You would be amazed how many people have come to me over the years with an insurance issue affecting their home. Whether it was a case of coverage being denied due to a lapse in the policy or insufficient coverage to replace valuable antiques and other items destroyed by fire—it is alarming how many people have not properly addressed their insurance needs. Whether you are buying a new home and need insurance—or you are reviewing an existing policy that is up for renewal—here are some tips to make sure you will be protected!

BEFORE YOU START LOOKING FOR A HOME

• Check your credit rating: Having good credit may assist you in obtaining a more favorable rate on your insurance. Apply online for a copy of your credit report from Equifax, TransUnion or Experian and immediately report any mistakes.
• Review your home insurance claims-filing history: You can obtain a record of prior home insurance claims that you have filed by obtaining a CLUE report from ChoicePoint or an A-PLUS report from Insurance Services Office (ISO). You can expect a lower insurance premium if you have not made prior claims or have an insignificant history of prior claims. If you have not filed a claim within the past five years, then you won’t have a loss history report.

WHEN LOOKING AT NEW HOMES OF INTEREST

The characteristics of your home, such as where it is located and how it is constructed, will directly affect your premium. Here are some other factors that will also come into play:

• Construction materials of the home: If you are planning on living near the ocean or in an active hurricane region, you may want to purchase a brick home that is more resistant to extreme elements. For properties located in areas that are prone to earthquakes, floods and severe storms, it is recommended to buy newer homes built in compliance with current codes or older homes that have been bolted to their foundations.
• Age of the house: Older homes that contain plaster walls, wooden floors and ceiling molding can be costly to repair. These unique features can raise the cost of your insurance. Older homes that have been remodeled or updated to comply with current building codes are typically less expensive to insure than older homes which are out of date.
• Safety devices: Significant discounts in insurance may be available to homes that are equipped with smoke detectors, burglar alarms, fire alarms and dead-bolt locks.
• Condition of the roof: Insurers are attracted to properties that have a newer roof in good repair. This will be a money-saver on your premium.

  YOU HAVE DECIDED ON A HOME

  Now that you have selected the home you want to purchase, you need to maximize the value of your premium by considering the following:

  • Select the highest deductible you can afford: A higher deductible will yield a lower premium. Over the long-term, you will save money and maintain insurance for when it’s absolutely necessary.
  • Inquire about discounts: Ask your insurer about discounts for smoke detectors, fire extinguishers, burglar and fire alarms, multiple policies with the same company, electrical systems upgrade and sprinkler systems.
  • Obtain enough insurance: It is absolutely necessary to have enough coverage to completely rebuild your home in the event it is destroyed, replace all personal contents within your home and insulate you from liability in case someone is injured on your property.

  Most importantly, keep your insurance current. Always, let your insurer know about alterations, additions and improvements to your home as these may affect your premium and coverage.

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Tags: buyers, buying-home, home, home purchase, homeowners insurance, insurance

I was recently reading a discussion on our forums, where someone asked “How can you know for sure if someone is really making another offer? What if this happens…is there anything you can do?” There were some good responses on the forums, but I wanted to share a little story about a situation I recently went through that I thought people would find interesting.

According to one of our members:

2. Never believe anything a Realtor tells you about “other offers”. A place that’s been on the market for a year, with ZERO interest will “magically” receive multiple offers about the time you show an interest. When this happens just tell the agent what my dear wife told one; “I guess we’re not meant to get this house then-but our offer stands AS IS.”

I agree with this advice, but I have to comment here. I was house shopping for my permanent residence back in January here in Denver, when there was over a foot of snow on the ground and I was the only person making tracks anywhere. My wife and I found a great house that we were excited about and placed an offer on it. Now, mind you, I had looked at 30 houses and had not seen one other set of tracks in the snow by these houses, including this one. Our offer was a lowball one (as it should be), and the next day I was told by the agent representing us that it was rejected. I was surprised, asking why the seller hadn’t countered us. The house had been on the market for a while, and it just seemed strange that we’d be flat out rejected.

As it turns out, there was another person interested in the house. Apparently, their agent had a deal with the selling agent that she’d be told if anyone came to see the house. When we made an appointment twice, the selling agent let the other agent and their client know, and they went out and made an offer. I guess they dropped the real estate agent’s feverish pitch that we were making a serious offer and their client’s offer, out of nowhere, was well over asking; this certainly locked in the property. for them.

I think it brings up two interesting thoughts:

• First, never assume that no one else is interested. We had to be the only people to see this place for at least a few weeks due to weather and holidays, yet a magical offer arrived the same day as ours.
• Second, the agent representing the woman who bought the home really must have been pretty good, convincing their buyer to offer so much. In this case, a place with zero interest, suddenly DID have other offers. I’m glad I didn’t win that game!

The house was not worth close to what the buyer paid, and the fear/excitement generated by their agent put them in a bad position, especially in the current real estate marketplace. I’m actually surprised that the loan could have gone through, but then again, we all know that many apraisers will tell you a property is worth whatever you want it to be . . . but that’s another story.

Low and behold, I went on to find a place I liked even more the next day (good thing!) and ended up getting even a better deal then I would have gotten had my offer the day before been accepted!

Tags: agent, buying-home, home, house, making-offers, real estate, real estate agent, Real Estate Deals, real estate investing, realtor