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7 Things That Affect What You Pay for Homeowner’s Insurance

Homeowner’s insurance is a non-negotiable. Not only does it protect you in the event the home is damaged, but it also includes liability insurance in the event someone is injured at your home. When evaluating the policy, insurance companies consider multiple items to determine their risk—and your cost.

Here are 7 things that affect the amount you pay for homeowner’s insurance—some that might make sense and some that might surprise you.

1. Square Footage – First and foremost, the size of the home is considered. The larger the home, the more it would cost to replace if damage occurred. More space also means more furniture, fixtures, personal belongings, and other items which would be replaced in a claim.
2. Layout – The style of the home is another factor in determining replacement costs. A single-story home, for example, might have higher foundation and grading costs, whereas a two-story home would need alternative construction methods.
3. Construction Materials – The type of material used to build the structure is important. Wood roofs would cost more to insure against a fire claim, as would a home with expensive travertine floors. A simpler home of modest building materials would cost less to insure.
4. Property Age – The assumption is that an older home might have more deterioration than a newer home and this is considered in the replacement cost.
5. Home Features – Homes with extra buildings or pools will be insured at a higher cost than other properties without these amenities.
6. Neighborhood – Local crime rates are reviewed to determine the risk to property and personal items.
7. Credit Score – Finally, the insurance company will consider the homeowner’s credit score. Not only does this help them understand if they are at risk for non-payment, but serious credit issues might be a factor in how well a property is maintained.

Homeowner’s insurance is important to every homeowner. Not only is it required by lenders, but it also protects the homeowner against financial disaster in the event of theft, fire, severe weather, and more. Understanding how rates are determined can help you compare options and get the best policy for your home.

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5 Tips for Starting Your Home Search

Everyone wants to time their home purchase “just right.” Ideally, you want to choose the picture perfect buyer’s market with plenty of well-­‐priced listings, low interest rates and a slow moving real estate market where the buyer has plenty of time to decide on an offer. The reality is that the current market is a fast paced environment where the best homes move quickly and serious home buyers need to be prepared to act when they find the right home.

Fortunately, starting your home search the right way is easy by following these simple tips:

  1. Find a Lender and Get Pre-‐Approved – Know what you can afford before you start your search.  By getting a pre-­‐approval letter, you demonstrate to sellers that you are serious when you write your offer and it proves you can afford the home.
  2. Research Neighborhoods – Each community will have its own personality and advantages; before you spend time looking at homes, choose the right area for your lifestyle and family needs.
  3. Pick the Right Home Style – Learn about the various home styles available in your community. Do you want a single story? Large yard? Do you like older homes or historic-­‐ style properties?
  4. Make a List of Must Have and Like-‐to-­Have – There is a difference! Make a list and be ready to compromise when appropriate by ranking the items.
  5. Take Notes – Often a home buyer can see 6-­‐7 homes in a single day; take notes, and if possible take pictures so you can remember the things you like and don’t like about the homes you see once you get home.

In a fast paced real estate market, spending some time preparing for your home search will help you move quickly when you find the right home for you and your family.

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Should I Consider Selling My Short-Term Rental Property?

The travel industry has changed significantly over the past decade. With the popularity of vacation rentals advertised by such sites as Airbnb, VRBO, and Home Away, travelers have more options than ever for lodging during their vacation. Unfortunately, 2020 has seen a serious decline in travel due to the COVID-19 crisis and many owners of these short-term rental properties are wondering what to do.

If you have a short-term rental property, you might be wondering if this is the right time to sell. Here are a few considerations as you weigh your options:

Long-Term Goals – While travel is down significantly right now, this slump won’t last forever. If this property is part of your overall investment portfolio which makes sense for the long run, consider other strategies to keep the rental. If you have a mortgage, speak to your lender about payment options during this time.
Housing Inventory and Local Home Prices – Housing inventory is down about 20% year over-year according to the National Association of Realtors®. Lower inventory has also prevented home prices from falling in most areas.
Historically Lower Interest Rates – Interest rates have dropped significantly since the beginning of the year. It might be time to refinance the property. In addition, if you do decide to sell, buyers are better positioned to buy.

This is a confusing time for everyone. The robust business of short-term rentals has certainly been affected over the past few months and the travel industry will suffer this summer. If you own a short-term rental, consider all your options as you decide whether it’s the right time to sell your property.

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Your Starter Home vs. Your Forever Home

 

Buying a home is exciting. Most people have visualized their dream home—large,
inviting kitchen; multiple bedrooms for family and guests; perhaps a backyard
with built-in BBQ, pool, and fireplace. Yet this dream is often out of reach
financially for first-time homebuyers. These buyers are ready to find a starter
home and perhaps are wondering if saving for a forever home makes more
financial sense.

Before making this decision, it’s important to consult with a professional financial
advisor about your unique situation; more often than not, getting a starter home
makes the most sense.

Things to Look For in a Starter Home vs. a Forever Home

As we already mentioned, a starter home probably won’t have all the features
you dream about, so it’s important to understand the difference between “want”
features and “need” features. For instance, the number of bedrooms might be
more critical than the huge, eat-in kitchen. Finding a home near a park for the
kids might take precedence over the expansive view of the water.

Focus on affordability and find a home that suits not only your immediate needs
but offers the ability to grow in equity. Your starter home should be viewed as a
financial tool to build wealth and position you to move up to your forever home.
Building wealth through homeownership is a great way to ensure you’ll be able to
buy that dream home when you’re ready.

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Real Estate Home Inspections and Appraisals in the New Normal

Even during the COVID-19 outbreak, real estate transactions go on. Buyers and sellers still need to move, and the industry is looking for new ways to accommodate both the needs of the transaction and, of course, the safety of everyone.

Many traditional real estate activities can be performed virtually. While no one is suggesting that a buyer will be comfortable buying a home they have only seen during a Zoom visit, they can minimize the number of homes they physically visit by pre-screening these homes ahead of time through virtual tours.

There are a few vital pieces of the transaction that require in-person visits, however. Among these are home inspections and appraisals. Both of these professionals need access to the property to properly perform their duties, and it leaves some potential home sellers and buyers wondering if it’s even possible to conclude a real estate transaction right now.

While everyone should cautiously move forward according to their personal sense of comfort, there are a few things you can do to protect yourself, your family, and the professionals while they are in your home. Before setting the appointments, think through the parts of your home the inspector or appraiser will need to access and think through the process.

Contact the home inspector and appraiser and work out a plan together to keep everyone safe:
• Communicate with them about off-limit areas, and what parts of the home they can access.
• Have a notepad in which they can communicate what parts of the home they came in contact with, and offer hand sanitizer and wipes for them to use before and after touching parts of the home.
• Finally, leave the home during the appointments, and clean properly once you return home.

Life does move on – if you are trying to buy or sell a home during this challenging time, it might take extra effort. However, working with your real estate team, you can conclude a successful real estate transaction amid the COVID-19 outbreak.

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Is Your New Neighborhood Safe?

How to Research Your New Community Before You Buy

Finding the right home for you and your family involves more than the right number of bedrooms and a lovely front yard; the neighborhood in which it’s located can make a huge difference in the quality of your experience in the home. The most important consideration must be the safety of the community. Not only is it a critical component of a healthy lifestyle, but it can also have a drastic effect on resale values. Fortunately, there are some strategies and tools available to help you learn about the safety of your potential new home.

  • Talk to the Neighbors – The first step in researching your new location is to talk with the locals. Start with the neighbors next door if possible, but also spend time in the local shops and ask about the community.
  • Drive through the Neighborhood at Varying Times – One visit on a Saturday morning will never give you a sense of the neighborhood. Drive by on a Friday night and weekday afternoons to learn more about the community. Watch for children playing in the parks and older couples out for a walk.
  • Use Online Tools  – There are a variety of online tools available. Crime research sites such as CrimeReports, SpotCrime, and NeighborhoodScout offer crime statistics. The National Sex Offender Public Website is another good research tool. Each city will also have a published crime blotter report available to review.

The safety and security of your new community should be a top consideration as you search for your new home. Taking the time to research the area will ensure you make the best decision possible for you and your family

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Top Tips When Buying Vacant Land

Building a new home from scratch can be a dream come true. The idea of designing the perfect property with morning sun in the kitchen and evening breezes on the deck can be exhilarating; the first step to a successful project is finding the right piece of land on which to build. This can present challenges if not approached correctly.

Top Tips When Buying Vacant Land

  • Hire Experience – More than most real estate transactions, it’s critical to hire an agent who specializes in vacant land purchases and can guide you through the steps.
  • Expect to Pay Cash – Finding a lender for vacant land can be very difficult. Those who will finance land typically require a 50% or higher down payment and above average interest rates and terms.
  • Get the Neighborhood Comps – Do not neglect to understand home values in the community so you do not over, or under, build your home.
  • Do Your Due Diligence – It is critical to research the property thoroughly. Just a few considerations include:
    o Site Surveys and Environmental Testing
    o Easements and Zoning Restrictions
    o Lot Survey and Boundaries
    o Utilities and Water Rights

Once you’ve completed these preliminary reviews, it’s time to consult with an architect and general contractor who will then begin to develop concept drawings to consider. Even at this stage, you might find that the home you want is not appropriate for the land you’ve chosen. Staying flexible is a key component to searching for land; remember that by following a few tips, you can ensure you find the right lot for your dream home.

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5 Questions Buyers Have During the Coronavirus Outbreak Answered

 

Everyone is being affected in some manner by the outbreak of Covid-19 coronavirus. During this time, buyers will have more questions than normal about the home buying process and their ability to buy a new home. While we can’t predict what the next few weeks and months will bring, the more we can educate ourselves, the better we can help buyers navigate the buying process smoothly during the pandemic. Here are a few common buyer questions as they related to the Coronavirus outbreak and real estate answered.

1. Can we still go see home listings in person? 

This is the hardest question to answer and it will depend on the home, the seller, the agent and any fast-changing governmental policies put in place. Agents should be able to offer a Skype or Face Time home tour virtually. Talk to your agent to find out what they have available for the buyers to prescreen the home virtually before setting up the visit; they might have virtual tours already available which can help rule out those that don’t suit their needs.

2. How can I stay safe while visiting homes?

Everyone’s health has to be the priority; this includes the buyers, sellers, and agents. If you are going to see a home in person during this time, carry hand sanitizer and wipes to use before, during and after the tour. Drive separately from your agent meet at the homes. During the tour, designate one
person to open doors, drawers, and closets and use disposable gloves during the showing.

3. What happens if I lose my job during the escrow period?

Most real estate contracts include a contingency that protects the buyer in the event they can’t get final loan approval and close the loan. Typically during the process, this contingency is removed after a set time frame, or after receiving the loan approval. Since every aspect of real estate is negotiable, consider asking for the contingency deadline to be extended and in place until the close; talk through this aspect with the seller and their agent in advance to set the right expectation.

4. Will I still have access to the home during the escrow period? 

It’s very common for the buyer to have easy access to the home during the escrow period; home inspections, appraisals and just measuring are all common reasons to visit the home during escrow. Consider grouping these activities whenever possible.

5. Will I get a better deal if I wait to buy a new home? 

We all know there’s no crystal ball, but with everything that’s going on, sellers on the market should be very motivated
to sell. There are also historically low-interest rates on home loans. There is no way to predict the future, so if the right home comes along, it makes sense to consider it.

The Covid-19 outbreak is causing some uncertainty among home buyers, sellers, and even agents. However, with the use of technology and following best practices, you can still find the home you’ve been waiting for during this time.