REMAX 440/Central Blog

What to Ask When Shopping for Homeowners Insurance

February 21, 2012 1:56 am

Being an informed consumer means not only reading your homeowners insurance policy closely, but also asking experts what constitutes the right type, and amount, of coverage you need for your home, according to the Insurance Information Institute (I.I.I.).

A qualified insurance agent or insurance company representative can guide you in your choices. Here are six basic questions the I.I.I. advises everyone to ask before buying or renewing a homeowners insurance policy:
  1. How much would it cost to rebuild my home in its current location in the event of a total loss? Your homeowners insurance policy should cover the cost of building a new home from scratch. Your insurance agent or insurance company representative will have knowledge of your neighborhood, and familiarity with the construction materials used when your home was originally built and can accurately calculate this cost. In general, homeowners policies cover partial or total damages caused by fire, hurricane, hail, lightning or any other disaster listed in your policy. Flood and earthquake-related losses must be insured separately because both perils are excluded in standard homeowners insurance policies.
  2. How much is the personal property in my home worth in the event of a total loss? Your homeowners insurance policy should cover the cost of replacing all personal property (furniture, appliances, clothing) should it be stolen or destroyed by fire, hurricane or another insured disaster. Most companies provide personal property coverage equal to about 50 to 70 percent of the amount of insurance you have on the structure of your dwelling. So if you have $100,000 worth of dwelling protection, most insurers would recommend $50,000 to $70,000 worth of personal property coverage. The best way to determine if this recommendation is appropriate for your specific situation is to conduct a home inventory. Consider using the I.I.I.’s Know Your Stuff® - Home Inventory app in the iTunes App Store.
  3. How much liability protection do I need? Liability covers you against lawsuits for bodily injury or property damage that you, or your family members, cause to other people. It also pays for damage caused by your pets. The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit of your policy. You are also covered not just in your home, but anywhere in the world. Liability limits generally start at about $100,000. Most insurance agents and company representatives recommend that you purchase at least $300,000 worth of liability protection. If you have significant assets and need more liability protection than is offered under the standard homeowners policy limits, ask your agent about umbrella liability.
  4. What level of additional living expense coverage do I need? The Additional Living Expenses (ALE) provision is found in standard homeowners insurance policies. It pays for the costs of living away from home if you cannot reside there due to damage from an insured disaster. ALE covers hotel bills, meals and other expenses over and above your customary living expenses. ALE coverage differs from company to company. Many policies provide coverage equal to about 20 percent of your dwelling protection. For example, if the structure of your home is insured for $100,000, you would have $20,000 of ALE coverage. Some companies impose a time limitation, such as 12 to 24 months.
  5. Should I buy a separate flood and/or earthquake insurance policy? There were numerous flooding events and earthquakes in the U.S. in 2011, but relatively few Americans had coverage for either type of natural disaster because these perils are excluded from standard homeowners insurance policies. Check with your insurance agent or insurance company representative to see whether you might need specialized coverage beyond your standard homeowners insurance policy.
  6. Do I qualify for any discounts? If you have smoke detectors, burglar alarms and/or dead-bolt locks in your home, you can often get a premium rate discount. Sophisticated sprinkler systems and alarms that ring at monitoring stations often reduce your homeowners insurance premium, too. Ask your agent or company representative about discounts available to you. If you are at least 55 years old and retired, for instance, you may qualify for a discount of up to 10 percent at some companies. If you have completely modernized your plumbing or electrical system recently, a few companies may provide a price break.

Published with permission from RISMedia.

Building Financial Confidence

February 20, 2012 1:52 am

Taking control of your finances means taking the time to conduct an honest assessment of your financial picture. According to Certified Financial Planner Board of Standards Consumer Advocate Eleanor Blayney, CFP®, peel back the layers of your financial life by gathering relevant financial documents, like your most recent tax return, your last paystub, and the latest statements for your retirement and investment accounts, and asking the following questions:
  • What is your gross and net income, and what are your expenses?
  • What do you have in terms of financial assets (savings and investment accounts, real estate, retirement plans, etc.)?
  • What are your debts, both in terms of amounts outstanding as well as what you pay each month?
  • What workplace benefits do you receive?
  • What insurance coverage do you have to protect your health, income, life, property, or need for physical assistance?
  • How are your assets titled and who gets them when you are no longer here?
Answering all these questions at one time, in one place is a key first step to building a sound foundation for a financial plan. As Blayney explains, this exercise will give you a clear picture of your financial starting point so that you can set and meet your financial goals.

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How to Be Productive When Working from Home

February 20, 2012 1:52 am

According to an article in the Kansas City Star, there’s evidence suggesting that more and more employees are seeking opportunities to work from home, while many managers and business owners are still reluctant.

According to the Star, middle managers are fearful that allowing employees to work from home will adversely affect productivity. According to Martha Jenkins, however, this does not necessarily have to be true. Jenkins and her company, Jenkins Coaching, offer practical advice to small business owners and contractors who work from home, helping them make the best use of their time.

According to Jenkins, clear communication and well-understood expectations are essential for making home-based employment work. She offers the following five tips for maximizing the work-from-home experience:
  1. Ensure you know what your employer’s expectations are: See to it that there are no unanswered questions about work hours, breaks, company equipment, and so forth.
  2. Ensure that your results are communicated to your employer: Working long hours will not matter if your boss is not aware of what you accomplish.
  3. Set up an effective work space: Make sure you have a work area that is free of distractions and is also comfortable and separate from the rest of your house.
  4. Establish boundaries with your family and friends: Make sure they are aware of the demands of working from home.
  5. Assess your progress on a regular basis: Record your achievements and mark your progress along the way, and make regular evaluations to your work habits.
Jenkins says working from home is ultimately successful when it is treated like a job. “In order to convince an employer you are serious about it, the bottom line is to behave in as professional a manner as possible.”

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Quick and Cost-Effective Home Updates

February 20, 2012 1:52 am

These days, every homeowner is looking for cost-effective ways to keep their homes fresh and updated. The following DIY home improvement and clean-up suggestions from the experts at Grime Boss will help you touch up your home without spending a fortune:

Repaint the walls

One great way to update your home without having to replace carpeting or furniture is to refresh walls with a fresh coat of paint. Determine the amount of paint needed by using an online calculator. For an inexpensive and quick project, simply update the paint on doors, cabinets and crown molding, rather than the walls. Likewise, you can paint an accent wall along a hallway, or within your kitchen or living room, rather than the entire space.
Replace hardware
If you'd love to renovate, but it's simply not in the budget for this year, make small updates now that you can incorporate into later construction projects. One quick trick is to replace the hardware in highly trafficked areas, such as the kitchen or the bathroom. Replace cabinet handles or knobs and drawer pulls. While replacing hardware, make sure to give your door hinges and drawer tracks a good oiling to prevent squeaking.
Install shelving in the garage
Who couldn't use extra storage space? For many, additional storage may mean looking beyond the house to the garage. Find a variety of storage solutions that fit within your budget—from finishing rod racks to cabinets and overhead ceiling-mounted shelving—at a variety of retail stores.


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MBA Survey: Delinquencies and Foreclosures Decline

February 17, 2012 1:52 am

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 7.58 percent of all loans outstanding as of the end of the fourth quarter of 2011, a decrease of 41 basis points from the third quarter of 2011, and a decrease of 67 basis points from one year ago, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate decreased five basis points to 8.15 percent this quarter from 8.20 percent last quarter.

The percentage of loans on which foreclosure actions were started during the fourth quarter was 0.99 percent, down nine basis points from last quarter and down 28 basis points from one year ago. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the fourth quarter was 4.38 percent, down five basis points from the third quarter and 26 basis points lower than one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 7.73 percent, a decrease of 16 basis points from last quarter, and a decrease of 87 basis points from the fourth quarter of last year.

The combined percentage of loans in foreclosure or at least one payment past due was 12.63 percent on a non-seasonally adjusted basis, a 10 basis point decrease from last quarter and was 107 basis points lower than a year ago.

In terms of changes since last quarter, on a seasonally adjusted basis, the overall delinquency rate decreased for all loan types except FHA loans. The seasonally adjusted delinquency rate decreased 20 basis points to 4.12 percent for prime fixed loans and decreased 151 basis points to 9.22 percent for prime ARM loans. For subprime loans, the delinquency rate decreased 157 basis points to 19.67 percent for subprime fixed loans and decreased 267 basis points to 22.40 percent for subprime ARM loans. VA loans also saw a decline, with the delinquency rate decreasing three basis points to 6.55, while the delinquency rate for FHA loans increased 27 basis points to 12.36.

The percent of loans in foreclosure, also known as the foreclosure inventory rate, decreased from last quarter to 4.38 percent. The foreclosure inventory rate for prime fixed loans declined four basis points to 2.52 percent and the rate for prime ARM loans decreased 33 basis points from last quarter to 8.72 percent. For subprime loans, the rate for subprime ARM loans decreased 56 basis points to 22.17 percent and the rate for subprime fixed loans decreased 17 basis points to 10.65. In contrast, the foreclosure inventory rate for FHA loans increased 27 basis points to 3.54 while the rate for VA loans increased 12 basis points to 2.37.

The non-seasonally adjusted foreclosure starts rate decreased seven basis points for prime fixed loans to 0.62 percent, 33 basis points for prime ARM loans to 1.83 percent, 17 basis points for subprime fixed to 2.33 percent and 86 basis points for subprime ARMs to 3.79 percent. The foreclosure starts rate increased 10 basis points for FHA loans to 0.88 percent and four basis points for VA loans to 0.60 percent.

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Boost Your Open-House Attendance

February 17, 2012 1:52 am

While marketing your home in today’s real estate environment often means a variety of tech-savvy approaches, the value of a traditional Open House cannot be overlooked. While prospective buyers may have narrowed down their choices over the Internet, they will still want to tour a home before making an offer.

From Newton, Mass. REALTOR® Jim Lowenstern, here are some great strategies for maximizing your open house experience.
  • Make the open house a community event. Invite the neighborhood to talk about the school system or other current events affecting the community. By opening your doors to invite people in for another reason than just to view your home, you can raise awareness about your listing while helping to unite the community on important issues. Be careful to stay away from political issues, however. There are many neutral issues such as neighborhood watch or a nonprofit organization that can be highlighted instead.
  • Invite a speaker. A great way to stand out from other open houses is to offer a guest speaker like a home stager or general contractor. If people are looking to buy, they’re usually in the process of selling, so hiring a home stager to talk about DIY staging techniques is a great way to get serious buyers through your door.
  • Don’t forget to properly market your open house. A mainstay for my company is the use of social media and email blasts to get the word out about any of the events we sponsor. Ask your agent what he or she is doing to get the word out about your home. It’s good advice to plan a marketing strategy with your agent before you hire them so that expectations are clear from the beginning.
  • Always provide refreshments. A hot cup of coffee and fresh baked goods can go a long way when it comes to developing a following to your open houses. On top of that, goodies will help keep prospective buyers at your showing longer. Some local restaurants will give you a discount if you help them get the word out about their business. If they have a menu, maybe you can offer a stack on your refreshment table.
  • Always add to your database. Raffle off a gift certificate to attendees that will share their business card or contact information with you. Keep a running mailing list of the folks that attend so you can easily keep them in the loop if there’s an offer or a price change.

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Less Home, More Impact

February 17, 2012 1:52 am

The building industry is placing increased focus on designing smaller homes, but with maximum impact.

According to an article by Claire Easley, senior editor at Builder, recent presentations at the International Builders’ Show discussed the trend toward less square footage but greater emphasis on maximizing space for lifestyle purposes.

As Easley’s article states, the trick to getting smaller homes right, according to consultant Gale Steves who spoke at the show, is to not only use every space in the home, but also to customize the allocation of space so that the owners’ priorities are reflected in where square footage is bestowed.

Building experts agree that today’s buyer wants a home with flexible space—a dining room that can easily be converted to a home office, for example. Or, for those in need of a complete home office, a spare room can be outfitted with a Murphy bed, so that it can act as a work space most of the time while accommodating guests when necessary.

Easley’s article also points out that homebuyers are shying away from redundant spaces, such as an eat-in kitchen and a formal dining room, and that builders are placing greater emphasis on areas of the home that are truly used the most, such as a side-door entrance as opposed to a front door that’s rarely used. Even “forgotten spaces,” such as hallways, can be transformed into useful and/or eye-catching areas by turning them into photo galleries or designing them with built-in storage cabinets.

Not to be overlooked, the smaller-home trend also has significant green implications, as builders strive to create a less-is-more environment with features such as WaterSense appliances that use less water while still looking as good and operating as well as other products.

Published with permission from RISMedia.

Need for Dog Adoption Rises Due to Foreclosures

February 16, 2012 1:50 am

Among the biggest victims of the economic recession are the once beloved family pets surrendered to shelters as their owners deal with extended joblessness, losing their homes, and renting properties that don’t accept pets. The U.S. Humane Society estimates 6 to 8 million dogs and cats enter shelters each year— and 3 to 4 million are euthanized.

Inga Fricke, director of sheltering issues for the U.S. Humane Society, says that while the majority of the public is in favor of adopting pets from shelters, the reality is, only about 20 percent actually do.

Fricke and retired police officer Irvin Cannon, a confirmed dog lover whose new book, “For the Love of Dog Tales” (, have teamed up to promote pet adoption. They offer the following pointers regarding breeds:
  • Among the breeds known for intelligence: Shetland sheepdogs, golden retrievers, Labrador retrievers, poodles, Australian cattle dogs, Papillons and Doberman pinschers.
  • Bulldogs, beagles and Basset hounds all start with ‘B’ but get much lower grades for smarts.
  • It’s a myth that mutts have fewer health issues than purebred dogs. Because some breeds have tendencies toward problems such as deafness, blindness or hip dysplasia, remember, these are genetic issues that are inherited. So if you’re mixed-breed includes some German shepherd, it may also have hip dysplasia (a problem with the joint’s bone structure).
  • If you’re in the market for a purebred dog, you have a 25 percent chance of finding one – although maybe not the breed you want – at a shelter. If your heart is set on a specific breed, check your area for a rescue group specializing in that breed.

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Choosing a Bank that Works for You

February 16, 2012 1:50 am

Choosing a Bank that Works for You
Finding the right bank means assessing your needs first, says the American Bankers Association (ABA). The ABA advises asking yourself the following questions when evaluating a banking relationship:
  1. What is your goal in establishing a banking relationship? Answers may include "to save money," "to have a checking account," "to get a loan," or all of the above.
  2. How much money can you keep on deposit each month and how many checks will you write? This will help you figure out how complex or simple an account you might need. "Packaged" or "multi-service" accounts offer a variety of services for one fee, while "no frills" accounts offer a minimum number of services at an extra-low price. Other accounts might be designed cafeteria-style: you choose from a variety of services and pay as you go.
  3. Will you be buying a home or car or making another large purchase in the near future? You'll want to find out about the variety of loan products offered.
  4. If you hope to save for a big expense or toward your child's (or your own!) future education, you'll also want to find out how many savings products are offered. Many banks now offer uninsured investments, such as mutual funds, as well as the more traditional insured deposit accounts.
  5. What time of day do you expect to do most of your banking? Some people prefer to visit the bank during their work hours, while others prefer a bank located close to home that they can visit over the weekend.
  6. Do you like the convenience of automated teller machines and other types of electronic services—like banking through your personal computer, or do you prefer to deal directly with bank personnel? Answering this question will help you determine if you'd be happier at a bank with an extensive branch network emphasizing regular, evening, or weekend hours, or one that focuses more on electronic services like ATMs and PC banking.
Once you’ve answered these questions, the ABA recommends visiting or at least calling the banks in your area. Compare fees and service charges at the banks you're considering, as well as interest rates on loans and deposit accounts. What does each charge for services like cashier’s checks, safe deposit box rental and ATM use?

Because price isn't the only—or even most important—factor for most people in choosing a bank, the ABA also advises taking a minute to think about how comfortable you feel at each institution. Are your questions answered quickly and accurately? Do customer service personnel offer helpful suggestions? Will the hours and locations save you time and meet the demands of your lifestyle?

Finally, look for an institution that is federally insured. This means your deposits will be protected by the FDIC. The FDIC has raised its coverage amount to $250,000 per depositor per insured bank. Look for FDIC stickers on bank doors and teller windows.

Source: The American Bankers Association

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Sales and Affordability Increased in Fourth Quarter Metro Area Home Prices

February 16, 2012 1:50 am

Housing affordability conditions improved in most metropolitan areas from softer existing-home prices and record-low mortgage interest rates in the fourth quarter, with rising sales and lower inventory creating more balanced conditions, according to the latest quarterly report by the National Association of REALTORS®.

Introduced with this release is a new annual metro-level housing affordability index, with historically favorable conditions dominating across the country.

The median existing single-family home price rose in 29 out of 149 metropolitan statistical areas (MSAs) in the fourth quarter from a year earlier; two were unchanged and 118 areas had price declines.

Lawrence Yun, NAR chief economist, said the figures reflect greater home sales activity at lower price points. “Sales have risen strongly in lower price ranges from one year ago, while sales at the upper end remain sluggish,” he said. “More importantly, we’re seeing a consistent trend of declining inventory, which means supply and demand conditions are becoming more balanced in more areas, which will help stabilize home prices.”

The national median existing single-family home price was $163,500 in the fourth quarter, down 4.2 percent from $170,600 in the fourth quarter of 2010. The median is where half sold for more and half sold for less. Distressed homes—foreclosures and short sales, which sold at discounts averaging 15 to 20 percent—accounted for 30 percent of fourth quarter sales; they were 34 percent a year earlier.
At the end of the fourth quarter there were 2.38 million existing homes available for sale, which is 21.2 percent lower than the close of the fourth quarter of 2010 when there were 3.02 million homes on the market.

NAR’s national Housing Affordability Index rose to a record high 184.5 in 2011, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power; recordkeeping began in 1970.

Between 2010 and 2011, in markets where comparisons are available, all but 2 out of 148 areas showed improvement in housing affordability, and 69 MSAs had double-digit increases in affordability conditions.

Source: The National Association of REALTORS®

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