Time to Review Your Home Owner’s Policy

What do you know about your Homeowner’s Insurance Policy? Have you evaluated it recently? If not, it is a good idea to review it every six months to ensure that your coverage is as expected. Obviously, the best time to review your policy is prior to a crisis situation. So take some time out of your busy schedule and spend a few minutes today going over the details in your insurance policy.

You should contact your insurance agent if you have questions or need to make a few adjustments. He or she should be able to answer your questions. If you don’t feel comfortable with your agent or question whether or not he or she are providing you with the best policy for your situation, please contact us for a reference. You may find that a change could save you money both short-term and long-term.

Some helpful questions:

Ask – Can I qualify for a premium reduction by installing smoke detectors, alarms, new locks or doors, or improved roofing material? Do I qualify for a preferred customer or senior/student discount? What is really covered by my insurance? Ask about the phrase “acts of God” and the interpretation of the insurance company.

Discover – What is insured, the actual home or only the land under it? Is land value part of my policy amount and if so, why? Did I opt for replacement value or actual cash value in your home coverage and does that still apply?

Discuss – Are my valuables and heirlooms in need special coverage? Would a higher deductible result in a significant reduction in my premium? Should I get earthquake or flood damage insurance?

Asking these questions now and periodically in the future will give you peace of mind and give you the knowledge you will need should you ever encounter a crisis with your home. It is a good idea to place a copy of your homeowner’s policy in a place away from your home, as well, in case just such an accident does occur.

EASY HOME IMPROVEMENTS TO DRIVE AWAY THE WINTER BLUES

Whether you’ve just moved into a new house or are preparing to sell, don’t let the fact that it’s cold outside stop you from getting started. Here are some projects you can tackle even if the snow is piling up outside!

Change the Paint

During the winter months the inside of your home typically is drier making it the perfect time to brighten up those walls with a coat of paint. Your paint will dry more quickly and you can get the affected room put back into place sooner. Since you will have less ventilation during the winter, make sure to choose low voc paints that have lower odors and fumes. Paint a whole room or create a chalkboard wall in your kids’ playroom.

Upgrade the Fixtures

This simple upgrade can give new life to kitchens, baths and doors. Changing out faucets, doorknobs, outlet covers and light fixtures can upgrade your home and give you a whole new outlook. Consider switching round knobs for lever-style so that children and elderly family members can operate them more easily. Simply switching out the bathroom vanity light fixturecan change the entire appearance of your bathrooms.

Trim the Walls

Add pizzazz to your walls with crown molding or chair railing. Even if you don’t have a garage full of power tools, you can cut foam molding — molding that is not made of wood and can be cut with a simple saw and miter box—and create beautiful designs on your walls and ceilings.

Scrape the Textured Ceilings

If you’re very ambitious, you can scrape the “popcorn” or “cottage cheese” texture off your ceilings. Before you begin this project, check to make certain the texture is not made of asbestos. Homes built prior to and in the first few years after the 1978 asbestos ban often had asbestos fibers mixed into the texture. After the ban, paper, Styrofoam or other products were used to create the texture. If your home is affected by asbestos texture you should consider having a licensed professional handle the removal since the asbestos must be disposed of properly in accordance with prevailing laws.

Install New Flooring

Winter is an ideal time to have new carpet or hardwood installed. Your professional carpet layer is only too happy to have winter work when construction typically slows down and the controlled indoor heat speeds up drying time for flooring adhesives.

Modernize Your Thermostat

If you haven’t already done so, winter is a great time to change out your old thermostat for an energy-saving programmable model. In fact, according to the US Department of Energy, you can save up to ten percent (10%) on your energy bills in both summer and winter by programming your thermostat to match your family’s lifestyle. You can set your heating and air conditioning unit to adjust upwards or downwards when you are sleeping or away from home at work and school.

BUYING WITH RESELLING IN MIND

If you know that the home you are buying my have to be sold within a few years, you have a few extra items you need to pay attention to prior to purchasing. This is particularly true if you’ll need to sell within a short time period due to a job transfer or similar pressing requirement.

So, while these suggestions are true for everyone that will want to resell their homes eventually, if you know that you’ll have to sell at short notice, you’ll want to add these suggestions to your home search.

Pay attention to the view:

Homes with a pleasant view out the windows will sell more quickly and at a premium to homes with a less pleasant view. While you should buy a home that you plan to live in with your own pleasure in mind, when reselling, what the buyer sees out the window has an impact on the sale.

Avoid views with the following:

• Water towers — in may parts of the country, you cannot avoid a water tower, but if the angle of the view can avoid having the water tower in the direct line of sight, your resale value will be higher and your home will sell more quickly.
• Power lines — for the same reason as the water tower, a view of power lines can impede a quick sale. In addition to the view aspect however, many people subscribe to the belief that high voltage power lines emit electromagnetic radiation that can cause illnesses and cancer. While much of the research is inconclusive, and power lines emit extremely low frequency (ELF) radiation (according to the American Cancer Society), the belief that they could cause a problem will hinder a quick sale.
• Railroad tracks — this is especially true for freight trains, but any home with a view of tracks might have in impediment to a quick sale.
• Retail establishments — if your home backs up to or is across the street from retail stores, restaurants, bars or other businesses, you may face a slower selling experience. For example, while there may be a high block wall between your backyard and a car wash, the sounds of the dryers or the potential for extra traffic into the neighborhood may hinder a quick sale.

How do you avoid these potential pitfalls?

When you look at a home to buy, check the view from EVERY window. Take the time to visit the property at different times of the day, especially if there are retail establishments nearby so that you can gauge the traffic and noises that that may come from them.

What if your home already has a water tower or power line in view?

When you’ve purchased a home and did not buy with the view in mind, or if the view has changed, there are some things you can do.

• Plant trees — If you can plant a tree that adds beauty while blocking an unfavorable view, do so.
• Mitigate sounds — if you can hear noises from nearby retail establishments, railroad tracks or nearby busy streets or freeways, consider replacing the windows with more insulated ones and adding insulation to the walls for soundproofing can overcome some of these negatives.

TAKE ADVANTAGE OF JANUARY APPLIANCE DEALS

Now that you’ve done all the hard work of qualifying for the loan, securing the mortgage and putting the deal in motion…you can start to shop for the new items you’ll need for your new home.

First up are kitchen appliances:

January is THE month to get great deals on appliances. Stoves and cooktops, wall ovens, dishwashers, trash compactors, refrigerators, washers and dryers, and disposals all typically are on sale at the beginning of the new year.

In the same way that car dealers sell of the old models of cars, new appliance models come out in the fall. But, appliance dealers make great deals on appliances in January to make room for the new models and to sell off floor models. In fact, because January typically is a slow month for retailers, you may even be able to haggle for items like free delivery and installation even on the newest model.

Price matching:

Always ask your favorite retailer about price matching, too. So if you prefer Best Buy, for example, to Sears or Lowe’s because it’s closer to your home or you get reward points, ask them to price-match the lowest prices you can find.

In fact, if you’re willing to go with last year’s model you’ll get the steepest discounts in January.

End of month or holidays:

If you can’t swing your purchase right now, consider buying your appliances at the end of the month. If your salesperson works on commission, the end of the month may be the time you can put your negotiation skills to work with a sales associate trying to reach a quota.

In addition to January and end of the month specials, most appliance retailers offer some sort of special corresponding to any of the major shopping holidays. These include: New Year’s Day, President’s Day (February), St. Patrick’s Day (March), Easter (March-April), Memorial Day (May), Independence Day (July), Labor Day (September), Columbus Day (October), or Black Friday (November). On these days you’ll get percentage off deals and specials on specific models or product lines.

The super deal:

In between these holiday sales events you’ll find the steepest discounts on open-box, scratch-and-dent or refurbished items. While you may fear these items, if you buy from a well-established retailer, you’ll get the same warranties as are available on a new, in-the-box item, but at a substantial discount.

Warranties:

In addition to the manufacturer warranties, you can purchase retailer extended warranty programs — also called service plans — for most appliances. While quality appliances should not break down within a couple years, sometimes they do. Given that refrigerators, washers and dryers and even ceiling fans now have electronics built in, you might want to consider one. Having an extended warranty can give you peace of mind as long as the price of the warranty doesn’t negate the great deal that you got. If buying the warranties puts the price out of reach, it’s not a good deal. Consumer Reports suggests putting that money aside instead and using it to pay for repairs down the line.

You might convince your seller to leave their appliances behind or to offer an allowance that would pay for new ones as part of the closing.

DREAMING OF THAT NEW KITCHEN OR BATH? WHAT RENOVATIONS REALLY PAY OFF?

Owners of older homes dream of updating or modernizing kitchens and baths. In fact, before they place their homes on the market, some folks go to all the effort to update the kitchen they’ve been meaning to redo for years … only to have someone else enjoy it.

The challenge can be when the update is for the purpose of increasing your home’s marketability or resale value. In that case, does the renovation really pay off? Here are some things to consider before you tackle that upgrade or renovations just to sell your property.

When it adds value:

Anything that increases your usable square footage adds value to your home. So, if you finish a basement or an attic space, add a wing or just extend a single room, that extra space and increase your home’s market value. Adding a bathroom or bedroom is a substantial improvement that changes a home’s category. A three-bedroom home with three full baths has more market value than a similar home with only two baths, or two bedrooms.

The biggest bang for you buck, however, can come from making some simple changes.

Consider this: a new front door, on average, adds up to 96.6 percent of the amount you will spend on it to the value of your home. Of course, you’ll need to pay attention to which door will enhance your home and which might look like an afterthought, but the right new door adds instant curb appeal. In fact, even painting the front door can bring a significant improvement (without the extra expense of replacing it).

Other improvements, such as replacing windows or worn and discolored siding can yield a greater return than an expensive kitchen remodel.

Minor kitchen upgrades, on the other hand, can add back over 82 percent to the value of what you spend on them. A “minor” kitchen upgrade can be as simple as new cabinet doors and hardware, or new appliances, an updated counter surface and sink, or new fixtures.

When it’s not worth it:

A $100,000 kitchen remodel on a $250,000 home will yield anywhere near that additional value to your home, especially if all of the other homes in the neighborhood are in the same price range. So, if you upgrade it while you’re living in it because your love to cook and want the perfect kitchen … the value is your enjoyment of the upgrade. Don’t expect it to increase your home’s resale value by that much though when the time comes to sell.

Another upgrade that you should only undertake for your enjoyment is the addition of a pool. In general, a pool does not increase the value in many locations. So, while a pool may be highly sought after in Southern California or Texas, it could even be a detriment in Missouri or Tennessee.

When it doesn’t pay off:

If you increase the value of your home while you continue to live in it, realize that you may be increasing your tax basis as well. A new assessment of your home may increase your taxes and cause it to be more expensive to live there. Simple improvements such as adding a garden shed can trigger a reassessment in some localities, while moving a wall or putting in an additional bath or bedroom most certainly will.

Before you take on an improvement, addition or upgrade for the purpose of increasing your home’s marketability, talk to us.

HOW DO FED RATE HIKES AFFECT MORTGAGES?

Eeeeek! Rates are going up … or are they?

Last week, for the first time after years of historically low rates, the Federal Reserve decided to raise short-term interest rates. For homebuyers, any rate hike often is seen a negative, but here are some reasons why this rate increase is good.

First of all, understand that the interest rate hike was NOT on mortgages. The Federal Reserve does not directly control interest rates on mortgages. What the Fed does control is the overall money supply. By raising interest rates at the Fed level on the “Federal Discount Rate,” they have begun a trickle-down effect that will begin to tighten the money supply. This makes it more expensive for commercial banks to borrow money and so decreases the amount of money available for short-term borrowing.

1. It’s a good sign

For the Federal Reserve to take such a bold step after years of low rates means that the Federal Reserve Board believes that the economy has improved enough that it can withstand an increase. Because the Federal Reserve has a mandate to achieve maximum employment rates AND keep prices relatively stable (curb inflation), raising rates means that employment levels have improved. An improved economy is a good sign that homebuyers will be able to afford to buy a home.

2. It does not directly influence mortgage rates

The discount rate does NOT directly influence mortgages. Mortgage-backed securities (bonds made up of pools of mortgages) track with the percentage yield on 10-Year U.S. Treasury bonds. Regular mortgages follow the mortgage-backed securities. While some mortgage rates increased slightly after the announcement, the bond markets have not settled on rate hikes, so the could end up either higher or lower once it becomes apparent how the economy reacts to the Federal Discount Rate increase.

3. It should be a slow increase

Because of the dual mandates of the Federal Reserve (low unemployment and stable pricing), the increases should be gradual rather than quickly increasing hikes because the Fed needs to make certain the economy is keeping pace with the increases. While it seems counter-intuitive, the Fed would like to see inflation rise slightly and this move is one way they can affect inflation in a gradual manner.

4. It might be good for your bottom line

Yes, your mortgage rates might increase a bit, but so will the interest on your savings accounts and securities. You’ll begin to see higher offerings on CDs and other interest-based income streams.

5. It’s still historically low

The current generation of homebuyers has not experienced high rates. Most millennials or Generation Xers do not remember when mortgage interest rates were in double digits and may fear the worst, but the changes in mortgage interest rates, at least for the near term, won’t increase their payments by more than their designer coffee or energy drink habits.

As always, if you have questions about the housing market, contact us. We stand ready to help you make sound decisions on the home of your dreams.

PROTECTING YOUR HOME DURING HOLIDAY TRAVEL

Plane tickets? Check

Suitcase packed? Check

Wrapped gifts packed? Check

House protected? Oooops!

If you’re planning on traveling for the holidays, don’t leave your home’s protection to chance. Coming home from a holiday trip to find your home has been broken into, or that a pipe has broken in your absence can ruin all those relaxing hours with family and friends.

While this is true for anyone, it is especially important that new homeowners take steps to safeguard their home while out of town.

Here are some of the basics:

Get a little help from your friends: Ask a friend to water plants, check on your house and pick up mail or newspapers.

If you’ve met your neighbors, you should let them know you will be away. Give them you phone number and the date you’ll get back. If you are having a friend check on your home or water plants while you’re away, let your neighbor know that too so they don’t accidently call the police on your friend.

Avoid posting to social media: In a world filled with tweets and posts that go out to the wide world, you can’t be certain that your posts of being away aren’t being viewed and monitored by thieves. Save your pictures to post after you’re back home. The memories will be just as sweet.

Lights, Curtains: All the world’s a stage…

While you’re gone, to make your home not appear empty, you might think about lighting up the rooms in the evening. This does not mean leaving the lights on in all the rooms the whole time. First off, that would seem weird, and secondly, it will give you a higher electric bill. The best course of action is to get timers and connect them to lamps. Have them set to come on and go off in each room as you would normally use that room. For example, from early evening to just prior to bed time in the living areas and in the bedrooms briefly as if you were getting ready for bed. You can find timers at many retail outlets and online for less than $10.

Regarding window coverings, keep them the way you usually do, but move electronics and other costly items out of sight.

Stop the mail: If you have mail or newspapers delivered to your home, suspend delivery while you are gone. The US Postal Service allows you to sign up online for most ZIP codes to hold your mail with the use of a credit card (for a nominal charge to prove identity).

What else should you do? If you have a neighborhood watch or community association, let them know to keep an eye on your place. Make arrangements with services to sweep leaves and snow off your walkways and driveway. Unplug appliances that have LED lights (coffee pots, microwaves, televisions, etc.) so that your electric bill isn’t huge when you get home. Lastly, if there is any chance of freezing weather, leave your furnace set to no lower than 56°F to keep your pipes from freezing. If you aren’t sure how well your pipes are insulated, open the cabinet doors below your sinks to let the warmer air circulate.