Insight to home insurance - By Lisa DiBiase

 

Imagine losing everything you own – every single possession in your home and maybe even the house too. Ask anyone who has lived through a devastating fire what it feels like to suddenly have nothing but the clothes you’re wearing and you’ll understand the importance of buying home insurance.

The purchase of this all-important coverage is the one point in the home-buying process for which few first-time homebuyers are prepared. The home insurance is factored into the mortgage loan payment: Principle – Interest – Taxes – Insurance (PITI) which becomes your monthly mortgage payment. Since the lender won’t allow the deal to close without it, the purchase of a home depends on the homeowner obtaining coverage since it impacts the monthly payment.

WHERE TO BEGIN:

Before you close on your home, you will need to purchase home insurance. You will need to know how much coverage you need and what the premium cost is. The insurance value is based on how much it would cost to rebuild the house, not what the home is actually worth at fair market value. Since you already have an established relationship with your real estate agent, they are a great source to start with. Otherwise your auto insurer may be another person to contact.

COVERAGE:

The typical homeowner insurance policy covers damage to the home caused by fire, some natural disasters – wind and hail for instance – vandalism and theft. In some areas homeowners need to purchase additional earthquake or flood policies, be sure to check with your real estate agent to better understand if you fall under this category. Your personal belongings, up to a set limit, are covered under your policy as well. Be sure to ask if they set a limit on some items, such as jewelry or any expensive pieces/art you own.

Coverage may also protect you:

For damage to other structures on your property such as the garage, a shed, fencing and an in-law unit.

From liability if someone is injured on your property.

From out-of-pocket expenses, such as housing and living expenses while your house is being repaired.

From liability for damage you or a family member causes to other people or their property.

WHAT'S NOT COVERED:

There are some items are known as “exclusions” in your policy. Be sure to ask the insurance agent to specify for you. The following is a list of some typical exclusions:

Water damage caused by flood or by sewer or drain backups.

Loss of pets.

Automobile damage or loss.

Damage as a result of war.

Neglect.

Power failure.

Earth settlement or other movement.

DEDUCTIBLE:

An insurance deductible is how much money will be expected to come out-of-pocket before the insurance company begins paying a claim. Some typical homeowners insurance policy deductibles are $500, $1000, $2500, and sometimes $5000. I recommend choosing the deductible carefully by considering what kind of a financial position you would should an unforeseen disaster occur. Ask yourself, would you have enough savings to pay the deductible? The lower the deductible, the higher your insurance premium will be annually which ultimately affects your monthly payment for your mortgage payment.

DISCOUNTS:

Ask your insurance agent about ways to get discounts by adding a burglar alarm, sprinkler system and even smoke detectors may bring down the premium. Revisit your coverage periodically to ensure that it continues to provide adequate coverage, the discounts and policies change each year. Notify your agent on any new life situations as they occur.

While the concept of homeowners insurance is simple, the policies may be confusing and complex. Everyone's situation can very different, so it is important to choose the right insurance professional to help you navigate the best structure for your home insurance.

LISA DIBIASE
LANDING REAL ESTATE
57 Exchange Street, Suite 103
Portland, ME 04101

Ph:  207-775-7653
Fax:  207-775-7622
www.LandingHomesMaine.com

Wait! Stop! - By Rick Yost

One of the great joys of homeownership is the ability to do whatever you want to do with your home. As long as you are not violating any town codes, that is. If you want a urinal in your living room, you can have it. The biggest caveat to that rule is "unless you plan on selling your home in the next couple of years.” If you are considering selling your home in the next few years, there are some big home No-Nos. These types of things can drastically reduce the value of your home and narrow the potential buyer pool. 

Do not turn a bedroom into something else. One of the very first preferences that potential buyers discuss is bedrooms. "I am looking for a four bedroom.” “I need two bedrooms, but prefer three.” These are very commonly the first sentences out of buyers’ mouths. You may need a home office, library, or a cigar room, but buyers may not. If you must use a bedroom for another purpose, do not build anything in like desks or shelves. Make sure the room is easily converted back to a bedroom.

Do not turn your children's bedrooms into fantasy lands. While you may love your 6-year-old daughter's Barbie princess room, buyers may have all boys or teenagers. Lots of stickers and wallpaper look like too much work to some buyers. Make your children’s rooms as neutral as possible before going to market. You want rooms that appeal to infants thru teens.

Do not carpet over hardwood floors. Hardwood floors are very popular and a must for allergy sufferers. Hardwood floors add a design element and look cleaner when showing.

Buyers can cover up the floors later if they like. It is easier for buyers to buy carpet they like than to match their decor style to your old carpet.

Do not convert your garage. A garage is a must for many home buyers. By converting your garage to a woodworking shop, a weight room, or anything else, you are severely decreasing the value of your home. If you must use your garage for a purpose other than parking your car, transform it back to car storage before going to market.

Do not install a pool. An above ground pool is an eyesore for many buyers and when remove can leave a huge dead spot on your lawn. A simple in-ground pool will cost about $30,000 and the average appraiser will only add $7,000 or less to the value of your home for having an in-ground pool. That is a horrible investment. Many buyers also see pools as lots of work and expensive to maintain. That can be a very major deterrent to buyers.

Do not get a pet. Pets are a real deal breaker for many buyers. Buyers that are allergic to cats may not consider a home with cats living in it. A house that smells like wet dog is not inviting to home buyers. The exotic pets that you love may literally scare buyers during showings. If you already have pets, be extra diligent in your cleaning, put away as many signs of the pet as possible, and use air freshener. Sweet little Fido may be a deal breaker.

Do not smoke in your home. Over a period of time the smell of smoke will permeate your home, which is a big turn off to many potential buyers. It is a big job getting that smoky smell out of a house. If you must smoke, do it outside or designate one room to smoke in. A clean smoke-free home will appeal to the most amount of buyers.

Do not go over the top with a decorating theme or fixtures. Buyers want to picture themselves in the home that they are going to buy. Your giant chandelier or gothic paint scheme may suit you perfectly, but not potential buyers. Get as neutral as you can to appeal to the largest number of buyers.

Any or all of the above may deter the perfect buyer from making an offer on your home.

Remember, your home is your castle. Do with it what you will - unless you want to sell it soon and for top dollar.

Rick is a realtor, real estate author, and long-time Windham resident. You can contact Rick with all of your real estate questions and needs at rickyost@kw.com.

It is getting busy out there - By Carrie Colby

The spring and summer months are typically the busiest times of year for the residential real estate market. Weather is more cooperative, and many families like to move while the kids are on their summer break. In recent years spring has meant more homes on the market, but also more buyers, more competition and a jump in prices.
 

If you’re in the market for a house this spring, there are a number of steps you can take to try to give you the advantage over other homebuyers, including:

Choose a realtor and get started early. Ask friends and family for referrals, and look to see who the more productive realtors are in your area. Let the person you choose know exactly what you’re looking for.

Get your loan pre-approved. This will give an advantage on several fronts. First, it will be done and out of the way. Second, you’ll know how much the bank is willing to loan you so you know in which price range to look. And third, it shows sellers that you’re serious and ready to buy when you make an offer. Get a letter of pre-approval from your lender that you can submit with your offer.

Figure out how much you have for a down payment. First-time buyers typically make a down payment of six percent on a home purchase, and 24 percent of down payment funds were gifts from relatives or friends. If that’s not an option, there are many loan programs that accept down payments of five or three percent. And don’t forget closing costs, which will often run two to seven percent of the property’s purchase price.

Be ready at a moment’s notice. If you’re in an especially tight market, your realtor will be reviewing new listings as soon as they’re available. If he or she finds something that matches your criteria, you’ll want to look at the house and be ready to make an offer - quickly.

When looking at houses, look at the potential. There are major factors you won’t be able to change like the neighborhood, proximity to work and schools, the basic floor plan of the house (unless you plan on completely renovating), and size of the back yard, among other things. If you’re put off by paint or carpet color or old linoleum floors, envision what the walls will look like with your color of choice and the floors in a material you prefer.

Listen carefully to your realtor or agent about how much you should offer. They should be able to do a market analysis (similar to an appraisal) to see what the home is worth based on recent sales in your area. If there’s competition you may want to offer more than the listing price and you shouldn’t try asking for things like carpet allowances or a long closing date. If you know sellers may have several offers in front of them, you’ll want to make yours the best.

Begin thinking about homeowners’ insurance now. Again get a referral from friends and family and your realtor will have suggestions as well. Begin by making sure your credit report is accurate - credit histories are sometimes used to determine whether a company will insure you, and, if so, at what rate.

Happy hunting!

Carrie Colby is the broker/owner of Premier Properties in Raymond. They have recently moved to an officer behind their previous location on Route 302.

The good & the bad - The skinny on tody's Maine real estate market - by Lisa DiBiase

A slight drop in interest rates and a number of available homes has helped Maine homebuyers and sellers alike. According to Maine Listings, sales of single-family existing homes increased 8.32 percent in April. This hasn't managed to coax many more homeowners to sell. Unfortunately with mortgage rates going up, this has made homes more costly for first time homeowners and all-cash investors. 

Where are the Sellers? Good question. It's slim pickings for a lot of would-be buyers. That brutal winter we just got through prevented many Mainers from listing their homes in recent months. Another part of the reason for the lack of inventory could be that some homeowners are underwater on their mortgages – meaning the sales price would not be enough to pay the current mortgage. Still, warmer weather, job growth and a strengthening economy are expected to encourage more listings this spring.

With few sellers, prices for the limited number of homes available will surge. Would-be buyers, facing a shortage of homes and locked in competition with one another, will have to raise their offers. However, this problem usually corrects itself. Higher prices should lure more sellers into the market who see an opportunity to cash out. This would then then lead to more listings and ease the face-offs among buyers.

Still, each mortgage payment repairs some of the damage and improves a homeowner's equity. As home values grow further, more people will start to put their homes up for sale, and the supply should rise.

While sellers are expected to remain in the driver’s seat in 2014, they will lose some of their power as inventory levels start to improve and rising mortgage rates shift some of the control to buyers. Even if 2014 still favors sellers, experts say we won’t see the buyer’s frenzy in 2014 that dominated many markets last year which led to bidding wars, contingent-free offers and rapid home value appreciation.

As I have said since the beginning, please call a local realtor for all your real estate needs no matter how big or small. We are trained professionals here to make your life easier. It's best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances.

Lisa DiBiase is the owner of Landing Real Estate.

First Impressions - By Rick Yost

You have made the big decision to sell your home. You interviewed at least two professional realtors and hired the best fit for you. You have de-cluttered and had the photographer take pictures that showed your home in the best possible light. Your home is advertised online and on the MLS. Now what?
 

The online advertising and MLS placement with your beautiful pictures is drawing interest.

Buyers that like what they see online decide to drive by, see the home in person, and check out the neighborhood. This will be potential buyer's first impression of your home. You want to make sure it is a good one. You also don't want to spend a small fortune on a home that you are trying to sell. So what do you do?

Here are some low cost ways to make sure potential buyers get a positive first impression when they drive by.

Keep your lawn mowed and your plantings pruned. 

Clear your walkways of all obstructions and trim back any overhanging branches.

Light up your pathway and entrance - use inexpensive solar powered LED lights that you stick in the ground to light the path. Mount two lanterns on either side on your doorway for symmetry and double the illumination.

Use large vinyl numbers to clearly mark your home. Make your home easy to find.

Paint your front door. A high gloss color with a reflective sheen will make your home stand out. Crimson, royal blue, and deep green are nice contrast colors.

Change your front door's hardware. A shiny new handle will do wonders for a door. While you are at it add a secure deadbolt and for a little more novelty, add a whimsical knocker.

Decorate front door glass. Decorative window film comes in multiple styles and motifs. It will add some privacy and ad some decor. An alternative to decorative window film is a decorative panel mounted inside your existing glass. It can create a stained glass effect.

Replace your old mailbox. Get a new mailbox that latches correctly, stands straight and is clearly marked.

Get a nice door mat. It will serve a dual purpose. It will make your home seem more welcoming and provide a place to wipe muddy shoes when buyers return to see the inside.

Put potted plants or shrubs at the sides of your door. Boxwood plants are perfect if you lack a green thumb. They are very low maintenance and look very tidy.

Any or all of the above improvements will add to your home's curb appeal without breaking your budget. Each of the projects can be completed for under a hundred dollars. These simple, inexpensive improvements will create the right first impression for buyers. So get out front, get to work, and get your home sold.

Rick is a realtor, real estate author, and long-time Windham resident. You can contact Rick with all your real estate questions and needs at columnist@thewindhameagle.com.