July 15, 2016

Real Estate Advice: Capitalize on social media.

Filed under: Real Estate — Chuck @ 11:03 am

While teens spend an average of eight hours per day on social media, don’t make the mistake of thinking that they are the only consumers of digital media for social interaction. Adults in North American now find ways to devote around two hours a day to platforms such as Facebook, Instagram, and LinkedIn, and that offers a great opportunity for real estate professionals to find them, engage with them, and convert them into steady clients. Here are some strategies and tips for things you can do to leverage your real estate brand and exposure on those three social media platforms, which account for the majority of online social networking and connectivity.

Facebook
One of the biggest mistakes that real estate agents make when using Facebook to generate leads and gain more clients is that they get bogged-down in social interactions that do not push that agenda forward. To avoid that misstep, relegate your personal Facebook activity to a personal account that can feed into and link back to your business Facebook page. Then focus your energy on that business page or account to highlighting the successes of your clients, versus simply tooting your horn for your own success – which is what all your competitors probably do.

Share stories of clients who struggled to buy or sell until they worked with you, for instance, or of first-time buyers who talk about how great it feels to own their own home. Highlight your partnerships with local charities and small businesses, and use your site to promote them – which will win you fans from their own sites. The more you let the voices of your partners or happy clients provide the messages on Facebook, the more it will add to your credibility. Keep in mind that Facebook posts that are most effective include visuals like photos or videos. Keep the writing to a minimum and let pictures, which each tell a thousand words, dominate the page.

Instagram
The place where those compelling visuals really shine, of course, is Instagram. You should post photos on a daily basis, to keep the account exciting and fun to view. You can use photos of clients in their new homes or sellers smiling at the closing table, or post favorite quotes or affirmations that convey positivity and a winning attitude. Whenever you or your brokerage participate in a community event, post a photo. Did you find a new restaurant, bike path, or hiking trail in the area where you focus your business? Post a photo of it to show your support and also give your clients a head’s up about a new neighborhood amenity or asset. Of course you should also post photos of your listings, but if listing photos are all you post, most people won’t follow you until they go house shopping. By using this other picture-a-day approach, more people will follow you – and when you do post photos that directly promote your business they will see them and tell their friends, which is the goal of social marketing.

LinkedIn
LinkedIn is a great way to keep tab with business partners and clients, and the majority of people on the platform basically just use it as a kind of address book. That’s fine, but it certainly is not why Microsoft just bought LinkedIn for an historically high price. The great value for you if you want to maximize it for real estate purposes is that LinkedIn can position you as the go-to expert in your field, in your city, and in your social network. So to take full advantage of this platform, start sharing your knowledge and expertise in one or more of the widely-read forums related to real estate. Many LinkedIn users rely on those expert posts to keep them in the loop and educated, and the more valuable the insight is that you share, the more valued you will be as a LinkedIn connection. Then, when those readers or people in their network need a real pro to help them with a real estate issue, you’ll get the call.

June 15, 2016

Real Estate Advice: Avoid time-wasting clients to close more sales.

Filed under: Real Estate — Chuck @ 10:58 am

The month of June is traditionally a very busy one for open houses and showing appointments. Part of the reason for that is that so many listings go live in the springtime, but if they haven’t attracted enough attention to sell by now, real estate agents schedule an open house to generate new interest. Or they persuade home sellers that their pricing is not in synch with the current market, and sellers agree to more realistic asking prices – which can trigger a flurry of showing appointments.

Prioritize Your Clients
Those two outcomes are both good news for Realtors – as long as they don’t get bogged-down with clients who are time-wasters. What are time-wasters? These are clients who are valuable, but because you don’t manage them appropriately they force you to miss out on the opportunity to sell to clients who are serious and ready to buy.

Clients who are just window shopping are most prevalent in the springtime, when new listings go on the market and curiosity brings out people who may not be ready to buy, but they want to see what is on the market. Don’t overlook those people just because they are merely curious and are not actually serious about buying, however, because they are one of the best sources of leads. Eventually, when they are ready, you want to be their go-to real estate professional.

Stay in touch with them, educate them about how to prepare for a mortgage application or get pre-qualified, and keep them informed about price changes, new listings, and data that demonstrates why it may cost them more to rent than to invest in buying a home of their own. Make sure they are in your marketing funnel, in other words, but not necessarily in your office or in your car.

Maximize Your Value to Your Clients
What you don’t want to do is to let that category of not-so-serious shoppers distract you from closing sales in the summer months. Those who are newer to the real estate business need to pay especially close attention to this, because they are especially susceptible. We are talking about the kind of buyers who are notorious for attending open houses only to see how big their neighbor’s closets are, or to eat whatever snacks are offered and engage in conversation that will never lead to a sale. Oftentimes serious buyers will come and go while a real estate agent is preoccupied with those who are only window shopping. The same is true for people who call to go see properties – you have to spend time with those who are more likely to buy, and avoid the casual lookers.

Pre-Screen Each Client
How do you do that? Get into the habit of screening everyone, before you give them your valuable time. Ask them three questions:

1. How soon do you want to list your home or buy a home?
2. If you are thinking of buying, have you spoken to a mortgage lender yet?
3. If so, have you been pre-qualified or pre-approved for a loan?

Based on their answers prioritize your time with them accordingly:
• If they want to buy but haven’t talked to a lender, guide them to that next step – before showing them homes on the market in their price range.

• If they are working with a lender, make sure they are pre-qualified or, better yet, pre-approved – before you take them out to actually tour homes and consider writing a purchase offer.

• If they are pre-qualified and ready to buy, then focus your efforts on finding them the right home – and closing a sale.
Why it’s Best for You and for Your Clients
You’ll save clients time and help them avoid the disappointment of having a loan request or offer rejected, or having to undergo long delays when trying to buy a home. You will also ensure that they have the best possible opportunity to buy a home that fits their finances and their vision of a dream home. You’ll help them submit a more competitive offer, with a better chance of being accepted – even when there are multiple offers on the same property. Meanwhile you will save yourself time, so you can focus on your clients, based on intelligent priorities, and enjoy better time management that free up more of your time for client service.

May 1, 2016

Real Estate Tips: Leverage social media this spring.

Filed under: Real Estate — Chuck @ 10:53 am

Almost all buyers these days first do research online before going out to shop for a home, and homeowners who are thinking of listing their property typically do their own background research, too. Buyers and sellers study current MLS listings, they check comparable recent sales data, they search for tax and appraisal valuations, and they also do extensive homework regarding mortgage and refinancing options. Of course it’s not just the real estate industry. Consumers of all kinds of products typically first compare prices and do background research online before they are ready to buy. Since all of your clients already live online as everyday consumers – and they also tend to socialize online and make business connections that way, too – it is essential that you have a strong and attractive social media presence. How do you do that? Here are some helpful tips that will allow you to boost your online brand presence during this active buying and selling season in the real estate industry.

Engage, Don’t Sell
Avoid the tendency to simply sell your services through social media. Instead, perform a service via the social media platforms that are popular with your target audience. By demonstrating that you are eager to offer real value as a way to interact and develop professional relationships with potential clients, you give them a valid reason to engage with you – and engagement is the name of the game.

Be a Content Curator
You know that your potential customers are already spending hours and hours online researching real estate market information, whether they are buying, selling, refinancing, or looking for income or vacation property. Capitalize on that fact by making that research easier for them. Spend time gathering the kinds of resources they are already searching for, and then present that information and knowledge to them in an organized, convenient way. You’ll become their go-to resource for all things real estate related, so instead of visiting the blogs and websites of your competitors they will follow you on social media.

Examples of Attractive Content
You can use platforms like Facebook or your own blog, for example, to post recent sales data or marketing trends in the neighborhoods you target. Or write blog articles to share the kind of knowledge and tips that buyers and sellers are wanting to know. You can write articles, for instance, about how inspections work, what tax valuations do not say about market value, or about how to generate curb appeal. Explain how to get pre-qualified for a loan, and how that differs from getting pre-approved. Ask them to send their real estate questions to you, and then answer them on Facebook or your own blog. There are countless ways to make yourself helpful to potential clients by teaching them – and that will position you as the expert to call when they need real estate services.

Delegate the Busy Work
Real estate pros are usually challenged by time constraints, and keeping up with social media can seem like a daunting time management task. But you can hire someone, like a college student, to manage your social media feeds for you. Then all you have to do is give them the information and they can continue to push it out to those who follow you on social media platforms. You can – and should – also re-purpose the same content across multiple platforms. Take a question someone asks and tweet it, with a link to the answer. Or take a short quote from a longer blog and tweet that. Post snippets from blogs on LinkedIn or Facebook, or Instagram photos that illustrate the content you want to promote.
Soon you’ll have a cohesive and active pipeline of fresh content on multiple social media platforms, to keep you name and brand in front of your customers and potential clients, 24/7.

April 1, 2016

Real Estate Advice for the Start of Spring

Filed under: Real Estate — Chuck @ 10:46 am

Real estate professionals who hit the ground running in April can set the tone for the rest of their year, because early springtime is the best time to cultivate new leads, solidify relationships with buyers and sellers, and generate the income and momentum that guarantees a successful year.

One of the most significant trends for 2016 is that staging homes that are listed for sale has transitioned from a rare and obscure practice – usually reserved for special listings – into a rather common and mainstream marketing tactic. That means two things for those real estate agents and homeowners who are competing to sell listings. On the one hand, it makes the curb appeal and interior cosmetic appearance of your listing much more significant, because homes that don’t look their best may look downright shabby compared to ones that are professionally staged.

The second important point for Realtors to understand is that the prevalence of staged homes, or homes that are designed to look like model homes, gives you a greater opportunity to convince sellers that they need to stage their listings. In the past it has been a difficult step to convince homeowners of, because many considered it superfluous, too expensive or labor intensive, or they were convinced that their homes already looked spectacular – even if they lacked general curb appeal in the eyes of buyers. Now there is plenty of evidence to show why it helps. There is also stiff competition to ensure that if homeowners don’t take advantage of this powerful marketing tool they may lose out on sales as buyers instead write offers on other homes in the neighborhood.

That all works in your favor as a Realtor, because the more your sellers support your marketing efforts, the faster your listings will sell and the higher the prices they sell for will be. A big part of success as a Realtor is to educate sellers in order to make your own job easier. When sellers are realistic about pricing, showing, and negotiating, it increases the chance of a sale. Those real estate professionals who are expert at teaching clients to be more realistic – and helping them understand why it matters – always close more sales and get more referral business.

Tax time is here, too, and that offers Realtors yet another window of opportunity to educate clients about how they can save money on their taxes by buying instead of renting, or by investing in income-producing property. You can also talk to potential sellers about how to keep a paper trail of their eligible expenses, so that when they do sell they can lower their capital gains. explaining the benefits of financial savings they can be eligible for if they become homeowners can encourage them to buy – especially if they have been “sitting on the fence” and pondering the idea without acting on it.

Every homeowner’s tax situation will be unique and they should consult a tax advisor being making any tax-related home buying decisions. But buyers may be able to deduct mortgage interest payments, for example, which can add up to thousands of dollars per year. Sellers may be eligible to reduce their capital gains tax by deducting legal expenses related to their purchase and sale – including the real estate agent’s commission fee – and by deducting the cost of capital improvements to the property. Those who buy income producing property, such as rental property, can usually deduct a long list of expenses related to management and upkeep of the property. That may even include regular travel to check on a property, so if a client buys a rental condo at the beach, for example, they may be able to legitimately deduct summer trips to the beach – as long as they perform some landlord-related tasks while there and keep a paper trail to document that tax-deductable activity.

The idea is to constantly think of ways to share value-adding information with your clients or prospective clients, because then they will naturally rely on you as their go-to real estate expert, and refer you to others in that way. You’ll develop more multidimensional relationships with your clients, and that will naturally grow your business and your reputation as the real estate agent to call when it is time to buy, sell, or ask a question about real estate

March 15, 2016

Real Estate Tips: Define yourself rather than having the market define you in the coming year.

Filed under: Real Estate — Chuck @ 3:49 pm

There are lots of industries that are cyclical in nature. The retail sectors is steady most months but then experiences a dramatic surge during the year-end holidays. Auto sales ramp-up when the new models come on the market. But in the residential real estate niche, the year typically begins anew every spring. That’s because people shop for homes – and sell their homes – when the weather is nice and warm. Over the decades spring has offered lots of surprises for Realtors. Some years it shows a downturn that forecasts bigger trouble ahead. In other years it can jump-start the real estate economy with significantly higher prices right out of the gate. But if you want to really drill-down to hit the ground running as a provider of real estate services, focus on who you are, versus what the market or economy is doing, and refine your specialization.

That could mean that you need to reevaluate your education and add new skills and knowledge to your toolkit. Or maybe instead of working with both buyers and sellers, you should consider becoming an exclusive buyer’s agent – or shifting into property management, relocation services, or a career path that involves primarily working with builders and developers. There are some Realtors who are great educators, and they segue into careers working in partnership with the National Association of Realtors as trainers and seminar leaders or they open their own real estate licensing school.

Are you an agent, but are ready to step up to the next level and get your broker’s license, to either work more independently or open your very own real estate brokerage company? You could also go to work for a bank handling their REO listings, for a commercial enterprise taking care of their office leases, or for investors scouting out the best deals to add properties to their portfolios.

The point is, you do not have to stay in the same niche that you were when you started out in the profession. That’s one of the wonderful aspects of real estate – it offers lateral as well as upward mobility opportunities. People and their personal and professional goals change over time, so it’s a healthy idea to take an inventory this time of year – before launching into another busy season – not just of your listings and hot leads on clients but of your career goals and needs, financial objectives, talents, and desires. Take a good look at where you are now in the real estate business, and where you dream of being in three, five, or 10 years from now.
What steps can you take this year to help you move closer to realizing those short or long-range objectives? Are there areas where you want to achieve a healthier or more rewarding work/life balance? Is your goal to continue the kind of real estate work you’ve been doing, but serve a more affluent clientele or build your own portfolio of income-producing properties to create a retirement nest egg? Maybe you want to work with low-income clients to ensure that they can also have their chance at home ownership, or you want to start contributing some of your expertise in real estate as a volunteer for a local nonprofit that provides financial guidance and helps people learn about the home buying process.
You are really only limited by your imagination and desire when it comes to this kind of planning. Before the tulips and daffodils are in full bloom and your phone is ringing like crazy with calls from buyers and sellers ready to take advantage of springtime 2016, pause for a few days to do a gut check and some soul searching. Write down your goals. See how they align with your current activities and plans. Then line yourself up with those dreams and make this the year you start making them come true in ways that will really have a tangible impact on you and your loved ones.

February 15, 2016

Real Estate Tips: Create a Listing Client Checklist

Filed under: Real Estate — Chuck @ 3:40 pm

In previous generations, real estate agents and brokers were the only people who knew the critical information and marketing data to facilitate a home purchase or sale. Those days are long gone, though, thanks to the advent of the Information Age and digital communication. Anyone, anywhere, with very little technical know-how or knowledge of mortgage finance, real estate, or home values can access reams of information in an instant, via the Internet. That includes coveted MLS data that used to be the proprietary treasure trove of the Realtor community. To succeed in this kind of environment and still distinguish your value as a real estate pro who is worthy of fair compensation, you have to become an active partner for your clients – the person they turn to for knowledge, education, and strategy they won’t find by doing a Google search late at night.

The Spring Selling Season Starts Now
One thing that most home sellers fail to understand, for example, is that the springtime selling season that all sellers look forward to does not being in spring. Yes, spring is still the traditionally busy season for home sales, that time when buyers historically come out of the woodwork and start snapping up listings. But if a seller wants to participate in that first wave of the year and they wait until the daffodils bloom to call a Realtor, they run the risk of missing the boat. By the time their home is actually market-ready and in its best showing condition, springtime buyers will already be at the closing table and unloading their furniture from moving vans.

Successful Marketing Requires Lead-Time
Do your clients a favor, and use the few remaining weeks of winter to school them about how to prepare to seize the moment as soon as weather warms. You’ll also be doing yourself a favor, because your listings will go live already prepped to sell at the highest possible price – while your competitors and their homeowner clients are still scrambling around to do cosmetic improvements, last-minute repairs, and critical curb appeal makeovers. They need to have a pre-listing inspection done ASAP, for example, so that they can contact contractors, handymen, and landscape crews and get any needed projects scheduled on the calendars of those professionals before the end of the month. If they procrastinate until mid-March or early April they may not be able to locate a quality contractor who charges a reasonable rate who is available before mid-May or June.

Make an Attractive Debut
That means their home cannot be ready to sell with an optimum marketing plan before summer, and they’ll totally miss out on the brisk spring sales momentum. Have you ever toured a new listing and noticed that the house did not show well, simply because the homeowner and real estate agent had not yet taken the time to get it completely ready for prime time? You probably walked away less than impressed, and weren’t surprised if you saw the listing languish on the market and go through a round of cuts to the asking price. When a home debuts on the market and does not look its best, buyers don’t put their plans on hold and then come back a month or two later to see it dressed to the nines. You don’t get a second chance at a good first impression. Help your clients get ahead of the curve, and the competition. They’ll reward you by telling all their friends and colleagues that you are the kind of real estate professional who truly earns your commission.

January 15, 2016

Realtor Advice: How to respond to the interest rate hikes now in progress.

Filed under: Real Estate — Chuck @ 3:23 pm

In anticipation of a rate hike, we’re already covered the topic of mortgage interest rates and how to prepare your clients for that looming event. But now it’s already a reality, and the Federal Reserve has disclosed its basic strategy for 2016. So now is the time for Realtors and other real estate professionals impacted by the financial markets to update clients about more specific approaches to take in the New Year.

Four Quarters and Four Predictable Hikes
There are likely going to be four rate hikes, including the one that just happened, for a full-year increase of one percent at the Fed level. That could translate into a much higher percentage rate at the retail level – which includes consumer borrowing and home loans. When prevailing interest rates rise, that has a trickle-down impact on other consumer rates. Auto loans get more expensive. Credit card rates go up, and offers for 0% introductory APR or balance transfer rates become more scarce. While that may not directly impact the mortgage market, it can dramatically influence your clients’ ability to qualify for a home loan.

Procrastination Can Be Costly
So even before your clients are ready to buy or refinance, they really need to be working overtime to pay down those other consumer loan balances. Otherwise that shopping hangover from Christmas gift buying and taking advantage of Black Friday and Cyber Monday could mean carrying a burdensome balance on their plastic – as the rate they have to pay keeps climbing. Many credit card issuers already hiked their rates and fees, and they keep doing so as long as prevailing rates trend upward.

Do you have clients who have variable rate loans? Find out by talking to them now. They’ll appreciate your proactive concern, because if they do have a variable rate mortgage it is going to get progressively more expensive as rates climb. By alerting them to that fact you could save them a lot of money because they may be able to shift into a fixed rate 15 or 30-year loan.

The Long Term Implications for Borrowers
How much will they thank you in 20 or 30 years? To answer than ponder the math for a moment. Just a 1% rise in interest rates on a 30-year loan for a $250,000 mortgage can add an extra $50,000 in additional interest payments over the life of that loan. That’s enough savings to make a down payment on a vacation home. Whenever discussing mortgage rate planning with clients, use an online mortgage calculator to help them get a clear picture of exactly why a tiny change in their rate can have a gigantic impact on their finances. There are many of those online calculators you can access for free on the Web.

Being a successful Realtor is all about finding ways to engage with your clients or potential customers all year ‘round, and if you become their go-to source for education about the housing markets and answers to other related questions it will reward you better than any slick advertising campaign can. When their friends and colleagues have a real estate question you’ll also be the one who gets the call – which is a wonderful way to organically grow your customer base.

December 15, 2015

Real Estate Advice: Educate clients about year-end closing transactions.

Filed under: Real Estate — Chuck @ 11:45 am

During the month of December you may have clients who are ready to break out the New Year’s Eve champagne ahead of time, to celebrate the closing of their real estate transaction. Both buyers and sellers tend to expect smooth sailing, once the contracts are signed, the mortgage is approved, and the miscellaneous details have been successfully ironed-out. Plus they are already in a festive mood for the holidays.

The Importance of Reality Checks

The problem is, as any experienced real estate professional can attest to, that there are countless ways that a closing can be delayed and postponed. That can cause stress and strain, despite the holiday atmosphere, and clients tend to blame their real estate agents when anything goes wrong.

That’s why, in order to protect your own reputation and proactively minimize the possibility of a damaging misunderstanding, you should educate your buyers and sellers ahead of time. If something subsequently does go wrong, your clients will understand and not lay the blame on you, since you already explained how things sometimes happen that are beyond your control.

Why Unexpected Delays May Occur

Clients don’t typically understand how complicated it can be to close a home in December. But if you inform them they’ll appreciate your expertise and your attention to detail – as well as your willingness to teach them how the process works. Start by explaining, for instance, that mortgage companies, closing attorneys, and others involved take extra time off during the holidays – so that naturally slows things down.

There are also many homeowners trying to finalize a closing, a mortgage refinance, or a home equity loan before the last day of the year, because they want the transaction to show up on this year’s tax returns instead of next year’s. Inclement weather often catches people off guard too, since December is typically the first month of the year for ice and snow in most regions. That can result in delays of real estate transactions for a variety of reasons, ranging from power outages and impassable roadways to business closures that impact appraisers, banks, and attorneys.

Proactive Steps to Speed Transactions Along

Another aspect of client education, of course, is preparing buyers and sellers in ways that can accelerate a closing – or at least help eliminate unnecessary snags and obstacles along the way. Many times, for instance, the closing is delayed not because of the Realtor, bank, title company, or closing attorney – but because the customer just isn’t organized and ready.

It’s always wise to give buyers and sellers a typed-out checklist to assist them in gathering needed documents and sticking to a timeline as you help them prepare to close. What tax documents do they need? What about copies of bank statements or payment stubs from employers? Are sellers available to provide access to appraisers, home inspectors, or contractors who need to do negotiated repairs prior to closing? Are all parties involved able to attend the closing, without a schedule conflict? If so, can they sign papers ahead of time or be represented by their attorney at the official closing so that everything proceeds as planned?

If you spell everything out on paper then it makes it very easy to share your knowledge with clients, and it also ensures that they are well-informed. You can reuse the same printouts with every client and transaction, and you can make them a branding and marketing tool as well. The best consumer is one who is educated, and by conveying important information about how closing work and how to ensure that they happen without a hiccup you and all of your clients can have a more stress-free closing – and a happy holiday season.

November 15, 2015

Real estate tips: Protect your credit to ensure a successful mortgage application.

Filed under: Real Estate — Chuck @ 11:32 am

There has not been a better, more affordable opportunity to buy a home in decades. Home affordability is typically measured by looking at the value of homes compared to their asking prices and by also factoring in the cost of financing a mortgage. Today we have all-time record low mortgage rates and bargain home prices, and various home affordability indices all confirm that this is a once-in-a-lifetime chance for buyers. But there is a potential obstacle. If your credit is not up to par it is difficult to qualify for a mortgage. Banks and other lenders are enforcing strict underwriting policies and are turning away many mortgage applicants.

How do you solve that potential problem? It is critical that you do everything possible to bolster your credit and improve your credit profile – before you ever submit your mortgage application. Here are some steps to take to help ensure greater success.

Check Your Credit File

There are three major credit reporting agencies in the USA and Canada, namely Experian, TransUnion, and Equifax. For a small fee you can get copies of your credit reports for you to review. But you don’t necessarily have to pay for those if you don’t want to. You are also allowed to get a free copy of your credit report mailed to you in Canada, and you can get access to your credit reports once every year if you are a citizen of the United States. Once you obtain these reports, check them for any errors, omissions, or outdated data. You can request that mistakes be corrected, and if erroneous information is found in your file the agencies have to fix it.

Avoid Frequent Loan Applications

Each time you apply for a loan, the lender checks your credit. Frequent requests for credit information from reporting agencies may indicate that you are desperate for a loan, however, or at least that is how banks view that kind of activity. So multiple loan applications can actually lower your credit score, and should be avoided. A better approach is to shop around for the best lender with the most attractive rates and terms. Then apply only once, when you’re ready to take out your mortgage. In the meantime be careful not to apply for other consumer loans either, including department store charge cards, credit cards, and auto loans.

Monitor Your Debt to Income Ratio

One of the most important components of your credit is the ratio of your debt to your income. Bankers like to see that your household expenses are 25 percent or less of your take-home pay. If you are carrying credit card debt, student loans, second mortgages, or other obligations you need to try to pay those off before applying for your home loan. Having low debt compared to your income will not only help your loan go through without a hitch, but it may also earn you a lower interest rate and more lenient terms.

Postpone Purchases Until After Closing

It used to be that once banks okay’d your loan application they lost interest in tracking your debt and credit profile. But in recent years, since the credit crisis of 2007-2008, they have started monitoring credit all the way through closing. So if your loan gets approved and you have six weeks until closing, for example, be careful not to make any new purchases or take on new debt during that interim period. Otherwise the bank may readjust your loan to a higher rate. In worse case scenarios they may even reverse their decision and decide not to fund the loan. Keep in mind that they typically pay extremely close attention to your credit report and debt levels from at least six months prior to loan application, all the way through funding of the loan and closing on your new home. Exercise financial discipline during those critical months and it can help ensure a smoother mortgage process.

The Value of an Annual Insurance Checkup

Filed under: Real Estate — Chuck @ 11:28 am

Insurance companies that are competing for your business are always running ads about the need to update your insurance. They tell you how you can save money while making sure you have adequate coverage, and there is a lot of value in doing that kind of reevaluation from time to time.

But there is another reason to keep your insurance up to date and monitored, and it’s a topic that your insurance company may not like to advertise. You need to keep an eye on whether or not you are really covered in the event that you file a claim.

Many homeowners buy their insurance when they buy their home, for example, and then just renew it over and over. But sometimes they are not fully covered or they have conditions on their property that give the insurance company a reason to deny paying for losses.

Insurance Doesn’t Guarantee Coverage

• Don’t be misled by the fact that you have a homeowner’s insurance policy. That is a contract between you and your insurance carrier, but it is not necessarily a guarantee that you are covered in the way that you believe you are.

• You might also believe that if a limb falls on your roof then you’re automatically entitled to coverage, since your homeowner’s insurance includes damage to the roof. But that may not be the reality. What if that tree limb fell because the tree was diseased? The insurance company may blame you for not having the tree cut down as a preventative measure.

• Is your electrical wiring up to date, and up to code? Have you added new appliances that might draw so much electrical current that they make your wiring unsafe in the eyes of your insurance company’s adjuster?

• There are lots of exceptions, in other words, that could give an insurance company justification for not paying a claim if you have violated one of the stipulations in the small print of your policy. Review the policy with your insurance provider, or with an attorney. Make sure you know what you’re getting for your premiums, and make adjustments to your coverage as needed.

Refresh Your Inventory List

• You should routinely refresh your insurance inventory list, making both a written list and a videotaped inventory. That means that if you made any large purchases, you need to file away the receipts to prove that you bought those things.

• You can also go around your house and your property every year or two with a video camera, taking a visual inventory of what you own.

• Maybe you bought a new computer, expensive television, diamond ring, antique sofa, or work of art since you took out your policy. If that’s not mentioned then it might not be covered in the event of a theft or other loss. Talk to your insurance agent. Do you need a new rider or addendum to your policy, or do you need to pay a little more to add that costly item that is exempted from your current coverage?

Consider Rental Insurance

• Rental insurance is another kind of policy to consider. This is a special kind of insurance coverage for people who don’t own a home but instead rent or lease it. Millions of people live in rental property.

• Maybe you’re planning to buy a home soon, are renting while your home is being built, or you own a home but have a child who is renting a place while they are away at college.

• For a small premium – usually $150 or less – you can get coverage for a rental to insure you against such things as floods, fires, theft, or liability related to an accident.
While talking to your agent, go over your homeowner’s policy line by line and item by item. There may be some significant opportunities for you to save money, but you’ll only know by reviewing your policy. Extend this review to your auto policy while you’re at it, because you might uncover some ways to save there. Maybe your vehicle is older, worth less, and doesn’t need such costly collision coverage. Maybe you paid it off and don’t have to maintain the same level of coverage that your auto loan lender required. When that teenager reaches a certain age and moves out, perhaps you no longer need them on your own policy – and that could save you a bundle. Do you qualify for safe driver discounts? Did you retire, so that now you don’t use your vehicle for business? That might mean that you can insure it for less. Ask lots of questions, consult with your insurance agent, and maintain adequate coverage while getting rid of any that you really don’t need to be paying for this year.

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