Assumptions.  You know what they say about assumptions, right?  Buyers, Sellers and even, well, Real Estate Persons/Professionals (REPs) are not immune to acting on assumptions either.  For example, the majority of our local market (remember that REPs have a job turnover that would make your head spin) has existed for years without giving a second thought to  certain assumed privacies. 

Few are aware that it is NOT illegal nor against the REALTOR Code of Ethics for a seller or their REP to share terms of your offer under certain circumstances.  WHat?!  you say.  Indeed, I say.  In fact, unless there is an enforceable (i.e. written/signed, etc) agreement between the parties in question (seller & buyer and for good measure the seller’s realtor should be included here) then if a seller formally requests that their REP share the terms of *your* offer with someone else (say a competing buyer?) then there’s not one skinny little thing you can do about it except rant at whomever will listen. 

Green and/or inattentive REPS are often shocked to find out that it is allowable and indeed advisable for a seller’s REP to share that info under very specific circumstances.  The few REPs who do know you can, quietly pray that their seller-clients will never ask so that they are not put in that position.  You see, in our small-town type of market, word spreads and word spreads fast—and if knowedgable other REPs know or even just hear that you have a reputation for squealing offer terms, then those buyer’s REPs start adjusting their behavior…

Perhaps those changes are as mild as being willing to present offers in person to the seller's REP ONLY if the seller is present (bypassing much desired prep time for the seller’s REP to review the offer and get their opinions and suggestions in order before reviewing strategy with a seller)…all the way up to advising their clients that they may wish to think twice before trying to purchase a certain REPs listing, as it is reported that they give out offer info, but that the decision would be completely up to them. 

The insider term for this is typically called “shopping offers”–it sometimes works  but I’ve seen it royally backfire on others a number of times, and the practice does still exist.  The smartest REPs I know avoid it like the plague.  And, to protect themselves they often include a phrase in the listing agreement saying that the seller agrees NOT to ever ask them to “shop offers” because although they know that while it might (might) help that particular seller, it could instead harm them, as well as possibly damage every future seller that REP works with due to a tarnished reputation.

So many people recently have asked me (both directly and indirectly) how to save money on basic household budget items such as food, utilities, SAVINGS (also a basic necessity, but which has gone woefully out of style) and such, theoretically in order to save for a home purchase.  My inexpert opinion is that people keep asking, and pundits discussing, because they don’t like the answers they are getting, or having to give, from people who actually know.
   For those of you that know me, sugarcoating is not my style–and the more something is likely to mislead someone if “softened” the more blunt I get.  So here it is folks: In order to save money on (or for) the basics, here’s the only things you have to do: cut down or eliminate extravagances, luxuries and conveniences  and/or you can get more organized and disciplined.  There I said it. 
   Now comes the tricky part:  each of those things are defined differently by each person  reading this.  For some, the drycleaning/pressing bill might be a basic need, for others, keeping the house at 75 degrees, other still: maxing out their retirement or HSA contribution.
   The fact is virtually everything we really enjoy falls into the convenience, luxury or extravagance category–the problem lies in how it makes us feel to cut back or cut out some or all of these things.  For most, it sucks–and rightly so–humans are creatures who seek comfort in all its myriad forms.
   And remember, instead of concentrating on the cut-back, think about the beneficial goal of doing so (being able to buy that house, have money in the bank in case of emergency, etc).
   So here’s a place to start that shouldn’t pinch too much: 1) Lower your thermostat at home a few degrees, either at night (Put on some woolies), or during the day while you are gone [you can do this, do the same for your garage if you are lucky enough to have one; 2) actually turn off (OFF-off) electronics, in “sleep” or “off” mode they are wee power vampires do this by turning off a surge protector or power strip; 3) Actually PLAN your trips in the car, combine tasks, do them in geographical order to save gas; 4) combine your cooking tasks for the oven so that its full when working (microwaves individually use less energy typically, but who wants microwaved tatertots I ask you?); 5) Make sure your heat source & car is in good repair, nothing sucks (fuel & money) worse than a poorly operating heating unit or automobile. 6) Hang your clothes dry–all those you can.  It also helps to humidify your home in these dry Fairbanks winters. 7) Take shorter showers with slightly less boiling hot water temps (dryers and hot water heaters are the kings of electric consumption in a typical household!); Stop (or slow down) eating out.  Not only will this reduce money outflow, time waste, gas use, environmental impacts from garbage, exhaust, etc–it will also typically reduce your waistline– bonus!

I can’t tell you how many people have stated with confidence in the last 6 months “…well I’ll just rent out my home, and sell it later when the market bounces back”.   Mind you, these folks are often very intelligent, observant individuals–but my advice to all of them is “Don’t hold your breath”.  Barring some gift-from-heaven local economic boom (and if I so much as hear a whisper of ‘gas pipeline’ I swear I’m going to scream), it is - in my humble opinion, going to be a long slow recovery given that the root of the underlying issues are intrinsic, complex and will not respond quickly to any *magic* cures that pundits have been bandying about.
So read on if you think that’s a fan-tab-u-lous idea (as it well may be):  assuming my assertions are correct, that means

(1) you’ll have to rent for more than 3 years (magical line across which you have to pay capital gains tax on (any) profits).  And don’t think a big “loss” will make tax time more fun, THEY gutted those benefits for most folks years ago.  That almost means that you can expect

(2) interior paint & flooring will need to be done (normal wear and tear from renters, folks),

(3) inspection practices will have changed and you’ll have different “required repairs”, often far outside the scope of “your” purchase inspection to pay for when you DO sell,

(4) one bad renter can easily cost you at least the equivalent of 3-5 month’s rent plus legal fees that will average $1500.00+ (and you’re still paying the mortgage and maybe even the utilities as well in the meantime) let’s not forget costs of clean up, damage repair, etc.

(5) the “system” unfortunately tends to assume you are a big bad landlord being mean to a poor defenseless, and more importantly innocent until proven guilty tenant, so unless you (AND your chosen manager) have pretty much done everything by the book AND can PROVE you’ve done it by the book–you name the issue, you will lose in court (and the book is long, thick and fraught with confusing procedural requirements that even apply if you are acting as your own manager).

6) it is usually impossible to prove that sheer stupidity on the part of the tenant was responsible for some whacked out repair bill to deal with an issue that has NEVER come up before in your home.

(7) if you bought your home with less than 20% down within 2-3 years of wanting to rent it out, it is PROBABLE that the rental income will not cover even your expected recurring expenses. 

(8) Minor repairs that you can pound out in an evening or weekend will now cost you an average of $55 - $125/hour (depending on the speciality involved) and neither the repairman nor your manager have the luxury of just doing something half-way due to legal obligations to both you and the tenant’s safety.   So a $45 repair for you (the owner) can easily end up being at least $300 (easily)–especially if something blows in the middle of the night.

(9) Good managers cost money, bad managers cost about the same.  Make sure you know which type you have chosen–often good managers are a pain in the tuchus because of all the annoying specificity with which they tend to do everything which normally traslates into asking you to find, provide, answer a lot of stuff.   If they cut corners on ANYTHING (information protection, safety, rule-following) typically YOU are going to be the one in the hot seat (along with them) if anything ever comes of it.

(10) Renting is not a magic bullet, and usually only appears to be a noticeably better answer to the answer to your can’t-sell-your-house-for-as-much-as-you-want-or-as-quickly-as-you-want prayers if you don’t examine the actual long term costs carefully and accurately.

For sellers AND buyers who have *not yet* gone under contract for a home purchase/sale:  10/4/08 wass the first day that the newly revised Real Property Transfer Disclosure Statement provided by the State of Alaska Real Estate Commission must be used for residential sales. 

So if you are a seller who poured blood and guts into thoroughly filling out your disclosures (which should be par for the course)…Guess what?  You get to enjoy the fun all over again, and hurry up while you are at it, just in case someone writes an offer sooner than you think!  Why not more notice you say?  Well, because for for some strange reason the Powers That Be decided that no one got to have access to the form until the night (night = after 5 pm) before you’re supposed to HAVE the form filled out and available for prospective buyers. 

Whee. 

Although I rarely have pity for fellow real estate types with lots of homes for sale, you’ve gotta feel for the high-listing-volume RE licensee who might have 10, 20, or more of these to shepherd through the process all (hopefully) within a few days time span…Note that if you had a fully signed (i.e. negotiations already successfully concluded) contract to purchase by midnight on 10/3 you do not have to re-do all of this (lucky you).