The Loken Group FAQ

There are a few steps for us to complete prior to the home going active on the market:

• • Listing paperwork will be sent to you digitally for completion and signatures.
  • You will meet with our stager for your complimentary staging consultation.
  • Once you’re ready, our professional photographer will photograph the home and furnish the lockbox and yard sign.
  • Your listing will be ready for approval and activation on the MLS!

As soon as your Listing Partner has received the edited photos from the photographer, your completed listing paperwork, and your thumbs up on the listing proof, your listing will be active on MLS.

All your listing documents will be sent to you via an e-signing program called Dotloop. Signing works best on a laptop or PC, however, if you’re using a mobile device or tablet, you may want to download the Dotloop app for easier signing. It is especially important to fill out the Seller’s Disclosure, Exclusions List, and Features List as thoroughly as possible. These documents are required by our broker and several of them are required for executing an offer, so we are unable to activate your listing until all listing paperwork has been completed.

Your listing team is happy to work with you on ensuring timely, accurate, and stress-free completion of your listing paperwork. If you are experiencing technical limitations or difficulties and are unable to sign electronically, your Listing Partner can coordinate the following signing options:

• • In-person signing with your Listing Partner at The Loken Group office
  • In-person signing with your Listing Agent at your home or office
  • Digital documents can be delivered as a PDF, printed, and hand-signed at your convenience
  • Printed documents can be hand-delivered by a Loken Group Operations Specialist
  • Printed documents can be mailed via USPS or UPS

Completed documents can be returned via scan and email, USPS or UPS, or picked up directly from you by a Loken Group Operations Specialist.

Texas real estate contracts state that the house, fixtures, improvements, and accessories are part of the sale. If you want to exclude items from the sale, a chandelier for example, the contract includes a place for that. Certain items stay or go depending on whether they’re permanently installed or built-in, keeping in mind there are always exceptions. Three factors determine if something is permanently installed or built in:

• • How is the item attached? Will the property be damaged by its removal?
  • Is the item customized or standard for the property?
  • Was the installation intended to be permanent or temporary?

Freestanding refrigerators, washers, and dryers go with the seller, but security equipment, curtains, and rods would likely stay. It is a good practice to thoroughly review the exclusions list included in your listing paperwork so we can let buyers know up front what to expect.

Our goal in providing a complimentary staging consultation is not to put a strain on your wallet or your time, but to provide you with the most comprehensive and informative list of items we know sell homes fast and for top dollar. How many of those items you choose to complete is entirely up to you. Your listing team and your stager can dive deeper with you on which items are simply desirable versus which will be the most critical for attracting buyers. We are also more than happy to be a resource for any professional references you might need, from contractors to cleaning services and lawn care.

Your complimentary staging appointment provided by The Loken Group does not include any furniture or décor rental; however, our professional stagers do offer these types of services, which can be contracted at the seller’s expense.

Absolutely! We have a “SWAT Team” of reliable, affordable professionals in just about every industry you might need as you prepare your home for the market, including contractors, cleaning services, lawn care, estate sale facilitators, and MORE! Your listing team is happy to provide you with contact and referral information for anyone you might need.

Your photos are professionally edited to present the home in the most flattering way possible. This includes any corrections in lighting, framing, color correction, and light touch up. Processing generally takes about 48-72 hours. As soon as the photos are out of processing, you will be sent proofs to view and approve. From there, your home will be active on the market right away and we can start marketing to prospective buyers.

Once photos are taken, you will be sent a proof of your listing for review. Please let your listing partner know if there are any errors or if we have misrepresented the property in any way. We are happy to make any desired changes within the scope of the data entry system. Your listing partner is happy to walk through any concerns with you to ensure we are marketing the home as thoroughly as possible.

No matter the weather, overcast or clear skies, the editing done afterwards will make your house shine. Our photo editor also takes special care to edit in beautiful skies, so even if it’s raining, you’d never know it from the photos. In some cases, overcast weather can be preferable for reducing harsh shadows, providing more natural light.

You are not required to be present for photos as long as our photographer has access to the home. If you have already provided us with an access code or key, or would like to hide a key for us at the property, we’ll ensure the photographer locks everything up at the conclusion of their appointment and places the key securely inside the lockbox.

The Loken Group has several experienced, professional Real Estate photographers on staff that will be photographing your home. Your photographer will be bringing the sign and lockbox with them to install at the time of your appointment. You’ll want to make sure that you have a spare key ready for the lockbox. They will also be taking a few measurements inside the home and taking note of all the details that will go into your MLS listing. In total, the appointment should last about an hour and a half.

Our photographer is setting aside this appointment time to give your home their undivided attention. If, for any reason, you need to cancel or reschedule your photo appointment, we are more than happy to work with you. Please let your agent or listing partner know as soon as possible so that we can make arrangements.

The Loken Group utilizes ShowingTime for management of all showings. ShowingTime has streamlined the showing appointment process to enable faster home sales. ShowingTime coordinates all buyer agent showing requests with you and all showing activity and agent feedback is saved on ShowingTime. You’ll receive a welcome email granting you access to the online portal and the ShowingTime mobile app.

You can instantly approve showings on your property with your mobile phone from an email or text message. If you don’t respond to the text message within a specified time, CSS will still make the necessary phone calls.

A little effort and time preparing for a scheduled showing goes a long way by reducing the amount of time it takes for a home to sell, and potentially leading to more money in the seller's pocket! Think about appealing to all five of the buyer's senses. It’s smart to start from the outside and simulate a potential buyer’s walk through. Pay close attention to the following tips or visit TheLokenGroup.com/Staging for ways to prepare your home for showings.

• • Enhance curb appeal. The first impression that a buyer will gather of a home is the exterior and the home's “curb appeal.”  Depending on the season, make sure the lawn is freshly cut, leaves raked, and flower beds are neat. Make sure lawn tools and toys are picked up, and if you have pets, please pick up after them
  • Welcome potential buyers with fresh flowers on a table in the foyer or countertop. Earn bonus points with buyers by providing light refreshments like bottles of water, cookies, or a bowl of wrapped candy or other treats near the front door with a small note thanking the buyer for coming to see your home.
  • Keep the temperature comfortable. You want the house to be warm and welcoming. Depending on the time of the year, make sure your home's temperature is comfortable. If it’s hot outside, set the thermostat between 70-74 degrees.  You want the buyer to feel instant relief from the heat once they enter your home.  If it’s cold out, set the thermostat between 72-76 degrees.  You want the buyer to feel as though they are entering a nice, warm and cozy home.
  • Make the space light and bright. Let in as much natural light at possible by opening the curtains and blinds to illuminate the interior. Place higher-watt light bulbs in lighting fixtures and turn the lights on, even in the daytime. Turn on background music like classical or jazz, as buyers can be uncomfortable in completely silent places. Keep the volume low.
  • Welcoming scents. A foul odor in a home maybe the largest turn-off for a potential buyer, whether it’s an odor from pets, smoking, cooking, or elsewhere. Clean carpeting and drapes to eliminate odors. Open the windows to air out the house. While you want to be careful not to overwhelm buyers, consider lightly-scented candles and diffusers. If you have time before a showing, brew a fresh pot of coffee or bake a fresh batch of cookies so that the aroma is permeating the home. Boiling cinnamon sticks can also provide a nice aroma as well! If you’re concerned about odors, it is often a good idea to have an opinion from a person who is not living in the home as homeowners often become immune to smells within their own homes.
  • Remove clutter. One of the most noticeable things to a prospective buyer is clutter – it can turn buyers off because they're not able to visualize how they will use the space. Some areas that often collect clutter are countertops, stairs, entryways, and closets. Organizing cabinets and drawers can go a long way as storage space is a vital selling point of any property.
  • Clean the kitchen. The kitchen is typically one of the home’s top selling features, so you’ll want to make sure the floors and countertops are not only free and clear of clutter, but also “clean enough to eat on.” Some buyers have a very difficult time looking past “personal” belongings, so the exterior of the refrigerator should have virtually nothing on it.  Staging your dining room or kitchen table for a nice meal encourages buyers to imagine what it would be like to entertain in the house. Your best china and a new neutral tablecloth with matching napkins will help with the visualization. For quick fixes in the kitchen, cotton balls soaked in vanilla extract or orange juice can instantly make the fridge a nicer-smelling place. Boil lemon juice in your microwave, then add it to your dishwasher to eliminate odors. You can also run lemon rinds through the garbage disposal for a similar effect.
  • Clean the bathrooms. Bathrooms are often the second biggest selling feature of homes. Ensure the countertop and floor are clean and clear of clutter. Most prospective buyers are going to peek inside the tub and/or shower so ensure they are free of grime or excess bathing products. Make sure the linen closet and the items inside are organized neatly. Hang a couple new bath towels neatly on a rack for the model home appearance.
  • Tidy the bedrooms. If a home’s bedrooms are on the “cozier” side, it’s critical that a buyer can see that they are practical, and someone is able to comfortably fit their belongings in the room. Removing clutter and ensuring the beds are made and decorated with some nice pillows or a throw can go a long way. A prospective buyer is almost always going to open the closets in the bedroom to see how much storage room they will have. A great way to make a closet look bigger is to remove everything from the floor and store it on high shelves. Remember, buyers won't notice if your home is spotlessly clean, but they will notice if it isn't. A cleaning service tackles all those dusty places you might forget: baseboards, tops of picture frames, and ceiling fans.
  • Lock up valuables. While it is uncommon for personal belongings to be missing after a showing, it can happen. Make sure any personal belongings and valuables are stored in a secure location or removed during a showing. Some specific items to be especially mindful of are jewelry, money, weapons, medications, and mail.
  • Leave. Buyers will feel more comfortable asking questions and exploring the home if you're not around. The buyer’s Realtor will highlight the positive features of your home without bias. Occupy yourself away from home for a few hours. If you have pets, take them with you. Some buyers might not feel comfortable around your four-legged friends or might have allergies.

Apart from some special circumstances, The Loken Group does not accompany showings. Research shows buyers feel more comfortable exploring the home, providing honest feedback, and speaking freely with their agent about the property when the seller and/or listing agent are not present. Buyers tend to spend more time in a home when only their agent is present, and they do not feel rushed or pressured. They are more relaxed and can take the time to really see the home and imagine themselves living in it, ultimately resulting in a higher likelihood of receiving an offer.

Your Loken Group listing team personally calls, texts, and emails each showing agent in an  effort to obtain thorough and useful feedback on your listing. Once feedback has been received, you will receive an email from ShowingTime. Please allow 48-72 hours for buyer agents to provide feedback, as most of them show multiple properties per day.

That’s a great question! While we use as much information as we can gather to interpret the market and price your home competitively from the outset, we know that the real estate market changes daily and we must make periodic adjustments to our listing strategy. If, in three weeks’ time, we’ve seen fewer than 10 showings, we are likely priced above the market by about 1-5%. If in three weeks' time we’ve seen fewer than 5 showings, we are likely priced above the market by about 5-10%. Your listing agent will work with you to make adjustments to the listing to maximize exposure, increase showing traffic, and obtain the highest possible contract price for your home.

The Loken Group has an exclusive relationship with Choice Home Warranty, which allows us to place a free seller’s home warranty on all our listings. We have the ability to  leverage this warranty should a covered item break down while the home is on the market or if issues arise during the inspection, allowing us to have repairs done quickly and properly. We have also found that buyers have more confidence when a home includes a warranty. It gives us an edge and helps us stand out from other listings by letting prospective buyers know their home and budget are protected from unexpected repair and replacement costs of covered appliances and systems. At closing, the buyers have the option to have this warranty transferred into their name for the first year of home ownership.

In our experience, thanks to technology, printed flyers outside the home have become a thing of the past. In the Greater Houston area, buyers use the award-winning HAR.com app and website to find and filter homes, view photos and details, and favorite listings. The GPS mapping feature makes it especially easy for buyers driving by to quickly locate your listing and access a wealth of information right at their fingertips. The advantage to this “digital flyer” technology is that your listing agent has access to click-through data, providing us with valuable insights into your listing, and buyers have a direct link to our inside sales team who are on stand-by to answer any questions or schedule a showing.

Because 90% of buyers start their home search online, The Loken Group understands the importance of a strong online presence and search engine optimization in order to maximize your listing’s exposure to qualified buyers. We run search ads on common key words or phrases, such as ‘homes in Houston’, that help our website, and more importantly, your listing to rise to the top of the search feed. Additionally, we market your home on over 150 websites (realtor.com, Zillow.com, Trulio.com, and homes.com to name a few), reaching buyers and real estate agents in and around our area, nationwide, and even worldwide. The Loken Group also features your home on our social media channels, including Facebook, Instagram, Twitter, and YouTube, for additional exposure and engagement.

In addition to online media, The Loken Group spends over $75,000 per month on advertising and marketing, including TV, radio, digital ads, and email campaigns. This, along with our robust team of inside sales agents who are prospecting daily for qualified buyers and sellers, drives in approximately 1,200 new leads per month, including potential buyers for your home!

Because these are third-party syndicated sites, it’s not uncommon to find errors in your listing as they aggregate information from multiple sources. If you happen to encounter an error on one or more of these sites, alert your listing partner and we will work with the individual companies to correct them as quickly as possible.

Over the last several years, like many other industries, the real estate industry has seen major technological shifts which have affected how homes are bought and sold. Open houses have consistently taken a hit as buyers opt for other home-searching alternatives. According to the National Association of Realtors (NAR), the percentage of homes that actually sell as a result of an open house is less than 2-3%. The reason is that today, serious buyers are very savvy and do most of their research online before scheduling private showings, which allows them to work directly with an agent at a time that is convenient for them. We’ve found that open houses generally attract, not actual qualified buyers, but neighbors, “lookie-loos,” passersby's, other real estate agents with competing listings, distant-future homebuyers, and thieves.

In order to maximize your listing’s exposure and attract qualified buyers, The Loken Group opts for the following open house “alternatives”:

• • Capturing excellent photographs of the home utilizing high-quality equipment and technology.
  • Having a strong online presence, including the ability of our website to rank highly in competitive search terms on the major search engines, such as Google, Bing, and Yahoo!
  • Understanding the importance of search engine optimization (SEO).
  • Having a strong social media presence on key social platform such as Instagram, Facebook, Twitter, Pinterest, and many others.
  • Demonstrating the drive to go above and beyond to develop videos, feature sheets, property information packets, and other marketing materials.
  • Clearly demonstrating strong communication skills and the ability to provide top-notch service.

Having said that, sellers in a specific type of community or homes with highly unique, sought-after features might benefit more than others. Your listing agent will work with you to decide if an open house is the right strategy for you and your listing, as it is always our goal to sell your home as quickly as possible and for top dollar.

The easiest estimate we like to use when calculating fees for our clients is about 8%, which should cover most expenses, including commissions. Standard closing costs for the seller in the state of Texas typically include the Realtor commissions, title policy, escrow and attorney fees, and one-year Home Warranty for the buyers. If your home is part of an HOA, you may potentially need to pay for HOA docs and a resale certificate. Sometimes a buyer will need help covering some of their closing costs and will ask for concessions within the contract, so it’s important to factor this in once the negotiating process begins. Your listing team is happy to assist you with acquiring an estimated net sheet at any point in your home selling process if you’d like more detailed information on what to expect regarding fees.

The buyer will deliver the earnest money to the title company no later than the second business day after the contract is executed as a show of good faith to purchase the home. This money will be held in escrow until you close on the home, at which time it is credited back to the buyer as part of their down payment.

This paragraph can cause some confusion as accepting the property “as is” means the present condition of the property as it exists at the time of the contract offer. Often the buyer will be accepting the property “as-is”, understanding that they will later (Paragraph 5: Earnest Money and Termination Option) have the option to negotiate repairs or treatments, or exercise their unrestricted right to terminate the contract during the option period.

The Option Period is considered the “due diligence” period for the buyer to complete inspections and negotiate any repairs. During this time, the buyer reserves the option to back out of the contract for any reason without losing their earnest money. Most buyers choose to exercise this termination option by paying for a specified number of days in advance (most commonly 10 days).

The amount of the option fee is negotiable; however, standard practice falls within the range $100-$200 for a 10-day period. The option period begins on the day the contract is executed and terminates at 5:00pm on the last day of the specified time frame, unless an extension is agreed upon by all parties.

The option fee check or monies must be delivered to the title company along with the earnest money within three days of executing the contract. A buyer is not in default of the contract for failure to pay the option fee. The only penalty for not paying the option fee is that the buyer doesn’t have the option to terminate. Upon closing, the option fee is typically refunded to the buyer on the settlement statement. You would retain the option money should the contract terminate.

More commonly known as a home warranty, a residential service contract acts like an additional insurance policy for the home in that there is an annual premium paid up front and nominal co-payments to repair or replace defective items within the property. Commonly covered items include (but are not limited to): appliances, HVAC systems, plumbing systems and leaks, etc.)

It is common practice for buyers to negotiate a one-year, seller-funded home warranty within the contract, as it provides a sense of security to know their new home and budget are protected from unexpected repair and replacement costs of covered items within the first year of ownership. Most commonly, sellers are asked to contribute an average of about $450-$600 for the buyer’s home warranty; however, homes with swimming pools, septic tanks, large square footage, etc. can merit requests of up to $800 or more to cover the one-year contract.

You may absolutely continue to approve showings while your home is under contract; however, it’s very likely that requests will drop off significantly once we’ve changed the status to Option Pending or Pending in the MLS.

Yes, please continue making all mortgage payments as you normally would to maintain good standing on your account. Depending on your close date, you may not need to make the final payment, as many mortgage companies don’t consider the payment late until the 16^th day of the month. Please check with your mortgage company for clarification. It is important to note that the title company will be pulling an updated payoff statement from your mortgage company, so any delinquencies will be charged on the settlement statement and taken from seller proceeds. Likewise, any overpayment of principal or interest, along with any balance of your escrow account, will be refunded to you by your mortgage company 2-6 weeks after closing.

It is important to ensure that at least the primary utilities - water, electricity, and gas (if applicable) - remain ON throughout the entire closing process, as these items are essential to inspections, appraisals, and final walk through appointments. You could be assessed a reinspect fee or experience a delay in closing if the inspector or appraiser cannot complete their reports due to canceled utilities.

A Sellers Temporary Residential Lease (or leaseback) creates a short-term lease between the new owner (the buyer) and the tenant (the seller) and is used when a seller needs a few extra days after closing to vacate the home. Most commonly, sellers will negotiate a leaseback for extra time to pack up and move out if the home they’re moving to isn’t ready yet or if the buyer wanted a short closing timeframe, but the seller knew they’d need longer to actually vacate the property.

Just like with any other type of lease, the seller can expect to pay rent and security deposit. Typically, the amount of rent is calculated at a per diem (per day) rate by taking the new owner’s mortgage payment and dividing by 30 (days in the average month), although the amount can be negotiated between the parties. The full rent amount is due at closing. The security deposit is used to ensure that the property is kept in good condition, and like any rental, damages to the property can be deducted from the security deposit at the end of the lease term.

When a leaseback is in place, we instruct our sellers to bring two checks to closing: one for the rent, which will be cashed by the buyer, and one for the deposit, which will be held by the buyer’s agent until the buyer takes possession of the property. Assuming the property is left in acceptable condition, the deposit check is voided or returned to the seller and is never cashed.

The Texas Real Estate Commission recently approved the Notice of Seller’s Termination of Contract (TAR 1950, TREC 50-0) for mandatory use by license holders if the seller has the right to terminate. The form gives notice to the buyer that the seller is terminating because the buyer failed to deliver earnest money within the time required or another reason identified in the contract or addendum. In the state of Texas, the seller has very limited rights to terminate the contract and should contact legal counsel if they wish to do so.

Title insurance differs from other categories of insurance. Auto, homeowners, and fire insurance require you to pay annual premiums because, unlike Title insurance, they expect you to make claims periodically throughout the life of the policy. Title insurance, however, is Risk Elimination Insurance and requires that you pay a one-time premium only.

By investigating all county records on your property, a title search can verify the seller’s right to transfer ownership, locate any claims, assessments, errors, or miscellaneous defects on the property and virtually eliminate the risk factor for any potential legal trouble post-close. Judgements, liens, and title defects are eliminated at closing and the process ensures a clear title transfer. Once completed, the appropriate documents will be recorded with the county as public record.

Title insurance can be roughly estimated at 1-1.5% of the sales price, but for a more accurate estimation of Title Insurance Premiums and other standard settlement fees, contact Connect Title.

You can expect for the inspector (sometimes two, if the inspector has an assistant or if the home is especially large), the buyer, and the buyer’s agent to be present for the general property inspection.

While it can feel like a stressful process, the best thing you can do during the inspection is to vacate the property. Buyers will be more comfortable discussing their concerns openly with the inspector if you are not within earshot. Whatever you do, do not follow the home inspector and buyer around. Buyers often perceive such supervisory behavior as evidence of a seller trying to conceal a defect or interfere with the thoroughness of the report. Home inspectors will be annoyed and, human nature being what it is, the process may become needlessly tense, when it should be educational.

A thorough inspection of a 2,000-square foot home should take approximately 2 to 3 hours. A basic home inspection includes an evaluation of 10 different areas of the home: structure, exterior, roofing system, plumbing system, electrical system, heating system, air conditioning system, interior, insulation and ventilation, and fireplaces. A professional inspector likely will:

• • Walk on the roof
  • Enter the crawl space and attic
  • Remove the furnace and electrical panel covers to see what’s inside
  • Check all electrical outlets and switches
  • Open and close all windows and doors
  • Examine the insides of closets and the undersides of stairs
  • Check walls, ceilings and floors for defects
  • Check water pressure and drain function in plumbing fixtures
  • Flush toilets to make sure they work
  • Check chimneys and flues to be sure they work
  • Check the exterior of the home for signs of weather damage, decay, and settling
  • Know the soil and flooding problems in the area where you're buying

The first step when preparing for a home inspection is simple but often overlooked: clean up! A clean home sets the tone and will show your inspector that your home is well-maintained and cared for. The following checklist can also go a long way in ensuring a successful home inspection.

• • Confirm that the water, electrical, and gas services are turned on and that gas pilot lights are lit.
  • Make sure your pets won’t hinder the inspection. Ideally, they should be removed from your home or secured outside.
  • Replace burned-out light bulbs to avoid a “light is inoperable” report that may suggest an electrical problem.
  • Test smoke and carbon-monoxide detectors and replace any dead batteries.
  • Clean or replace dirty HVAC air filters. They should fit securely.
  • Move stored items, debris, and wood from the foundation. These may be cited as conducive conditions for termites.
  • Remove items blocking access to HVAC equipment, electrical service panels, water heaters, the attic, and crawlspace.
  • Unlock any locked areas that your home inspector must access, such as the attic door or hatch, electrical service panel, the door to the basement, and any exterior gates.
  • Trim tree limbs so that they’re at least 10 feet from the roof. Trim any shrubs that are too close to the house and can hide pests or hold moisture against the exterior. If necessary, hire a professional to do this.
  • Repair or replace any broken or missing items, such as doorknobs, locks and latches, windowpanes and screens, gutters and downspouts, and chimney caps.

Don’t be alarmed if you don’t hear anything right away after the home inspection is complete. The inspector will take 24-48 hours to compile a thorough report on problems needing immediate attention, as well as conditions that can lead to more serious defects down the road. The buyers and their agent will determine what items, if any, are of concern and provide a formal request for repairs or concessions to your listing agent. While timing for repair requests varies from transaction to transaction, all negotiations for repairs should be completed within the option period.

No, it’s important to remember that the inspector’s report is very thorough and includes everything from cosmetic defects to serious safety concerns. It’s up to the buyer to determine what, if any, items within the report are of great enough concern to request repairs or concessions. Your listing agent’s goal is to minimize the hassle and expense of repair negotiations by helping you separate the important items from the unimportant ones and working hard to minimize or remove any superficial items. Our options for responding to a repair request are:

• • Do ALL the repairs requested
  • Do SOME of the repairs requested
  • Do NONE of the repairs requested
  • Do SOME of the repairs requested and offer an allowance for the rest of the items
  • Offer an allowance for ALL of the repairs requested
  • Don’t do anything and put on the market, should the buyers choose to terminate the contract

Any and all repairs agreed upon will need to be completed by a licensed professional, unless the buyer has given explicit approval for you to complete the repairs yourself. However, to avoid the potential for legal action after closing, it is always advisable to contract a licensed professional to complete all repairs, no matter how small. Regardless, you will be expected, and often required, to provide receipts for all repair work upon completion.

A seller may wish to hire an appraiser to value their home before selling the property. However, the lender most likely will not accept this appraisal for the purposes of the loan approval, so another appraisal will need to be done by an appraiser the lender selects. The cost to the seller for this pre-sale appraisal will be about $300-500.

The physical inspection of a typical property does not take long. Most appraisals only take 10-15 minutes, unless the house is difficult to measure or has some unique features that require additional investigation by the appraiser. During the inspection the appraiser will take photos to document the condition of the property and any special features of the home.

After the initial property inspection, the appraiser may tour the neighborhood and identify other properties that are similar to yours. They may also search property records to locate “comps” or comparable properties that have recently sold. The appraiser takes pictures of these properties to include in the appraisal report.

The appraisal report uses a standard format, and takes about four hours of work to complete. You can expect the appraisal report to be completed and delivered to the lender within a day or two of the property inspection.

During the inspection, the appraiser measures the house from the outside to determine square footage. This external measurement is standard throughout the industry. Usually no interior measurements are required. The appraiser takes notes concerning the features of your house such as room layout, number of bedrooms, baths, etc. The appraiser also makes a determination of the general condition, appeal, and functional layout of your house. All of these items are taken into consideration in the appraisal report. Other items that may be considered are:

• • General condition and age of the home
  • Size of home and property
  • Location of the home
  • Features of the home (i.e., 3 bedrooms, 2 baths, etc.)
  • Major structural improvements, such as additions and remodeled rooms
  • Architectural features, such as skylights and fireplaces

Items that usually contribute very little to value are swimming pools, finished basements, landscaping, new roofs, new furnaces, etc. Concerns about property conditions that may require the home buyer to invest more in maintenance to sustain the property value, such as upkeep on a private road, may also be an issue.

The most important thing you can do to prepare you home for an appraisal is to make sure all the maintenance you can do is done before the appraiser arrives. This includes yard work and clutter removal, as well as any painting, new flooring, or other improvements you plan to make.

Because the appraisal is used in granting credit to the borrower, there are federal regulations surrounding disclosure of the report and only the buyer is entitled to a copy. As the seller, you may be able to obtain a copy if the home does not appraise for contract value or if the buyer is obtaining a government-backed loan (FHA, VA, or USDA) and there are any specific terms or conditions that must be met in order to fund the loan.

An appraiser assessing a home to be funded via a conventional (non-government) loan has a fairly simple goal: determine the home’s value. Hence, they often use a standard appraisal form. Government-backed loans - FHA, VA, and USDA – however, each have different standards. They also may use different appraisal and inspection forms for each loan type.

If the home doesn’t meet minimum government standards for safety, security, and structural soundness, it will have to be repaired or the loan will not be approved. These repairs can be handled in one of the following ways: (1) The seller can agree to complete the repairs (2) Both parties may renegotiate the contract, splitting the costs or changing the sales price or (3) The buyer exercises his or her option to walk away and terminate the contract.

Some of the most common issues that arise on government loan appraisals that must be remedied prior to closing are:

• • Roof replacement or repair
  • Lead-based paint removal in homes built prior to 1978
  • Structural or foundation problems
  • Major plumbing issues
  • Electrical defects like exposed wiring
  • Broken HVAC systems
  • Rotting wood
  • Faulty exterior doors
  • Damp/wet basement or crawlspace

In a rapidly changing market, buyers and sellers are often surprised when the appraised value is higher or lower than expected. A higher value will not have an impact on the loan approval process, but a lower value will if the value is lower than the actual sales price of the property. The lower appraised value is used to determine an acceptable loan amount, which is generally up to 80% of the appraiser’s opinion of the home's value.

Options for dealing with a low appraisal include increasing the buyer’s down payment to make up the difference between the appraised value and the purchase price, or the seller can lower the purchase price.

Your agent may also work with the lender to request an appraisal review or a second opinion if there is additional information such as recent comps that may have been overlooked. If the comps that were used are unlike the subject property due to differences in condition or improvements, or if the appraiser is not familiar with the type of home or neighborhood, additional information can be useful in obtaining an accurate appraisal.

Section 6.C. of your contract contains a provision that identifies which party is responsible for providing a survey. Like most other provisions, who pays for the survey is negotiable: (1) Seller provides existing survey (2) Buyer to purchase new survey (3) Seller to purchase new survey. On average, new surveys cost between $400-$800 and are ordered by the title company in accordance with the terms of the contract.

Providing an existing survey and completing a T-47 form is very attractive to prospective buyers because it can save time and money by not requiring a new survey to be taken of your property. The T-47 Affidavit affirms that there have not been any changes made to the property other than those listed on the Affidavit since the date of the existing survey. This notarized document is used by the title company and lender to determine whether they will accept the existing survey of your home or require that a new one be purchased.

“Clear to close,” or CTC, means the mortgage underwriter has reviewed and approved all documentation required to fund the loan, and we can move towards closing. Along with the CTC, the lender will send the buyers an Initial Closing Disclosure which provides them with detailed information regarding closing costs and financing terms. Federal regulations stipulate that the parties must wait three business days to close the loan once the buyer has signed the Initial Closing Disclosure and agreed to the terms. During this time, the lender will work with the title company to balance the settlement statement, and we can schedule the closing date and time with all parties.

It is your Listing Team’s goal to give you as much time as possible to prepare for closing. Often, this looks like scheduling your closing 5-7 days prior to the contracted close date. However, we know that there are several milestones within a transaction that must be reached before we can confidently schedule your appointment, like receiving the “clear to close” from the lender. It’s important to remember at this stage of the process, the lender is often the driving force behind the timeline. If title is waiting on documentation or the underwriter is requiring additional items, for example, we may need to make some last-minute scheduling adjustments. Your Listing Team understands that plans need to be made regarding work schedules, movers, childcare, etc. and will always work to be as proactive as possible and limit surprises throughout your entire transaction.

You will be required to be present at the title company to hand-sign all closing documents, unless prior arrangements are made. If you are unable to attend closing, let your Listing Team know as soon as possible so all parties can prepare accordingly for one of the following closing options:

• • Power of Attorney: One option, if you are unable to attend closing, is to grant power of attorney (POA) to someone you know and trust to sign on your behalf. This is a good option if you are out of town or homebound but could still be available by phone as the escrow officer would need to speak with you at the time of closing to ratify the POA. It is important to note that POAs must be notarized and approved in advance by both the title company and lender’s underwriters. Inability to take off work is rarely, if ever, approved as a viable reason to utilize a POA. Your escrow officer will be happy to help prepare the required Power of Attorney paperwork should you need it for your transaction.
  • Mobile Notary: A mobile notary is a Notary Public who will facilitate a closing at the location of your choosing, such as your home or work, if you are unable to be present at the title company office. This is a great option for sellers who are unable to leave work for closing or who might be homebound due to health reasons. It is important to note that should a mobile notary be employed, the seller would incur the cost of the notary, which costs $125-$150 on average. Your escrow officer will be happy to help secure and schedule the mobile notary should you choose to utilize this option.
  • Mail Out: A mail out is a great option if you have moved out of town permanently or are pre-scheduled to be out of town at the time of closing. With a mail out, the title company will send you all your closing documents digitally, along with a prepaid FedEx Overnight label. You will be responsible for printing the documents and signing them in front of a notary and returning the completed package to FedEx to be overnighted back to the title company. The following day, the buyers would sign and execute their portion of the documents. It is important to note with this option, the title company and the lender need to have documents prepared at least one day in advance of the contracted close date, so it is imperative they are made aware of the need for a mail out well in advance. Additionally, unless you have a personal connection to a Notary Public, you may need to hire and pay for a Mobile Notary to facilitate your signing. Your escrow officer will be happy to help you coordinate these details should you opt for a mail out closing.
  • RON (Remote Online Notary) Closing: A Remote Online Notarization (RON) closing is a eClosing where documents are electronically signed online in the presence of a notary who is authorized to perform remote online notarization via remote, two-way, audio-visual conferencing. Eligibility for RON closings is dependent on lender and title requirements, so ask your Escrow Officer if this is the right closing option for you.

If you owned your home before marriage, the property is your separate property. Marriage does not change the property’s classification, however, if your spouse moved into the property after you were married, they acquired homestead rights per the Texas Constitution. Your spouse would be required to attend closing and to sign the warranty deed. Their signature and cooperation does not necessarily assert any ownership in the property, it merely provides the consent required by the homestead protections in the Texas Constitution.

If your spouse has not lived at the property, then he or she does not have to be on the contract and will only need to sign a non-homestead affidavit prior to or at closing. The exception to this rule is, if your spouse signed the deed of trust to help secure the financing of the property, they must then join in on the sale and attend closing to satisfy any interest they have in the property. You and your spouse will need to sign the listing agreement, contract, warranty deed, and other closing documents.

Most contracts stipulate that the seller will be fully vacated and deliver possession of the property to the buyer at the time the sale closes and funds - meaning all parties have signed, executed documents have been submitted, and wires have been sent to all appropriate parties - or according to the terms within the temporary residential lease agreed to by all parties. Upon move out, you will want to ensure the home is left empty, free of all personal items and is in “broom swept” condition, unless other cleaning stipulations have been agreed upon within the contract (ex: professional cleaning services, etc.).

There may be a short delay between closing and actual funding when a lender is involved; however, it is best practice to be prepared to deliver possession of the property by the time you, as the seller, attend closing to avoid any potential closing or funding delays.

You’ll want to ensure you have the following items with you when you arrive at your closing appointment:

• • Current government-issued photo ID (ex: driver’s license, passport, etc)
  • Any house keys or keypad codes, garage remotes, mailbox keys, etc. which will be distributed to the buyer only after closing and funding.
  • Any receipts, warranties, or manuals that should be provided to the buyer as useful information or as part of agreed upon repair negotiations.
  • Your bank’s wiring information or one voided check if you’d like the proceeds from your sale to be wired to your bank account.

If you have secured a seller leaseback, you will need TWO checks: one check for the “rent” and one check for the deposit. Your listing team can confirm amounts for you.

The goal for the final walk through is for the buyers and their agent to ensure the property's condition hasn't changed since their last visit, that any agreed-upon repairs have been made and that the terms of your contract have been met. This is a good time to provide the buyers with hard copies of any receipts, warranty information, instructions, or manuals that might be helpful to them as the new owners of your home (think about the alarm system, sprinkler system, pool, etc).

Typically, the final walkthrough is scheduled for a day or two prior to closing or on the morning of closing.

Once the invoices, payoff, statements, and loan documents are received by the title company, the settlement statement is prepared. This document includes the closing calculations and is used to inform the buyer and seller of their bottom line figures. In general, we expect to see a final settlement statement 24-48 hours prior to closing; however, your escrow officer will be more than happy to prepare a preliminary estimate statement for you upon request at any time during the contract-to-close process.

There are a number of factors that might be contributing to the outcome of your bottom line on the settlement statement. Some of the most common factors might be tax prorations, HOA prorations, lien/mortgage payoffs, etc. Often, sellers who escrow their property taxes and homeowner’s insurance will receive a refund of any remaining balance a few weeks after closing. We always recommend that sellers estimate approximately 8% of the sales price for closing costs and fees. If you have specific questions about your settlement statement or any fees incurred, contact your Listing Specialist and/or title escrow officer for clarification.

Essentially, the difference between the payoff and the balance on a loan is the amount you currently owe (balance) compared to the amount it would cost you to pay off your loan by a specific date (payoff).

When you get your regular loan statement, it will reveal the loan's current balance. The payoff amount, however, contains additional interest and is the total required to completely satisfy the loan. The payoff balance on a loan will always be higher than the statement balance. That’s because the balance on your loan statement is what you owed as of the date of the statement. But interest continues to accrue each day after that date. The lender will want to collect every penny in interest due to him right up to the day you pay off the loan.

When you are selling your home, knowing the payoff amount helps you plan how much money you will receive from the sale. As we approach closing and the title company is preparing to pay off your existing mortgage with sale proceeds, they will need to know the exact amount that you will owe so you can send a payment for the correct amount. Therefore, the title company will be collecting information from you about your current mortgage so they can pull the most up-to-date payoff statement from your lienholder. It’s important you provide this information as quickly as possible to avoid any delays in closing.

Because most HOA accounts are paid in advance, it’s very likely that you paid for the full year in January. Your escrow agent will obtain a statement of account from your association and the dues will prorated on a per diem basis between the buyer and the seller on the settlement statement. This means that as the seller, you will receive a credit from the buyer for HOA dues for the number of days that the buyer owns the house in the current year.

The property taxes are prorated between the buyer and seller through the closing date. Because property taxes are paid in arrears and due at the end of each calendar year, the escrow agent will estimate at closing the taxes for the current year. Any shortages or overages due at the end of the existing year are settled between the buyer and seller, per the contract. This means that as the seller, you will be giving the buyer a credit for taxes for the number of days that the buyer owns the house in the current year.

Because property taxes are paid in arrears and due at the end of each calendar year, the escrow agent will estimate, at closing, the taxes for the current year and credit the buyers on the closing statement for the number of calendar days that you owned the property. The buyer will then be responsible for paying the current year’s taxes when they come due. If your property taxes are collected and held in an escrow account, you will be issued a refund by your mortgage-holder 4-6 weeks after closing.

It is imperative that you remain current on your mortgage payments through the close of your home, as the title company will be working with your mortgage-holder to obtain an accurate payoff statement. Even if your closing date falls within your mortgage payment “grace period,” we recommend continuing to make timely payments in the event we experience any unexpected closing delays. Should there be any overpayment of the mortgage balance escrow account, the bank will issue you a refund check 4-6 week post-closing. For timely delivery of any refunds, be sure to update your mortgage-holder with your forwarding address.

It’s very important that your homeowners policy remains current and in place until after the sale has closed and funded. Even though your personal property may be removed from the home, the empty structure could be damaged or someone could be hurt on the property, and you would be responsible as the homeowner until possession has officially transferred to the new buyer through the close of escrow. It’s likely that you paid your insurance premium for an entire year in advance, so be sure to contact your provider with your forwarding address in case you are due any prorated refund of your account.

It is our recommendation that you schedule utilities to be turned off the day AFTER closing. While we do everything we can to ensure a smooth and timely closing, minor delays are lessened when a little buffer time is built in. Additionally, some utility companies take several days to turn utilities back on, so it’s courteous to give the buyer a little wiggle room as well.

Disconnecting utilities too early can result in unnecessary closing delays and additional fees for the seller so it is imperative that the primary utilities (water, gas, electricity) remain ON through the closing and funding of escrow.

• • If the home is still on the market: Heat and A/C maintain interior comfort for potential homebuyers, increasing the chances they will spend more time in the property and consider making an offer.
  • Maintaining the integrity of the home: Plumbing, hardwood floors, and other finishes can be damaged in extreme heat or cold.
  • Security: Using a timer to automatically turn on a lamp or porch light can make a home appear occupied and discourage break-in attempts.
  • Inspections and appraisals: Many tests required by both the inspector and appraiser require that the primary utilities be connected and working properly. Failure to ensure these utilities are turned on could result in costly reinspect fees at the seller’s expense.
  • Final walkthrough: Most purchase contracts provide for a buyer’s final walkthrough in which the buyer verifies that the home is still in the same general condition it was when the contract was executed and that any repairs have been completed according to negotiated terms. Disconnecting utilities prior to this walkthrough could result in closing delays.

Funding occurs after both the buyers and sellers have signed their respective closing documents. As the seller, you have two options for receiving funds:

• • Physical Check: The title company can cut you a physical check for your proceeds which can be picked up from the title office. Some banks place a hold on large deposits, so you may not have access to the money immediately after depositing the check into your account. Check with your bank for details.
  • Wire Transfer: You may also opt to have your proceeds wired directly into your bank account. As long as documents are signed by all parties before the wire cutoff time (4:00pm), it’s very likely that you’ll have funds in your account the same day. Closings that occur after the wire transfer cutoff time will result in funding on the next business day. Some banks charge a wire transfer fee, so you’ll want to check with your bank for specific details.

It’s not uncommon for sellers to sign closing documents for their listing in the morning and have funds wired to another title company for closing on the purchase of their new home in the afternoon. Your listing partner(s) will do everything in their power to coordinate a smooth “double closing” for you; however, it’s important to remember that the timing of closing is heavily dependent on the lender’s timely delivery of documents, title company availability, and cooperation of the buyers and their agent.

Given the sometimes-unpredictable nature of real estate transactions, it’s not a bad idea to talk to your listing agent about negotiating a 24-48 hour leaseback on your current home. This will allow a little buffer time between closings for funds to be transferred and for you to coordinate moving to your new home while maintaining access to your existing home until the leaseback expires.

The federal Fair Housing Act of 1968 and the federal Fair Housing Act Amendments Act of 1988 prohibit discrimination on the basis of the following criteria (called “protected categories”): race or color, religion, national origin, familial status or age which includes families with children under the age of 18 and pregnant women, disability or handicap, or sex.

The federal Fair Housing Acts apply to all aspects of the landlord-tenant relationship. A landlord may not:

• • advertise or make any statement that indicates a limitation or preference based on race, religion, or any other protected category
  • falsely deny that a rental unit is available
  • set more restrictive standards for selecting tenants or refuse to rent to members of certain groups
  • before or during the tenancy, set different terms, conditions, or privileges for rental of a dwelling unit, such as requiring larger deposits of some tenants or adopting an inconsistent policy of responding to late rent payments
  • terminate a tenancy for a discriminatory reason

Federal antidiscrimination laws are administered by the Department of Housing and Urban Development (HUD). If you want to read the text of federal discrimination law, see 42 United States Code Sections 3601-3619 and 3631. Find federal laws by going to the Library of Congress's legal research site.

Rent proration is used to calculate the rent amount due for any month that a tenant does not stay for the entire month. In order to calculate the prorated rent amount, you must take the total rent due, divide it by the number of days in the month to determine a daily rent amount. You then multiply the daily rent amount by the number of days the tenant will be occupying the property to generate the prorated amount for the partial month. Because the first full month’s rent serves as commission for the tenant’s and landlord’s agents, if the first month the tenant occupies the house is prorated, the tenant typically pays the first full month’s rent upon move in and the prorated rent on the first of the month following the move in date.

Once a lease has been fully executed between landlord and tenant(s), the first full month’s rent is due to the listing broker and serves as commission for procurement of a qualified tenant. The commission is split evenly (50/50) between the listing agent and the tenant’s agent. More detailed information can be found in the Broker Compensation (Sec. 5) and Cooperation With Other Brokers (Sec. 8) sections of your Residential Real Estate Listing Agreement Exclusive Right to Lease document. The tenant should not be allowed access to the home, nor should the keys be turned over to the tenant until both the security deposit and first month’s rent have been delivered to the landlord or listing broker.

The security deposit, most commonly equal to one month’s rent, is due immediately upon execution of the lease, and serves to protect the landlord if the tenant breaks or violates the terms of the lease agreement. It may also be used to cover damage to the property, cleaning, key replacement, or back rent after the tenant vacates. Upon move out, the landlord has 30 days to return the tenant’s deposit in full or provide a written, itemized list of each of the deductions for which deposit has been reduced. The landlord can withhold from the security deposit only those amounts that are necessary and reasonable and not a result of “ordinary and reasonable wear and tear.”

Normal wear and tear is a part of renting that every landlord expects. However, what’s considered normal and what’s considered damage can depend on the condition of the home when the tenant first moves in. To avoid any security deposit disputes, it’s advised that landlords require the tenants to complete a Residential Lease Inventory and Condition form upon move in. Photographs are also advisable as an addition to this thorough checklist as well as signatures of all parties acknowledging receipt. Best practice suggests that the tenant should return this completed form within 7-10 days of the lease commencement. It is important to remember that this is not a repair request. The landlord should retain this itemized list for property evaluation at the conclusion of the lease as it’s common for the Inventory and Condition Form to play a major part in whether or not the tenant gets his or her full deposit back.

With so many potential tenants looking to rent from pet-friendly landlords, remaining competitive in your market might mean reconsidering your stance on allowing pets in your rental home. Except for service or companion animals, it’s generally within your right to restrict types of animals, number, or size of the pets you allow and require renters to pay an up-front pet deposit to cover any potential damages caused by the pet(s). Pet deposits can be fully or partially refundable depending on any damage incurred by the animal. The Loken Group generally advises a $500 pet deposit, $250 of which is refundable and $250 is not refundable.

If you inspect the property upon move-out and notice damage, take the following steps, as you would when refunding a traditional security deposit:

• • Document each problem/instance of damage with pictures
  • Create an itemized list of how much was spent on repairing the damage

Tally how much each repair costs to determine the portion, if any, of the security deposit that will be returned.

Section 17 of the lease agreement addresses property maintenance, and whether the landlord or tenant pays for lawn care is addressed here. Per Section 17. B. (3), there are three options for how the lawn care can be handled:

• • The landlord, at the landlord’s expense will maintain the yard and the tenant must permit the landlord and landlord’s contractors reasonable access the yard. Usually, in this scenario, the landlord hires out a lawn care service to care for and maintain the lawn. The advantage, of course, is having a professionally licensed company responsible for your lawn. The downside, if any, would be the additional cost of the service however, some property owners include this added fee into the rent.
  • The tenant, at the tenant’s expense will maintain the yard. The advantage to this scenario is you, the landlord, don’t have to deal with it. The downside comes if or when the tenant either neglects the lawn completely or doesn’t care for the lawn as agreed to. In some areas, penalties and fines can be imposed on the property owner from their homeowner’s association if the lawn is un-kept.
  • The tenant will maintain a scheduled maintenance contract with a contractor who provides lawn service. This scenario allows the landlord to specify a specific or existing contractor that must be used to maintain the lawn at the tenant’s expense.

Any pool or spa on the property will be maintained according to the Pool/Spa Maintenance Addendum to the lease agreement. The tenant is responsible for maintaining property water heights in the pool at all times, emptying and cleaning skimmers at least once per week, properly operating pool equipment, and taking necessary precautions to prevent the freezing of pipes, equipment, and water. There are three options for how the recurring maintenance (vacuuming, chemicals, equipment) can be handled:

• • The landlord, at the landlord’s expense will maintain the pool and the tenant must permit the landlord and landlord’s contractors reasonable access the pool. Usually, in this scenario, the landlord hires out a pool service company to care for and maintain the pool. The advantage is having a professionally licensed company who you are familiar with and is familiar with your pool and equipment that is responsible for your pool. The downside, if any, would be the additional cost of the service, however, some property owners include this added fee into the rent.
  • The tenant, at the tenant’s expense will maintain the pool. The advantage to this scenario is you, the landlord, don’t have to deal with it. The downside comes if or when the tenant either neglects the pool completely or doesn’t care for the pool as agreed to, as deferred maintenance can become costly to repair once your tenant moves out.
  • The tenant will maintain a scheduled maintenance contract with a contractor who provides pool maintenance service. This scenario allows the landlord to specify a specific or existing contractor that must be used to maintain the pool at the tenant’s expense.

According to section 17. Property Maintenance of the residential lease, the tenant is responsible for the following at the tenant’s expense:

• • Pay any periodic, preventive, or additional extermination costs desired by tenant, including treatment for bed bugs
  • Supply and replace all light bulbs and fluorescent tubes as well as batteries for smoke alarms, carbon monoxide detectors, garage door openers, ceiling fan remotes, and other devices
  • Supply and change heating and A/C filters at least once per month
  • Replace any lost or misplaced keys
  • Keep property clean and sanitary
  • Promptly dispose of all garbage in appropriate receptacles
  • Maintain appropriate levels of necessary chemicals in any water softener
  • Take action promptly to eliminate any dangerous condition on the property
  • Take all necessary precautions to prevent broken water pipes due to freezing or other causes
  • Remove any standing water
  • Know the location and operation of the main water cut-off valve and all electric breakers and how to switch the valve or breakers off at appropriate times to mitigate any potential damage
  • Water the foundation of the property at appropriate times
  • Promptly notify the landlord, in writing, of all needed repairs

Even a landlord who regularly maintains their property is bound to get calls from their tenants about repair requests. Tenants might think every repair is an emergency, but there are certain repairs that require immediate action by landlords and others that can be resolved in a day or two. Electrical or gas concerns are health hazards and can be classified as maintenance emergencies while situations like appliance or carpeting repairs may have lower priority. It can be helpful to have a maintenance request system in place and it is always recommended that tenants communicate repair requests in writing. However, if you choose to have tenants notify you, be sure to acknowledge repair requests and provide a timeframe for your intended solution. Communicate to the tenant when the repairs will take place and arrange to be there if the tenant cannot let a service provider in.

Obtaining a home warranty is probably one of the smartest investments you can make for your rental property. Your homeowners insurance only covers what could happen (like a fire or flood). A home warranty, on the other hand, covers what will happen (like an appliance breakdown). With a home warranty, you can rest assured that covered breakdowns will be resolved as quickly and efficiently as possible, with minimal out-of-pocket costs. An additional bonus of obtaining a home warranty for your rental property is that it may be tax deductible — the annual premium and service fees may be considered operating expenses that can be claimed (of course, you must verify any tax benefits with your tax professional).

Community mailboxes or cluster mailboxes are owned by the USPS and are federal property; they are not owned by the public or property owners. Therefore, in order for the tenant to receive keys to the mailbox, they must establish residency by visiting the local post office that services your property with a copy of the executed lease agreement to prove residency has been established. The tenant will also need to show a valid government issued ID.

To find the post office that services your property, the tenant may call 800­.275.­8777 or go to the USPS Postal Office Locator. It is important to select "Post Offices" only and not the default "Post Offices and Approved Postal Providers," then enter the property zip code to find the closest post office.

Upon providing documentation, the postmaster will provide the tenant with a key which requires a new lock and minimal fee (approximately $20). Any fees that the Post Office may charge are the responsibility of the tenant, as the key is the tenant's possession or for their personal use, not the property owner. It should also be noted that new mailbox keys can take between three and five business days to receive.

Tenants have the right to receive mail securely. A landlord may not interfere with the delivery of a tenant’s mail, nor are they allowed to look through a tenant’s mailbox.

Not every rent collection method is right for every landlord. Looking at these options can help you determine the method that will work best for you and your tenants. When you decide on a rent collection method, sections 5. C. and 5. D. of the lease agreement will clearly outline payment requirements for your new tenant.

• • Collect rent online: There are many online sites which offer online payment services to landlords, including ERentPayment, RentMatic, and RentMerchant. You can do a search of online rental collection services to find the site that best suits your needs. Prices will vary depending on the plan selected, and range from very basic with simple rent collection to detailed services that include an online rent roll, the ability to upload important forms and documents for your tenants, and the ability to send messages directly to your tenants.
  • Pay Pal and Venmo are other options for collecting rental payments. Venmo allows instant payment but requires you to be friends on social media. Pay Pal is a free service, but payments made through Pay Pal can take several days to process and require the tenant to follow exact instructions so you are not charged a processing fee. An increasingly popular option among those with U.S. bank accounts is Zelle - which allows you to send money directly from your bank account to somebody else's simply by knowing their email address or phone number.
  • By mail: Allowing tenants to send their rental payments by mail saves you the time of having to collect the payments yourself; however, this method does have certain issues. For example, the envelope could be postmarked by the required payment date, but you may not receive the payment until several days later. The rent would not technically be considered late, but you would still not receive it on time. In addition, if the tenant only partially pays their rent, sending it in the mail will buy them a few extra days until you find out. Allowing the mail method of payment also allows for the age-old excuse of "the check got lost in the mail." To prevent this, your tenant can obtain a certificate of mailing from the post office, which costs a little over a dollar. This certificate serves as proof that the mail was sent when the tenant says it was. However, it does not verify the actual amount that is in the envelope.
  • Drop off location: If you have an office for your property investing business, or are comfortable providing your tenant with your home address, you may choose to allow tenants to drop the rent off at this location. Be careful that they do not drop off envelopes of cash, which could be stolen, or a tenant could claim they left a certain dollar amount, only for you to find less in the envelope.
  • In-person: You could decide to personally collect rental payments from all tenants. The benefit of this option is that you will have the payment in your hands immediately. While it is not advisable, if you allow your tenant to pay in cash, sometimes in person payment is the best method since you can personally count the money carefully by hand and provide the tenant with a receipt. The drawback is that it can be time consuming and frustrating to try and coordinate pick-up times with all your tenants.
  • Property management company: Finally, you could choose to completely outsource rent collection to a third party by hiring a property management company. Not only can this company collect rent payments on your behalf, but they can also deal with all tenant complaints, handle maintenance issues, and fill vacancies.

If this is a one-time incident involving a good, long-term tenant, you may agree to grant the tenant’s request for a payment extension. For most landlords, however, the best approach is to consistently stress to tenants that rent must be paid on the due date or face the prospect of their tenancy ending. The specific terms of late rent payments can be found in section 6. Late Charges of the Residential Lease. It is typically advised that the rent be considered late at 11:59 p.m. on the third day of each month, after which the tenant will be responsible for, in addition to the rent amount, an initial late charge and a per diem late charge for each day thereafter until the rent is paid in full.

In Texas, a landlord can terminate a tenancy if the tenant does not pay rent in accordance with the lease terms. Before filing an eviction lawsuit, the landlord must first give the tenant a three-day notice to vacate. The landlord is not required to give the tenant the option to pay the rent. If the tenant does not move out of the rental at the end of the three days, then the landlord can file an eviction lawsuit with the court.

It is highly advised that all landlords familiarize themselves with landlord-tenant laws in Texas, including eviction procedures, landlord requirements, and tenant rights: TexasPropertyCode.org.

The landlord of a rental unit is responsible for providing a ‘habitable’ unit for a tenant. The term ‘habitable’ means that the rental unit must be fit to live in, be free from hazards or defects, and be compliant with all state and local building and health codes, including:

• • Maintaining structural components and a reasonably weather-protected unit
  • Providing the necessary heat, electric, and hot and cold water facilities
  • Making any requested repairs promptly

Additionally, the landlord must re-key or change all the key-operated locks (or other combination locks) on the exterior doors between each tenancy at the landlord’s expense. The re-key must be completed no later than the seventh day after the tenant moves in and the landlord must ensure that the following security devices have been installed and are working properly:

• • a window latch on each exterior window
  • a doorknob lock or keyed deadbolt on each exterior door
  • a sliding door pin lock on each exterior sliding glass door
  • a sliding door handle latch, or sliding door security bar, on each exterior sliding glass door
  • a keyless bolting device (that only can be locked and unlocked from the inside) and a door viewer on each exterior door.

It is highly advised that all landlords familiarize themselves with landlord-tenant laws in Texas, including eviction procedures, landlord requirements and tenant rights: TexasPropertyCode.org.

Landlords in Texas are required to provide written notice of entry onto the premises; however, no notice period is specified under Texas law. It is recommended that landlords provide at least 24 hours’ notice before entering a tenant-occupied home, and as a courtesy to the tenant, refrain from requesting access during late or inconvenient hours.

In the case of an emergency, the notice of entry law is waived. Emergencies are situations where people or the property are threatened. The landlord does not have to provide any proof of the emergency at the time, but if the tenant should believe that the landlord entered unlawfully, the landlord will need proof of the emergency. Proof could be a gas report or notice from the utility company.

Contrary to popular belief, supplying large appliances in a rental unit isn’t the industry standard. It’s entirely dependent on the location and quality of the rental. Generally, many rentals located in the lower-end price point don’t supply appliances due to the cost of upkeep and potential for theft, while higher price point tenants fully expect appliances in their rental homes. In order to stay competitive, many landlords specifically mention providing refrigerator, washer, and dryer when marketing their rental units. When providing large appliances for your rental, it’s important to consider placing language in the lease agreement indicating whether the landlord or tenant will be responsible for repairs should any of these items break down.

If a tenant’s personal belongings are damaged, lost, or stolen, renter’s insurance potentially covers the cost of replacing their personal property. In some situations, it can also cover destruction of the landlord’s property due to tenant negligence, giving landlords additional protection and potentially lowering the likelihood of their own premiums increasing due to multiple claims. If you allow tenants to keep pets on your property, renter's insurance can also cover liability for dog-bite injuries and pet-related damage.

Many tenants don’t think they need renter’s insurance because they either underestimate the value of their possessions or are under the misconception that their landlord is responsible for their belongings and don’t think they need it. Requiring a tenant to have renter’s insurance can protect them should their property become damaged or stolen. Replacing even a minimal amount of lost property can cost thousands of dollars, and the last thing you want is for your tenants to have an added and unexpected expense.

A property manager is a third party who is hired to handle the daily operations of a real estate investment property such as:

• • Interview and screen potential tenants
  • Handle executing a lease agreement
  • Collect rent on behalf of the landlord
  • Manage maintenance and repairs

While every landlord’s situations is different, the decision to hire a property manager will likely be a balance between time and money. Below are some questions you might ask yourself if you’re considering whether to contract a property management company to manage your investment property:

• • How far do you live from your rental property and how frequently can you visit the property on a regular basis?
  • How do you deal with stress? Do you consider yourself to be a tolerant person?
  • Are you currently overwhelmed with your property(s)?
  • How many rental properties or units do you have?
  • How much experience do you have with maintenance and repairs?
  • Are you capable of handling the accounting and record keeping for your property?
  • Are you willing to be on call 24/7/365?
  • Are you willing to confront tenants about late payments, and if need be, evict them from the property?
  • How well do you understand the laws governing land lording?
  • From a financial standpoint, is managing your property the best use of your time?
  • Is your rental unit profitable enough that you can reasonably afford to pay a property management company for their services?

While we are well-versed in listing rental homes and helping our landlords find qualified tenants, The Loken Group does not currently manage rental properties once a lease has been executed. We do, however, have professional relationships with several highly-qualified property management companies and are happy to provide you with recommendations should you decide to explore that option.

Most written leases state that upon the expiration date, the lease is automatically renewed on a month-to-month basis, unless one of the parties indicates otherwise. The party wishing to terminate the lease on the expiration date must usually give a notice 30 or 60 days prior. You should review Section 4. Automatic Renewal and Notice of Termination of your residential lease to determine how much notice must be given if one party wants to terminate the lease at the date listed in the agreement. It is at this time that you may consider meeting with The Loken Group and placing the home back on the market to find your next tenant.

Should both the landlord and tenant agree to renew the lease, an Extension to Residential Lease form should be used to indicate any new or updated lease terms, including rent changes, new expiration date, etc., and then signed by all parties.