Home Warranties: Are They Worth It?

January 23, 2020 by

Home Warranties Are They Worth ItOwning a home comes with major responsibilities and also offers major questions. One of the biggest questions that people will have to answer is whether or not they want to take out a home warranty. In order to decide whether a home warranty is worth it, it is important to first understand what a home warranty is.

What Is A Home Warranty?

A home warranty is not the same thing as home insurance. First of all, homeowners insurance is something that is required to purchase a home in the first place. Home insurance is in place to protect the homeowner, and the lender, from disaster.

In contrast, a home warranty is not required but might be offered by the lender or a third party. A home warranty is designed to cover the repairs that come with routine wear and tear on various home appliances. This includes items such as the HVAC system, plumbing, and electricity (but everyone needs to read the information on any home warranty policy to see exactly what is covered.) Therefore, what might not be covered by home insurance is covered by a home warranty and vice versa. 

The Benefits Of Having A Home Warranty

One of the biggest benefits that come with a home warranty policy is peace of mind. Every home appliance is going to break down at some point as a result of routine wear and tear. When this happens, it can create a large, unexpected expense.

When this expense arises, it is helpful to have a policy that covers the cost of repairs. People might be surprised to hear that homeowner’s insurance policies are not going to cover routine repairs on appliances resulting from wear and tear. This unexpected expense can cause a lot of stress for someone’s budget. The cost of this repair can be covered by a home warranty.

The Drawbacks Of A Home Warranty

On the other hand, there are also a few drawbacks to note. The biggest drawback of a home warranty is that people might end up paying for the cost of the repair simply via the cost of a home warranty. Many of the repairs that are not covered by homeowner’s insurance can be covered out of pocket. Therefore, having a home warranty policy might be redundant.

It is important to weigh the benefits and drawbacks of a home warranty before deciding whether or not the policy is worth it. 

If you are interested in buying a new home or refinancing your current property, be sure to consult with your trusted home mortgage professional to discuss financing options.

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Safety First! How Often Should You Clean Your Chimney?

January 22, 2020 by

Safety First! How Often Should You Clean Your ChimneyChimneys are as old as homes themselves. Yet, when it comes to chores, cleaning the chimney is one of the most neglected tasks. While people often think about yard work and housework, they often forget to clean the chimney.

When someone neglects to clean the chimney, they risk the development of mold. This can influence the efficiency of the chimney, causing debris to back up into the home. For this reason, it is essential for people to clean their chimneys on a regular schedule. 

Make Sure To Inspect The Chimney Properly

Chimneys are used seasonally. When the temperature starts to drop outside, people are going to start up the fireplace and use the chimney. Prior to lighting up the chimney for the next season, it is important to make sure they are properly inspected.

Cleaning grout and mold is an important part of making sure the chimney works properly. When someone is cozied up in front of the fireplace, it is important to note that there is an active fire happening. About 25,00 fires per year start due to an issue with the chimney. Make sure that all routine maintenance has been performed on the chimney for that year before firing it up.

Why Clean the Chimney In The First Place?

When it comes to fires, safety should always come first. This the biggest reason why chimneys need to be thoroughly cleaned. When someone cleans the chimney, they are working to prevent home fires. 

The more people use the fireplace, the more soot is going to build up in the chimney. The end result is flammable substances backing up in the chimney. This can be dangerous because it might lead to a fire when people least expect it. To prevent this from happening, be sure to clean the chimney on a regular basis.

How Often Should A Chimney Be Cleaned?

At a minimum, it is important to clean the chimney at least once per year. Annual maintenance on the chimney should be a readily accepted part of owning a home. This includes both cleaning the chimney and inspecting it for any structural flaws.

Some people may want to clean the chimney themselves. This is acceptable; however, it is also recommended to have a professional come in and take a look at the chimney. An extra set of eyes on the chimney may help prevent a fire from breaking out in the future.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional about financing options.

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5 Important Mistakes To Avoid When Selling A Home

January 17, 2020 by

5 Important Mistakes To Avoid When Selling A HomeSellers of homes often make mistakes that are not in their best interests. Here are common mistakes people make when selling a home and how to avoid them.

Using Bad Photography

Using lousy photos or no photos to promote the property for sale is foolish. Professional photography is not so difficult or expensive that sellers should settle for the use of bad photos. Sometimes all the potential buyers will see is the photos they find online. If the photos are bad or not there at all, then that is the end of their interests. 

To stimulate interest in a property, it is even better to use a high-quality video walk through than simple photos. This allows a buyer to enjoy a virtual showing of the property.

Allowing Emotions To Control The Process

Sometimes, buyers should step aside and let the experts guide the process. One example of this is the decisions about staging a home for sale. Staging is getting the home in an immaculate condition that is most attractive to buyers. 

An important part of staging is the depersonalization of the home. This means removing any photos or family items. The reason for doing this is to allow the potential buyer to imagine their family living in the home and not have them think about the previous residents. 

This part of the process may be quite emotional for the seller because it is the first clear sign that they are truly giving up a home. Those emotions are natural but should not stand in the way of getting the home ready for sale.

For Sale By Owner

It may be tempting to try to sell a home without utilizing the services of a professional REALTOR®. However, many studies show that the net price that sellers receive for selling a home on their own is about the same as if they used a real estate agent. 

The buyer pays the real estate agent’s commission. Usually, the price achieved by a professional real estate agency is higher than what an owner may achieve alone. The reason for this is that buyers expect to get a discount from the market price for a for-sale-by-owner (FSBO) home. Another consideration is that marketing a home is not easy for amateurs to do, so FSBO homes may languish on the market for a long time before selling.

Too Pricey

Listing a home for a price that is higher than the market value, automatically puts the seller at a disadvantage. It discourages a potential buyer from making an offer. Eventually, this may lead to having to discount the listing price. This makes the home look like something may be wrong with it.

Not Making Repairs

Homes that have a pre-inspection and all the necessary repairs made are much more attractive to buyers. This is true, even if the price includes a discount from market value to allow for the estimated repair costs. It is mostly a matter of convenience for buyers who want a home that is ready to move in and does not immediately need repairs to be made.

Summary

Avoiding these common, and sometimes costly, mistakes may help sellers to sell their homes faster and hopefully get a higher price. Work with a qualified REALTOR® to learn more about how to get a home ready for sale, what price to ask for, when to list it, and what to do to maximize the sales price.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional to discuss financing options.

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What Does A Property Management Company Do?

January 15, 2020 by

What Does A Property Management Company DoFor those who are interested in learning more about real estate, property management companies are an important topic of discussion. Some people might not ever consider hiring a property management company.

Other people wouldn’t ever invest in real estate without a property management company to help them out along the way. This can be a hard decision for people to make. In order to figure out if hiring a management company is the right decision, it is important to think about what they do.

What Is Property Management?

It is the job of a management company to both maintain the quality of the residence while also keeping the occupants happy. Typically, the owner of the property will hire a third party to do this job. The management company then oversees the daily operations of everything that happens at the real estate property. 

This means that property managers respond to the concerns of the residents or tenants. If something goes wrong with one of the appliances, the property management company is typically the one who handles this issue.

If there is something wrong with one of the utilities, the management company handles this also. Parking problems are often handled by the manager as well. Property managers will also make sure that rent is collected on time.

Property managers are also busy while the property is vacant. The manager will make every effort possible to get the property filled if it is vacant. The manager will also make sure that the property is well-kept when it is empty. This means keeping it clean, updating appliances, fixing leaks, and other common issues that arise.   

Is A Property Manager Needed?

In order for someone to decide whether or not a property manager is needed, there are a few important considerations.

First, the more rental properties someone has, the more work will need to be done. It might be too much for one person to do on their own.

Next, think about how far away the property is. The farther away the property is, the harder it will be to keep an eye on it.

Finally, managing property is an active job. Those who intend to get into real estate as a form of passive income will want to hire someone else to handle this job.

Consider these questions carefully when thinking about property management companies.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

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What Is A Short Sale?

January 9, 2020 by

What Is A Short SaleNobody enters into a mortgage assuming they are going to fall short on their payments; however, life happens and borrowers might need a way out. In serious situations, lenders may elect to foreclose on homeowners who are unable to make their mortgage payments. Fortunately, there might be another way out. This is called a short sale.

A short sale can be used to help homeowners who are struggling cater to those who are looking to buy a home. At the same time, there are risks to both parties. Therefore, there are a few important points to keep in mind.

What Is The Structure Of A Short Sale?

If someone owes more on their mortgage than the property would otherwise sell for, this is called a short sale. In this situation, the lender accepts the money coming from the sale of the home rather than that money going to the homeowner. This is because the homeowner still owes a significant amount of money on their mortgage.

Take, for example, someone who owes $300,000 on their mortgage. In a short sale situation, he or she would sell the home for $250,000 in a short sale. In this fashion, the lender agrees to accept a smaller amount of money for the home than he or she would get otherwise. In essence, the lender is then short $50,000. This is where the name comes from.

This is different from a foreclosure. A foreclosure happens when the borrower falls so far behind on payments that the lender reclaims the property.

The Benefits Of A Short Sale

The biggest benefit of a short sale is avoiding foreclosure. A foreclosure is a disastrous event for someone’s credit score. When someone agrees to a short sale process instead, he or she will often buy a more affordable home shortly thereafter. 

Buying A Home In A Short Sale

On the buyer side, the biggest benefit of targeting a short sale home is that there is usually a great deal on the price. The lender is already not getting their money on a regular basis and is often motivated the sell the home quickly to recoup their money.

On the other hand, short sales often take longer to proceed. The lender has to approve the sale and price, which might lead to delays. The condition of the house may also not be in good shape. Therefore, be sure to get a home inspection.

Calling your trusted real estate agent and mortgage loan professional is the best thing to do if you have questions regarding your home and a possible short sale.

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Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise Strategy

January 8, 2020 by

Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise StrategyHave you ever seen a scientific experiment with things growing in a Petri dish? This is a metaphor for how neighborhoods grow as well. Things in a Petri dish grow towards the areas that have more nutrition to attract them and repel from areas that have bad things that they do not want.

A popular neighborhood does a similar thing. It may have boundaries that are certain street or other physical barriers. Nevertheless, if the area builds its popularity, it tends to grow and might also cause an improvement in the surrounding areas.

Homes In Adjacent Neighborhoods

An adjacent neighborhood is one that is right next to another one. For example, in the Los Angeles Metro Area, just to the west of Beverly Hills is Century City. Century City is a fine area so it is usually called by its name. However, properties in Century City are also “Beverly Hills – Adjacent.”

This nomenclature is a bit like identifying a “used car” as a “pre-owned vehicle.” It is a marketing technique to say a home is located in a neighborhood adjacent to a popular one. However, those homes are indeed special. If the popular area appreciates significantly, this may have a positive impact on the neighborhoods surrounding it.

Mapping Adjacent Neighborhoods

It is a terrific strategy to look at the opportunities for buying a home in an adjacent area near the best neighborhood in town.

Use Google maps to find the map that includes the best area of town and what is around it. Then, research the listing prices for homes that are within the best neighborhood and those that are in the adjacent areas. For comparison, look for homes of the same style, type, and size

Zoom in on the satellite view of the streets to get a close look at the places just inside and just outside the official boundaries of a great neighborhood. It may be surprising to find areas that have a significant pricing differential, even just for a few blocks on a few streets. Those particular areas are worth further exploration.

Barriers To Progress

Be aware that physical barriers are stronger than psychological ones. A river, a very wide street, a public park or another major physical barrier can permanently separate a neighborhood from another adjacent one. These may block a growth opportunity.

What to look for are adjacent areas where the barrier between the neighborhoods is psychological and there is nothing at all very different between the great neighborhood and two blocks down the street. These few blocks in the adjacent neighborhood are where one might discover a treasure. It is possible to find a home that has a slightly better price. It might appreciate at the same rate as the best neighborhood next door or faster to catch up with other similar homes.

Summary

Using the adjacent neighborhood strategy may help avoid buying a home only in the most expensive areas that may be over-priced. Many find that the adjacent areas are just as nice and a home there may be a better value. 

Work with a real estate agent that knows the area well. Your agent should be able to help you discover the up-and-coming adjacent areas and properties that might offer an enhanced investment opportunity. As always, your trusted home mortgage professional is the best resource for current financing options.

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3 Critical Considerations When You Choose Your Garage Doors

January 3, 2020 by

3 Critical Considerations When You Choose Your Garage DoorsOwning property comes with a number of major responsibilities. This includes home maintenance and repairs. One of the common topics that people think about is the garage door. Sometimes, the garage door breaks and needs to be replaced. Other people might be adding a garage door for the first time. There are lots of options to choose from and this is an important decision.

There are a number of factors that people need to consider when trying to decide on a garage door.

The Material

First, people need to think about what their garage door is going to be made out of. The classic option is wood. It has a sleek, stylish look and can be stained to the owner’s preference. At the same time, steel has become a more popular option. This is because steel is stronger than wood. Other homeowners even elect to go with aluminum. Aluminum is lighter than steel and uses less energy. Aluminum can also be colored to look like wood. The material is a good place to start when looking for a garage door.

The Durability

Next, homeowners need to think about the durability of the various options. Some garage doors are going to be stronger than others. Garage door repairs can be expensive and this is a cost that homeowners should avoid if possible. Try to find a durable garage door that can stand up to the routine wear and tear. The stronger the material, the more durable it is going to be.

The Insulation

Finally, also consider the insulation that will be provided by the garage door. The garage is typically an unheated area. This means that any heat in the garage can easily escape through various openings. One of the largest openings is through the garage door. Try to find a door with some insulation. This will trap heat inside the garage and lower the home’s energy costs. An insulated garage door might be more expensive but can also save money on utility bills.

Choosing The Right Garage Door

There are a lot of options when it comes to garage doors. Each choice has its benefits and drawbacks. Homeowners need to take the time to assess the various options and figure out which one is right for them.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

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5 Excellent Pathways To Home Ownership For Millennials

December 31, 2019 by

5 Excellent Pathways To Home Ownership For MillennialsMillennials are a huge socio-demographic group of over 83 million people. Many of them want to buy a home but face challenges that their parents did not necessarily have. Homes are more expensive. In most places, home prices rebounded to exceed the pre-2008 economic collapse values. Moreover, home prices continue to go up.

The encouraging news is that there is home financing readily available and mortgage interest rates are still reasonable. Even if it is more challenging, the greatest investment that most Americans can make is buying a home. Paying rent is only helping the landlord get rich. Homeownership is still highly desirable and a part of a wise long-term investment strategy.

Here are some tips that millennials can use to become homeowners.

Save For The Down Payment And Build An Excellent Credit History

The best rates for home loans are for those with an excellent credit history who can put down 20%. It is possible to borrow the down payment. The problem with this strategy is that the cost of the loan is higher. The mortgage rate may be higher and the lender may require private mortgage insurance (PMI). PMI pays off the loan balance to the lender if the homeowner defaults on the loan; however, it does not protect the homeowner’s equity in the home or any down payment. PMI just adds another monthly expense.

Create Non-Location Dependent Income

Home prices are somewhat dependent on the local economy and the employment available in the local area. By creating non-location dependent income through the “gig” economy. Work as a freelancer or a person who telecommutes by working from home. With this income, you will be freer to look for a home in a rural area or an area where the home prices are lower.

Take Advantage Of First-Time Homebuyer Programs

Many first-time homebuyer programs are offered by programs of the federal government through the Housing and Urban Development (HUD) and other agencies. Be sure to investigate those possibilities when considering buying a home.

Hunt For A Home In Low-Cost Areas

Use the online systems when searching for a home to compare two things, 1) the median price of homes for each area and 2) the cost of living for each area. The areas with low median prices and that have a lower cost of living are usually easier places to buy a home.

Partner With Others

A home-buying partnership is something many are using to make owning a home more affordable. Multigenerational ownership is used by many families to buy a large home together and share it. Other partnerships can be made among individuals, who are not relatives, to share ownership. Choose ownership partners very carefully and be sure to have competent legal counsel when creating a written ownership agreement.

Summary

Millennials are challenged with new obstacles when seeking to buy a home. The strongest challenge is the cost of homeownership. However, there are many clever ways to improve the chances of enjoying an affordable ownership situation. Be patient and do not give up. Work with a REALTOR® who understands the challenges and is an expert in the area where you are thinking about buying and with a trusted home mortgage professional to find the best financing options for your situation.

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The Advantages Of A Dual-Location Lifestyle

December 27, 2019 by

The Advantages Of A Dual-Location LifestyleCommuting for hours in traffic on a daily basis is a waste of resources, time, and money. It is stressful and bad for the environment. The infrastructure in many parts of the United States is falling apart. The roads and highways do not have sufficient capacity to handle the demands of the traffic load that continues to increase each year. Many busy professionals and families are turning to a solution of owning two homes for the convenience of enjoying dual-location living.

What Is Dual-Location Living?

The most common form of dual-location living is having a home and also owning a vacation home. Many like this lifestyle of having a vacation home to enjoy, to get away from it all. Retirees may use this strategy to have their residence for spring and summer in the cooler areas and then have another place to spend the time during the bad weather months of fall and winter. 

The trend of dual-location living, which is increasing now, is when the two homes are closer to each other. Professionals and families who want to spend the weekdays in the downtown areas or an area near the best schools may have a downtown residence and also a weekend residence in the suburbs. 

The Best Of City And Suburban Living

During the working week, the time spent downtown can be to enjoy going out to eat and partaking of the various amenities that come along with the big-city life. Then, by waiting until after the commute time, it is easier to go to the home in the suburbs. This allows for a couple of relaxing days before heading back late Sunday night to downtown, once again with less traffic. Waking up on Monday just a few minutes from work is pleasant.

Reducing Expenses

For those who need to manage their budget carefully, maintaining two places can be quite expensive. It may be better to share expenses with others by renting out a portion of each home. The proportional sharing does not have to be equally-divided in both homes.

Instead, the city-based home may have a private room and bath with the rest of the house rented out and the reverse in the suburbs, where only a guest room rents out. Doing this well means the rental income will offset significant portions of the expenses.

Another possibility that comes from dual-location living is using the time saved, which comes from less time wasted on commuting, to generate additional income.

Summary

The trend of owning two homes, near each other, yet on the other side of a long commute, makes sense. Besides all the conveniences of dual-location living, it is the start of building up a real estate investment portfolio by buying a second home and generating some rental income to help pay for it.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted mortgage professional to assess financing options.

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Questions To Ask When Transitioning To A Retirement Community

December 26, 2019 by

Questions To Ask When Transitioning To A Retirement CommunityOne of the dreams that many people have is to eventually retire. People work their entire lives and save diligently to be able to enjoy those golden years. When the time finally comes, people need to think about the community that is right for them. With this goal in mind, there are a few common questions that everyone should ask to find their ideal retirement community.

Important Questions To Consider

Some of the key questions that retirees should be asking include:

Do I Want A Communal Setting?

Many retirement homes are built in a communal setting. Think about a bunch of condos that open up into a main hallway. There might also be a main dining area where the residents congregate to spend time. This might be a great way to meet new people; however, it might also sacrifice some independence along the way. Some individuals who require medical care might need a communal setting.

Where Is It Located?

While this might seem obvious, this question is often overlooked. What part of the country is the retirement community located in? Some people might be interested in moving to have access to better weather. Other people might want to move to be closer to family members or friends. Think about geography as well.

Are Meals Provided?

Some people don’t want to cook when they reach their golden years. Other people want to be able to cook every meal. Some individuals may simply want to have options. Some retirement communities provide meals for their residents. Others do not. Be sure to ask about the meals that are provided. Also ask when they are made, what the options are, and how much they cost.

Are There Transportation Options?

Some retirement communities provide their residents with transportation that can take them around town to get groceries, to doctors’ appointments, and other errands. As people get older, they might not be able to drive. Therefore, this transportation can be important.

Asking The Right Questions About A Retirement Community

These are a few of the important questions that everyone needs to ask when moving to a retirement community. This will help everyone find the right living situation for them and their family.

If you are in the market for a new home or interested in refinancing you current property, be sure to discuss your financing options with your trusted home mortgage specialist.

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