By: Tara-Nicholle Smith
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 I’m not talking about 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.
I’ve known homeowners who 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. The spectre of 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 homebuyer 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