Savvy home sellers make even the smallest of repairs if they want to get an offer quickly.
Q. We are planning to put our home up for sale next month. My wife wants me to fix all the "little things" around our place -- the leaky faucet in the kitchen, the chipped paint off the walls from moving stuff around, etc. -- but I think it would be a waste of time because every buyer knows the home they want to buy has a few tiny flaws. What do you think?
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A. Your wife is correct: There are two key reasons why you should fix those little problems now, before putting the home up for sale.
The first: All states now have disclosure laws, stating that a seller must tell a potential buyer about a home's problems. Some states limit such disclosures to major issues, like a leaky roof or a flooding basement. But others go much farther, allowing a buyer to cancel a deal or even sue for damages if a built-in stove doesn't work properly or cracked tile in the bathroom was overlooked by a professional home inspector.
Equally important, though, is that failing to fix such little problems as a leaky faucet, or dabbing over some chipped paint on the wall, can raise other questions in a potential buyer's mind. If the seller wouldn't take the time to repair something as simple as a dripping faucet or cracked window pane, it suggests that maybe there are bigger and more costly issues with the property -- like a roof that leaks because the rain gutters weren't cleaned on a regular basis, or the water heater might burst soon because it wasn't drained at least once a year.
Fix those "little things" that your wife mentioned now if you want to sell your house fast, and at the best price. You can buy a rubber washer at the local hardware store for about 10 cents to repair the dripping faucet, and can do the job yourself in about 20 minutes without the cost of hiring a plumber. Also, get a small (probably $5) pint of paint to re-cover the chips on your walls. Again, it's an easy task that you can do in a matter of minutes instead of spending lots of money to hire a professional to do the work for you.
Q. I recently inherited my aunt's house, which is only a few blocks away from my own home, and I want to rent it to tenants. When I called the insurance company that covers my own home, the agent said the company does not insure rental property because "the risks are just too large." The agent wouldn't go into details, but can you?
A. Sure. Many insurance companies won't cover rentals because they worry the tenant won't take proper care of the place, which increases the risk of damage claims. Insurers that are willing to offer coverage for rental property often charge more than they would for a similar-size house that's occupied by the owner, figuring that the owner will take better care of the property than a renter would.
Keep shopping around for a policy for your late aunt's home. Ask each insurer or broker if you can get a discount if you shift your own home's policy to the company, and maybe even your automobile or life-insurance coverage, too. The practice, typically called "bundling," can save a property owner hundreds or even thousands of dollars each year.
An alternative would be to ask the insurer if it offers a "blanket policy," which would cover both your home and the rental. Such policies are sometimes the cheapest way to insure more than one house because they allow the insurer to spread its risk over multiple properties instead of just one.
Q. My wife and I purchased our house three years ago, and now we would like to refinance because interest rates are so low. But if we do, would we have to pay for a pest inspection, home inspection, an appraisal and the like all over again?
A. Few lenders require a borrower to get a pest inspection or home inspection as part of a refinancing deal. But most banks require an appraisal of the property's current value, which typically costs between $150 and $500.
Fortunately for borrowers, though, competition among lenders to get a larger share of the red-hot refinancing market is fierce. As a result, many banks are willing to waive the appraisal fee and many other upfront charges -- especially if the applicant is savvy enough to ask.
Real estate trivia: There are now more than 50,000 of those ubiquitous 7-Eleven Inc. convenience stores across the globe, nearly twice as many as there are McDonald's outlets. A long-running joke in the realty business is that the company got its name because it has only seven parking spaces for every 11 cars.
• For the booklets "Straight Talk About Living Trusts" and "Refinancing the Right Way," send $4 for each and a self-addressed, stamped envelope to David Myers, P.O. Box 4405, Culver City, CA 90231-4405.
© 2012, Cowles Syndicate Inc.