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Your neighborhood has a big impact on your lifestyle. Follow these steps to find the perfect community to call home.
o Is it close to your favorite spots? Make a list of the activities (movies, health club, etc) you engage in regularly and stores you visit frequently. See how far you would have to travel from each neighborhood you’re considering to engage in your most common activities.
o Check out the school district. This is especially important if you have children, but it also can affect resale value. The Department of Education in your town can probably provide information on test scores, class size, percentage of students who attend college, and special enrichment programs. If you have school-age children, visit schools in the neighborhoods you’re considering. Also, check out https://www.greatschools.org/
o Find out if the neighborhood is "safe". You should look up the neighborhood crime statistics online. Consider not only the number of crimes but also the type (such as burglaries or armed robberies) and the trend of increasing or decreasing crime. Also, is crime centered in only one part of the neighborhood, such as near a retail area?
o Make personal observations. Once you’ve narrowed your focus to two or three neighborhoods, go there and walk around. Are homes well maintained? Are streets quiet? How does it feel? Pick a warm day if you can and chat with people working or playing outside.
o Scout out new listings yourself with the website you prefer.
o Be ready to make a decision. Spend time in advance deciding what you must have in a home so you won’t be unsure when you have the chance to make an offer.
o Bid competitively. You may not want to start out offering the absolute highest price you can afford, but don’t go too low to get a deal. In a tight market, you’ll lose out.
o Keep contingencies to a minimum. Restrictions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing. In a tight market, you’ll probably be able to sell your house rapidly. Or talk to your lender about getting a bridge loan to cover both mortgages for a short period.
o Don’t get caught in a buying frenzy. Just because there’s competition doesn’t mean you should just buy it. And even though you want to make your offer attractive, don’t neglect inspections that help ensure that your house is sound.
Home inspections will vary depending on the type of property you are purchasing. A large historic home, for example, will require a more specialized inspection than a small condominium. However, the following are the basic elements that a home inspector will check. You can also use this list to help you evaluate properties you might purchase.
For more information, try the virtual home inspection at www.ASHI.org, the site of the American Society of Home Inspectors.
Structure: A home’s skeleton impacts how the property stands up to weather, gravity, and the earth. Structural components, including the foundation and the framing, should be inspected.
Exterior: The inspector should look at sidewalks, driveways, steps, windows, and doors. A home’s siding, trim, and surface drainage also are part of an exterior inspection.
o Doors and windows
o Siding (brick, stone, stucco, vinyl, wood, etc.)
o Attached porches, decks, and balconies
Roofing: A well-maintained roof protects you from rain, snow, and other forces of nature. Take note of the roof’s age, conditions of flashing, roof draining systems (pooling water), buckled shingles, loose gutters and downspouts, skylight, and chimneys.
Plumbing: Thoroughly examine the water supply and drainage systems, water heating equipment, and fuel storage systems. Drainage pumps and sump pumps also fall under this category. Poor water pressure, banging pipes, rust spots, or corrosion can indicate problems.
Electrical: Safe electrical wiring is essential. Look for the condition of service entrance wires, service panels, breakers and fuses, and disconnects. Also take note of the number of outlets in each room.
Heating: The home’s heating system, vent system, flues, and chimneys should be inspected. Look for age of water heater, whether the size is adequate for the house, speed of recovery, and energy rating.
Air Conditioning: Your inspector should describe your home cooling system, its energy source, and inspect the central and through-wall cooling equipment. Consider the age and energy rating of the system.
Interiors: An inspection of the inside of the home can reveal plumbing leaks, insect damage, rot, construction defects, and other issues. An inspector should take a close look at:
o Walls, ceilings and floors
o Steps, stairways, and railings
o Countertops and cabinets
o Garage doors and garage door systems
Ventilation/insulation: To prevent energy loss, check for adequate insulation and ventilation in the attic and in unfinished areas such as crawlspaces. Also look for proper, secured insulation in walls. Insulation should be appropriate for the climate. Excess moisture in the home can lead to mold and water damage.
Fireplaces: They’re charming, but they could be dangerous if not properly installed. Inspectors should examine the system, including the vent and flue, and describe solid fuel burning appliances.
Source: American Society of Home Inspectors (www.AHSI.org)
o Know about exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These types of coverage must be bought separately.
o Know about dollar limitations on claims. Even if you are covered for a risk, there may be a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.
o Know the replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000.
o Know the actual cash value. If you chose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation. This is called actual cash value.
o Know the liability. Generally your homeowner’s insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.
Tips for lowering Homeowners Insurance:
o Seek insurance coverage as soon as your offer is approved. You must obtain insurance to buy. And you don’t want to be told at closing that the insurer has denied your coverage. o o Maintain good credit. Insurers often use credit-based insurance scores to determine premiums.
o Buy your home owners and auto policies from the same company and you’ll usually qualify for savings. But make sure the discount really yields the lowest price.
o Raise your deductible. If you can afford to pay more toward a loss that occurs, your premiums will be lower. Avoid making claims under $1,000.
o Ask about other discounts. For example, retirees who tend to be home more than full-time workers may qualify for a discount on theft insurance. You also may be able to obtain discounts for having smoke detectors, a burglar alarm, or dead-bolt locks.
o Seek group discounts. If you belong to any groups, such as associations or alumni organizations, they may have deals on insurance coverage.
o Review your policy limits and the value of your home and possessions annually. Some items depreciate and may not need as much coverage.
o Investigate a government-backed insurance plan. In some high-risk areas, federal or state government may back plans to lower rates. Ask your insurance agent.
o Be sure you insure your house for the correct amount. Remember, you’re covering replacement cost, not market value.
o Title insurance is an insurance policy or contract issued by a title company at settlement that protects the holder from any losses sustained from defects in the title. In addition, the title insurance company agrees to defend you in court if there is an attack on your title. It will cover attorney and court expenses or pay a loss caused by the defect in title up to the face amount of the policy subject to the terms listed in your policy.
o Protects your ownership right to your home, both from fraudulent claims against your ownership and from mistakes made in earlier sales, such as a mistake in the spelling of a person's name or an inaccurate description of the property.
o There are both lender/mortgagee title policies (protect the lender) and owner title policies (protect the homeowner). The lender will most likely require a lender policy.
o Ask your Title Company the difference between Standard and Enhanced policies.
General Home inspection* – may cost $375-$700+ depending on type, age, size of home.
Additional inspections such as fireplaces or mold are in not included in the standard inspection.
Termite inspection – will cost approximately $30-$60
Radon inspection* - will cost approximately $120-$170
Appraisal* – will cost $400-$700
Closing costs – will cost approximately 3% of the sales price
* = Paid prior to closing
Communication is key. Talk to your agent and lender frequently to ensure everyone is "one the same page" and your home buying team is working seamlessly.