How much you've spent on a house doesn't matter

 
 
Posted5/19/2018 6:00 AM

Q. I'm facing the sale of my home. I've been living here for 38 years. I am curious about a few things:

• After choosing an agent to sell the house, should you share any weaknesses in the house, i.e. a couple of drafty windows, although all are replacements?

 

• I purchased the house plans from the architect for $700. Does that figure into the selling price?

• The cement garage floor has become pitted and weathered. Should that be resurfaced?

• What is the relationship of the assessed value of a house/property to the selling price?

A. Here are my answers:

• I'm not sure drafty replacement windows are important enough to be disclosed to potential buyers, but you should discuss that with your agent.

• How much money you've spent on the house isn't really important. What matters is what the buying public currently seems ready to spend in your neighborhood.

• Your agent will advise about that garage floor. It's not always possible to recoup money spent preparing property for the market, but I haven't seen that floor, nor do I know your home's price range.

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• Buyers have a right to know your home tax assessment figure. But no matter how recent that assessment or how scientific the assessor's estimate, it's of little use in determining your asking price. Again, what matters is what buyers have recently paid for similar nearby properties.

Q. What is the best way to ameliorate and eliminate pet odors before listing a house? The cats are gone, but alas, the memories linger.

A. This is the first time a reader has ever asked that question! It's a good one, too. You'd be well-advised to treat the problem before inviting in potential buyers.

Years ago, I wrote a book with a chapter on preparing a house for the market. It reads: "Except in rare instances, it is unwise to invest much cash in improving a house that's going on the market. It is usually impossible to recoup the outlay … so eliminate major improvements from your plans. If you're ready to spend some money … the best investment -- after soap -- is probably paint."

For starters, professional cleaning services are probably called for. And for the rest, you will find plenty of advice searching "pet odors" on the internet.

                                                                                                                                                                                                                       
 

Q. We just refinanced a home. When computing the cost to pay off the old mortgage, the mortgage company calculated the daily rate based on 365 days per year. However, when computing the cost charged for the days between when we closed and the end of the month, they calculated the daily rate based on 360 days per year.

The 365-day calculation comes to $2.74 a day per $1,000 mortgage.

The 360-day calculation comes to $2.78 a day per $1,000 mortgage.

When I questioned it, I was told that this is the standard practice everywhere.

Now, this may not seem like a lot: a difference of 4 cents per $1,000 payment and only $1.20 for our refinance. But if this is the standard practice across the country, I would think this would amount to millions of dollars that the consumer is being overcharged.

Is what the mortgage company is doing legal?

A. I remember when hand-held calculators first went on the market. When our scientist son was in college in the 1970s, we were excited to buy him one of these new little wonders as a graduation present. To get one that not only added and subtracted but also figured out square roots, we spent $125 (the equivalent today of more than $500). And it didn't give you a decimal point -- you had to guess that part of the answer.

So, yes, in the years before, it was standard practice to head off paper and pencil mistakes -- and arguments -- by using a simplified 360-day year and a 30-day month at real estate closings. Money adjustments among lender, buyer and seller -- the prorated share on items like real estate taxes, water bills and mortgage interest -- were easier that way.

And yes, that old system is still standard in some but not all areas today. I suspect those small charges work both ways and even out more or less.

If you want more to quibble about, you could consider the question of whether buyer or seller should pay real estate expenses for the actual day of closing.

So, anyhow, the answer is yes, that's just the way it's still done in your area.

• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.

© 2018, Creators Syndicate

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