and -- with the biggest gains -- Seattle.

But plenty of cities aren't covered by this study, and even regional trends don't tell the whole story. That's why it's important to get to know your local market -- even at the neighborhood level -- before bidding on a house. Go to open houses and quiz the selling agent about how many offers they anticipate, ask your agent to pull up actual sales prices on comparable houses sold within the last few months (or research these yourself on sites like Zillow), talk to the neighbors, read the local headlines, and more. Then you'll be ready to submit an appropriately priced and crafted bid.

To learn more about how to assess the market in your area - or even somewhere you've never been - check out Nolo's Essential Guide to Buying Your First Home, by Ilona Bray, Alayna Schroeder, & Marcia Stewart (Nolo).

Ilona Bray

November 5, 2007

Don't Go Wild Buying Holiday Home Decor

Holiday lightsLooks like it's time for me to take down the Halloween decorations and get ready for the next spate of holidays. My family always gets absurdly nostalgic about saying goodbye to holidays just passed - my mother once left the Christmas tree up until Valentine's Day. (I remember, because we replaced the ornaments with hearts, as a joke.)

But aside from sentiment, one of the worst things about taking down decorations is that you've got to repack them and find space to store them. And if you're the owner of a small, starter house like I am, storage is a never-ending problem.

So, as one who is already stretching the limits of her attic, let me caution new homeowners: Don't buy too much decorative stuff! Especially the space-consuming, landfill clogging plastic type of decorations. Paper products at least stack or fold up nicely, and can ultimately be recycled.

You'll go easier on your budget, too. According to Forbes, Americans paid a total of around $1.4 billion for Halloween decorations this year. Although that still translates to an expenditure of only $26.59 per person buying, the numbers have been steadily rising - and retailers are responding with new temptations. And we're only at the start of the holiday buying season . . . .

Ilona Bray

November 1, 2007

California Wildfires Remind Buyers to Carefully Choose an Insurance Policy

The recent fires that have plagued Southern California remind us of one of the more mundane aspects of shopping for a home: buying homeowners insurance. It's hard, before you even have keys to your new home, to think about what will happen if it's destroyed or damaged. It's especially difficult when you're already about to spend a huge sum of money on the purchase itself. You may be tempted to cut corners when it comes to buying insurance, but don't.

The most important policy you'll buy will be hazard insurance, which will cover you for major disasters and theft, but will have major exclusions too (including flood and earthquake damage). At very least your policy should have "replacement cost coverage," which will be based on the cost of replacing your home and its contents, not "actual cash value" coverage, which only covers the current, depreciated value of your home and its contents. You'll also need loss of use coverage, paying you for extraordinary expenses you incur as a result of not being able to use your home. You'll want to know the overall dollar and time limits for receiving loss of use payments.

You'll also need liability coverage, which will cover the medical costs of guests who sustain injuries in you home, as well as related court costs you may incur. Policy limits may be too low given the cost of medical expenses today; you may want to purchase additional coverage.

Depending on your situation, you may also purchase flood or earthquake insurance, which is well worth it if you live with risk of either. (Check your flood danger and earthquake risk yourself.) And many homeowners need personal property floater policies, covering specific high-value items like jewelry.

To find the best policy for you, consider working with an insurance broker. The broker will have access to many different companies' policies and can answer questions you have about what each policy offers (of course, that's no substitute for reading it yourself). Compare at least three or four separate policies before making a decision. Don't base your decision solely on lowest price--instead, look for quality of coverage. You can use a handy form like the one here.

These careful decisions will make it easier to deal with your insurance company when it comes to a fire or other qualifying incident. (For tips on what to do after a fire, see the article in Nolopedia entitled After the Fire: Dealing with Your Insurance Company.) Hopefully, you'll never have to deal with these problems at all.

If you want to learn more about the types of insurance that are available to homeowners, check out Nolo's Essential Guide to Buying Your First Home, by Ilona Bray, Alayna Schroeder, & Marcia Stewart (Nolo).

Alayna Schroeder