A Lender’s Perspective: How does the Homeowners Insurance Agent fit in during a Home Purchase?
In the case of a home purchase, the mortgage lender cannot do his job unless homeowners insurance is provided. And a good insurance agent is very important to make sure the client has the correct and adequate insurance coverage. How is the right coverage amount determined and how does the mortgage lender and insurance agent work together to insure this gets done?
As part of the process of buying a home the subject property needs to be appraised by a certified appraiser who works in conjunction with the mortgage lender. The appraiser determines the market value of the property and provides a formal document with all of the detail of the property, like the square footage and many other things.
What I do as a lender is provide a copy of the appraisal to the insurance agent to assist him or her with their process of ensuring there is adequate and full insurance to cover the client and the lender in case of a loss. Once the cost of the insurance is determined, the insurance agent provides that information to the mortgage lender and we factor that information in the cost of purchasing the home.
As you can see the lender and insurance agent need to work together to make sure that this information moves freely between each and in a timely fashion.
When Furniture Abounds: A Staging Success Story
My favorite success story encompasses the “there’s good news and bad news” scenario. It started when I received a staging job for a 2 bedroom, 2 bathroom owner occupied home that was packed to the gills with furniture. It even had a large office armoire in the breakfast nook! A plan of attack had to be created to make this home less cluttered and more easy on the eye.
We decided to move about 80% of the owners furniture into storage which would allow me to bring in smaller pieces to set the look. The owner, understandably, was overwhelmed with the idea of moving so much furniture to storage, but I was prepared for that. I told her to go to work and I’d take care of everything.
I had my professional movers come in and move the furniture to storage and by the time she was home from work the entire house had been transformed! The owner was delighted that she hadn’t had to lift a finger to move the furniture and the Realtor was pleased the home was ready for the market.
I thought everything was fine until I received a call from the Realtor a week later. It ends up the owner liked the new feel of the home so much she decided to pull her house off the market and keep the newly transformed home!
Definitely a staging success story for me, and the Realtor was a good sport about it as well. He still uses me for all of his listings, as when staging is done right it makes selling a home much easier!
What You Should Know About Making an Offer on a Short Sale
First, what is a short sale? A short sale is a home that is sold for below what the current owner owes on the property. And, at the time of closing, the seller does not have the means to make up the shortage.
Now, here are some things that you should know.
It used to be that a short sale would take up to six months or longer to receive an approval. Now, due to programs
like Home Affordable Foreclosure Alternatives (HAFA), the average time is 90 days. Still, every lending institution is
different, so it is important that you have an understanding of timelines, documents that are needed, etc.. Also,
choose an agent that is familiar with the short sale process. Additionally, find out which banking institution is
involved in the negotiation and approval process. Have your agent work with the listing agent to find out what the
average turnaround time will be.
Make your best offer using comparable sold properties in the area over the last 3 months (longer than that does not
reflect the current market) and the appraisal that the bank has done. Lenders want to minimize their losses, so if
you make an unfair low offer, it will most likely be rejected. What the lender wants is a strong buyer and a decent
and fair offer.
In your offer, don’t count on asking for repairs or credits. You will probably have to take the property “as is”.
Know if you are competing in a negotiating or multiple offer market – it matters as to the price you will have to offer.
With multiple offers, the bank will usually pick the highest and best offer.
In the end, if you have the time and patience and understand how to bid, short sales can be a win-win situation.
West Portal, SF Market Trends as of July 23, 2010
If you have a West Portal home that you are thinking about selling now may be the perfect time. There is solid buyer demand, the properties that are well priced & show well are receiving multiple offers and inventory is really low (a balanced market is considered 6 months of inventory; <6 mos.is a sellers market; >6 months is a buyers market).
Trying to buy your dream home in West Portal? Be prepared, it’s going to take time, patience and perhaps writing an offer on more than one property to get in.
Top Green Gardening Tips
Looking to go green, but unsure of where to take your first step? Try the greenest spot of your home: your yard. Green gardening is a great starting point for any journey toward a more earth-friendly lifestyle. It’s easy to get started, it’s fun, and changing how you garden in even small ways can have a massive positive impact via benefits such as reduced chemical usage and water consumption. Try these techniques for transitioning to green gardening:
* Conserve how much water you use. Start collecting rainwater in large barrels or containers — ideally with spigots — and use that water for your garden. Make sure to keep the barrels covered when it is not raining in order to prevent any mosquito infestations.
* Install a sprinkler system. Installing PVC pipe, sprinkler heads and control units might seem antithetical to green gardening, but being able to control exactly when different parts of your yard and garden are watered and for how long results in voluminous water savings. Ideal times to water are in the early morning and the cool of the evening to maximize the soil penetration.
* If you live in a particularly dry area, consider xeriscaping, which is landscaping with plants that have very meager water needs, while designing the yard in such a way as to prevent runoff and diminish evaporation.
* Start composting. Composting combines home and yard waste that is left to decompose in order to create not only the perfect plant food that is free of chemicals, but also one that helps the soil stay moist. Balancing your compost’s “ingredients” is essential, so read up on what you can compost, the correct ratios of ingredients and how to turn your compost.
* Adding mulch around your plants will help keep the soil moist, making your garden look attractive and well-tended.
* Vermiculture, a.k.a. “worm farming,” is a great way to improve your soil. Essentially, you keep a bin full of dirt, organic waste and worms and harvest the worm “castings” (what they leave behind after eating the dirt and garbage) to amend your soil.
* Use nature’s pest control. Put out bird feeders and perhaps a few bird houses to attract some feathered friends. Not only will the bird songs add cheer to your garden, but they also eat pesky insects that might otherwise eat your plants and flowers.
* Ladybugs are another great winged ally in the battle to bar bugs from your garden. You can buy them in most home stores and they absolutely love to dine on flower-destroying aphids.
* Try to plant fauna that is local to the area. This helps reduce reliance on fertilizer, since native plants are more apt to thrive in your soil.
So what are you waiting for? Grab that hoe and trowel and start saving the planet!
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Eight Quick Tips for Living Green
Today, living green isn’t just a lifestyle choice; it makes solid financial sense. As home energy costs increase, homeowners are seeking simple and smart ways to save energy and consequently save money, too. Trying to create a more environmentally sound household doesn’t have to start with taking out a massive loan in order to slap solar panels on your roof. Here are some easy ways to start living green:
1. Swap out all your incandescent bulbs for compact fluorescent lights (CFLs). CFLs last 15 times longer and use two-thirds less energy, saving at least 2,000 times their own weight in greenhouse gases. They have gotten much cheaper too, costing well below $10.
2. Start recycling your trash. You might already be a recycler if your city provides trash services that include recycling services. All you have to do is start making a habit of sorting your trash. If your community doesn’t recycle, start separating out your garbage yourself and taking it to a recycling center. Most will pay you some money for your bottles and cans — perhaps enough to pay one of your monthly utility bills.
3. Reduce the amount of refuse your home produces. Recycling is great, but you should also cut down the amount of material you have to recycle. Are there magazines you barely read? Are you consuming food items that come in too much packaging? Have you contacted junk mail sources to have your name removed from their lists? Have you ditched paper towels and switched to kitchen towels and cleaning rags?
4. Install a programmable thermostat. This will ensure you aren’t heating or cooling your home when you don’t need to. You can pick up one of these low-cost items at any home store, and you’ll recoup its purchase price in a month or two with the money you’ll save.
5. Get some large room fans. On hot days, always opt first to open your windows and get a cross-draft going with some large fans before switching on your air conditioning. And if your A/C unit is several years old, use the money you save on electricity by using those fans to put towards a new one. Even air conditioners that are 10 years old consume up to 50 percent more energy than new models.
6. Cut down on your showers. We Americans love hot showers so much that easily two-thirds of our home-heating bills are devoted to them. Install a water-saving shower head and start timing your showers to minimize your water consumption and cut your energy costs.
7. Change your ventilation filters regularly. Clogged-filters will force your heater and air conditioner to work harder, thus consuming more energy. Swap them out for new ones at least twice a year.
8. Don’t just clean the inside of your fridge. Use the brush attachment on your vacuum to clean its coils, which will be located either on the backside or behind the bottom grill of the refrigerator’s front plate. This will ensure your fridge works more efficiently and doesn’t overheat. Also, don’t forget to change the water filter if it has a water dispenser.
By following these very simple tips you can have bragging rights about “going green” without making much effort, and you’ll save yourself some cash too!
Proper Care and Feeding of a Living Trust
*This information is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal advisor who is familiar with your personal situation. We are lawyers based in California. If your matter involve non-California issues, please contact a local lawyer.*
URGENT REMINDER: Many Lenders ask you to take property out of Trust ownership when you get a mortgage, but they don’t put it back in afterwards. A Trust avoids Probate Court for assets properly titled in the name of the Trust. If property is out of Trust at death, it is subject to Probate Court. This is a BIG mistake that can be fixed easily now, while you are alive; if not fixed, it will explode later.
So check your property tax bill NOW. Even if you are SURE it’s OK.
As always, the key to proper maintenance of the Trust is to make sure assets are properly titled in the Trust:
a) It is important to review your estate plan periodically to make sure that you still trust those people you have appointed to act after your death, as well as to ensure that the dispositive provisions still meet your present desires.
Are minors on track, or have they detoured?
Our trusted people: are they still competent or senile? Do we need to reconsider who should be in charge?
b) Make sure your Health Care Agent has copies of your medical form. If they get a call in the middle of the night, they may need to grab the form and run to the hospital. Can they find the form (or did they lose it and need a new copy)?
c) When you are dead or incapacitated, the people on whom you dumped this huge chore need some guidance from you to make it as easy as possible for them.
But, if you are dead, can they find your assets? (Bank and stock accounts, safe deposit box, real estate, retirement plans, and insurance? If you have no insurance, think how much time they might waste looking for it, just to make sure they did not overlook something.) Put a current asset list with your Trust papers.
Can they access your computer and the requirements of modern life: email, banking, etc. If you are dead or hospitalized, can they find your passwords?
Can they find your accountant, broker, insurance agent, lawyer, and property managers? Tell them whom to trust and who they should not.
d) Do they know your wishes? Either discuss this with them now, or write them a letter (to be opened after your death) with instructions so they know.
They should know your funeral wishes before they are “guilted” into spending a fortune (unless that’s what you want).
e) Consider writing an “Ethical Will”; a letter (to be delivered after death) of advice about life. Ethical Will: Life Lessons for your Heirs: Tell them who and what you are; who and what you hope they will be. This is not a legal document, but a life lesson letter to your descendants. This is a wonderful way to stay connected with family over future generations. It might contain:
Lessons you have learned (perhaps they can learn from your mistakes);
Personal experiences; or
Family stories and histories which otherwise will be lost forever.
I keep updating letters to my wife and daughters on my computer whenever I am reminded of a lesson in life.
Always, the major chore in the maintenance of a Living Trust is to make sure that all of your assets which have any form of registration are properly titled in your Living Trust. These assets include bank accounts, stock, and real estate. Now is a good time to verify that all such assets are held properly.
You should have received a real property tax bill for each parcel of California real estate you own.
[Please verify from your tax bill that the Homeowner's Exemption is claimed on your personal residence. If not, call your local Tax Assessor for a claim form.]
You also will receive Forms 1099 showing interest or dividends received during the past year, and K-1s for Partnerships.
Please check each real property tax bill, Form 1099, and K-1 to ensure that it reads something along the lines of:
John and Mary Smith, Trustees of the Trust of John and Mary Smith, dated January 1, 1991.
There may be other property which should also be in the Trust but may not provide annual reporting, such as stock which does not pay dividends and, therefore, no 1099 is provided.
Pension Plans, IRAs, and Life Insurance are not usually in Trust: they are owned by you individually, and payable to the Trust at death.
[Creditors (such as your mortgage holder and credit cards) do not need to know about the Trust; only those holding your property should know.]
If you inherited any property or received substantial gifts since formation of the Trust, you should discuss its status and your desires with an attorney.
If you refinanced your property since doing the Trust, you should verify that the property is back in the Trust.
If you bought new property or opened new investment accounts, you should verify that these are properly held in the Trust.
If your marital status (or domestic partnership status) has changed since the formation of the Trust, we should discuss the ramifications.
Although it may not be necessary, it may provide additional certainty to execute annually a statement that all property is in the Trust. This clarifies that any property you may have acquired is in the Trust.
If you have any questions email me at marcw@wwlaw.com
*In accordance with Treasury Regulations Circular 230, we are obligated to inform you that any tax advice contained in this communication was not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.*
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Beautiful on the Outside
They say you can’t judge a book by its cover, but many homebuyers do just that: judge a home by its external appearance. If you’re gearing up to sell your home this spring, you need to make sure your home’s exterior and landscaping stops buyers in their tracks and gets them to come in for a walk-through. Here are some easy and effective ways to accomplish that.
* Clean up the yard. Take a weekend and start mowing, trimming, weeding, raking and doing everything you can to make the yard neat as a pin. Trim back grass and other ground coverings away from the bases of trees, shrubs and flower beds for a professionally landscaped look.
* Start planting. If your front yard is sparse, invest in some small, inexpensive trees and bushes from your local home store or nursery. Likewise, plant flats of various spring flowers to add “pop” to your landscape.
* Nix the gnome. It’s time to stow all your cherished lawn ornaments in the garage. That said, you can keep one or two truly engaging landscape features, such as a unique fountain or simple outdoor sculpture, if you and your real estate agent feel they would add a tasteful, designer appeal to the landscaping.
* Get a wash and trim. While painting your home might be out of budget, get the exterior power washed and paint all the trim. Additionally, paint your door in an engaging color that accentuates your exterior color scheme and invites the prospective buyer to knock.
* Make an entrance. Add some design features to your entryway to further draw attention to your front door. If there is enough space, aim to create symmetry in your design elements. For example, two small, flowering trees in decorative pots on either side of your door add a welcoming touch. Just make sure your color choices match or compliment your door color.
* Roll out a clean carpet. Lastly, clean up your concrete and stone driveways and walkways. Besides the standard sweep-up, remove any built-up dirt and grime. If you have stones separated by moss, grass or other ground cover, give the greenery a good trim to help redefine the stones. And don’t forget to eradicate any oil stains from concrete driveways. If you’re concerned about chemical run-off, there are a variety of highly effective cleaners that are environmentally friendly and safe for your storm drains.
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What about the outside of my home? Do staging professionals help with the outdoor spaces?
Some staging professionals do and some do not. At Décor Staging we view your property from the front curb to the back fence. Curb appeal is critical. Not only in the virtual tour pictures but by all the people driving by.
Let’s face it, we all look at the front of a home and form an instant opinion. Why would you stage the inside and ignore the outside? I’m not talking about putting down a few colorful annuals here, I’m talking about the condition and color of the front door, the exterior light, the mailbox, the doorbell, the door mat and the paint.
With our beautiful climate outdoor living is a big sell. Does it have comfortable seating in good condition? Are there bright colors, a barbeque, a firepit? Is the concrete or wood decking in good shape? If we lived in Minnesota I wouldn’t worry so much about the outside living spaces, however, here in California it’s what we are known for. It’s in our outdoor spirit. Creating dynamic outdoor spaces sell homes.
Contact me at kerry@decorstaging.com or 650-619-9052 and I can share more information with you!
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What all is considered in the cost of home staging?
When we work up an estimate we take several things in consideration.
1. The design time needed to work up a complete design layout – after taking a look at your home and figuring out the target market, we sit down and design an overall plan to stage your home.
2. The furniture rental – We rent from a few local and two national vendors as well as carry our own inventory. This assures we can fit any style or period we need to.
3. How many accessories, rugs, mirrors, plants and linens will be needed. – Small touches make the staging complete. These things also help prospective buyers envision the home in use, rather than have to imagine it because of sparse and unfinished furnishings.
4. The delivery and pickup charges – Furniture is heavy. But, we have our people who take care of moving it all around, and once the home is sold they come in and pick it all up. Clients don’t have to move a thing.
5. The distance – Not everyone lives right around the corner, and heavy furniture and travel time cost man power and gas!
6. The time frame desired – How quickly are you trying to sell your home? How fast does your listing hit the market? These and other factors play into the cost of staging your home.
Having been in the home staging market for many years I can personally attest and give examples of how staging a listing can increase market value and return on investment. Contact me at kerry@decorstaging.com or 650-619-9052 and I can share more information with you!
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