Cook’s Corner: Hubbard Agreements, School Systems, And Bathroom Renovations

by Steve CookOctober 26, 2016

What is a “Hubbard Clause”?


The eternal question move-up buyers must answer is: should they sell first to avoid the risk of paying two mortgages simultaneously, or take a risk and buy the new home before selling the old one? In today’s buyers’ markets, where inventories are slim and interest rates are still low, many are choosing the second option. They are more concerned about finding the right house for their family than finding a buyer for their current one.

However, what if you need the cash from your current home to qualify for your new one? Most move-up buyers use their proceeds from the sale of their home to put down a large down payment. With a down payment of 20 percent of the total cost of the home, they avoid mortgage insurance, eliminate the risk of a low appraisal killing the deal, get a good rate and pay less interest over the life of their loan. However, 20 percent of a $400,000 home large enough for a growing family is $80,000, a fair chunk of change unless you have the proceeds in hand from the sale of your current home.

There’s an answer to this dilemma, and it is called the “Hubbard Clause.” A Hubbard Clause reserves your right to buy a particular property while trying to sell the one you already own. It is sort of like tagging a Christmas tree on the lot with the promise that you will come back later and buy it—unless you can’t. Seller’s don’t have to agree to the clause, which is why it is critical that it spell out the terms precisely.

Hubbard Clauses, in one form or another, are increasingly popular in today’s hotter markets. They play a critical role in helping families move up from their starter homes to large homes that better meet their families’ bends. Without the flexibility made possible by Hubbard Clauses, tens of thousands of fewer homes would be bought and sold each year.

What is the best way to learn about the school systems in areas you are moving to?


Moving to a new neighborhood across the nation, or even across town, is more difficult when pre-school or school-age children are involved. The quality of school districts influences the buying decisions of 25 percent of all home buyers and half of all families with children younger than 18, according to the National Association of Realtors. Finding good information on a school district or specific schools in a district can be tricky if you live far away and don’t know parents with kids at the school.

The information on every Homes.com for sale listing is a good way to start your search for information on specific schools. Scroll down to the bottom of each Homes.com listing page, and you will see information on the public elementary, middle, and high schools of students who live in the home for sale. Each school receives a score from A to D computed from state test results as compared to other local schools. Average class sizes and distance from the home are also listed. By clicking on the link below the scores, you can see information about adjoining school districts.

The scores are only a start, though. Do your homework and access information on other leading sites with local school information such as Great Schools.org and NeighborhoodScout.

What adds more value to a home: a walk-in shower, or a free-standing bath tub?


More and more homeowners are converting that extra tub in a second or third bathroom into a stall shower. The American Institute of Architects’ annual Home Design Trends Survey found that more than 60% of homeowners preferred a stall shower without a tub in 2013. However, most real estate agents are adamant about having at least one bathtub in your house to preserve marketability.

Extra shower space allows for multiple shower heads, a built-in seat, and designs without shower doors, said John Petrie, president of the National Kitchen and Bath Association, in an email interview about the current kitchen and bath trends.

All that being said, few remodeling projects pay for themselves on dollar for dollar basis when the house is sold. A midrange bathroom remodel of an existing 5-by-7-foot bathroom that includes replacing all fixtures costs an average of $17,908, and returns only $11,769 when the house is sold. That is a return of 65.7% on the dollar. Source, Cost vs. Value Study by Remodeling magazine.


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About The Author
Steve Cook
Steve Cook is editor and co-publisher of Real Estate Economy Watch. He is a member of the board of the National Association of Real Estate Editors and writes for several leading Web sites, including Inman News. From 1999 to 2007 he was vice president for public affairs at the National Association of Realtors.

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