AirBNB – Here to Stay?

The world of travel has been recently revolutionized by Airbnb – an innovative company that allows travelers to have a more home-roots experience when venturing to new cities.

Available in over 191+ counties, the site gives home owners an opportunity to capitalize on empty rooms or vacant apartments. It describes itself  as “a social website that connects people who have space to share with those who are looking for a place to stay”.

While Airbnb certainly makes travel more convenient, more affordable and let’s face it – more fun, a few cities are concerned with their casual approach to the travel industry and argue that it is contributing to the current housing crisis.

Should we, as homeowners/renters in one of the most populated cities in the country be concerned with the growth of Airbnb?


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To start, some lawmakers are anti-Airbnb because it allows people to make money without having to pay hotel taxes. The company charges guest a 9-12% service fee on every reservation made, as well as charging hosts a 3% fee.  Worth over $10 billion dollars, the company’s current valuation exceeds that of many global hotel chain. It has lessened our reliance on traditional hotels and motels – which ultimately means that the hospitality industry is losing money. In fact, HVS estimated that hotels lose approximately $450 million in direct revenues per year to AirBnb.

Beyond this financial impact, the popularity of Airbnb could ultimately be contributing to the rising cost of living in your city. It is more profitable for home owners to offer short-term rentals (think $150 a night) rather than long-term monthly rental agreements – think $150/night vs $800/month!

According to research done by Vice, this issue is aggravated in cities where vacancy rates are low and rental rates are historically high. Bennett Baumer, an organizer with the Housing Conservation Coordinators, shared, “Airbnb is exacerbating the affordability crisis and the general anyone-looking-for-an-apartment crisis by taking almost 20,000 apartments out of the market.” While this powerful statement was made in reference to New York City, Los Angeles no doubt fits the “low vacancy rates, historically high rent” description and it is likely that this issue translates over to the West coast.

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Further, renters who list who list their apartments or homes on the site may very well be in breach of their rental agreements. People who use their spare rooms to make quick cash on Airbnb without approval from their land-lord or the home owner, may find themselves evicted or in court! While Airbnb encourages its users to be “responsible hosts” and check renting laws and lease agreements prior to listing their spaces, the company does not take responsibilities for any legal issues that may arise.

On a more personal note, there is always the risk of bringing loud, irresponsible and reckless groups into your home/neighborhood. While you have the opportunity to screen and ultimately decline guests, the site does not require background checks. There have been instances of neighbors or fellow tenants reporting properties that are illegally renting out their homes.


In family friendly Redondo Beach, it is easy to see why your neighbors may be wary of you listing your home on Airbnb. While we see both the pros & cons of Airbnb, we urge you to be cautious if you are considering listing your home on the site. If you currently in a lease, be sure to double check your rental agreement and run the idea by your landlord. If you are a homeowner, we advise being open with your neighbors and selective in your guest selection.

Do you have an Airbnb experience you would like to share with us? We would love to hear more 🙂

 

 

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How To Rock Your Request For Repairs

A typical Residential Purchase Agreement contains an inspection contingency that allows for the buyer to inspect the property, review the reports and present a request for repairs to the seller. If the buyer is unsatisfied with the agreed upon repair list he or she can choose to cancel the deal and have their deposit returned. A request for repairs may ask for a detailed list of work to be done and/or a credit amount to cover the cost of the repairs.

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While some buyers feel that opting to waive the inspection contingency will give them a better at getting their offer accepted, we always advise buyers to opt to have the property inspected. While general home inspections cost several hundred dollars and are paid by the buyer, they could save the buyer a large amount of money in the long run. It also helps to educate you on the overall condition of your home and the condition of its systems.

Your home inspection will inevitably point out some problems with the property – no matter if it is brand new or 25 years old. Your home inspector will check that the main appliances and main systems (plumbing, heating, electrical, etc) are safe and operational. They will also check to see if there are any health and safety issues that might be a problem with the specific property. Pending the results, the general inspector will recommend additional inspections from a specialist (such as a roofing or foundation expert) and/or a list of necessary repairs. Most home inspectors have years of experience and should be able to identify what is problematic and needs to be addressed immediately, as well as what will need maintenance in the near future.

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At this point, you will need to generate a list of requested repairs or credits to present to the seller. This part of the escrow process requires negotiation and strong communication between both the agents and their respective parties. Thus, when deciding what issues or problems to put on your list it is helpful to consider how the seller might react – while you may feel that you are entitled to put everything the inspector recommends replacing, this is a key example of “picking your battles”. You may an extensive list, but it is best to get the list down to the most crucial items and be willing to let the minor things go.

Generally, it is a good idea to stick to health and safety items, as well as any damage that could adversely affect the structural integrity of the home over time. A few items of real concern are: cracks in the chimney, foundation cracks or a damaged roof.

As a buyer, you should be absolutely be persistent on ensuring that your future home is up to par, but you should prepared to take on some of the responsibility of the repairs. After all, you do not want to the deal to fall apart or get drawn out because you cannot come to an agreement as to which party will fix a few cracked floor tiles.

The best way to ensure that you get the most from the seller is to present estimates of the actual cost from contractors. While this may require more effort on your end, doing this gives the seller concrete proof of the price work that needs to be done and gives them little wiggle room.

Another thing to keep in mind when crafting your request list is the sale price of the home. If you were able to secure the home way below asking price, you should consider being a bit more lenient on your list. If you paid full price, you will have more wiggle room to include more requests, but remember that it is very rare to have the seller agree to all the requests right off the bat.

Most importantly, lean heavily on your agent during this whole experience! Remember, we are negotiation specialists and have gone through this process many times. We know the importance of being flexible, but also when to stick to our guns and fight for our clients and their wants. In the end, our job is to ensure that you get the best deal and that you feel 100% confident moving forward with closing on your new home!

Con’s of Contingent Offers

Looking at a real estate purchase agreement can be overwhelming…Even the name of the contract is an unnecessary mouthful (Residential Purchase Agreement and Joint Escrow Instructions). Each page is full of confusing terms & dense explanations. One area of a contract that a majority of people have trouble comprehending is the “contingency clauses.”

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According to Investopedia: “A contingency defines a condition or action that must be met in order for a real estate contract to become binding. These becomes part of a binding sales contract when both parties (i.e., the seller and the buyer) agree to the terms and sign the contract.”

Basically, a contingency is generally put into a contract as a way for the buyer to back out of a sale if something goes wrong  without losing their full deposit.

There are two main kinds of contingency clauses within a Residential Purchase Agreement there are :

  1. Appraisal Contingency: This requires hiring a third party to determine the current fair-market value of the home. If the appraised value is lower than the sale price, the buyer is given the option to cancel the deal. Buyers still have the option to move forward with the sale , but should remember that a lender will only provide money based on the APPRAISED COST, not the agreed upon sale price. You could also chose to waive this contingency entirely when writing an offer, but this could drastically raise the amount you pay out of pocket.
  2. Home Inspection Contingency: This allows the buyer to have the home professionally inspected and then, based on the inspection results, to request repairs to be made by the seller. If the seller refuses to make the requested fixes, the buyer is given the option to back out of the sale. A good home inspection looks for major issues (such as foundation problems or mold), but also examines the functionality of the home’s major systems (such as water heaters). Again, a buyer could choice to waive this contingency clause but we generally do not suggest it.

 

It is important not to confuse these contingency clauses with a contingent offer!

 

A contingent offer is an offer that is reliant on the sale of your buyer’s home. Generally speaking, contracts contingent upon the buyer’s sale of his home do not even enter escrow and or being inspections, appraisals, etc until the buyer actually sells his/her home. We suggest caution when it comes to accepting a contingent offer for a few reasons:

  1. Once you accept a contingent offer, the MLS will require your to change the status of your listing.. meaning that it will be listed as “pending” or “contingent”rather than “active”. While this does not completely remove your home from search sites, it will limit it’s visibility or marketability. Buyers and agents are less willing to take the time to see or make offers when a home is not 100% available, which makes it more difficult to line up a back-up buyer.
  2.   It is stressful  enough worrying about selling your own home.. but accepting a contingent offer means that you are now dependent on the sale of second home. You also have no say in how this home is marketed or how proactive the owner’s/owner’s agents are being. This scenario could increase your stress level, drag out the sale of your home and culminate in a frustrating outcome.

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However, there are exceptions to the general rule.. and each situation must be evaluated individually. For example, if the buyer’s home is in the last stages of escrow then accepting their contingent offer is a much lower risk. It might be worth considering if it is your only offer OR if their offer is significantly better than any other offer you have.

In general though we suggest to avoid contingent offers by asking the buyer to remove the sale contingency and replacing it with a longer escrow. This gives the buyer more time to sell their home, but compensates you for your time by allowing you to keep their deposit. If the buyer is unwilling to do so, you could always suggest that the buyer resubmits an offer once his or her home is sold.

 

Creating An Eco-Friendly Home

From solar panels to green-lifestyle dating sites (yes, those are a thing!), it is hard to miss the emergence of new products/lifestyle options that take eco-friendly living to a whole new level!

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While it is inspiring to see more Californians opting for a less harmful existence, many still view taking on a greener lifestyle as a daunting and expensive endeavor! We have devoted this week’s blog post to putting together a list of simple, cost-effective, and in a few cases, fun tips to help make your home more eco-friendly. You do not have to implement all the suggestions below, but try to pick one that seems feasible and go for it!

Anything else you’re interested in is not going to happen if you can’t breathe the air and drink the water. Don’t sit this one out. Do something. – Carl Sagan

Upgrade Your Insulation & Windows

Adding insulation to prevent leaky  walls, windows, doors and duct can reduce your home’s energy usage up to 20 or 30 percent. If totally updating your insulation is too expensive for your fall budget, consider trying out thermal shades. These shades are made not only to block the sun in the summer, but also to retain heat in the winter! Energy-efficient windows also help to better insulate your home. Check out this article by House Logic to learn more about the importance of efficient windows and to find the best models for the most reasonable prices.

Opt for Fragrance-Free Products

Conventional fragrances often contain chemicals that may be harmful to the ecosystem when washed down the drain. If you like your soaps, cleaning products, or cosmetics to smell good (we certainly do!) read the labels to find ones that are made with essential oils. Real Simple offers a huge selection of all-natural cleaning solutions! This helpful blog post also provides a list (and reviews!) of the best eco-friendly cleaning products for your home.

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Low-Flow Your Bathroom

Flushing toilets accounts for 30%  of indoor water use! An average family can reduce water used for toilets by 20 to 60 percent and save $$ in water costs by replacing old toilets with newer WaterSense labeled models.  While you are in the bathroom, go ahead and install a low-flow shower head as well. Also, regularly check your toilets and faucets for leaks.

Replace Your Lightbulbs

Save up to 66% of energy by replacing all of your incandescent lightbulbs with Compact Fluorescent Lightbulbs! Beyond saving energy, CFLs also last up to 6 times as long as incandescent bulbs. (Saving money and time!) Also, turn off the lights when you leave a room.. or consider installing automatic timers in your forgetful teen’s room!

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Cool Down Your Clothes.

According to Huffington Post a huge amount of energy goes into heating water to wash your clothes. Try selecting the “cold water cycle” on your washing machine next time you throw in a load! Also, always make sure you are washing a full load every time. Running a full cycle for just a few towels or a pair of pants uses a substantial amount of water!

Grow An Indoor Garden

Living plants such as the Gerbera Daisy can act as natural air filters and help to improve indoor air quality. Check out this full list of 15 houseplants that not only brighten up a room, but help to absorb harmful pollutants throughout your home!

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Create a Recycling or Compost Station

Nearly half of the trash that a home produces is made up of food scraps. Rather than sending these scraps to the dumb, why not get a compost bin at your house and use those scraps to make fertilizer for your garden?! Get creative and build your own…(or check out these top-selling Amazon options!)

 

We are working to implement these changes in our own homes, so we are open to any tips or suggestions  our readers have!