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Looking to squeeze the most from your home insurance dollar? Try these practical steps.

1. Shop around for home insurance quotes:

Check with several different home insurance companies to get rate quotes. An independent insurance agent can provide rate quotes from multiple companies. Ask around: Do your friends and family like their home insurance company?

2. Raise your home insurance deductible:

The deductible is the amount of money you have to pay toward a loss before your insurance kicks in. Typically, home insurance deductibles start at $250. The Insurance Information Institute (III) estimates that if you increase your deductible to either $500 or $1,000, you can realize double-digit decreases on your premiums. For example, an increase to $1,000 can save you up to 25 percent. However, make sure you can afford to pay the higher deductible out of pocket if something should happen.

3. Buy your home and auto insurance policies from the same insurance company:

Most companies will give a multiline discount if you buy both home insurance and auto coverage from them. It’s one of the more significant discounts you can garner.

4. Consider insurance when buying a home:

If you’re looking at buying a home, think about the cost of it. A newer home’s electrical, heating and plumbing systems and overall structure are likely to be in better condition than those of an older home. This can lead to lower premiums.

You’ll also want to consider the construction of the house and where you live. If you live on the Atlantic Coast, you’ll want the house to be able to stand up to wind damage, while on the Pacific Coast, you need to keep earthquakes in mind. Home insurance does not cover these perils; instead, you need to buy windstorm or earthquake coverage separately, adding to your insurance cost.

5. Insure your home, not the land:

While your home and its contents are at risk from fire, theft, windstorms, and other perils, the ground your home sits on is not. Don’t include the value of the land when deciding how much homeowner insurance you need to buy in order to rebuild your house. Your insurance agent can help you assess the right coverage level.

6. Improve security and safety:

Items such as dead bolt locks, burglar alarms and smoke detectors can usually bring discounts of 5 percent each, depending on the company. Your insurance company may also offer a significant discount of 15 or 20 percent if you install a sophisticated home-security system. If you’re thinking about buying such a system, check with your insurer to see which systems qualify for a discount.

7. Stop smoking:

Smoking accidents account for almost 23,000 residential fires every year, according to III. Some insurers offer to reduce premiums if no one in the home smokes.

8. Look for senior discounts:

Retired people stay at home more and spot fires sooner than working people. Older people also have more time for maintaining their homes. If you’re at least 55 years old and retired, you could qualify for as much as a 10 percent discount. However, it really depends on the insurer and some companies don’t offer the discount.

9. Look for group coverage:

Large employers and business associations often work out deals with an insurance company, which includes a discount for employees and members.

10. Stay with a home insurance company:

If you’ve kept your coverage with a company for several years, you may receive special consideration. Several insurers will reduce your insurance rates by 5 percent after you stay with them for three to five years; and some companies will discount you as much as 10 percent after six years.

11. Check your coverage annually:

You want your policy to reflect the value of your home and belongings. If you review your policy every year, you will be able to make the necessary adjustments. If, for example, you just sold a valuable painting, you won’t need the same amount of personal property coverage. But if you’ve added a room to your home, you’ll need to increase your dwelling coverage.

12. Look for private home insurance first:

If you live in a high-risk area – one that is especially vulnerable to coastal storms, wildfires or crime – and think you’ll be forced to buy home coverage from your state’s high-risk insurance pool, check first with an independent insurance agent. You may find that you can still buy insurance at a lower price in the private insurance market than from your state’s insurer of last resort.

13. Make EFT payments:

Many companies now charge $5 or more for mail payments, so having your payments automatically deducted will help shave off excess cost. Often your payments can come automatically from your credit card.

14. Maintain a good credit history:

Many insurers now check your credit and can adjust your price based on your level of “risk” as judged by your credit history, where allowed by state law. Make sure your credit is in good shape when you apply for policies.

15. Consider actual cash value vs. replacement cost:

Actual cash value coverage reimburses you for the value of your property at the time of damage or loss, minus your deductible. If you buy this option, you need to account for depreciation of your property, which may result in a lower claim payment than you expect.

Replacement cost coverage reimburses the full value of the item lost – after you purchase the new item and submit your receipts. The up-front premium is higher, but you receive full compensation for your possessions

Filed under: 20 Blogs, Blog by Kim Bregman
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Homebuyers and sellers looking to negotiate the best commission rate, obtain the highest level of service, and protect their legal rights in the event of a dispute can start off on the right foot by making sure they understand the form of representation their broker or agent is providing.

Consumers may assume that, like a lawyer, a real estate agent always represents their interests and their interests alone. But the rules governing the agency relationships between consumers, real estate brokers and their agents vary from state to state, and have been completely rewritten in the last 25 years.

Laws in most states allow real estate agents to “double dip,” representing both the buyer and seller in the same transaction without owing either party their undivided loyalty. Licensees in 25 states are now permitted to provide services to one or both parties as non-agency “facilitators” or “transaction brokers,” owing limited or no fiduciary duties to act in their clients’ best interests.

Depending on where they live, buyers and sellers may receive services from Realtors who are acting in an agency capacity as sub-agents, single agents, disclosed dual agents, or designated agents. Or they may have the option of working with non-agency transaction brokers, facilitators or intermediaries.

Many states also allow brokers to provide limited services to unrepresented buyers as “customers” rather than clients. In theory, providing consumers with a range of options for working with real estate brokers and their agents gives buyers and sellers flexibility to choose the form of representation that works best for their situation.

Experienced buyers or sellers, for example, may be comfortable working with a transaction broker or a “dual agent” who doesn’t owe them loyalty — especially if that helps them negotiate a reduced commission rate.

But consumers who don’t understand their agency relationship with their broker or agent may be at a disadvantage when searching for properties, marketing their home, or negotiating a sale — and may be more likely to blame their agent if they’re not happy with outcome of a transaction.

Buyers and sellers should insist at “the first substantial contact” that brokers disclose whether they will represent their financial interests at all stages.

If not, the group advises, consumers should ask whether the broker will represent the financial interests of the other party, or simply serve as a facilitator or transaction broker.

In general, consumer advocates warn, buyers and sellers alike rely on their brokers and agents to put their clients’ interests first. When brokers or agents owe limited or no fiduciary duties to their clients, buyers and sellers may have little or no legal recourse if they get bad advice or are victims of incompetence. Transaction brokers, facilitators and intermediaries are largely immune to claims of professional negligence.

Today, most states — Florida being the notable exception — require real estate brokers and agents to disclose agency relationships, including who they are representing and what duties they owe their clients.

(In Florida, licensees are presumed to be operating as transaction brokers, and aren’t required to provide agency disclosures unless they intend to represent consumers as singe agents.) But it’s difficult to gauge the effectiveness of disclosures. Most states require that disclosures be presented in writing, but a few allow brokers to provide spoken explanations.

Most states require that agency disclosures be provided early in the process, before confidential information is shared. But some allow agency disclosures to be provided in purchase contracts, after most of the negotiating has already been concluded.

What An Exclusive Buyer’s Agent- Single Agent Will Do For You:

Information & Counseling

• Explain the forms of agency available to you and explain how different relationships may affect the level and type of service a Buyer may receive from a real estate agent.
• Offer to enter into a written Agency Agreement with the Buyer. The agreement will include fee structure and payment method and the responsibilities of both parties.
• Pledge absolute confidentiality to a Buyer when representing him/her.
• Counsel the Buyer regarding his/her financial qualifications and assist the Buyer in finding and working with mortgage lenders.

Searching For A Property

• Discuss preferences in size, areas, styles, age, floor plans, and develop a property profile.
• Search the entire real estate market, including the Multiple Listing Service (MLS), properties for sale by owners, short sales, foreclosures, custom builders, and upcoming developments.
• Provide information and insight about communities
• Unbiased assessment of the pros and cons of each property

Contract Offer

• Inform the Buyer about any defects or problems he/she has observed or discovered regarding the property.
• Prepare a comparative market analysis, to determine the property’s fair market value.
• Explain the choices available in each section of an offer to purchase and explain the alternatives available to the Buyer.
• Advise the Buyer to seek legal counsel where appropriate.
• Prepare the offer to purchase in a manner which will protect the Buyers interest. Will provide proper disclosures regarding agency representation and any other matters as required by law.
• Develop negotiation strategies with the Buyer, including pre-set limits on key points of negotiation when the Buyer wishes to do so.
• Counsel the Buyer regarding the time requirements in the contract and encourage the Buyer to have professional inspectors inspect the property if the contract is accepted.

After The Offer To Purchase Is Accepted

• Will counsel the Buyer about home inspections, and provide the names of real estate inspectors. Will encourage the Buyer to be present during inspections.
• Will explain options available to the Buyer regarding items in the inspection report.
• Where appropriate, will notify the Seller or the Seller’s Agent in writing of inspectors’ findings and the Buyers choice of any options available to the Buyer.
• Assist in locating a mortgage and property insurance
• Maintain contact with the Title Company and Mortgage Company to insure that the Buyers interests are being protected.
• Will review the settlement statement with the Buyer at or before closing.
• Will attend the closing with the Buyer and be prepared to answer questions the Buyer may have.
  Assist with temporary housing alternatives and movers

Filed under: 20 Blogs, Blog by Kim Bregman
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Homeowners’ insurance shouldn’t be taken lightly. If you get too much coverage, you’re throwing money away. However, with too little, you won’t be able to rebuild if disaster strikes. Homeowner insurance policies can vary greatly, and if homeowners aren’t careful, they may find their claims denied when disaster strikes, according to a study to be published early next year by the University of Chicago Law Review.

Knowing what your insurance policy covers — including fire, theft, and earthquakes — is important. Nevertheless, knowing the things that aren’t covered — known as exclusions — may be even more crucial. While home insurers once used standard policy forms by the Insurance Services Office, now some are coming up with their own policies and a few tweaks in the wording can mean trouble for some homeowners, according to the study. Homeowners should read the fine print and carefully review their policies to examine what’s covered and what’s not, the study notes. For example, some policies include mold and lead coverage; other policies do not.

Your homeowners’ insurance policy should probably cover the following items:

1. The structure of your house: Don’t base the cost of replacement of your home on what you paid for it, or on the value of the land. You’re not replacing the ground around you, and construction costs might be much different from what you paid.

2. Your personal possessions: Take an inventory of your home’s personal property, especially high-priced items such as jewelry, furniture, and electronic equipment. Determine how much it would cost to replace everything if you lost your goods to theft or destruction. If you think you need more than what the basic policies provide, talk to your agent.

3. Additional living expenses if you can’t live in your home: Additional living expenses are usually part of your standard policy and total about 20% of the cost of insuring your home. Policies that provide for unlimited expenses for a short period may also be available, as are policies for special situations, such as renting out your home.

4. Liability for injury to others: While most policies provide a base of $100,000 in insurance to cover your liability should you be sued, consider getting more: In today’s litigious society, potential damage awards could exceed those lower limits in a hurry.

5. Get special coverage if you need it: If you live in an area that floods frequently, you’ll want to make sure your coverage won’t leave you underwater in a flood. Similarly, residents in earthquake-prone areas have to weigh the added costs of earthquake insurance against the risks of being uninsured.

6. Consider umbrella insurance: Umbrella insurance isn’t directly connected to your home. However, if other types of insurance you have don’t provide enough coverage for damages, then your home could be at risk. Umbrella insurance provides additional coverage that makes sure injured parties won’t threaten to collect by taking away your home.

You should consider homeowners’ insurance to be an integral part of your overall financial plan. It can help minimize the disruption and economic loss you would realize should a calamity strike.

Filed under: 20 Blogs, Blog by Kim Bregman
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Homes.org recently released a list of the top 10 reasons for using a buyer’s agent. The list was derived from detailed feedback provided by numerous real estate professionals across the country. After reviewing the reasons provided it became clear that the better question wasn’t why should home buyers use a buyer’s agent but why wouldn’t they?

“HUD’S Settlement Cost Booklet, ‘Shopping for Your Home Loan’ advises the home buyer in Section IV on page 6: It is your responsibility to search for an agent who will represent your interests in the real estate transaction. If you want someone to represent only your interests, consider hiring an “exclusive buyer’s agent”, who will be working for you, ” points out John F. Sullivan, Vice-President & Associate Broker at Buyer’s Edge Co. Inc. “If a buyer can’t find an exclusive buyer’s agent in their area, they should seek a single agency licensee who is an Accredited Buyer’s Representative (ABR) or an ABR with a small dual agency brokerage to minimize the chance of dual agency.”

Maxwell Carr Realtor and Designated Luxury Specialist at First Team Real Estate put it this way, “imagine sitting at a poker table, and there’s $200,000 in the center of the table. You’re emotionally involved, nervous – get the idea? Rather than risk making a mistake, find representation. A [buyer agent] Realtor is a professional negotiator, with a fiduciary duty to act in your best interest.”

Top 10 Reasons for Using a Buyer’s Agent based on feedback from real estate professionals actively working around the country, the points below are the most important and beneficial reasons for hiring a buyer’s agent.

1. It’s free
2. It’s makes the home search and buying process much more convenient
3. Market knowledge
4. Professional negotiation
5. Professional connections
6. Insider knowledge
7. Access to Comps/Sales
8. Â Info Help Identifying your needs
9. Buyer agent is a mitigatory of emotions
10. Knowledge of industry standards, legalities, and writing a contract

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What do you do when the appraisal on the dream home you want to buy comes in below the price in the offer the seller has accepted even as much as 10 to 20 percent below?

Chances are that raising the cash for your down payment and closing cost has tapped you out. Finding thousands more to make up the difference between the appraised value and the contracted amount is out of the question.

You’re not the only buyer who has hit the low appraisal snag. This past June and July, 16 percent of real estate pros reported a cancellation in a sale, mostly due to a large number of low appraisals.

However, you don’t have to walk away. In fact, some real estate professionals and economists say that low-ball appraisals are pushing home values down and undermining the housing recovery.

You can fight back. You have options, and chances are you can find a way to make the deal work without increasing your down payment.

Appraisals are largely based on prices recently paid for comparable local properties. Over the past decade, finding comps that accurately reflect values has been a challenge as values rose quickly during the boom and fell just as fast during the bust. Discounts paid for foreclosures and short sales have created a dual price structure between normal and distress sales.

Finally, today many buyers rely on popular online valuation tools, called AVMs or automated valuation models, instead of a comparable market analysis from a real estate professional. AVMs give fast property value estimates, but they often differ greatly from appraised values because they are determined by algorithms using available local price data, not actual inspections of the property. During this time of record low home values, it’s no wonder that more and more appraisals are coming in below prices that buyers and sellers have agreed on.

It may seem ironic that buyers would want the homes they want to buy to appraise for as much or more than they are willing to pay. Remember, the purpose of the appraisal is not to help you get a better price, but to protect your lender should you default. The lender wants assurance that your home will be worth enough to recoup their investment.

Even if you have a great job, sterling credit, an adequate down payment and money in the bank, your lender will still want a conservative appraisal. In light of losses they have taken on the millions of foreclosures in recent years and the tough times many banks have had on Wall Street, lenders are taking no chances these days. They are more interested in protecting themselves from a loss than they are in giving you a loan.

Here are five steps you can take to save your dream home:

1. Get the seller to lower the price. By far, this is the easiest solution, especially if your appraisal comes in less than 10 percent of the contract price. Obviously, a lower price is a great idea for the buyer, but why would a seller go along? In July, 2011 the average home in America took about 88 days to sell. Demand is soft and time is money. Your seller, particularly if they are selling to buy another home, could be in a real bind if you are forced to back out and they have to put the house on the market again. After all, there is no guarantee that if you walk away, the seller won’t receive a low or even lower appraisal from the next buyer’s lender. Today, many buyers are offering incentives to sellers, such as payment of some or all closing costs. Lowering the price might be a cheaper option for the seller in order to get the deal done on time. Sometimes a bird in the hand is best.

2. Ask the seller to offer to carry a second mortgage for the difference. This solution doesn’t cost the seller anything but the buyer incurs greater debt. If the buyer really wants the home but cannot come up with the difference in cash, making payments or a lump sum payment at a later date to the seller is an option. After the escrow closes, sellers often retain the right to discount the second mortgage, and can sell it for less than face value to an investor.

3. Do your research and dispute the appraisal. Is the contract sales price a fair assessment of the property value based on a well-prepared comparable market analysis (CMA) from your real estate agent as opposed to an online AVM? Was the appraisal done by an appraisal management company that may have used a less-than-expert or out-of-town appraiser?

Disputing the appraisal may sound a little aggressive but you might be the victim of a poorly prepared appraisal. Do some research first and go to war if you have the ammunition.

You have the right to get a copy of the appraisal from your lender and to find out who did it. What is the appraiser’s reputation? Have any complaints been filed with your state appraisal licensing agency? Where is the appraiser based? Did they perform an appraisal in a housing market that they may not know well? Did the appraiser have adequate information about the subject property? If your appraisal was conducted by an out-of-town appraiser unfamiliar with your market, you have every right to demand a new appraisal.

What comparable did they use? Ask your agent and the seller’s agent to put together a list of recent comparable sales that justify the agreed-to sales price. Submit that list to the underwriter and ask for a review of the appraisal. Also, ask the agents to call the listing agents of pending sales to try to find out the actual sales price of those properties. Listing agents do not have to disclose the sales price, but many are happy to help because they could find themselves in the same situation. Pending sales are more current and are not closed, so the original appraiser would not have access to them.

The key to a successful dispute is data. You will need as much data you can get to back up your dispute.

4. Ask the lender for a new appraisal. Should you find that you have a good case that the appraisal wasn’t fair or accurate, ask your lender for a new appraisal, which you may be charged for.

Another strategy is to get two additional, unbiased appraisals and use the average of all three to arrive at a fair price. This is a risky strategy, in light of the fact that another appraisal might not come in higher than your first; it might even be lower if values have fallen.

Depending on how convincing your argument is, your lender has the ability to override the appraisal estimate, which is unlikely, or to order a new appraisal, which is more likely. If a new appraisal is ordered, talk with your agent about somehow splitting the cost with the seller. Perhaps the listing agent and selling agent will split the fee so the buyer does not have to incur additional costs associated with the transaction. Appraisals cost around $400 or so.

5. Get your own, independent appraisal. If you order your own appraisal and your loan is an FHA loan, ask the lender for a list of approved appraisers. Usually the bank will review your appraisal and ask the previous appraiser if they agree or disagree with the newly submitted one.

If the first appraiser disputes your appraisal, the bank may request a third appraisal done by another appraiser, or they may just reject your appraisal.

However, if the first appraiser agrees with the disputes you present, they may adjust their original appraisal and you may get a better price.

If these tactics fail and you cannot make up the shortfall in the appraised value, you may find yourself moving on. If so, be sure that you were protected by a contingency clause in the sales contract, stating that the transaction can be terminated if the home doesn’t appraise at, or above, the sales price.

Filed under: 20 Blogs, Blog by Kim Bregman
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