Three homeowner rights that are often underutilized

In the real estate realm, it's easy to feel like almost everything about the market, your mortgage and the value of your home is out of your control. But the truth is that there are many real estate rights that go unrecognized and, thus, unexercised:

1. The right to control your own utility bills. 

Many a homeowner feels slightly held hostage by their utility companies. Who else can you buy electricity, gas, or water from, they wonder briefly, before waving a mental white flag when they sign the check for their monthly payment?

In truth, there is much a homeowner can do to control both the amount and the provider of his utility services. You can go solar, whether by buying panels yourself or working with a solar power service that owns the panels and charges you a reduced, preset rate for energy over 20 years.

And there are many other investments you can make -- at many levels -- in improving your home's efficiency and, thus, reducing your utility bills. Things like installing dual-paned windows, improving your insulation, installing tankless or solar-powered water heaters, and converting every faucet to a low-flow fixture are among them.

On a less conventional side of things, installing graywater tanks that use wasted sink water for toilet flushing and landscaping, and replacing swathes of green lawn with low-water-consuming native landscaping or food gardens are some more work-intensive -- but more rewarding -- ways to put you back in control over your household's energy and water consumption (and expenses).

2. The right to fire your mortgage lender. 

Most people find their mortgages to be burdensome, to say the least. Even those who aren't among the 28 percent of homeowners with mortgages that are still underwater are almost always positioned such that their mortgage is their largest monthly expense and a looming financial obligation. Paying it off seems remote and hard to imagine; further, many homeowners will take out equity lines or refinance their mortgages over time, simply restarting the already long countdown to payoff.

But here's a shocker: Roughly one-third of American homes are owned outright by their owners, free and clear of a mortgage. Truth is, there are many ways to get your home unmortgaged, and not simply by asking your lender to forgive it.

You can exercise your right to live and own your home mortgage-free by pulling one or both of two basic levers: (1) you can cut your existing monthly spending and redirect your savings to paying down the principal balance of your home loan, (2) you can bring more income in, using that to pay your mortgage off earlier than planned, or (3) you can do both!

This might seem impossible, but if this is a right you'd like to exercise, calendar a few quiet hours to really review last month's bank statements. What you face is a decision about values and priorities: What's really important to you?

Some financial experts advise that lunches and dinners out, coffee shop stops, and cable TV are common categories of budget leaks -- these seemingly small expenses add up. But don't go extreme and try to deprive yourself of every night out or coffee chat with your friends; it's not sustainable, and you'll end up turning these moments of happiness into moments of guilt. Instead, cut back where you feel you want to and also cast an eye at larger expenses that can be eliminated.

Some homeowners have found hundreds of dollars a month they could redirect away from cable TV packages they didn't really watch and payments for cars and other big toys (motorcycles, boats, etc.) they didn't really drive.

In the same vein, it can be relatively painless to turn your hobbies or passions into small-scale side businesses, generating some early mortgage payoff funds. I personally know folks doing this through part-time bookkeeping, getting a stand at the local farmers market or even doing some cake decorating on the side. As well, an increasing number of homeowners are using their own homes to generate side income, either renting out rooms or floors on an ongoing basis, or just for a couple of nights here and there on sites like Airbnb and VRBO.

3. The right to HOA sanity. 

While the vast majority of homeowner associations (HOAs) are functional and smooth, the fact is that many have at least the occasional personality or financial drama. Rapidly rising dues, inane restrictions on minutiae like the color of your window coverings, and scary "surprise" special assessments for unbudgeted property repairs have made many a home buyer simply refuse to even look at properties that belong to HOAs.

It would be naive and inaccurate to suggest that you can 100 percent bulletproof your HOA experience from these sorts of potential potholes, but there are a number of rights you can exercise to minimize their likelihood of happening.

First, exercise the right -- really, the responsibility -- to spot red flags of impending HOA dramas before you even close escrow, by truly reading all the HOA disclosures you receive, no matter how mind-numbingly long and boring they might seem. If you see that many homeowners are behind on their dues or that the HOA's budgets don't seem to include plans for reroofing buildings, replacing windows, or making similar repairs to the common areas over time, be concerned.

And don't forget the seemingly fluffy newsletters or the seemingly boilerplate board meeting minutes: That's often where talk of neighbor disputes and proposed dues hikes and special assessments pop up first.

Once you're part of the HOA, you have even more of a duty-slash-power to participate in it, if you want to do your part to avoid problems. Attending board meetings or even becoming a member of the board is not overkill if you want to have a hand in choosing the accountants, building managers, and contractors who will have such a huge impact on your experience as a member of an HOA.

Buyers pay premium for move-in-ready homes

First impressions are lasting. Home buyers and real estate agents remember what they see, not what you say your home will look like after you reduce the clutter, paint, and replace outdated floor coverings and light fixtures.

Most people don't have the ability to visualize how a home will look spruced up. If you show your home to prospective buyers or their agents before it's ready to show, you could lose out on a possible offer because they're turned off by the lack of appeal. It's often difficult to get someone back for a second look after you've made improvements.

One couple who'd been looking for a home that was big enough for their family heard that one of the largest homes in the neighborhood was coming on the market. They contacted the sellers and asked if they could look at the house before it went on the market. If they liked it, they could save the sellers the expense of preparing the house for sale.

The sellers agreed. The prospective buyers looked at the house but turned it down. They couldn't see past the dated décor.

The house went on the market months later. The interior was painted in decorator colors; old carpet was removed and the hardwood floors underneath were refinished; the overgrown yard was pruned and a new lawn was installed; and all the seller's belongings were moved out and the house was staged.

The house looked fabulous. It received multiple offers and sold for well above the asking price. Ironically, the couple who had seen the house before it was fixed up and passed on the opportunity were encouraged by a friend who attended the open house to take another look.

They did and ended up making an offer in competition. Unfortunately, another buyer made a better offer. The couple who first saw it lost out on an opportunity because they couldn't visualize the property's potential. This worked to the sellers' advantage because they netted much more on the sale than they would have if they'd sold it to the first buyers for the list price.

HOUSE HUNTING TIP: Many sellers resist the notion of fixing their house up for someone else. Although it's not a good idea to make major renovations just before selling a home, cost-effective cosmetic improvements can make your home more salable and could increase the amount you recoup when you sell.

Most sellers find the decluttering process tedious. The bonus of weeding out what you no longer want or need is that you don't have to pay to move these items. And, you're making your home easier to sell.

Some agents don't want to take time to help sellers prepare their home for a more profitable sale even though buyers pay more for a home that's in move-in condition. Ask your real estate agent how much your home might sell for in both its "as is" condition and after making cosmetic improvements. If you decide to prepare your home for an advantageous sale, use an agent who will assist you with this by prioritizing what should be done and helping you find people to complete the work.

It's not always possible for sellers to cosmetically update their homes before selling. The trade-off will be a lower sale price.

THE CLOSING: Make sure if you are going to spruce up your home for sale that you don't show it before the work is done.

Agent Communication

Finding the right stager

Buyers in some areas complain about walking into an open house and finding dirty laundry in bedrooms. 

In places like the San Francisco Bay Area, so many listings are well presented for sale that sellers who don't stage their homes are at a disadvantage.

Occasionally, a home shows beautifully as is and needs little work to get it ready to sell. 

A listing in the hills above Oakland, Calif., came on the market last year without the aid of a professional stager and sold for the asking price within a week. The house had just been renovated and the sellers had great taste. Their furnishings and paint colors were perfect for the house.

Most sellers need to put more effort into preparing their homes for sale if they want to sell successfully. Some of this work can be done on their own, like decluttering, painting and sprucing up the yard, if they have the skills, time, and are so inclined.
Many sellers will benefit from hiring a stager, which is a decorator who specializes in preparing homes for sale. Finding the right stager is important. You want to hire someone who will give your home a look that will sell it for the highest price possible.

HOUSE HUNTING TIP: One way to get familiar with different stagers' work and style is to visit Sunday open houses. Usually stagers display their business cards at the property. If not, ask the agent holding the house open if it was staged. If so, ask for the stager's name.

Most professional stagers have Web sites where you can find out more about them and preview samples of past staging jobs. Your real estate agent is a good resource. Some real estate agents have a favorite stager. If your agent has had success working with that stager, that could be an obvious choice. You're looking for results. A stager who has a good track record in your area is someone to seriously consider.

If you live in an area where staging is not popular, ask your agent for the name of an interior decorator to consult with about how best to arrange your furniture and artwork. Make sure, before you pay for a consultation, that this person also can select colors for you if your home needs painting. 

Some sellers talk to several stagers before deciding on one. Each stager should meet with you at the property. Try to arrange for your agent to attend the meeting to give input on how the house should be staged to appeal to the most buyers. For example, should a bonus room be staged as a den or home office?

Find out if the stager can use some of your personal possessions -- those that are appropriate for selling the house. The staging cost should be less if the stager doesn't have to bring in as much furniture and accessories. Ask if the stager will select paint colors. If not, there might be an additional cost for hiring a colorist.

A stager should provide you with a written proposal, including the scope and price of the job, the term of the contract, and the cost to extend, if you need it. In this market, it could take months to sell your home. Staging contracts usually run for two to three months from the date the house is staged. Extensions are usually 10 percent to 25 percent of the original fee for each additional month.

Deciding who should stage your home shouldn't be based on price alone. A cheap look is not going to generate an enthusiastic response. Go with the best stager you can afford.You want your home to look amazingly good so that it creates a buzz among buyers and their agents.