Tips on reducing your home insurance costs

Tips on reducing your home insurance costs
by Margueritte Rossi

Organising and paying for your home insurance can be a financial nightmare, especially if you’re not entirely sure what you’re doing.
There are lots of little ways that you can reduce the cost of your home insurance but you need to know how.

Here are my top tips.

Increase your excess
By making the decision to increase your excess ...you can make big savings on your premium payments.

Increase your security
Some insurance companies offer better premiums to clients who increase their home security measures.
Consider adding things like external home monitors, alarms and dead bolts on windows and doors. By spending a little extra money on home security systems you can reduce your premiums on your home and contents insurance.

Shop around & compare prices
Many people simply sign up for home and contents insurance, without thinking about how much it costs. Don’t pay the same premium year on year without first checking whether you’re getting a deal which suits you. You could save hundreds of dollars.

Do your research before you move
If you’re moving to a new city, research which areas have low crime rates and look into finding a home in those areas.
High crime risk areas will increase your monthly premiums so if you’re looking to save some cash on your home insurance it’s best to stick to the safer suburbs in your city.

Correctly calculate your insurance needs
When making estimates on what your belongings are worth, be thorough. You don’t want to be paying increased fees for items that aren’t worth as much as you think they are, or accidentally underestimate what they are worth.

Switch from monthly to annual payments
Many companies will offer a discount if you pay your premiums annually rather than monthly. You’re probably going to be paying for home and contents insurance for most of your adult life and you can save a significant amount of money by bulk paying for your insurance.

Combine you home & contents insurance with other products (like car insurance)
Some insurance companies will create bundle packages for you. So, for example, if you have your car insurance covered by the same company that does your home and contents insurance they might offer a multi-policy discount.

Credit Report Error Sinks Short-Sellers Bids for a Mortgage

Credit Report Error Sinks Short-Sellers Bids for a Mortgage
By Scott Sheldon

Need to finance a home this year? If you had a previous short sale, pay very close attention to your credit report, because it might list the home as a foreclosure. It's important to know how this difference can prevent you from getting a new mortgage again, and how you can deal with it so you can get a mortgage.

Maybe you're purchasing another home to live in, or for investment property. Perhaps you're financing your primary home for a specific purpose. Whatever the reason, the credit reporting from the previous shorted lender can make or break your new mortgage. Short-selling allows homeowners to avoid foreclosure. Foreclosure involves defaulting on the mortgage, and essentially giving the house back to the bank, and is typically seen as the worse event of the two, in terms of credit-worthiness. Lenders are obligated to report the true and exact circumstances surrounding a delinquency.
When reporting on a short sale, they will typically report "Settled for less than full balance." This is what the new lender you're working with on your loan will want to see because this indicates the previous property was a short sale. However, while lenders do have a responsibility to report accurately to the credit bureaus, it doesn't mean they always do. It's not uncommon to see a previous lender reporting the property as "Settled for less than full balance, chapter 9." Enter a red flag...

The Credit Report Codes You Need to Watch Out For: If the previous lender includes the following codes on your credit report, you'll need to put the brakes on your new mortgage loan process -- Chapter 5, 8 or 9. These classifications are synonymous with a foreclosure, which can deter your ability from successfully procuring a mortgage two years after a short sale.
For a short sale, a borrower is eligible for conventional loan financing 24 months post-short sale at 80 percent loan-to-value or lower. But for a foreclosure, a three-year window is required to get a mortgage again with as little as 3.5 percent down on a primary home with an FHA loan. Seven years must have passed for the homebuyer to qualify for a conventional loan post-foreclosure (or, four years with extenuating one-time economic hardship circumstances). So the addition of chapter 5, 8 or 9 flags the previous short sale on the credit report as a foreclosure, thereby making the loan ineligible for conventional financing in a shorter time frame.

How to Challenge the Code: All mortgage companies originating run each and every loan through what's called an automated underwriting system, or AUS. It's sort of like Google for mortgage lenders, but it evaluates the credit, debt, income and assets -- the total borrower picture -- and gives a preliminary approval. The chapter 5, 8, or 9 prevents the AUS from issuing the preliminary approval. Here's what you can do to challenge the item:

1.Write to the creditor.

2. Include a copy of the final settlement statement indicating the previous property you owned was a short sale, as well as a copy of the grant deed transferring the property from you to the buyer.

3. Explain to the creditor that there is an erroneous item (the chapter 5, 8, or 9) on your credit report, and that it must be removed to indicate a short sale.

4. Wait about 60 days to receive the confirmation letter.

5. Re-apply for the new mortgage.
Because there were so many short sales processed in recent years -- and this is especially true with the bigger banks -- lenders' credit reporting may not have been as accurate as it could have been. So this is exactly why it's especially important to check your credit reports before you apply for a mortgage. (You can do this for free once a year from each of the three major credit reporting agencies.)

If you find these foreclosure codes listed on your short sale before you apply for a mortgage, you'll know that you need to clear up the error first in order to put yourself on the path to a new mortgage.
If you're working on rebuilding your credit after a short sale, monitoring your credit scores can be a great way of tracking your progress. You can do this for free using the Credit Report Card, which updates two of your credit scores for free every month.

That is Unacceptable-Great Story and Insight

By Todd Duncan Let me tell you a story of audacious courage.

Do you have children? Well, Deb and I have two high-octane, athletic, teenage boys that will climb, jump off of or skateboard over any object known to man. It’s not unusual for us to get a call that one of them is getting stitches or an X-ray. Both kids are on their high school varsity surf team, which in California is better than being on the football team.

Last February the boys were at surf practice at 6:00 a.m. fighting the predawn, freezing cold water. On the very first wave, our youngest son Matthew wiped out. The tremendous wave tossed him around, pulling at the surfboard leash and causing the board to snap back against the side of his head like a giant paddle ball. He surfaced consciously, but blood was pouring from a large wound on his scalp. His older brother helped him get into shore, and his coach rushed him to ER.

I got the call to pick up Matt at hospital. When I arrived, the doctor was stitching up a serious gash on the side of my son's head. As he finished, the doctor called me out into the hallway, saying words no parent ever wants to hear:
“Something is wrong. I want to do a CAT Scan.”

My heart dropped to my toes. This was one of those moments when it doesn’t matter how much money you have in the bank, or how many deals are in your pipeline—in this moment you know that you and everyone you love are mortal. Matthew's skull was broken, and there was nothing I could do.

My son was admitted to ICU at Children’s Hospital in Orange County, and for three hours I sat in the waiting room. I spent the time thinking about my life; not about regrets I have, but about how happy I am for the things I haven't missed.

I haven’t missed my kids' lives. I haven't given up on my own life, even when times were dark. I've done everything I could as a dad, living out new experiences and challenges with my family at my side. And sitting in that hospital waiting for Matthew to come out of life-saving surgery, this was the thought that brought me the most peace.

This is why I want you to learn and grow as fast as you can; so you can work less and make more money. Do not miss your life. Do not miss your children's lives.
After the operation the surgeon explained that the surfboard fin had crushed Matt’s skull, puncturing the sack around his brain, and slicing through the part of his brain that controls speech. The doctors expressed that there was a possibility that Matt would ever talk again.

 As a speaker the idea that my perfect son, with his darling sense of humor and ability to debate, may never speak again was one of the hardest realizations of my life.
“We need Matt to do two things: he needs to talk, and he needs to smile,” explained the doctor.

As Matt began to wake up, I urged him to respond. And as he started trying to move his mouth, tears began welling up in my eyes.

“Am I on the other side?” Matt asked. I howled laughing, and he smiled.
After spending two increasingly uncomfortable nights in a tiny, comfortless room, Matthew plucked up the courage to ask the doctor how much longer he’ll be in the hospital. After consulting his chart, the doctor replied, “A week, maybe two weeks.” To which Matt promptly said, “THAT IS UNACCEPTABLE.”

He’s fourteen years old, and it’s only been 48 hours since he had brain surgery where they put in two titanium plates and twenty-four screws.

He the said, “WHAT HAS TO HAPPEN FOR ME TO GET OUT OF HERE TODAY?”

Matt was released 3 hours later.

The Learning

“That is unacceptable.”

“What has to happen in order for this to change?”

I call these “Power Phrases”. Use them! Take back control! Own your life!

1. What is no longer acceptable to you in business?
2. What is no longer acceptable to you in your life?
3. What needs to happen in order for things to change?

At our Sales Mastery Event this past October, over 50 professionals lined up at microphones and shared with over 1,500 other participants, the answer to the above three questions.

In conclusion, make a list of your top five answers for questions 1 and 2. Then come up with one thing you can do to change your reality. You will find this to be one of the most amazing exercises you could ever go through!

U.S. Homeownership Rate

U.S. Homeownership Rate
By Danielle Hale

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the homeownership rate.
...
The U.S. homeownership rate remained roughly stable at 65.2 percent in the 4th quarter of 2013 from 65.3 in the 3rd quarter of the same year. It was also roughly the same as the 4th quarter of 2012 when the rate was 65.4 percent. If adjusted for seasonal variation, the rate has remained stable at 65.1 percent since the second quarter of 2013.

The Census Housing Vacancy Survey, the source of this data, shows that there are just shy of 115 million households in the U.S. and slightly fewer than 75 million of those households own the home that they live in. This also means that every one percent change in the homeownership rate at this population size results in a shift of 1.2 million households from renting to owning or vice versa.

The Census bureau actually has several estimates of the homeownership rate which are slightly different and typically show similar trends. This particular data source has been published quarterly since 1965. As shown in the graph below, this is not the first boom and bust that we’ve seen in the homeownership rate. From the beginning of the series in 1965 through 1980 the homeownership rate was on a slow and steady rise from a low of 62.9 percent. In 1980 it peaked at 65.8 percent before falling back to 63.5 in 1985.

From its 1985 low through 1995 the homeownership rate remained in a roughly narrow range of 63.5 to 64.5. In 1995, the homeownership rate began a steady ascent that peaked at 69.2 percent in 2004. Since that time, the rate has receded, but at slightly higher than 65 percent, it remains higher than the 1985 to 1995 norm. With a year’s worth of readings around the 65 percent mark, has homeownership reached its near-term low? Will it stabilize at 65 percent for a long time as it did in the late eighties and early nineties or will it climb again? Only time will tell.

In favor of a stabilizing homeownership rate, homeownership rates have begun to rise in the Midwest and South—regions with homeownership rates already above the US average. By contrast, homeownership in the West continues to slump and the pattern in the Northeast varies substantially from quarter to quarter.

The Law of Dress Rehearsal

By Todd Duncan If you’re serious about reaching the peak of your selling potential, you must acknowledge that mastering your "lines" is very important to your success as a sales professional. You must know your lines. You must know your presentation. You must know the next step.
In the process of selling, you don’t have time to think about it. You don’t have time to flip through the pages of your “How to Sell” manual if you’re interested in earning a customer’s trust. The truth is that if you want to be a world-class sales professional there are two things you should never have to think about:
1. How to sell
2. What to say in a selling situation

Sales Bloopers

Remember the popular prime-time show hosted by Dick Clark and Ed McMahon called TV’s Bloopers and Practical Jokes? For an hour we laughed as we watched some of the best actors thoroughly mess up their lines. We laughed because it’s very human to make mistakes. And seeing actors make bloopers reminded us that despite the flawless performances we saw on their television shows even the very best actors forget their lines from time to time.
Have you ever made a blooper in sales? Ever said something you shouldn’t have said or done something stupid then wished with everything in you that someone would just yell, “Cut!” so you could start again?
I have and it doesn’t feel good. That’s because in sales, unlike television, you don’t get a second chance to retake your lines. You don’t have a production crew to edit out your bloopers and create the impression of a flawless performance.
In sales, once a word or an action is out, it’s out, and you can never reel it back in. You can’t undo the negative impression it may have created or regain the sale it may have lost. Sales is a live performance day in and day out. Like a Broadway play, where most mistakes are noticed, and where one wrong move can jeopardize the entire performance if you’re not careful.

A HIGH TRUST PERFORMANCE DOESN’T JUST HAPPEN

Unfortunately, the truth is that most salespeople are not prepared to succeed when opportunities present themselves. Most salespeople are not sure how to proceed in a selling situation, but they do anyway, right or wrong. They’re not sure what to say in a selling situation, but they speak anyway, right or wrong. They usually end up talking too much and listening too little. And when the curtain comes down, they wonder why the customer didn’t applaud with approval.
Most salespeople are not prepared to earn a customer’s trust, so they generally don’t. That’s why the average salesperson has to make dozens of sales attempts before landing one sale. That’s because high trust doesn’t just happen. While you can haphazardly persuade, manipulate, or con customers into buying your product or service from time to time, you can’t earn their authentic trust and lasting business that way.
The Law of the Dress Rehearsal says that to give a great performance you must be well practiced. In other words, to be highly successful you must know what to say and do when a sales opportunity arises. You must know how to earn high trust initially, then foster high trust permanently. That’s what it means to follow the Law of the Dress Rehearsal.

Building A Trustworthy Sales Business

In sales it’s not enough to be a trustworthy person. While it’s certain that you must have a trustworthy foundation within you (beneath the surface) to be highly successful, high trust selling is still about taking action; the right action. Therefore to become a trustworthy salesperson with a trustworthy sales business you must not only know why you are selling, you must also know how to sell during each act of the process.
You must know how to apply yourself, so to speak. That’s why the Law of the Dress Rehearsal is so critical, because the better you know how to sell, the better you will perform. And every steadfast business is built one sales performance at a time.

SEVEN THINGS SELLERS SHOULD DO BEFORE PLACING THEIR HOME ON THE MARKET

SEVEN THINGS SELLERS SHOULD DO BEFORE PLACING THEIR HOME ON THE MARKET

By Clara Outler

As the Spring time approaches, many homeowners who need or want to sell will make the decision to place their home on the market for sale, since Spring is considered the best time of the year for home sales. However, prior to making that decision to place your home on the market, there are at least 7 crucial ...things that the Seller should do before putting up that ‘For Sale’ sign:

1. Do All Needed Repairs:
You would be surprised to know the number of sellers who put their homes on the market without doing the repairs needed. I guess they think the buyer won’t notice the dripping faucet in the bathroom or the dry-rotted weather stripping on the front door. Guest what? The buyer notices everything! And if they see that you haven’t done minor maintenance on the home, they will assume that you haven’t done any maintenance on major items like servicing your HVAC unit over the 15 years you’ve been in the home. If you are fortunate to receive an offer from a potential buyer, EVERYTHING will be revealed during the home inspection and it will only affect your bottom line in the end or lead to the buyer terminating the offer. It is in your best interest to do the repairs prior to listing your home.

2. Remove any Traces of Wallpaper:
Most buyers absolutely hate wallpaper. Let me repeat that again. Most Buyers “absolutely” hate wallpaper! If you have wallpaper in your home, it is best to remove it prior to listing your home. Not only is wallpaper personal to your taste, it is also dated and makes the house appear older than it is. When buyers see wallpaper, they immediately walk-out in most cases because it is hard for them to imagine their furniture in the home with someone else’s décor. It is best to remove it and paint your walls a neutral color so that buyers can easily envision their furniture working in any of the rooms.

3. Clean Your Home Thoroughly (Interior and Exterior).
Maybe it’s a mild case of OCD that I have but I usually keep cleaning wipes in my car so that I can wipe my hands when necessary after a showing. You would not believe the condition some people leave their homes in when it is on the market. I once showed a home that still had dog poop and poop stains on the carpet—and it was NOT a foreclosure. I get it that some people still live in their home while it is on the market but when you’re selling your home, you have got to keep it clean! Kitchens and bathrooms sell homes, so they especially need to be thoroughly cleaned. Ceiling fans should be dusted as well as light fixtures. One thing that some people tend to forget about are wall plates and light switches that are used frequently. Sellers tend to forget about these and they are often dirty from constant use. Have your home thoroughly cleaned to include windows, wiping down doors and door knobs and cabinets. Also clean the yard for better curb appeal and pressure-wash the exterior if needed.

4. De-Clutter, De-Personalize, and Organize Everything:
Buyers like open spaces and are willing to pay for it. If you have too much furniture, it is best to either get rid of some or rent a storage facility to store it in while your home is on the market. I also advise my sellers to de-personalize the home by removing any personal photos and tchotchkes, and also making it gender-neutral by re-painting colors that would lean towards one particular gender (i.e. pink bedrooms) to a more neutral color. Since you’re going to be moving anyway, it is best to pack these personal items away and put in storage to use in your new home. Organize all your closets, cabinets, and garage if you have one. If you have small closets, take out the clothes that you don't wear very often to create the appearance of spaciousness.

5. Look at Your Home More Objectively Through the Eyes of a Buyer
Once you’ve done all the things mentioned above, look at your home objectively like a potential buyer would and ask yourself. “If I was a buyer, would I purchase this home?” If the answer is yes, then you have succeeded in getting your home prepared for the market. If you have difficulty looking at your home objectively, have a friend or someone you trust walk through and give you honest and constructive feedback.

6. Be Realistic about the Listing Price You Set for Your Home
Homes sell for market value—period. You don’t determine the price of your home—the Market Does. With the onset of technology and so much information available online, most buyers are very savvy and perform their research in advance. They are not going to pay more for your home that what it is worth. And if they are represented by a good Buyer’s agent (like myself) I will not let my Buyers pay more than what it is worth. It doesn’t matter if you need to get a certain amount out of the sale in order to purchase your new home. Your home is only going to sell for what similar homes like yours are selling for at the current time.

7. Choose a Professional Real Estate Expert to Sell Your Home
The final step is to choose a local, experienced, real estate expert who specializes in marketing and selling homes. You will want to interview the agent and ask several questions pertaining to how they will market your home prior to making a decision to list with them. Your agent should also do a comprehensive market analysis (CMA) to determine what your home could possibly sell for in the current market. Once you have selected an agent, follow the professional advice of that agent throughout the listing period.

Sell it or rent it out?

Sell it or rent it out?

 

 By Harriet Edleson

Ryan Severino liked the location of his family's home in Scotch Plains, N.J., but he also thought they needed more space. So in the summer of 2011, they decided to buy a bigger house. Mortgage interest rates were down, and so were home prices. "We were outgrowing our house," Severino says. "We didn't want to wait for prices to go bac...k up."

But one thing he didn't realize was exactly how long it would take to sell the first house or to rent it, if that turned out to be the better option. "It comes down to more than pure economics," says Severino, senior economist and associate director of research at Reis Inc., a real estate research firm.

Finally, in the spring of 2012, eight or nine months later, Severino found a buyer for the first house. In the interim, Severino weighed the pros and cons of renting versus selling, and he reflected on the decision he ultimately made.

"It was tough to sell it in that market," Severino says. "We had the house on the market for sale while we were getting inquiries for renting it." But Severino knew he didn't want to be a landlord, and "didn't want the money tied up in the house."

Determining whether a property is a good investment takes research and analysis, and it's wise to take your time in making the decision because it's a major one, real estate experts say.

"You will break even if you rent out a place in some cases, and in most cases you will be profitable," says Walter Molony, an economic issues spokesman for the National Association of Realtors. "Investors swooped into the markets in 2011, 2012 and 2013 when they could buy up a place at a lower price," he adds.
But the situation in many U.S. markets has changed with housing prices and rents on the rise, depending on the market. If you're thinking of renting your house, condominium or coop, do a comparative market analysis on your own or with the help of a licensed real estate salesperson or broker, he suggests.

"Figure out how much money you will have to spend to get it up to market standard," Molony says.

Evaluating whether a property is a good investment and worth renting is both a monetary and personal decision that depends on your situation and tolerance for risk.

"Figuring your costs – that's the easy part," says J. Frank Barefield, Jr., president of Abbey Residential LLC, in Birmingham, Ala., and a member of the National Apartment Association. "The hardest part is the one variable that we can't control – time."

A second factor is the unknown: Who is the person or people who will occupy your home and, hopefully, pay you the agreed monthly amount? "I would want to know everything I can find out about my potential renter," Barefield says. Whether you do it yourself or work with a management company, make sure you pay for both a financial and criminal background check on prospective tenants, he says.

To evaluate whether to rent or sell your property, here are six tips from real estate experts:

Evaluate current market conditions. Before you decide which way to go, consider the current situation in the area where your property is located. Determine the demand for rental properties like yours is in the neighborhood, Molony says. Through a comparative market analysis, which real estate professionals use, determine the value of existing properties in the neighborhood and the price similar properties rented for within the last six months. You can research online or ask a real estate professional – either a licensed salesperson or broker – to help you.

Consider the longer-term outlook for the neighborhood. "Where is the property located? Is it in an area that is likely to be improving or declining?" Barefield says. It's not always easy to determine which way the property values are moving in a neighborhood. You can find comparables from the last three to four years to detect a trend. If the neighborhood's property values are on the rise, you might want to keep the property and give it time to appreciate. If values are declining, and you will still make a profit, you might prefer to sell and take the profit before the market declines.
Determine your expenses for the property. Calculate your actual monthly expenses or carrying costs for the property: any mortgage payment, real estate taxes, insurance, homeowners association or other common charges such as monthly condominium fees and any assessments the homeowners association may have added. If there are monthly assessments on a property, factor into your calculation how long they are expected to last.

Analyze your cash flow. Determine how much monthly rent you can secure for the property and for how long. Then, compare that to your expenses to determine if the place is "going to carry itself," says Michael Corbett, Trulia's real estate expert and author of the book "Before You Buy!" In addition, he and others advise having a maintenance or emergency fund for the property for "when things break," Corbett says. A key question to ask yourself is what to do if you don't think you can break even or make a profit. "Analyze: Can I carry that extra debt? Is it worth it to me? Is the market appreciating?" Corbett says. Sometimes it's worth taking a shortfall now because you will be able to sell the property down the line at a higher price, he adds.

Weigh personal factors. Renting your home is more than a financial decision. It's a personal time commitment, which isn't for everybody. Be aware that as a landlord, you may receive calls at inconvenient times unless you hire a management company to handle repairs and emergencies for you. In that case, your costs can be higher. Approximately 1 percent to 2 percent of tenants do not pay the last month's rent or fail to pay at some time during the term of the lease, Barefield says, so weigh whether you are prepared for either situation. Ask yourself whether the personal costs are worth the trouble. How much time do you have to spend on a rental property, and is the financial return going to be worth it? Single-family homes tend to require more work and time from an owner than condominiums, but all properties require attention and time.
Get the property ready to rent. Determine how much it will cost you to get your property ready for the rental market. "Do not do anything more than necessary to get top dollar," Barefield says. The basics are painting and cleaning. Most people either don't improve their property enough or go overboard, he says. If you need help, seek out companies that do "apartment turns," Barefield says. They specialize in "turning a unit – taking it from a move-out to a rent-ready unit," he adds.

Renting your home as an investment can be worth it, but be sure to weigh both the financial and personal factors.

For some people, like Ryan Severino, owning a rental property isn't desirable. "It's not just pure economics," he says. "If we rent it, how much difference it is going to make in our lives in terms of day-to-day living? I owned the house I wanted to own, and wanted to put the money into other investments."