Getting the Most from a Home Warranty

Warranty houseUnlike homeowner’s insurance that offers protection against perils such as weather and other natural disasters, home warranties offer protection against major home system failures.

The protection of home warranties can offer homeowners peace of mind against major repairs and unforeseen expense by assigning the repair risk over to the warranty provider.

Resale homes, in particular are great candidates for home warranties as the used systems and appliances they contain already have wear and tear and often times limited life remaining.

Here are three important tips in getting the most out of a home warranty:

Know your coverage
Know what is covered and what isn’t. Home warranty coverages differ and the providers that offer them differ too. Most home warranties cover all major systems within a home including central heating and cooling systems, electrical components, plumbing systems, clothes washers/dryers, and kitchen appliances.
Home warranty providers offer coverage at an annual premium, but they also include deductibles and service call fees. Knowing what those costs are can help you to weigh the benefits of one plan over another.

Perform routine Maintenance
Home systems must be “properly maintained” so knowing what a provider deems as proper maintenance is crucial in identifying any potential policy exclusions. Your maintenance performance as well as that of the previous homeowner before you will be evaluated by service technicians and relevant to your policy.

Choose a reputable warranty provider
Some warranty providers are prompt and professional and some are not. Researching a provider’s reviews as well as its service history is important to identify a reliable company. Home warranty providers typically have data available to reflect its performance and claim history. Use that data to compare and choose the provider that will offer you the peace of mind you deserve.

Is Mold Making You Sick

Mold is a type of fungus that grows in moist areas, both indoors and outdoors. For someone with a mold allergy, Moldyexposure to mold can cause the immune system to overreact resulting in uncomfortable symptoms.

The good news is that even if you have a mold allergy, mold is not likely to kill you. The bad news, however, is that it can make you extremely uncomfortable and potentially cause long term health problems such as asthma.

So… how do you know if mold is making you sick?

What are your symptoms-
Allergic reactions to mold are similar to those of other allergies and include symptoms like headache, sneezing, runny nose, throat irritation, itchy watery eyes, cough/congestion, skin rashes, and hives.

What are the conditions-
While mold is available year round, it’s more prominent during warm, humid conditions and is often found in wet or damp areas. If you have experienced any type of recent flooding, the conditions are ideal for mold growth which can happen very quickly. Any damp area within a home or commercial building should be properly cleaned and dried immediately.

Have you been tested-
Doctors can perform blood tests to look for antibodies in your immune system after exposure to mold. Skin tests are also available which include pricking or scratching the surface of the skin to identify mold allergies.

Many people can be exposed to mold with no effect, while many others can suffer significantly from its exposure. If you believe you or a family member may have a mold sensitivity or allergy, take precautions within your home by preventing the growth of mold.

– dry all wet areas immediately
– monitor indoor humidity levels and maintain sufficient air flow
– ensure proper slope and gutter drainage
– consider investing in mold resistant home products

Stigmatized Properties

Every home has a past and as the term ‘stigma’ signifies a mark of disgrace, a stigmatized property is essentiallySpooky house one that Buyers may shun for reasons other than its physical condition.

Most stigmatized properties are usually associated with some type of event that leaves a psychological condition on the home. Some good examples of stigmatized properties include homes with a history of hauntings, suicide, violent crime, or other similar types of event.

There are also many circumstances which could be considered a possible stigma including a home with a neighbor who is a known hoarder or a registered sex offender.

The disclosure requirements for Sellers regarding stigmatized properties vary by state. Many states do not require disclosures be made to Buyers on properties with psychological stigmas as it is considered not pertinent to the home’s physical condition. Some states however, do require the disclosure by the Seller of any material fact that could impact what a Buyer is willing to pay for a property.

Caveat emptor is a Latin phrase which translated means “buyer beware”. In many states, the burden is on the Buyer to do his due diligence and fully examine a property and satisfy all concerns before he purchases.

It makes sense that Sellers can be fearful or reluctant to reveal a home’s negative past, however disclosure is recommended to avoid any potential legal consequences or claims of misrepresentation. If a Seller is questioning whether a particular disclosure is required, he should contact an attorney.

Although stigmatized properties may be shunned by Buyers, the history they share can also be viewed as interesting. Some listing agents will use creative marketing strategies to accentuate the home’s unique history in hopes of appealing to Buyers with an appreciation for the macabre or unusual while other listing agents prefer to take a more timid approach.

A good rule of thumb for Buyers concerned about the history of a home is to do your research and ask a lot of questions.

What Every Buyer Should Know About Home Inspections

Home Sellers are often encouraged to have a home inspection performed prior to listing time so that any potentialMagnifying glass issues can be addressed and resolved prior to an offer being submitted. This often does not occur however, leaving the Seller and the Buyer to discover the condition of the property through the course of the home purchase.

So- what exactly is a home inspection? A home inspection, quite simply, is an assessment made to determine the home’s condition. A home inspector is chosen by the Buyer, taking into consideration his credentials, tools/technology used, and years of experience.

Although it’s considered ‘optional’, real estate agents recommend Buyers hire a professional inspector to assess the property they wish to purchase so the Buyer has a full understanding of the condition of the home before the transaction is finalized.

The Buyer’s written request for a home inspection is included in the purchase agreement, which states how many days the Buyer has to have the home inspection completed. To protect his interests, a Buyer must have the home inspection completed within the time frame established in the accepted contract.

Home inspection costs are typically an out of pocket expense and vary anywhere from approximately $200-$500, depending on the size of the property and the scope of the inspection to be completed. Some inspectors offer varying service levels, but most inspections take several hours to complete and include a review of:

Heating and cooling systems

Plumbing and piping

Electrical and wiring

Roof coverings

Attic (if accessible)

Exposed insulation

Foundation and structural integrity

Walls, ceilings, floors, windows, and doors

Appliances

 

When a home inspection is completed, the inspector will prepare and provide a report to the Buyer including his opinion as to the condition of the home and its components. Sometimes- an additional inspection by another inspector who specializes in areas such as pest, chimney, sewer, or septic systems may be necessary. These additional inspections may be optional or they may be required by the lending institution financing the Buyer’s mortgage. While the costs are a separate charge from the general home inspection, these additional specialty inspections are often included with the Buyer’s closing costs.

When a Buyer has ordered a home inspection, it’s important for him/her to understand that the home inspector will find ‘problems’- which may be minor- and may be major.

Most often times a minor repair(s) needs to be made or a minor component(s) needs to be replaced. In these instances, the Buyer and Seller, who share a mutual interest in proceeding to closing, work together to determine the associated repair costs and execute a specific plan of resolution.

Other times, a major issue is discovered during a home inspection that may dramatically impact the Buyer’s desire to complete the transaction. In these instances, if the Seller is unwilling to 1. proceed with satisfactory remedies for the newly discovered defect or 2. reimburse Buyer for the related expenses so Buyer can execute the remedy, the Buyer has the opportunity to “walk away” from the deal and have his/her earnest money returned to him.

Buyers are encouraged to discuss home inspection results and concerns with their real estate agent, who has experience in home inspection resolutions and is familiar with the Buyer’s purchase contract.

When You Can’t Pay Your Mortgage

If you’ve recently suffered a financial hardship- possibly a job layoff or death of a family member- the pressure ofMan with empty pockets making your mortgage payments each month can be very frightening.

If you’re unable to make your house payments, the worst thing you can do is do nothing. Below are some relief options available which can help you avoid foreclosure.

1. Refinance-
If your credit is good, you may be able to qualify for refinancing for a longer term or at a lower interest rate.

If you have not yet missed a payment, visit with your lender to see if refinancing can save you money.

2. Forbearance-
If your financial hardship is only temporary, this may be an option for you. Forbearance includes working with a lender to reduce or suspend your payments so you can get caught up.

3. Loan Modification
A loan modification is simply a change in the terms of the original loan, which can help you to achieve a lower, and more manageable monthly payment.
It’s important to ask a lender about potential affects to your credit score before pursuing a loan modification.

4. Sell your home-
If you can sell your house and net more than the amount you owe, selling your home might be the solution for you. It’s best to visit with a real estate professional to determine the market value of your home as well as the expenses you can expect to incur from a sale. Use those figures against your current mortgage payoff to calculate whether this option is for you.

5. Short Sale-
If the amount you owe on your home is greater than the home’s worth, a short sale may be an option.
With short sales, a homeowner suffering a financial hardship may be eligible for “forgiveness” for some or all of the deficiency.
In most short sale situations, the lender accepts a sale price and a non-collateralized loan for the shortage amount.
The specific terms of the short sale will ultimately determine the degree of impact to the consumers credit history and his credit score.

6. Bankruptcy-
Although not a desirable option, filing bankruptcy can offer debt relief and abruptly stop the foreclosure process. In exchange for a fresh start, those who choose bankruptcy will have their credit score and credit history damaged severely and for a long time.
Bankruptcy may be a desirable option for those suffering severe financial hardship.

7. Deed in Lieu of Foreclosure-
This is a title transferring document signed by a homeowner giving his ownership interests to the bank. Lenders are not obligated to offer a deed in lieu of foreclosure, but may do so after a loan modification or short sale have been denied.
It is extremely important to obtain legal advice prior to accepting a deed in lieu of foreclosure.

8. Renting
Homesharing is an option if you’re looking to earn extra money to help pay the monthly mortgage. This can be done in a couple of different ways-
– by renting the home out exclusively to a reliable tenant (and you live elsewhere)
– by renting most of the home exclusively to a reliable tenant and you remain in a room of the home in exchange for a small fee
Homesharing involves a great deal of risk and potential liability. If you as the homeowner become a landlord and you continue through the stages of default on your mortgage, you could find yourself in significant financial and legal trouble.

A Basic Guide to Homeowners Insurance

Whether you’re a current or a future homeowner, it’s important to know some basic information about homeownersHomeowners Insurance insurance to ensure you have the proper coverage in the event you need it.

A “peril” is any type of event that causes damage to your home or belongings, such as a tornado or a fire. (Most policies do not include flooding). The perils covered by your insurance are stated in your homeowners insurance policy.

Add-ons or “endorsements” are offered as extra protection to policies which may be lacking. A few examples include: sewer backup, earthquake, or home business coverage.

The different types of homeowner insurance policies available are called “forms”. While you’re reviewing your current policy or shopping for a new one, make sure you understand exactly what is and is not covered.

Here are some general guidelines:

HO-1 Basic form

The HO-1 form is the most basic policy and provides coverage for only the following, basic perils:
Fire and smoke
Hail, windstorm, and lightning
Explosion
Vehicles and aircraft
Civil commotion
Vandalism
Theft
Volcanic eruption

It is a policy often used for catastrophic loss only and is not available in some states.

HO-2 Broad form

HO-2 is a broader type of policy than the HO-1, which covers the same perils as HO-1 plus the following:
Falling objects
Weight of ice, snow, or sleet causing damage
Accidental discharge or overflow of water or steam
Sudden and accidental tearing apart, cracking, burning, or bulging
Freezing of plumbing, heating, A/C, sprinkler system, or appliance
Sudden and accidental damage from artificially generated electrical current

The HO-2 broad form only covers damage resulting from a named peril so any unnamed perils occurring outside those listed are not covered. Personal property may be listed at replacement or actual cash value. HO-2 generally excludes coverage for damage relating to water backup, foundation, or slow leaks.

HO-3 Special form

HO-3 is more comprehensive and is often referred to as an “all risk” policy because it includes “open, unnamed perils” and does not limit coverage to only named perils. HO-3 includes:
The dwelling and private structures connected to the dwelling
Unscheduled personal property on and away from the premises
Loss of use
Personal liability coverage and medical payments

HO-3 is probably the most common policy today. Its coverage applies to the home for open (unnamed) perils, but to the personal property for only named perils. Coverage is additionally excluded for the following:
Ordinance of law
Earth movement
Governmental action
Nuclear hazard
Power failure
War or military action
Water (flood)
Inherent defects
Vermin

HO-4 Tenant’s form
Also referred to as “renter’s insurance”, the HO-4 policy is for tenants and can be written as either an actual cash value or replacement cost policy. It includes coverage for personal property- but not for the dwelling itself. Actual cash value policies use a method of depreciation which means you will only be reimbursed in a claim for the value of the item when it was purchased- not for the cost to replace it.

Most renter’s insurance policies include an amount of liability coverage for legal or medical situations.

HO-5 Comprehensive form
HO-5 is a more elite type of policy that includes a broader protection and higher coverage limits than a typical policy. Not all homes/homeowners qualify for this type of policy. Its coverage applies to the home for open, unnamed perils and to personal property for open, unnamed perils.

HO-6 Condo form
This is a policy designed specifically for condos and most often includes coverage for the walls, floors, and ceiling of the unit. Coverage includes for the interior of the unit and the personal property inside.

The homeowner’s association policy typically includes the rest of the building structure.

HO-7 Mobile home form
An HO7 is similar to that of an HO-1 or HO-3 policy, but is designed specifically for mobile or manufactured homes that don’t meet the requirements for typical homeowner’s insurance policies. It includes coverage for the mobile home structure and adjacent structures as well as most personal belongings. Liability coverage may also be included.

HO-8 Older home
HO-8 is a very basic policy designed specifically for older homes that would be difficult to replace if destroyed- particularly historic homes and landmarks.

Unlike other policies that use the replacement cost method to determine the cost to repair or replace, HO-8 uses “common construction” materials and methods to determine the cost, leaving insurance companies with flexibility in determining what they pay out on claims.

Preparing for an Empty Nest

When your last child has moved out or is about to, it’s common to experience a lot of mixed feelings. While yourNest child is beginning his or her new chapter in life- so are you!

Your new chapter will provide you with more privacy, more time, more flexibility, and more opportunity. So- cry if you want to cry. Just don’t get stuck looking back because you have a lot to look forward to!

Here are six things to think about if your nest will soon be empty:

Make lists
What kind of lifestyle do you want to have in this new chapter of your life? Now is the time to rediscover yourself and to embrace all the things you didn’t have time to do when you had kids in the home.

Have you created a bucket list yet? If not- get started! If you already have a bucket list, start working on a plan of action so you can achieve some of those lifelong goals!

Start organizing
Decluttering and organizing can bring a lot of satisfaction to more than just empty nesters. Go one room at a time and sort through which items you’d like to keep, to donate, or to sell. If you struggle getting rid of sentimental items, try taking a photo of the item that you can hold onto instead of the item itself.

Donating items to charity is a great way to declutter your home while helping others in need.

Prepare a Budget
You may expect to have more money when your kids leave the home, but it’s possible you might not. While you will likely save money on your weekly visits to the grocery store- unless your children are completely financially independent- you’ll want to budget some unanticipated expenses for them because you still have kids- they just don’t live with you anymore!

Plan and monitor your financials to determine a budget for when the kids are no longer in the house.

Work on Projects
Have you been putting off replacing the roof on your house? Would you like to convert one of the bedrooms in your home to a home office space? Have you always wanted to take a cooking or yoga class or learn another language? If your kids have left the home- this would be a great time to tackle new ventures or some home improvement projects to increase your home’s value.

Nurture relationships
It’s not uncommon for married couples to put their relationship on the back burner while raising kids. Once the kids have left the home, there’s more time for privacy for you and your spouse. Nurture your marriage and relationships with other friends and family members. If you need extra support, reach out to a friend who has an empty nest too and start a support group together.

Don’t be impulsive
Once the kids are no longer around to help with the cleaning and yardwork- downsizing and maintenance-free living might start to look really appealing. While you may experience a wide range of new feelings and ideas, it’s important not to be impulsive about major decisions like selling your house.

If your mortgage is paid off on your family home, now may or may not be the right time to take on the additional expense of a new place.

If you’re an empty nester considering selling the family home, visit first with your children as well as a real estate professional to discuss all of your options.

What Happens When You Overprice Your Home

If I had a dollar for every time I heard- “well, I can always go down, but I can’t go up”. Ugh. It makes perfectHouse on stack of cash sense that a Seller wants to obtain every dollar they can for the sale of their home, however overpricing a home has proven, detrimental consequences that many Sellers don’t realize or comprehend until it’s too late.

If a home is priced appropriately for the market (not too high and not too low), a Seller will enjoy a full spectrum of buyers and maybe even multiple offers. If a home is overpriced however, a Seller will fall into a cycle of negative and predictable consequences.

 

Take heed of these dangers before overpricing your home:

• Sellers who overprice their home tend to have fewer options available when it comes to listing agents. Many agents won’t even take on an overpriced listing because of the time and energy involved.

Other agents might accept an overpriced listing believing they can acquire new Buyer prospects to sell other homes to when they’re unable to sell the overpriced one.

• Buyers who are qualified to buy in the price range of the home’s actual market value will be deterred from viewing overpriced homes. Those qualified Buyers will skip over the home and not even look at it, believing it’s something they cannot afford.

• The higher the home’s Days on Market (DOM), the higher the home’s marketing time and marketing expense, which can add up quickly and result in unnecessary out of pocket expense.

• Overpricing a home will result in fewer showings, which can be extremely stressful to Sellers who may be vulnerable emotionally. I mean- there’s sadly no chance of selling the home if no one wants to see it, right?

• Buyers from a higher price range who view the overpriced home will inevitably notice that the home is missing the amenities of other homes in that same price range.

• There is a stigma attached to overpriced homes for both Buyers and real estate agents. The longer a home is on the market, the more likely a Buyer will be to believe there must be something wrong with it.

Agents will view an overpriced home as one with unreasonable Sellers. They will, in turn, focus their efforts on selling homes that are reasonably priced.

• Sellers of overpriced homes are less likely receive offers because many Buyers will be afraid to ‘offend’ the Seller with their offer. Buyers instead will present offers on and purchase competing homes.

• Imagine saying ‘maybe tomorrow’ over, and over, and over again. Overpricing a home results in wasted time when ultimately- the Seller will be faced with reducing the list price to what it should have been in the first place- maybe weeks or months after the initial list date.

• The longer a property sits on the market, the longer the Seller will need to pay property taxes, utility expense, and incur other expenses such as lawn maintenance or possibly HOA fees. As a Seller, if you’ve already moved out of the home or are paying for 2 properties, you can incur some hefty expense.

• When it’s all over with, Sellers of an overpriced home will receive a lower overall sale price, which will affect the value of future sales in the market too.

Places to Donate Unwanted Items

Whether you’re Spring cleaning, preparing for an upcoming move, or just wanting to downsize or declutter, thereGiving hands are many charitable organizations that are willing to accept your unwanted stuff.

Consider keeping your unwanted items out of the landfill and donating them to others in need.

Books
Operation Paperback is a national non-profit organization that sends gently used books to military service men and women overseas- as well as to their families at home.

Another place to donate books is to your local library.

Clothes
One of the most widely known places to donate clothes is to Goodwill, which supports employment program opportunities in communities and keeps items out of landfills.

Another place to donate clothes is to the Salvation Army, who collects donated items to sell at its stores and uses the profits to help those in need.

Furniture
The National Furniture Bank Association is a non-profit organization that collects furniture for families struggling with poverty.

Other places to donate furniture are local homeless or battered women’s shelters, or to a local thrift store.

CDs and Videos
CD’s, videos, and many other items can be donated to the American Red Cross via the GreenDrop Program, which converts donations to funds for American Red Cross’ programs and relief efforts. GreenDrop has pickup or dropoff options available.

Shoes
Soles 4 Souls collects new and gently used shoes to provide relief to those in times of poverty or natural disaster and also to those in underdeveloped countries.

Goodwill Industries also accepts donated shoes and will even recycle those in poor condition.

Used cars
You can arrange a pickup or find a local chapter to donate your used vehicle to be repaired and sold with the proceeds benefitting the local Make a Wish Foundation chapter.

Electronics
Ebay’s Giving Works program allows consumers to sell their used electronics and other items online and donate proceeds to a charity of their choice.

Best Buy also has a recycling program, allowing consumers to drop off their unwanted electronics items and appliances for a nominal fee.

Cell phones
New, used, or even damaged cell phones can be donated to Cell Phones for Soldiers that provides cost free communication services to active military members and veterans.

Lumber, building materials, home fixtures, bathtubs, sinks and more
If you’ve recently completed a renovation on your home, Habitat for Humanity will gladly accept a variety of household and building goods. It helps families to build an affordable place to live in the local community and around the world.

Children’s toys and games
The Ronald McDonald House offers support for families when a child is sick or needs medical care. Because it hosts thousands of children though, the Ronald McDonald House only accepts toys and games that are new.

Many local preschools and churches are willing to accept toys and games that are new or used.

Costume jewelry
I Have Wings Breast Cancer Foundation accepts donated jewelry and offers support to, not only breast cancer research, but to families during a breast cancer diagnosis.

What is Earnest Money and How Does it Work

What is earnest money? Earnest money is simply a sum of money made from Buyer to Seller to demonstrateHand with cash a Buyer’s seriousness about purchasing a property.

If an offer proceeds to a successful closing, a Buyer can consider his earnest money deposit a type of pre-payment which will be applied to his down payment or closing costs or put toward the purchase price.

Check out the following commonly asked questions to learn more about how earnest money works.

Do all Buyers need earnest money?
Earnest money is not required, however it is highly recommended to demonstrate to the Seller that you, the Buyer, are committed to seeing your offer through up until the time of closing.

Why is earnest money important?
A Buyer’s offer and his earnest money deposit will be taken into consideration by the Seller when the offer is presented so it is important and the amount is important too.

If, for example- a Seller received two offers from two different parties with a similar purchase price and terms, but one has an earnest money deposit and one doesn’t, it stands to reason that the Seller will give more consideration to the offer with the earnest money.

Likewise- if you were a Seller and were presented two similar offers from two different parties, yet one had $500 in earnest money and the other had $2000 in earnest money, which offer do you think you would you give more consideration to?

How much earnest money is enough?
There are different guidelines based on many different factors, but typically $500 is the minimum. Generally speaking- earnest money deposits range from 1%-5% of the purchase price.

How much to offer as earnest money depends on a great deal of variables. A $500 earnest money deposit may be adequate for a $150,000 property, yet insufficient for a $600,000 property.

When do I need earnest money?
As a Buyer, you should have the money to cover your earnest money deposit in your bank account at the time you write an offer. In Iowa, the earnest money is required to be deposited into the listing agent’s escrow account within 5 days of offer acceptance, where it will be held until closing. Held does not mean uncashed! The check will be cashed and must be made payable to the listing agent’s office, not to the Seller.

How might I lose my earnest money?
Earnest money offers assurance to Sellers that the Buyer won’t back out of the deal without valid cause so it’s important as a Buyer to fulfill all your obligations as they are stated in the purchase contract and do so within the specified time frames.

If a Buyer backs out of the deal without valid cause, it would result in forfeiture of the Buyer’s earnest money.

Can I get my earnest money returned to me?
A Buyer is only qualified to receive refunded earnest money if he had, according to the terms of the contract, valid cause to do so.

For example- The Buyer’s offer includes a financing contingency, allowing the Buyer 7 days to obtain financing. If the Buyer is unable to obtain his financing within the 7 days as stated in the contract and decides he wants to backs out of the deal, he would be allowed to do so and would also be entitled to have his earnest money deposit returned to him.