8 Tips For Selling a Unique Home

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Selling a cookie-cutter house can be a challenge because you’ve got to go the extra mile to make it unique enough to stand out from the rest. But what about when your home is so unique and quirky that buyers find it downright strange?

A unique property can definitely come with its own set of challenges when it comes to selling. A home that’s unique is one that is unlike any others in the area. Whether it’s the exterior elevation, the interior layout, or the flamboyant fixtures, a unique home can be tough to market successfully.

That said, there are still some things you can do to effectively prep and market your home to make it more attractive to buyers looking in your area. While it may take a little more time to sell, there’s no reason why you can’t find the right buyer who will appreciate the rarity of your home as much as you do.

Here are some tips to marketing and selling a unique home.

1. Hire an Agent Experienced in Selling Unique Properties

First things first: get yourself a seasoned real estate professional. Selling a unique property on your own is highly discouraged, as takes a certain amount of skill and expertise to effectively market the property to attract the right type of buyer. In fact, it’s extremely important to work with an agent regardless of whether or not the home is unique.

2. Understand Your Target Buyer

Unique homes typically attract a much smaller pool of buyers compared to traditional style homes, and as such, it’s critical to identify exactly the type of buyer who would be interested in making on offer on such a property. Once this demographic is identified, the next step is to come up with an effective strategy to market the property specifically to this group of buyers.

Knowing precisely how to reach these buyers is essential, and your real estate agent will know exactly how to target them.

3. Go Crazy With Home Staging

Professional home staging has been known to help homes sell faster and for more money, but this process is even more important when it comes to selling a unique home. Buyers of unique homes are obviously looking for more than just your average home decor, so give it to them.

For instance, adding an element of Feng Shui or “Vastu” can up the ante in your home staging efforts, which are ancient Asian interior design systems that are meant to maximize the flow of energy (“chi”) through careful spatial arrangement and orientation. After all, it doesn’t hurt to have some good energy flowing to make a prospective buyer feel more at home.

4. Throw in Some Lavish Goodies

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The design of a unique home already provides some sort of a ‘wow’ factor, so why not continue that trend with some extravagant extras to throw into the deal?

These days, any incentives you can offer buyers can go a long way at the negotiating table. Sellers are topping up their deals with all types of freebies, such as all the furniture, 6-months’ worth of mortgage payments, and even vacations. If you can swing it, throw in an unexpected and highly valuable goodie to entice buyers to take a step closer to putting in an offer and sealing the deal.

5. Use High-Quality Video and Aerial Photography

Having a professional photographer come in and take shots of your home is extremely important to attract buyers. But when it comes to a unique property, you’ve to pull out all the stops. Many homes are unique because of their setting or where they are located, so having an aerial shot of the property and surrounding area can works wonders at highlighting the majesty of the property.

Having a video taken of the property is also very helpful, and in fact, it’s come to be expected from buyers. This is especially true if the unique home is considered a luxury property. In this case, a high-quality video is an absolute must.

6. Make Your Open House a Festive One

Instead of holding an average open house, infuse some energy into it and turn it into a party. Vamp up your open house by having live music, food, wine and spirits, and other elements that go into a festive gala. Advertising a shindig like this will certainly get buyers’ attention and can generate a lot of interest in your home.

7. Give Buyers a Trial Run

While an unconventional tactic when marketing real estate, you may want to be open to allowing buyers who have expressed serious interest in your home to actually spend the night. This will give them the chance to really get a sense of what life would be like for them if they lived in the home. If a certain buyer is on the fence about buying, perhaps spending 24 hours in your home is enough to nudge them in the direction of sealing the deal.

8. Give it Time

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It’s important to understand that selling a unique home will almost certainly take longer to sell compared to your average home. With a smaller pool of buyers to depend on, you can expect the property to sit on the market a little longer until the right buyer comes along. Keep that in mind to prevent you from becoming discouraged if the home is not sold as quickly as would have hoped.

The Bottom Line

Selling a unique home is certainly unlike selling a conventional property and definitely calls for some out-of-the-box thinking when it comes to effective marketing. In today’s housing market, it takes a lot more than just planting a For Sale sign on the front lawn and throwing up some photos on the internet to attract the right buyers, especially when your home is unlike any other in the neighborhood. Be sure to hire a real estate professional who is well-versed in the art of selling unique homes and follow their advice in detail.

6 Questions Every Buyer Should Ask the Seller Before Move-in Day

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There are obviously plenty of questions that you should ask sellers before you even put in an offer on a home. This will help ensure that you’re making a sound buying decision. After all, this is a huge investment that should only be done with due diligence.

But there’s a whole new set of questions that you should be asking your seller after the deal is sealed and you’re given the keys to your new abode. Having the answers to these questions will help ensure a seamless transition into your new home.

1. Are there any issues with the home?

Sellers are obligated by law to disclose known issues with a property, but it doesn’t hurt to ask your own set of questions. Have any major systems broken down in the past? How has the place been maintained? Has there ever been any damage from natural disasters, like fires or earthquakes? Has there ever been a grow-op on the property?

Ideally, you’ll get honest, detailed answers to these types of questions. This question and answer session will give you the opportunity to have any quirks pointed out that might cause some inconvenience or may even be unsafe, such as sticky doors, electric outlets in weird places, or a loose handrail. Ask the seller if there is anything that you should know or expect going forward before you even get the keys to the house.

2. Have there been any improvements made on the home?

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As mentioned above, sellers need to provide a disclosure about any issues regarding the property they’re selling, and that includes any improvements that have been made in the past. Even if a problem was fixed, it’s still important to know that the issue did occur and how it was rectified.

Obtaining a disclosure statement from the seller is extremely helpful, but don’t just take it at face value. Use that written statement as an opportunity to ask more questions about any improvements made or other issues that might not be on paper. Perhaps the seller may think of something that they forgot to include in the disclosure statement, and asking more questions may trigger their memory.

3. Where is the main water shut-off, circuit box … ?

There are plenty of important components of a home that you will want to locate before the seller is off the hook. It’s critical for you to find out where these essential elements are, which can save you a ton of hassle.

For starters, you’ll want to know where the main water shutoff valve is, which would be helpful to know should a plumbing pipe burst at any time. You’ll also want to ask the seller where other things are located, such as the circuit box, sump pump, and gas shutoff valve.

And don’t forget to ask if the smoke alarm and carbon monoxide detector work (all homes should ideally come with these critical alarms already installed. Be sure to test them right after moving in, and if there are none present, your first item on the agenda is to have them installed right away.

4. What’s the neighborhood like?

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While this is probably a question you’ll want to have an answer to before agreeing to purchase the home, you can ask for more detail once the deal is sealed. What are the neighbors like? Are there any local eateries or food markets that are recommended? What’s the nearest dog park? If you approach the seller in a light and conversational manner, you can get a ton of useful information about the neighborhood – both good and bad.

5. Will you be leaving anything behind?

It would be nice to know if the seller will be leaving anything behind before they go on their way. Some of these things you might find helpful, while others will just cause you more work.

For instance, you may be interested in keeping some of the furniture in the home if it suits your tastes, is in good condition, and fits well within the space. This can actually save you a bunch of money in new furniture expenditures. The sellers might even be willing to leave behind some plants and artwork that you may have fallen in love with.

On the other hand, some sellers may take off without having dealt with the removal of any junk and debris. That will leave you with the hassle of removing it yourself or paying a junk removal service to tackle it for you. Of course, your real estate agent will probably be able to bill the seller for the removal of any debris on the home, but this would just be an unnecessary nuisance.

6. When is garbage/recycling day?

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Rather than waiting to see when the neighbors put their trash and recycling out at the end of their driveways, it would be helpful for you to know when garbage day is so you can be prepared for the next pick up.

The Bottom Line

It’ll take a little bit of time to get used to your new home, but gathering some key pieces of information will help you settle in a lot faster. Before cutting ties with the seller, make sure you’ve had the opportunity to have the above questions answered first.

These Things Will Have Your Mortgage Denied, Even After Pre-Approval

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Real estate professionals will always advise their buyer clients to get pre-approved for a mortgage. Why? For a few reasons.

For starters, it will help you find out how much you can afford to spend on a new home, and will help your agent to narrow down the homes that fit within your budget. Being pre-approved also shows sellers that you’re serious about buying, which can put you one step ahead when they’re reviewing your offer.

But does being pre-approved for a mortgage mean you’re guaranteed to get approval after your offer has been accepted? Not necessarily. Only after offer acceptance does the real mortgage approval process start, and there are things that can happen which can lead to a denied mortgage application.

Changing Jobs

Your lender is basing their assessment of whether or not you make a good candidate for a specific type of mortgage based largely on your employment. If you suddenly switch jobs in the middle of your mortgage application process, you stand a really good chance of being denied a mortgage. Many times your lender will have to start over because a key detail of the application has completely changed.

Sometimes a change in employment is acceptable in certain cases if it’s within a similar field or just a different location. For instance, if you’re a dental assistant who just switched offices, many lenders may be fine with this change as long as there isn’t a significant difference in income. Having said that, it’s always best to wait for your mortgage to go through before making any changes in employment.

Buying Big-Ticket Items on Credit

One of the biggest factors that plays a role in whether or not you’ll be approved for a mortgage is your debt-to-income ratio. The more debt you have compared to your income, the lower the chances of being approved for a mortgage. Typically, the highest DTI ratio that lenders will accept is 43% before approving a borrower for a conventional mortgage.

If you take on more debt – such as buying a new car or purchasing new furniture for your home on credit – you’ll be skewing this number and make it harder for yourself to get approved. In the weeks after getting pre-approved for a mortgage and just prior to closing on your home, avoid making any major purchases. That includes taking out and running up a big balance on a new credit card, which could result in your lender re-examining your debt-to-income ratio and denying your mortgage application.

Low Appraisal

Most lenders want to make sure that the amount you agreed to pay for the home matches what it’s valued at according to current market conditions in your area. If the purchase price is well over the market value of the property, your lender might not agree to extend a home loan. If they do offer you a mortgage for more than what the home is worth, they put themselves at risk of being stuck with collateral that doesn’t adequately cover the loan amount given should you default on the mortgage.

That’s where an appraisal comes into the picture. Lenders will send out a professional appraisal to assess the value of the property before they agree to approve you for a mortgage. If the appraisal comes in low, there’s a good chance that the lender may not agree to approving you for a mortgage.

Receiving a Large Chunk of Money

It can be tough these days to come up with a large sum of money to be used for a down payment for a home purchase. Some buyers may ask family for some financial help in order for them to come up with a sizable amount, which is fine as long as it’s done the right way.

But if you start moving large sums of money around within your bank accounts, that could raise a red flag for your lender. Money laundering is a real issue, and the sudden influx of money into your account may look suspicious in the eyes of the underwriter who will really scrutinize your situation and application before approval.

The Bottom Line

You may be shocked to find out that you’ve been denied a mortgage after you’ve already been pre-approved for a home loan, but it’s certainly possible. Though a step in the right direction, pre-approvals are not equivalent to actual mortgage approvals after all is said and done. To minimize the odds of being rejected for a mortgage after agreeing to buy a home, make sure not to switch jobs in the meantime, take out additional lines of credit, or move large sums of money to and from your bank account.

Luckily, you have an experienced real estate agent by your side to help guide you along the way and help you make all the right moves while avoiding the wrong ones that could jeopardize your deal. Be sure to heed their advice.

How a Pre-Listing Home Inspection Can Speed Up the Real Estate Transaction

The majority of residential real estate contracts typically come with a contingency that allows the buyer to have the home inspected by a professional before the deal is sealed. Buyers usually pay for this service themselves, while sellers simply allow them to book a few hours to inspect the home from top to bottom. So, if the buyer is arranging – and paying for – a home inspection, why should you as a seller pay to have your own pre-inspection done?

There are many reasons, including speeding up the transaction. Here are just some of the advantages of having a pre-inspection conducted on your home before you list it.

homeinspectionBuild Confidence in the Buyer

Imagine being the buyer of a home and knowing that it’s already been inspected. You would have a little bit more confidence in the property and the transaction as a whole, wouldn’t you?

A pre-listing inspection tells buyers about all the behind-the-scenes details lurking within your home. Nobody wants to put in an offer on a property that has hidden problems. If there is anything in your home that requires fixing, any repairs that you make can be highlighted in the listing description and can even boost the asking price. With an inspection, you can prove that your home is in good condition and is worth every penny of your asking price.

Even if you don’t make the repairs, at least disclosing the issues builds your credibility as a seller and helps boost buyers’ confidence that much more.

Highlight Your Home’s Listing

A home inspection report that’s drafted up before your home is even listed makes for an awesome marketing tool because it helps you showcase your home’s best features. You can take this opportunity to make specific upgrades to your home and highlight them in your listing description, which buyers will notice. 

Buyers like to see that improvements have been made on a home, as it provides the peace of mind knowing that the home is properly maintained. Such reassurance can help to move the transaction along.

highlightlistingIdentify Issues That Need Attention

Minor problems are one thing, but major problems are quite another. Having the opportunity to uncover any significant issues before listing will give you some time to repair them, which is not only a big benefit for the buyer, but it’s also advantageous to you too.

Instead of paying for the buyer’s contractor to get the work done quickly, you’ll be able to make these repairs on your own schedule and budget. Without a pre-listing inspection, you won’t be able to identify any issues until the final inspection before escrow closes, which can waste time and derail your sale.

Help Determine the Right Listing Price

Coming up with the right listing price is critical. If you fail to list appropriately, you risk your home sitting on the market for longer than necessary, and may end up with a stale listing. But it can be a challenge to price your home properly when you’re not fully aware of the state that it’s in.

Having a pre-listing inspection done can help you adjust the asking price accordingly, whether you make the repairs or choose not to. If there’s nothing to be done according to your inspection, you can realistically list higher.

listingpriceLower the Odds of Renegotiation

Your buyer will likely want to conduct a home inspection after offer acceptance, but if their inspection uncovers any major problems with your home, you can bet that you’ll be back to the negotiation table. This time, you could be asked to lower the price of your home, pay for the repairs, or even make the repairs yourself before they take possession.

It can be agitating to have a deal fall apart after it seemed to be on course to close. While renegotiation can still result in a closed deal, it can also go the other way. A pre-listing inspection can help you prevent this scenario from occurring.

Save Money

Buyers often over-estimate how much certain repairs can cost. You may be able to save some money by having the work done ahead of time with a contractor that you choose yourself. This could literally mean the difference of a few thousand dollars.

savemoneyThe Bottom Line

While it’s certainly not mandatory to conduct a pre-inspection on your home before listing it for sale, it can certainly help ensure a more streamlined process. Selling real estate will inevitably come with a certain amount of uncertainty and stress, but you can greatly reduce and even eliminate these negative factors by including a pre-inspection on your property as part of your selling process.

What’s the Difference Between Market and Assessed Value?

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If you’re planning to sell your home some time soon, knowing its current market value is extremely important in order to price your home right. Of course, many sellers tend to believe that their homes are worth a lot more than what they really are. But it’s not wise to establish a listing price based solely on what you might think your property is worth.

Sound research and due diligence are required to come up with a price that accurately reflects the current market and what buyers would be open to spending for a property.

But while market value is certainly a critical component to consider, there’s also a thing called “assessed value,” which is not necessarily the same thing.

So, what’s the difference between ‘market value’ and ‘assessed value’?

Market Value

Essentially, market value is the price that a certain property would most likely be able to command in a specific market at any given time. It’s basically the price that a property would be able to sell for within a reasonable period of time, and one that a qualified buyer in the area would be willing to pay for a home.

In order to figure out exactly what a home’s market value is, several factors need to be considered, including its location, exterior and interior condition, lot size, house size, number and size of rooms, age of major systems and appliances, and so forth. Usually, these traits are compared to that of similar homes in the area that have recently sold, which are referred to as “comparables.” Real estate professionals use the market value of a home to determine a fair asking price.

Assessed Value

The assessed value of a property is based on a percentage of its appraised value, and is used to establish how much will be owed to the local government in property taxes. The local assessment office sends out assessors to determine the value of properties within a specific area.

More often than not, the assessed value of a property is lower than its market value. In fact, about 60% of properties across the U.S. are assessed at a higher value than their current market value, according to the National Tax Payers Union.

The assessed value of a property is not necessarily what a home will sell for; instead, the market value of a home is what will usually determine its listing price and roughly what it will sell for.

Tax assessors aren’t required to match the actual market value by adjusting property assessments every year. For this reason, there’s usually a big gap between what a home can realistically sell for and what it’s worth according to the municipal tax office.

An actual appraisal conducted by a professional home appraiser will give you a much better indication of what your home is worth according to current market conditions compared to what’s on paper as per your annual tax assessment. Recent comparable sales of similar homes in your neighborhood that appraisers – as well as real estate agents – use as part of their appraisal will give you a much clearer indication of what you can realistically list your home for.

The Bottom Line

When it comes to selling your home, you’ll really want to know what its market value is as opposed to its assessed value. While the assessed value is important as it pertains to how much you pay in property taxes every year, the market value will tell you what you should list your home for in order to increase the odds of a successful transaction.

It’s the market value that will guide you to selecting the right price that will attract qualified buyers looking in your area. Before you list your home, get some advice from your real estate agent who will do the research necessary to provide you with an accurate and objective assessment of the value of your home based on its traits as well as recent sales in the surrounding neighborhood.

Buying a Home With a Pool? You Should Have it Inspected

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A swimming pool is not exactly a foreign feature among homes. In fact, if you’re looking to buy a home, the odds of finding one with a pool are pretty high, especially further south. And just like any other component in a home, they’re subject to break down over time.

When you put in an offer to buy a home, you’ll likely insert a home inspection contingency in the contract that gives you the opportunity to have the home scoped out by a professional in case there are major issues with the property that need to be rectified. But while you’re at it, you should seriously consider having the pool inspected too.

Inspecting a pool is out of the average home inspector’s scope. It’s not very often that a pool will be covered in a home inspection, and even if it is, many inspectors do not have the skill-set and experience to deal with these components. In fact, the majority of inspection reports will include a disclaimer releasing them from any liability if they miss any issues with the pool.

Here are some reasons why you should specifically hire a pool inspector before sealing the deal on a new home.

Pool Equipment is Intricate

There’s a lot more that goes into the operation of a pool than meets the eye. Aside from the actual pool itself (which should be inspected for any cracks or leaks), there are a few key pieces of equipment that need to be carefully assessed, including the pump, filter, and heater (if there is one).

The surrounding surface should also be inspected, whether there is patterned concrete, natural stone, pavers, or any other type of material to ensure it’s in good condition and safe for you and your family to walk on near the water.

Any pool cover and associated hardware used to move and secure it in place should also be inspected, which is something most home inspectors are not well versed in. Experienced pool inspectors will test the overall operating condition of the pool and its equipment to ensure they’re in good working order.

Plumbing Leaks Can Be Uncovered

Even if home inspectors take a stab at inspecting the pool, they likely won’t be able to determine the state of the plumbing pipes, which is critical. Any leaks along the pipelines can be a major problem that can be time-consuming, labor-intensive, and very expensive to fix.

If necessary, an experienced pool inspector might recommend having a pressure test done to the plumbing system, which is definitely not something your average home inspector is used to doing.

Main Drains Will Be Inspected

A critical aspect of a pool inspection is ensuring that the pool has the appropriate covers over the drain and suction outlets. Ideally, these covers should be government approved, and the inspector should be familiar with all state laws regarding pools and drain covers.

The Security Fence Will Be Inspected

All jurisdictions have their own specific rules governing fencing around pools, which offer a means of protection for children who may happen to wander into a pool area by themselves. While the specifics may vary from one municipality to another, they will all require gates that are both self-closing and self-latching. Again, a professional pool inspector will be familiar with the local requirements.

A Detailed Inspection Report Will Be Provided

Like a standard home inspection, you will get a detailed report from your pool inspector which will detail what was inspected and will outline any issues that may have been uncovered during the inspection. This professional will go through the report with you to ensure you understand exactly what is in it and highlight more important issues that need your attention.

Should any repairs need to be made that are detailed in the report, you can use this information to perhaps renegotiate with the seller to either reduce the purchase price or ask to have the repairs made before you take possession of the home.

The Bottom Line

Considering how expensive a swimming pool and all of its components are, it makes sense to ensure the one that comes with the home you’re buying is in good condition. The last thing you want is to have to dump a few thousand dollars into fixing issues with your pool shortly after moving into your new home. To avoid this unpleasant and expensive situation, call the experts in pool inspection before signing on the dotted line.

5 Savvy Tips to Packing Delicate Items When You Move

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The odds of your most fragile belongings suffering damage during a big move are pretty high if the necessary precautions aren’t taken into consideration. It’s vital that you take the time to properly package and label your delicate items in order to make sure that they arrive to their final destination in one piece.

The best thing you can do while packing is take your time. When you’re strapped for time and have to rush to get everything packed away and ready to be moved, that’s when problems arise. Instead, plan ahead and give yourself plenty of time to properly pack up your delicates while keeping the following tips in mind.

1. Gather Up Your Arsenal of Packing Materials

Packing delicates is not exactly like packing your average product. You need specific types of packing material that will ensure that your fragile goods are adequately wrapped and kept safe from damage.

One of the most important steps for safely packing very delicate items is gathering the appropriate packing supplies. Last Sunday’s newspaper and the box that your toaster came in won’t cut it. When it comes to packing easily-breakable items for a big move, you’ll need the following supplies:

• Sturdy cardboard boxes – The type of cardboard boxes that you need should be very thick and strong so that the weight of your items isn’t too much for them to withstand;

• Bubble wrap – Nothing beats the amount of protection that bubble wrap can provide, so be sure to stock up on a few rolls;

• Packing paper – You’ll need plenty of packing paper to stuff in between items to make sure they stay put and don’t move around the their boxes. And you can forget about printed newspaper – this stuff will just leave marks all over your items;

• Packing tape – The higher the quality, the better, as strong packing tape will ensure your delicates won’t fall through the bottom of the boxes.

2. Make Sure the Moving Boxes Are Sturdy Enough to Handle the Weight

Preparing the boxes that you’ll be using is a crucial step, and is probably just as important as wrapping your fragile items. You want them to be strong enough to hold the weight of your goods while also providing some cushioning at the same time.

To make sure the moving boxes are fully capable of handling these potentially heavy loads, look closely at them to make sure there is no structural damage. Tape up all openings of the boxes – especially on the bottom – to give them some extra strength. Line the bottom of the boxes with crumpled packing paper to help eliminate any vibrations or impact that could damage your items.

3. Wrap and Pack Each Type of Item Appropriately

Not every type of delicate item should be packed the same way:

Plates – Each plate should be individually wrapped in bubble wrap and then packed vertically, the way vinyl records are stacked. Storing them in this manner can help cut back on the risk of breakage during the move. Take things a step further and add a sheet of pliable cardboard or foam between each plate and on the top and bottom of your box, again stacking them vertically.

Glasses – Wrap each glass with packing paper, making sure to tuck some of it inside as well. Considering how delicate these items are, it’s recommended to pack them in small boxes in order keep the weight to a minimum. You can layer the glasses on top of each other, but just make sure to place the heavier glasses at the bottom and not layer too much. Divide each layer with a sheet of cardboard or foam.

Glass and ceramic accessories – If you’ve got vases, bowls, or other fine glass and ceramic goods, use small boxes. Wrap each item in packing paper and fill in the middle with crumpled packing paper. Then, wrap the entire item in bubble wrap. The bottom of the box should be lined with thick padding, such as towels or linens, to absorb shock.

Mirrors, picture frames, and other large items – Before you wrap and pack large glass items like these, wrap painter’s tape around the width and length to form a “+”, which will help absorb any shocks that could possibly crack the glass. Place foam protectors on each corner, then wrap them in bubble wrap secured with tape.

4. Prevent Movement of Your Delicates Within Their Boxes

After you’ve wrapped and packed your delicates into their appropriate boxes, fill up every tiny space with crumpled packing paper. This will help to prevent any shifting of your delicates while they’re being hauled to your new home. You can even use socks, towels, scrap pieces of bubble wrap, or anything else small enough that will be able to keep your goods in place so you find them in the same condition you left them in.

5. Clearly Label Your Boxes

This might sound like a no-brainer, but it’s amazing how easily you can forget such a seemingly simple task. Not only should you label the boxes “FRAGILE” on at least two sides of the boxes, you should also indicate which side is up. In addition, specify which items are in the boxes and what room they belong in to make unpacking a lot easier.

The Bottom Line

It goes without saying that once all of your delicate belongings have been packed up in their respective boxes, you need to take extra care when moving them. Watch every step you make, don’t rush, set the boxes down slowly and gently, and use ropes or straps to secure them in the back of your moving truck or trailer. If you’re driving the truck yourself, proceed cautiously. Practicing vigilance is the best way to pack and move your fragile items when transporting them to your new home.

6 Signs Your HOA Might Be in Bad Shape

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Condominium living might not be for everyone, but there are definite perks to them, including affordability, desirable location, and access to amenities. They’re particularly well suited for those who like the idea of having someone else take care of many aspects of their property for them.

However, the state of your HOA can have a huge impact on your enjoyment of living. An HOA that’s run professionally can ensure that you’ll enjoy your home with minimal issues. On the other hand, an HOA that’s in bad shape can do quite the opposite.

So, how can you tell if your condo association is shady? While many times it’s not possible to tell until it’s too late, there are still some telltale signs that you may want to look out for that may signify that your HOA is in trouble.

1. The HOA Owns the Services Operating the Community

Ideally, all the service contracts for the community or building are with companies that have absolutely no affiliation with the board itself. If the HOA – or any board member on it – owns or has a stake in any one of the maintenance companies – such as the landscaping company, security company, engineering company, and so forth – this is a direct conflict of interest and even a sign of possible corruption or fraud.

2. A Board Member Holds Other Associated Paid Positions

Board members are typically owners who work on a voluntary basis. However, if any board member holds some sort of paid position within the association, this can open the floodgates for all sorts of problems, from constant complaints from owners to harassment and fraud.

3. The Community or Building is Self-Managed

A professionally-run condominium should have a reputable property management company appointed to run the community rather than allow it to be self-managed. While the latter may save owners in HOA dues, the types of problems that can arise are vast.

For starters, it’s highly possible that the appropriate insurance and property taxes are not being filed properly in a self-managed property. It’s also likely that there is no solid accounting measure put in place, which can put an association in financial duress at some point.

4. There Are Obvious Maintenance Issues

If you notice elevators out of service, unkempt landscaping, stains all along the hallway carpets, and overflowing garbage dumpsters, these may all be signs that the condominium is not being adequately managed, especially if these issues have been lingering for weeks or months – or longer – without being dealt with promptly.

Issues will always arise with these types of communities, but an HOA that is well run will know how to handle them in a time-efficient manner. Any obvious lack of maintenance often means there may be other issues lurking behind closed doors that you can’t see.

5. Reserves Are Low

Before a deal on a condo sale closes, you’ll have the opportunity to request documents from the HOA that you and your real estate agent can look over to ensure the community is financially sound. While there are plenty of things that these documents contain, you’ll want to pay particular attention to the financial statements, including the balance sheet, profit/loss statements, and reserves.

If those do not exist, or seem insufficient, that’s a really bad sign. This could potentially mean that there is not enough money to cover future expenses, such as a new building roof, new parking lot, new elevator, and so forth. If there’s not enough money in the pot, the funds will have to come from the owners, which means a big hike in your HOA dues at some point in the near future.

6. The Condo Fees Are Too Good To Be True

Low condo fees might be something you’re looking for, but be careful with advertised fees that seem too low to maintain the community. Of course, it’s possible that the fees have been able to stay low because the building is very well run, but it’s still important to check the reserve fund mentioned above, as well as the profit/loss statement to make sure there is no overspending involved.

If you’re buying a new condo from the builder, it’s important to keep in mind that some builders advertise low HOA fees just to attract buyers, only to raise them shortly after occupancy. Many times the initial budget that is set-up by the developer is inadequate to cover all maintenance issues.

Be sure to compare other similar properties and their HOA dues to get an idea of what an average is so you don’t end up unpleasantly surprised with a fee hike in the near future.

The Bottom Line

At the end of the day, it’s critical to thoroughly review all the documents that you are provided with to look for anything that may seem a little odd. Ask your board members for a copy of the most recent HOA meeting minutes to find out exactly what happens at these gatherings. If at least one or more of these signs are noticed, consider them red flags. If you haven’t bought yet, you may want to look elsewhere.