Home Insurance Shopping Tips for First-Time Homebuyers
Here are some good tips to follow if you’re a first time home buyer. I strongly recommend that if this is your first time buying a home that you use a Realtor. He or she will save you time and money in the long run.Buying a home can be overwhelming for anyone, and it can be especially hard to navigate as a newbie to the process. From selecting the picture-perfect home to choosing the right mortgage, you’ll be making decisions you’ve never had to make before – decisions that have long-term consequences, including increasing what you'll pay for home insurance.Yes, home insurance. Your lender's going to require it, and you'll need to factor that cost in when you're deciding how much you can pay each month for housing. How much will it cost? That depends on several factors that are good to keep in mind as you search for the perfect home.One factor that will affect your premiumsYou've no doubt heard your real estate agent say it – location, location, location. He or she generally says it to refer to how close a particular house is to good schools or shopping or other amenities you might seek in a home. But location is important to home insurance, too. Here's how:Location: Your location will help determine your risk of certain perils. For example, if you live in Tornado Alley in the Midwest, you'll pay more for coverage than if you live in a part of the country where severe weather isn't as common.Location: Are any of the houses you're considering located in higher-risk flood zones? This is a great question to ask your real estate agent. Home insurance doesn't cover flooding, so your lender will require you to purchase a separate flood policy depending on the threat.Location: How close are nearest fire hydrants and fire stations? It matters. Home insurance premiums increase by up to 20% if there's no fire station within 5 miles. Depending on how far it is to the station, premiums can double. Premiums also increase if there's no hydrant within 5 miles of the house.You really should have a CLUEAs you find homes you like, request that the owners turn over CLUE reports on the properties. CLUE stands for Comprehensive Loan Underwriting Exchange – it's a database that tracks insurance claims and losses for the home over the previous seven years. Consider it a CARFAX for homes.Why does the CLUE report matter? Because insurance providers often consider what's on it when determining premiums for home insurance coverage for the property. They'll also consider your claims history if you've owned a home previously – consumers who file claims are considered more likely to file more claims.In most states, providers also will consider your credit history when writing a policy. The idea, according to insurance companies, is that policyholders who have been responsible with their credit generally are much less likely to file claims.Ask the age-old questionWhen you're looking at houses, be nosy. Find out when the house was built and whether the roof has been replaced since then. Look into when the plumbing, electrical and HVAC systems were modified, too. If you don't, your insurance provider will – and will raise or lower your premium according to what it discovers. Older isn't better in any of those scenarios.Read more: http://www.nasdaq.com/article/home-insurance-shopping-tips-for-firsttime-homebuyers-cm452323#ixzz3UDl4aD5mThe best tip I know of when buying a home for the first time is DO YOUR HOMEWORK. Check sales prices, check Realtors, check your documents, CHECK EVERYTHING!
Should You Price a Home High or Low? A New Study Makes a Surprising
Pricing your home to get the most amount of money can be a tricky proposition. Should I price it high on the market or should I price it low on the market.Here’s a study that tells you how to price your home for maximum profit:Home prices are up. Mortgage rates are low. Housing supply is stretched thin. Suffice it to say—it’s a tight market.And in a tight market, the conventional wisdom is to price your house a little lower than its actual value, in the hopes of sparking a bidding war that will result in an above-market sale price.Not so fast! Homes priced higher might end up selling even higher, according to a study published in the Journal of Economic Behavior & Organization.The authors surveyed more than 200,000 homes listed in Delaware, New Jersey, and Pennsylvania from 2005 to 2009 and found that homes priced 10% to 20% higher than similar homes saw a bump.It’s tied to a psychological tendency called “anchoring”—using the first price we see as the anchor around which we base our judgment. It’s why sales make shoppers salivate—if jeans have an $80 price tag, then we think 20% off is a steal, even if another store sells jeans at $60.We may also accentuate the positive in order to fit our anchored model—”a buyer exposed to a high-priced property might attend more to the attractive landscaping, than to the outdated plumbing,” the study notes.But there are a few caveats—the numbers came before and during the market crash of 2007–2008. And the returns, while statistically relevant, may not mean much for the bottom line. A Wall Street Journal article on the study notes that brokers may also have to spend more time marketing the house to justify the price tag and the difference in fees wouldn’t be worth it.In the current market, brokers suggest the opposite. All around the country, they research comparable sales. Could they price a home a little higher? Perhaps. But is it worth the risk?Read more: http://www.realtor.com/advice/asking-price-home-high-or-low/So the new conventional wisdom is to price your home a little on the high side and wait it out if you want to get the best price.
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