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Losing Your Earnest Money

Question: The contract I just signed to purchaser a house contained the following language: “If the buyer defaults, the earnest money will be forfeited to the seller. This is to be considered liquidated damages and not as a penalty”. Can you please explain what this means? Beth.

Answer: Shame on you, Beth, for signing a contract without fully understanding what it means. It could have required that your car and your current pension plans be given to the seller if you did not go to closing (escrow). (Just kidding, but stranger things have happened when people sign something they don’t understand).

In your case, should you not be able to finalize the deal, you will have to forfeit (ie lose) the earnest money you posted when you initially signed the sales contract. But the law is clear that if the amount you are forfeiting is not consistent with what the seller may have lost because you did not go to closing — but instead is really a penalty — the law will not allow you to lose your deposit.

So lawyers put in the language you question about to protect the sellers.

However, that does not mean you will lose your deposit, if you can prove that the money is disproportionate to the actual loss that your seller may face.

Oversimplified, the damages will be accepted as “liquidated” if the seller cannot really anticipate what the losses will be should you default. Accordingly, it is typical for that language to appear in real estate contracts.

So, for my buyer readers, try to post as little of a deposit as possible; and for my seller clients, try to get as large a deposit as possible.

Hopefully, you will eventually split the difference. And of course, this is completely academic if the buyer closes the deal.

Question: I am a teacher and I live in a co-op. I paid $200,000 cash for my apartment in 2003. In 2008, I took out a HELOC loan on my equity. I now owe $75, 000 on it. When I signed the papers, I was told that if I did not sell my home before principal and interest payment kick in (March 2017) I would just need to apply for refinancing. I did that a few months ago while rates were low and everything was set within a week. My FICO score hovers at 800 and I only owe a monthly plan for a new air conditioner on which I pay more each month than the monthly requirement. At the last minute I was called by the bank to say “sorry, we no longer finance co-ops as we did when you got yours.” My payment will go up about $450 for an grand total of $640 a month. As a teacher who has not had a raise in a long time, I can not afford this payment. I have never been late on any payment for anything and don’t live beyond my means. I can not find an instance where my co-op had a problem with a bank. In checking around, I have not been able to find any local banks who finance co-ops, especially for such a low amount.

Any suggestions? I do not want to sell my house and renting is astronomical. Kim.

Answer: Dear Kim: Assuming your cooperative apartment did not dramatically go down in value since you bought it some 14 years ago, you clearly have considerable equity. I know that not every lender is prepared — or even understands — how cooperative funding works, but clearly there are lenders out there that can assist.

First, is there a teacher’s credit union near you? From my experience, many credit unions will make you a loan based primarily on your credit standing. They need to take the ownership certificate (often called “shareloan certificate) as security but that is something that any local real estate attorney can easily assist in doing.

Another source of lending is the National Cooperative Bank. Although its main office is in Arlington, Virginia, they make loans all over the United States. (www.ncb.coop).

Question: My husband and I plan to buy an investment property, and want to make sure our other assets are protected. What is the best way for us to take title? Emily.

Answer: Dear Emily: as I just wrote to another reader, I cannot provide specific legal advice. However, in general, there are three ways in which title can be held.

First, individually, in the names of you and your husband. That provides the least protection. Even if you have more than adequate insurance — including umbrella coverage — there is always the possibility that your other assets can be grabbed. For example, a court judgment exceeds the insurance limits; or the insurance carrier declines coverage for reasons spelled out in the insurance policy.

Next, you can take title in the name of a corporation. Talk with your financial advisors about this approach; from my experience, there is too much paper work and corporate filings required to make this a favorable option.

Next, you can take title in the name of a limited liability company (LLC). Although I don’t normally make recommendations, this is what I generally suggest to my investor clients. The LLC provides the same protection as if it were a corporation but with less complications and less paperwork. Oversimplified, it is called a “pass through” entity; the LLC files an information tax return but the profits or losses are “passed through” and you include those numbers on your individual tax returns.

Every project is different; review these alternative but discuss with your financial and legal advisors. And the recent tax proposals submitted to Congress by the President seem to favor “pass-through legal entities, as we all know, Congress has the final say.

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Designing Condos For Kids

The idea that cities are no place to bring up children — that somehow every kid should grow up on a farm or in a suburban home with a huge backyard — has always been challenged by City of Toronto planners. More than 100 years ago, the city developed the Playground Movement to build inner-city playgrounds for children.

By 2011, 30 per cent of families with children lived in mid and highrise buildings.

But in recent years the explosion of condos hasn’t been so friendly to children. From 2006 to 2015, more than 80 per cent of the new dwelling units in the city were in buildings higher than five storeys, but 50 to 70 per cent of them were bachelor or one-bedroom units. Many of the two- and three-bedroom units were considered too small for a family to live in.


A City of Toronto staff report, which will go before City Council in July, says, “This trend towards highrise accommodation of housing need will continue. Given that 39 per cent of households in the City of Toronto include three or more people, it is important to ensure our future housing stock accommodates a variety of household types at different life stages.”

The city has developed a study, Growing Up: Planning for Children in New Vertical Communities that includes draft guidelines for developing highrise communities that are family friendly.

“In vertical communities, planning for children is predicated on the understanding that the public realm and community amenities become extensions of the home,” says the study. “Families rely on routes that are safe and that facilitate children’s independent mobility as they grow up. A public realm that meets the needs of children also accommodates the population as a whole. For example: designing comfortable, safe streets that support public life will not only encourage families to linger and socialize, but they will become an asset to all users. The presence of children in the public realm is an indicator of a healthy community.”

The study guidelines cover neighbourhoods, buildings and individual highrise units.

“The guidelines reflect what we heard during the consultation process and recognize that in many cases families living in vertical communities rely on the city’s parks and open space system as their outdoor living room,” says the staff report. “They also provide consideration for integrating community services and facilities such as child care and schools into developments.”

Developers should be encouraged to provide flexible and diverse retail space on the ground floor of buildings, along with “a sense of joy and playfulness by incorporating whimsy in public art, building design, streetscapes, street furniture and open space features.”

The study recommends that each building provide a minimum of 25 per cent of large units in buildings that have 20 units or more (15 per cent two bedrooms and 10 per cent three bedrooms) and that these units be located in the lower portions of the building. Being on the lower floor reduces dependence on the elevator and provides easier access to the outdoors. It also could allow units to overlook outdoor playgrounds or public spaces to allow informal supervision, as well as “take advantage of deeper floor plates to provide wider common corridor space, enable layout flexibility and maximize unit size for laundry rooms, entrances and storage areas.”

Some current condo buildings reportedly don’t allow strollers to enter via the front lobby — they must come in the building through a service entrance.

Buildings should also provide indoor and outdoor amenity spaces that are flexible and support a variety of activities and age groups, say the guidelines.

A few Toronto condo buildings have already introduced day care spaces in their buildings, as well as amenities such as games and crafts rooms, indoor and outdoor playgrounds and splash pools.

“While these projects do not meet the proposed Growing Up guidelines related to unit size and mix, they do illustrate an uptake in the demand and supply of family-suitable condominium buildings,” says the staff report. “They also reflect the developer’s willingness to market to families with children.”

Buildings should “become future-proof and allow for alterations, such as adding or removing partitions,” says the study. The guidelines call for flexible building designs that use columns rather than shear walls and provide a 3m to 5m “demisable” partition near the corridor if shear walls are unavoidable. “Alternative construction systems are encouraged as they can easily be repurposed, such as wood-frame construction up to six storeys,” say the guidelines.

Hallways could be designed like indoor streets with natural light, encouraging people to stop and chat. Where possible, doorways to units should be staggered to maximize privacy and “indented within hallways to create more space, like a front porch.”

The guidelines say the ideal two-bedroom unit is 969 square feet and the ideal three bedroom is 1,140 square feet.

“While overall unit sizes are recommended to ensure that a family’s needs are met comfortably and efficiently, there is flexibility in how designers can arrange unit elements, resulting in a variety of unit sizes, depending on the layout and the efficiency of the connecting spaces such as corridors,” says the study.

“Appropriately sized bedrooms can adapt to various configurations and can comfortably accommodate two people.”

City staff recommend that the guidelines be considered when development proposals are evaluated and that feedback from a voluntary online survey of developers and architects will be evaluated. Modifications will be presented in 2018, with a goal of implementing the final guidelines for a two-year period starting in 2019.

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California Court Allows Weekend Open Houses For Tenant-Occupied Properties

Section 1954 of the California Civil Code provides that a landlord may enter a leased or rented dwelling to “exhibit the dwelling unit to prospective or actual purchasers.” Such entry may not be made “during other than normal business hours” unless the tenant consents to entry at some other time. Provided that the tenant has previously been given notice within the past 120 days that the property is for sale, 24 hours is presumed to be reasonable notice, and notice may be given orally. (§1954 (d)(2))

While that civil code section clarifies a number of issues, some questions have remained. What, for example, are “normal business hours”? Also, might exhibiting the dwelling to prospective or actual purchasers include holding open houses?

A California Appellate Court decision (Dromy v. Lukovsky, Second Appellate District, August 30, 2013) provides some answers. To some they may be surprising.

Landlord Dromy leased a Santa Monica condominium to Lukovsky (Tenant) in 1994. In approximately 2010, Dromy entered into a listing agreement to sell the property. The Tenant allowed the agent to conduct individual showings, but she refused to permit open houses on the weekends.

Dromy filed a motion in Superior Court based on Civil Code 1954 and sought declaratory relief against the tenant. In a declaration supporting the motion, his real estate agent stated: “In my professional opinion, Ms. Lukovsky’s refusal to permit weekend open house showings at the subject property has made it much more difficult to find a prospective purchaser. The custom and practice in the residential real estate community is to conduct weekend open houses in order to market properties more effectively and expose listed properties to the general public.” The statement was not contested.

The Superior Court ruled in favor of the landlord; but it did not grant an unrestricted right to hold open houses. Indicating a desire to fashion an order that was fair and reasonable to both sides, it came up with the following:



1. The agent could hold two open houses per month.

2. They could be on weekend days between 1:00 p.m. and 4:30 p.m.

3. The agent must be present, and the tenant may be present, during any open house.

4. The agent must give 10 days advance email notice to the tenant of proposed open house dates, and the tenant has 48 hours to acknowledge or to propose an alternative weekend date.

The tenant appealed.

The Appellate Court noted that the phrase normal business hours, though not defined in the statute, was meant to strike a balance between two competing policies: (1) the tenant’s right of quiet enjoyment of the property, and (2) the landlord’s right and ability to sell his property. The Court noted that, at the time the legislation was enacted, the current edition of Black’s Law Dictionary defined “business hours” as meaning: “In general those hours during which persons in the community generally keep their places open for the transaction of business.” The Court then went on to say, “For our purposes, the relevant community consists of licensed professionals working in the residential real estate business.” Moreover, “It is undisputed that the custom and practice of [that community] is to hold open houses during weekends…”

Thus, the Appellate Court held that the judgment of the Superior Court was “reasonable under the facts and circumstances and that it complies with the requirements of section 1954, subdivision (b).”

California real estate agents will no doubt wonder how this decision applies to their business. The legal department of the California Association of REALTORS® (CAR) had this to say in its realegal publication. “…landlords and their listing agents who want to arrange weekend open houses should obtain the tenant’s consent or comply with the reasonableness standard required by the Dromy court.” To help insure that what they schedule is reasonable, landlords and agents “are strongly encouraged to, depending on the circumstances, pattern your weekend open house arrangements in a similar fashion to what the trial court ordered in Dromy…” (See the 4-point requirement that was stated above.)

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Smart Home Improvement Tips To Save You Time, Money, And Aggravation

Fixing up your house can bring great joy, and also personal satisfaction when you pitch in and DIY some of the tasks. But proper preparation is key to getting things done right. Take a short cut and you’ll likely end up with a project that that takes longer, costs more, looks like it was DIY’d and hurts more than your bank balance along the way.

Measure thrice, cut once

It’s the oldest tip in the book when it comes to renovation and it’s every bit as important as you think it is to make sure you have the right measurements before you start up that power saw. In fairness, the rule is typically, “Measure twice.” But let’s face it: Some of us need a little more assurance. If you’re not super skilled at using power tools, if you have tricky cuts to make, or if you’re doing anything with mitered corners or involving angles, do yourself a favor and take one more look before you slice away.

Buy more materials than you actually need

It can be incredibly tempting to buy only what you think you need when it comes to flooring materials, backsplash tile, or wall coverings, in an effort to save money. But problems can arise for a variety of reasons – some of the tiles are cracked, you cut some of the wallpaper incorrectly, some of the wood for the floors is warped, you didn’t account for all the cuts you have to make when measuring the space – and soon you don’t have enough materials to finish the job.

You can always order more, but now you’re behind schedule. And, you may run into additional problems with your flooring if the new pieces don’t precisely match the existing ones because they’re not from the same batch. That’s why experts recommend that when you purchase your materials, you add 20% to the actual measurements. It may add a few bucks to your bottom line, but it will save your butt in the long run.

Invest in some quality tools

You’re an adult now. You can have a real hammer and a drill and a pair of needle nose pliers. If you’re just setting out on your own or it’s time to do a little tool upgrade, This Old House has some good tips for what tools to buy.

Try it before you install it

The well-meaning contractor who installed this faucet forgot about one thing: The space needed to actually wash your hands. Installing the faucet too close to the sink left insufficient space, so hand-washing is reduced to an awkward placement and cupping/pouring exercise. Before you drill those holes, give it a test run!

Buy the right ladder, and use it properly

According to the International Association of Certified Home Inspectors (InterNACHI), there are “more than 164,000 emergency room-treated injuries and 300 deaths in the U.S. that are caused by falls from ladders.” In addition, “Falls from ladders are the leading cause of deaths on construction sites, and, “The number of people who have died from falls from ladders has tripled” over the last decade.


moffittcorp.com

If you’re thinking those falls must have been from a roof or tall commercial building site, here’s more sobering news: “Most ladder deaths are from falls of 10 feet or less.”

You can check the InterNACHI site for basic ladder safety tips, but the most important thing to remember is this: Use your common sense. Use the ladder properly, don’t balance on the paint tray, don’t overextend the weight limit, make sure it’s in proper working order – you know, the basics.

Glove up, glasses on

While we’re talking safety, there are other measures you’ll want to take to protect yourself. The last thing you need is a nail through your hand or your eye or anywhere else, for that matter. Gloves and goggles are basic go-to’s. And if you’re doing your loors, think like a soccer player and get out those knee pads.

Hanging art

Between picture hangers and specialty nails and screws and laser levels, there are so many tools available to help you hang art that we should all have it nailed (pun intended!), right? Yet picture hanging remains one of the most frustrating tasks.


diply.com

There are numerous tricks and tips that aim to help, but these are a few of our faves:

  • “Use a little bit of toothpaste (yes, toothpaste),” said Quick and Dirty Tips. “Place a dab of toothpaste on the back of the frame on the hook or string (whatever will touch the nail). Then hold the frame up to the wall, position it carefully, and press it against the wall. The toothpaste will leave a mark that you can hammer a nail through, then wipe away.”
  • “Instead of moving the photos up and down, place the photos on the floor and line up some tape from hanging point to hanging point,” said Diply.com. “Then mark each point with a dot. Next, put the tape on the wall and use a level to make sure it’s straight. Then use those dots to put in your screws, and hang!” 

Keep the mess away

We love this easy tip for keeping the site clean when hanging photos or drilling/hammering into walls for any other reason. If you hate having to clean up afterwards…don’t. A sticky note is all you need.


themanual.com

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5 Hot New Parent Products For The Design And Tech Connoisseur

If you’re about to be a parent, you obviously already know about car seats and strollers and bottles and onesies. But these new products might become some of your favorites. From sleek nursery furniture to top tech to keep you connected to baby, these are the things you’ll definitely want to have when your new addition comes home.

A crib that’s cool to look at

Nurseries are some of the chicest rooms in the house these days, which is great for parents who don’t want to sacrifice style just because they’ve made a person. The Babyletto Hudson 3-in-1 Convertible Crib made Babylist’s list of Best Cribs of 2017, and it’s not hard to see why.

It’s “modern yet timeless,” they said. And, affordable, at $341.

A crib that acts like a car

If you’ve never had to grab the baby and the car keys and go for a ride to get your sweet little thing from screaming her sweet little head off, it’s probably only a matter of time. Many babies are soothed by the movement of the car, which is the idea behind Ford’s new “smart” crib.

The MAX Motor Dreams cot is a “genius crib was designed for a Ford of Spain campaign by WPP’s GTB agency in collaboration with Ogilvy and Mather,” said Forbes. “The ‘smart’ crib simulates the best parts of a nighttime drive that induce sleep like clockwork. It mimics the engine’s rumble, the car’s movement and the streetlights passing by the window. Parents can even replicate a specific car ride that is tried and true, using their smartphone application to record familiar sounds, movement and lights.”


happiestbaby.com

Unfortunately, it’s only a prototype – for now. In the meantime, you can try the Snoo smart cradle. “This gorgeous, high-end cradle was designed by industrial designer Yves Béhar, so it looks like a work of art,” said Digital Trends. “The minimalist design includes lovely wood paneling along the bottom of the cradle, slip-resistant metal legs, and a gorgeous white mesh enclosure that’s soft on the inside for the baby’s comfort. You strap your baby in a cute, little swaddling suit to make them feel happy and cozy, just like they were in the womb, and it buckles into the crib itself. The crib rocks at a variety of speeds and emits white noise to mimic the sounds a baby hears in the womb. The Snoo smart cradle is based on hard science, thanks to its creator, pediatrician and author Harvey Karp, and a team of Massachusetts Institute of Technology engineers. It’ll help your baby – and you – get back to sleep in peace, but the ultimate aim is to reduce sudden infant death syndrome (SIDS) by ensuring your baby sleeps safely.”

Self-warming bottle

It’s not something that’s necessarily for use in the house, but this self-warming bottle will make your life outside the house as a new parent much easier. “You can warm up your baby’s bottle on the go using the iiamo Go self-warming bottle,” said Business Insider. “The bottle is warmed up by heating cartridges that are environmentally friendly, disposable, and filled with only salt and water. You simply put the heating cartridge into the bottle’s heating chamber, turn it on, and shake the bottle. Four minutes later and the bottle is ready to go!”


4moms.com

A swing that won’t clash with your decor

A baby swing is a must-have, and, pretty much since they were invented, parents have had to overlook or endure design issues that didn’t exactly complement their décor. We personally love that the mamaRoo isn’t covered in storybook farm animals, and, more importantly, it gets high marks for its function.

“Anybody who’s ever stuck their baby in the car and drove around in hopes that she would fall asleep say, ‘I,'” said Parenting. “Enter the 4moms mamaRoo. It’s a swing! It’s a bouncy chair! It’s…the thing that will help get your baby to sleep. With five different movement settings – yes, “car ride” being one of them – this thing is sure to soothe your little one.”

A newfangled baby monitor

All new parents need a baby monitor, and they’ve changed a lot over the years. It used to be that just audio was OK, but in the time of daily tech advancements, that’s obviously not going to do. And neither will a “normal” video feed, either. Gadget website T3 likes the Motorola MBP853 Video Monitor, which goes beyond the typical offering with some state-of-the-art features, including “streaming HD footage from a neat camera, which can be mounted to a wall or any flat surface, to a wireless monitor. It packs a night vision mode, sound detection with visual alerts and a microphone, so you can sing lullabies into the device.”

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A Regional Guide to Staging Your Outdoor Space

Indoor-outdoor living is a concept that’s becoming ever more important to homebuyers. And no matter where in the US you live or when you want to sell, you can stage your outdoor space to show buyers how they can make the most of it year-round.

Southwest

With so many gorgeous days on the calendar, a great outdoor space is a must on most homebuyers’ wish lists in this part of the country. But the region – which ranges from Arizona to parts of Louisiana – is challenged by extreme heat. To help buyers imagine how to beat that heat, be sure your outdoor space includes umbrellas, sail shades or another form of cover from the blazing sun. Use outdoor rugs to soften the effect of foot-searing stone surfaces underfoot, and add pops of bright color–from chair cushions to blooming flowers – to cheer up a space where the plantings or lawn have fallen victim to the heat. If your outdoor space includes a fan, turn it on to get the air moving and break up the humidity. Finally, consider adding a small water feature for pleasant background noise and to create the impression that all is not hot and dry.

Southeast

Hot summers and mild winters make this region – roughly from Virginia on down – a great place for outdoor living almost year-round. Capitalize on this by creating different settings to show how the home’s space can be used in a variety of ways. Almost every room inside your home can have an outdoor twin. To help buyers envision al fresco family meals, set up a “dining room” on the patio or porch complete with a table, chairs, and even simple place settings with melamine dinnerware and vases of fresh flowers. In another area, arrange a few lounge chairs around a low table or fire pit to bring to mind leisurely conversations over cocktails. Pull up a chaise or two in a sunny spot, and include a side table stocked with a couple of books from the current bestseller list. If your home has a porch, turn it into a cozy nook: There’s nothing more inviting than a porch swing.

Northeast and Midwest

Four distinct seasons – including very cold winters that necessitate a break from outdoor living–make this region an interesting place to take in what nature has to offer, from lush green springs to warm summers and brilliant, crisp falls. If you’re selling during winter, bring your outdoor furniture out of storage to show buyers how they can set up when it’s warm. Cheer up the vibe with string lights and fill planters with wintertime greenery, grasses and berries. Unused outdoor spaces can get grimy and drab in wintertime, so be sure to sweep stairs, patios and porches, dust exterior windowsills and touch up peeling fences or railings. The other three seasons allow you to show your space at its best. To prep for photos and showings, refresh your patio furniture with new cushions or outdoor throw pillows, fill your planters with blooming flowers, set up a bright, cheery umbrella to create shade, and keep the landscaping immaculately maintained.

Pacific Mid/South

This part of the country encompasses two totally different sides of the weather spectrum, from nearly year-round perfection in California to high snowfall and frigid winters in Montana and Colorado. In the former, appeal to buyers of all ages by making your outdoor space look breezy, modern and clean in keeping with West Coast culture. Opt for streamlined furnishings and architectural planters over anything too traditional. Drape chaises with chunky blankets in natural hues to show how the space can be used on chilly nights after the sun goes down. And in states that get winter weather, be sure to include a fire pit as part of your outdoor setup. If it’s cold when you list the home, stage outdoor furniture (minus the cushions) to show how the space can be used in milder seasons, and fill planters with winter greenery for a lush look.

Pacific Northwest

Yes, it’s the wettest part of the country, but the region that includes Oregon and Washington lures nature lovers who dream of living among lush forests and stunning coastlines. Outdoor staging should include seating areas under umbrellas or covered porches, where homebuyers can imagine themselves snuggling up even on drizzly days. String lights go a long way toward cheering up a space in dreary conditions, and a fire pit, lanterns or heat lamps can also help warm up the vibe. Since ferns, flowers and grasses tend to thrive in this region, play up that benefit with plenty of landscaping to enliven the space. Craftsman and transitional architecture are popular in this part of the country, so choose furnishings and planters with a modern-classic look – not too sleek, not too traditional.

Stage your home’s outdoor space with the same care you use inside, and buyers will have double the reason to consider making the property their own.

Amalie Drury is an expert on home design and furniture trends, writing on behalf of Crate and Barrel. She has covered related topics as a senior editor for magazine publisher Modern Luxury and as a city editor for women’s lifestyle site PureWow. She has also written for Time Out, the Chicago Tribune and Sophisticated Living.

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8 Reasons Why Cottage Living Benefits You And The Environment

In 1950 the average American home measured just 983 square feet. By 2004 that average had grown to 2,340 square feet. But is bigger really better?

There seems to be a growing interest in smaller homes (fueled, in part, by the success of Sarah Susanka’s The Not So Big House books). Sure, you have less space. But you gain in other ways. Lets look at some of the advantages.

First, cottages simply cost less. And we are talking about more than their purchase price. A smaller home will cost less to heat, cool, furnish and decorate.

Note: Although we are talking about the adorable structures commonly referred to as cottages, these benefits apply to any small home – in my definition, a single-family residence around 1,200 square feet.

Generally, your smaller home will come with lower property taxes, lower insurance costs and a lower mortgage, which means less money flowing from your wallet.

Exterior maintenance will also cost less. Big-ticket items like roofs, siding – even exterior painting – will take a much smaller bite out of your paycheck.

All of which allows for splurges. Because a cottage’s small size requires fewer materials, you may be able to indulge your heart’s desire and upgrade from what your larger home might have allowed. Perhaps you could invest in a tile roof like this one…



…or add stone to your exterior…



… or get the kitchen countertop you’ve always yearned for, and better appliances than you otherwise might have been able to afford.

Or you could use your lower costs to focus on saving – or reducing – debt. That might also lower stress, which will enhance your quality of life.



Improved quality of life, however, is about way more than the money you save. All those home maintenance tasks, like cleaning and scrubbing and mowing and weeding, take far less time to accomplish in a smaller home, leaving you more time to do the things you really love.

Like spending time with your friends and family! Small homes encourage togetherness. By necessity, they create intimate spaces. And if the space is cozy and well thought out, “humans gravitate toward them,” says eminent Pacific Northwest architect and cottage specialist Ross Chapin. Whereas large homes have multiple rooms where families can scatter and hide, the cottage demands that everyone remain in pretty close proximity. Even if everyone’s nose is buried in a cell phone, they are still together, and there is something basically wonderful about that.



Benjamin Franklin apparently embraced the togetherness concept. He is said to have asserted that conversation around the dining table is much livelier when knees touch.



The front porch that almost always graces a cottage extends that welcome and intimacy to neighbors and passersby. Sitting on your porch in the cool of the evening with a glass of wine or lemonade nourishes your soul and makes you more available.



Owning a cottage-size home can simplify your life. Cottages call us back to our past, where almost every home had a small vegetable garden and a few chickens, and there were no shopping malls luring us away from hearth and family.

After all, if you live in 1,200 square feet and less, you won’t spend a lot of time shopping. There is simply not enough room for stuff. Small-home living causes you to make choices about what is important enough to make room for, and what you can happily live without.



Lower your environmental impact. In 2010 the Oregon Department of Environmental Quality, in collaboration with the Oregon Home Builders Association and Earth Advantage Institute, concluded that constructing smaller homes is among the best ways to reduce greenhouse gas emissions and waste generation from the residential construction sector. The report concluded that of 30 different material reduction and reuse practices evaluated, reducing home size was the most beneficial – not just because of reduced electricity and fuel consumption, but also because of the material production avoided.

Wow! Who knew that choosing to live in a cottage-size home made you so environmentally righteous?



Cottages make you feel good. Apart from all the financial, social and ecological benefits, cottages simply emanate warmth, comfort and welcome. Maybe it’s because they tend to be unique rather than cookie cutter, and compact rather than vast.

Whatever the reason, the cottage-size home offers enough benefits to make it a move worth considering.

Also See:

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Passive Income Is Great, But Are You Really Cut Out To Be A Landlord?

The idea of buying an investment property to rent out and collect some passive income sounds good, does it not? After all, being a landlord is one of the greatest and most time-tested ways to build long-term wealth. Especially when rents just keep on rising, which means more money for rental owners. According to Apartment List’s National Rent Report, they “are up by 2.1% compared to their December 2016 level” and have risen each month of 2017. “In addition to the growth the national level, rents are increasing in most of the nation’s biggest markets,” they said, with “some individual markets seeing substantial increases.”

But, you have to do it right. And doing it right may not be as easy as it seems. The rental reality check includes:

Your tenants might be turn out to be lunatics. They may refuse to pay their rent or even leave your property.

Those are obviously worst-case scenarios, but that doesn’t mean you don’t have to prepare for them. Expecting the best and not preparing for the worst is a recipe for rental distaster. Doing a thorough background check and collecting a sufficient security deposit are key protections. Bigger Pockets has a few more suggestions to “protect newbie landlords against bad tenant situations.”

You’ll have to collect rent

Your tenant’s late rent check isn’t just an inconvenience. For some property owners, it can meet not paying the mortgage on time, which will mean incurring late fees and dinging your credit. Having several months of reserves in the bank to cover anything that might come up with your rental or renter is key, but, for those owners who are cutting it close, including an iron-clad late-fee policy for renters should help to ensure it’s paid on time.

They may be slobs or they may be destructive… but are they worth it?

Yes, you’ve collected that security deposit, but it might not cover the damage left behind when tenants move out. Many landlords don’t like to rent to college students for this reason (Hello, nightly parties!). Another downside is that there is often a higher turnover because students may not stay in the same place for more than one year and they may also be looking for a shorter lease if they’re planning to return home for the summer.


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The potential upsides:

Increased rent potential. “Off-campus housing is often paid for by the student’s parents, or even by the college itself, so you may be able to get a higher rental price for the property,” said The Balance. Investors looks for rental property in college towns often key in on homes that have multiple bedrooms, which can further increase the price.

A reliable tenant pool, said Rentec Direct. “With some student populations ranging from 20,000-50,000 and accounting for as much as 25 percent of a town’s total population, there is high demand for rentals for co-eds who want to live off-campus and are not in the market for purchasing their own home.” You can protect your bottom line by requiring a co-signor, especially for students who have no previous rental history and may also gave no credit history.

You may get calls in the middle of the night.

The toilet overflowed and flooded the bedroom, and now you’re double-fisting a plunger and toolbox at 3am. If that sounds as painful as it is, or if you have minimal (or zero) home maintenance skills, you’ll probably want to read the next entry.


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You may have to hire a property manager.

If your investment property is out of your local area, you may not have a choice when it comes to hiring a property manager. But if you’re looking to do as little as possible – or if you simply aren’t qualified – and don’t mind paying out a little of your potential profits, property management might be for you. “A typical property manager will interact directly, on your behalf, with applicants and tenants. Managers will usually market and advertise your rentals, meet with prospects to host showings, collecting rent, deposit money to your bank account, and coordinate repair issues,” said Landlordology. “They are also the first line of defense when responding to tenant complaints and will even stand by your side when you have to pursue an eviction or get sued.”

Still interested? Heed these tips:

Make sure you have enough money to put down. You already know that the more you put down, the less you’ll have to finance. But financing for rental homes may also require a larger down payment than you were planning. “If you’re borrowing money for your first rental house, you’re going to need at least a 20% down payment,” said Interest.com. “And if it’s your first rental property, your current income is going to have to be enough to handle the mortgages for both your residence and your new property.”

Don’t buy more home than you can afford. Yes, a higher-priced home may increase the potential profit every month, but it can also increase your potential loss. What if you can’t rent right the home away? What if there’s a lapse between renters? Keep in mind how much your carrying costs are so you can determine how much house you can really afford without counting on max rent every single month.


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Don’t take a chance on an unfamiliar neighborhood. Your best bet when you’re just getting started is staying local, where you know the home values, the rental trends, the crime rates, and maybe also have some local resources that can help with renovation, maintenance, and yard work.

Don’t be greedy. This may sound like an odd tip if the idea behind owning rental property is to make as much money as possible, but if your asking price isn’t getting applicants in the door, you need to rethink your strategy. Consider this: “Every month of vacancy costs you 8.3% of your potential yearly revenue, so you would be better off renting every property one month faster for 5% less rent, two months faster for 10% less rent, and so on,” said TIME. In the end, it may make better financial sense to lower the price of your rental if you’re having trouble finding tenants.

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Speed Along the Real Estate Transaction with a Pre-Listing Home Inspection

Arguably one of the more significant steps of the home-buying process is the home inspection.

Done properly, the home inspection allows buyers to gain a clear understanding of the property they are about to purchase as well as provide sellers the knowledge of what can (or should) be improved at their home.

As the real estate market becomes increasingly competitive and consumer confidence rises, buyers and sellers are more motivated to seek opportunities to close deals efficiently. That’s why real estate professionals often suggest a pre-listing home inspection — an inspection prior to putting the home on the market. Pre-listing inspections provide an added benefit for the buyer, seller and real estate agent, and often allows sales transaction to be completed more quickly.

Here are some key points to remember for your pre-listing inspection:

Involve your Real Estate Agent

When it comes to real estate, agents are pros and they play a key role in moving the home buying transaction along. During a pre-listing inspection, agents know what questions to ask the inspector to be sure they fully understand any issues, and to alleviate client concerns. Good real estate agents take the time to work with their clients post-inspection to go over the inspection report. Their goal is to make sure buyers and sellers fully understand the findings of the inspection report.

Build Trust with the Buyer

For homebuyers, a pre-listing inspection builds confidence. It allows buyers to immediately know all the under-the-surface details within the home. If there are parts of the home that need fixing, the seller’s repairs can increase the asking price or be touted in the listing description to help a home stand out. Where repair issues are identified but not repaired, credibility through disclosure is gained and the issue is factored into the pricing upfront. In each case, sellers who disclose the condition of a home upfront gain the trust and faith in a buyer during the initial stages of their purchasing decision.

Spotlight Your Home

A pre-listing home inspection report is a great marketing tool for sellers and agents because it clearly points out the best features of the property. Any recent home renovations will be noted and stand out to buyers. These updates can offer both aesthetic and mechanical value with items such as new flooring, new appliances or a new furnace or air conditioning unit. A home buyer likes to see updates have been made to the home as they are often costly — and it reassures them the home is properly maintained. This assurance will help to accelerate the transaction.

Planning Can Save Time and Money

For the seller, a pre-listing home inspection allows for time to make repairs before putting the house on the market. They can then make these repairs on their own budget and timeline rather than having to pay for a buyer’s contractor to quickly complete the work.

Remember, the goal of a home inspection is to provide a true reflection of the issues concerning the home and offer a non-alarmist, practical solution. Leveraging the knowledge and experience of professionals like WIN Home Inspection ensures important things aren’t missed, reports are received in a timely fashion and all parties are enabled to move the home smoothly and successfully through the real estate transaction.

AUTHOR: Steve Wadlington, president of WIN Home Inspection, one of the fastest growing franchised home inspection companies in the United States with more than 150 operators in more than 185 locations in 32 states.

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How To Handle HOA Board Meeting Attacks

Out of the blue, an irate homeowner launches a smear campaign aimed directly at the board. It’s relentless and focused. The motivation may be some personal grievance, hatred of a board policy, disagreement on how the board does business in general or loathing for the whole HOA concept. Rather than seeking redress in an orderly and open way, however, often it takes the form of poison pen letters, back alley rumor mills or a terrorist-like assault at a board meeting.

Board meeting terrorism is designed to hold the board hostage to relentless rants and demands. This form of HOA terrorism is designed to directly challenge board authority and to disrupt the orderly process. As with any terrorist attack, the board’s initial reaction is usually disbelief. But, the cold reality of the assault soon becomes clear and the need to act urgent.


How should the board deal with this kind of attack? When presented a list of demands, should the items be discussed point by point? Should they be recorded in the minutes? What should be done?

Rule #1: Never negotiate with terrorists. The board is not obligated to discuss anything off the agenda. And it’s unreasonable to expect informed answers to firing line questions. The response should be, “Thanks for making your points. We’ll review them and give you a response in writing or consider them at the next board meeting.”

Rule #2: Don’t record a list of demands. Minutes are intended to discuss in broad terms the business accomplished by the board. Specific motions should have enough detail to describe them and the outcome of the vote. It is not a forum for soap boxing, editorializing or where items are entered into “evidence”. It’s enough for the minutes to state, “Mr. Sniper asked that the board consider issues relating to (general description).”

Rule #3: Control the Owner Forum. To encourage owner input, an Owner Forum before the meeting should give each speaker owner up to, say, 5 minutes to speak, so the board can get on with its business. Letting someone hold the board hostage should never be allowed and it’s up to the president to control such actions. An abusive person should not be allowed to continue for any length of time.

Rule #4: When attacked, respond quickly and firmly. When the attack becomes apparent, it’s the president’s job to interrupt and, if necessary, ask the attacker to leave the meeting. If the attacker refuses to comply, the president should adjourn the meeting and advise that such conduct will not be allowed at future meetings.

HOA terrorist attacks are designed to fan the flames of emotion and to promote rash response. The board needs to walk the high road and refuse to “dance”. While this isn’t easy when the attack is intense, the directors outnumber the attacker and with a unified response, should be able to defeat the challenge and even help point the terrorist toward a better way.

For more innovative homeowner association management strategies, subscribe to www.Regenesis.net.

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