Personal Perspective

There are those that negotiate for the most reasonable deal possible and those that negotiate for the sake of negotiating. Sellers and buyers alike need to realize that the best deal possible is one where both get what they want in the deal.

This isn’t necessarily an easy point to arrive at and is often a lesson in patience. In real estate, there’s something called the X-factor – a potential home buyer spends countless hours viewing properties until they finally find their perfect home. Instead of making an offer based on what the value of the home is to them and what comparable prices are, they immediately start to ponder how much less they should offer than whatever the asking price might be.

Sorry, but there isn’t some tacit X-factor percentage that should just automatically be subtracted from all listing prices. Home owners are more often than not just as eager to sell as the buyer is to buy. If so, the price of the home is usually realistically priced and priced closely to its comps.

Still, the quest for a deal spurs many to start with a low-ball offer that’s not only unrealistic, but often insulting to the seller. If the seller is offended, negotiations usually die before they’ve ever begun. So, any serious buyer shouldn’t have some magic automatic deduction from an asking price in their head. Look at the comps in the area and determine what the value of the home is for you based on how congruent it is to the needs and desires of your family.

How a purchasing price is arrived at for both owner and buyer is a very personal process. When accepting an offer, a buyer considers how fast they need to sell the home, how bad they need to sell the home, pressures from having already purchasing a replacement home, what is owed on the home, and so forth.

On the other hand, two potential buyers can look at the very same property and come up with two very different personal values for the home, depending on how congruent it is with each of their needs, the location of the home, appeal of the home, amenities, school system, and so forth. Aside from personal value, buyers and sellers must also look at the how much a lender will lend on the home based on it appraisal.

Price isn’t the only thing negotiated during the sale of a home. There’s also time lines, what will stay and go from the home, and who will pay for any problems found upon professional inspection. The most important thing for buyers and sellers to remember is that negotiating isn’t about one side getting everything they desire; it’s a give-and-take process of compromise.

To avoid a winner-take-all complex from forming, buyers and sellers should both have a list of top priorities prior to starting any negotiations. As new issues arise during the process, priorities might need to be re-evaluated to see if the priority is truly a must have for the home to change hands.

Many problems, such as fees and repairs, often can be solved by the buyer and seller meeting in the middle. Agreeing to split the costs evenly can be a much better option than wasting time and money to negotiate for weeks. For example, a seller that will pay another mortgage payment because of the additional time spent negotiating might actually find it cheaper to pay half the cost of a minor repair and close the deal before the next note is due.

Sometimes there are legitimate deal breakers. If so, then it just wasn’t the best option for the parties involved. But, before giving up, do try mulling over the troubling aspect of the negotiation for a few days. You can move on to the other areas of the negotiation. If everything else is agreed on, then there may be more encouragement to compromise on the problematic area.

Your teen is ready to drive, and you have the privilege of preparing them for this responsibility. Use nine tips as you prep your teen to navigate the road safely.

1.Ensure Your Teen Meets State Licensing Guidelines

Teen drivers may officially get behind the wheel after they earn a learners permit. Then they will probably have to complete a certain number of hours behind the wheel while supervised by a licensed driver. Be sure your teen is properly licensed before they drive on the road.

2. Purchase Adequate Auto Insurance

Your teen driver must have auto insurance. Contact your insurance agent  to purchase an individual policy for your teen or discover how to add your teen to your policy.

3. Give Your Teen Real-World Driving Experience

Give your teen time to drive on all types of roads and in all types of weather. They can learn to parallel park in residential areas and merge with existing traffic on the highway. Real-time driving gives your teen the experience they need to drive safely any time.

4. Limit Passengers

Your teen driver should only host one passenger at a time. Otherwise, they become distracted, and their accident risk and aggressive driving incidents increase.

5. Set a Curfew

Driving at night can be tricky due to lower visibility and increased fatigue. Plus, some states limit a teen’s driving to daytime and early evening hours. Reinforce the curfew you or your state set as you encourage safety.

6. Sign a Safe Driving Contract

A driving contract outlines your expectations for your teen driver. It can include where  your teen can drive, who can be in the car, what happens if your teen breaks a law and consequences for breaking the contract.

7. Take a Driver’s Ed or a Defensive Driver Course

During driver’s ed, your teen learns the latest traffic laws, safe driving techniques and strategies to avoid accidents or traffic violations. Your teen may also be eligible for an auto insurance discount after passing the course.

8. Prepare Your Teen for an Accident

Your teen driver could be in an accident even though they’re not at fault. Be sure they know what to do if they are involved in a collision or fender bender.

9. Teach Your Teen to be Cautious but not Scared

With all the dangers on the road, it’s easy for teens to be scared, and then they’re more likely to make a mistake. Instead of scaring your teen, teach them to be cautious and confident as they drive.

Driving is a rite of passage for teens. Prepare your teen to be safe on the road with these nine tips.

Are you planning to welcome trick or treaters to your home this month? Follow 11 steps that prepare your property for safe Halloween fun.

1. Clean your walkways.

Jack-o-lanterns are cute, but they are also tripping hazards. Remove decorations and all clutter or debris such as toys, yard tools or twigs from your sidewalks, steps and walkways.

2. Clear the yard.

Ideally, kids will stay on the walkway and front porch as they retrieve their candy. However, you will want to clear your yard so curious and excited kids don’t trip on any toys, branches or yard tools.

3. Repair broken sidewalks and steps.

Inspect your entryway and steps carefully. Then repair any broken stepping stones, loose railings or other hazards.

4. Install lighting.

Your front porch light is turned on to welcome trick or treaters, but you may also need additional lighting to ensure safety. Solar-powered walkway lights or a string of lights can illuminate your walkway and porch.

5. Change your location.

Instead of making kids walk up your long driveway or steep steps, stand or sit in a location that’s easy for them to access.

6. Lock doors and windows.

On trick or treat night, your attention is focused on your front door. Lock all the other doors and windows in your house so no one can gain access to your home while you’re out front. Remember to lock your garage and car, too.

7. Secure valuables.

Move your grill, mower and other valuables to the shed or another secure location. With this tip, you prevent potential burglars from adding your home to their future target list.

8. Protect your pets.

Some kids are scared of animals. Also, pets can become startled and bolt or bite when they see strange costumes or dozens of noisy kids. Always secure your pets so they and the kids are safe.

9. Extinguish candles.

Open flames pose a fire hazard. As an alternative, try battery-powered bulbs, or install Halloween-themed covers on your flashlights.

10. Consider allergies when choosing candy.

Many kids are allergic to nuts or dairy. Place a teal pumpkin on your step to show trick or treaters that you offer safe alternatives like books, stickers or toys.

11. Update your property and homeowners’ insurance policies.

Despite your best efforts to promote safety, someone could be injured while on your property. Be sure your property and homeowners’ insurance policies are updated and include adequate coverage.

Trick or treating is a fun family activity. As you give out treats this year, follow these 11 safety tips. They secure your property and reduce your liability risks.

Don’t wait until the weather forecast calls for prolonged heavy rains before buying flood insurance. While this practical insurance can be purchased anytime, the policy does not take effect for 30 days. As the most common natural disaster in the country, flooding ruins millions of dollars of homes and property every year. Even so, flooding is not commonly covered in your typical homeowner’s insurance policy, making it necessary to purchase additional coverage for this costly, devastating disaster.

If you are in a high-risk flood zone, a federally regulated lender will require a would-be borrower to buy flood insurance in order to qualify for a mortgage loan. To satisfy the lender, flood insurance must be purchased in an amount that sufficiently covers the loan.

A homeowner should also buy flood insurance if he or she resides in a flood plain with no failsafe controls, such as a dam. Flood policies even pay off if the President does not declare the area a federal disaster area, which can prove to be invaluable. Because the nation’s Chief Executive Officer rarely issues such a declaration, protecting yourself is extremely important. Besides, you have to repay the federal aid you receive for home repairs related to a natural disaster so providing your own protection is the only way to ensure financial recovery suffered from flooding.

Not all homes qualify for flood coverage. For instance, flood insurance for beachfront or ocean-side property may not be available for the obvious reasons.

The Federal Emergency Management Association (FEMA) reports that more than 20,000 communities have agreed to tighter zoning and building measures to control floods. Residents of these communities can buy flood coverage from the National Flood Insurance Program (NFIP), which FEMA oversees. As of 2009, NFIP had 5.7 million flood policies inforce nationwide.

Premiums for flood insurance vary widely, depending primarily on individual risk. In determining price, flood insurance underwriters consider several factors including the property’s elevation, proximity to bodies of water, and whether the dwelling has a basement. Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renter.

Most Americans have seen ads on television for get-rich-quick seminars that teach novice investors the secrets of making money from housing foreclosure sales. In spite of all the hype, successfully buying and selling foreclosed real estate requires research, money, knowledge, experience and time. Furthermore, buying foreclosed real estate is not without risk. If you plan to try your hand at this type of investing, you need to be well-versed in foreclosure basics. Foreclosure is the legal recourse lenders or governmental agencies have to recoup money owed them because a property owner failed to make payments. The lender/agency can take the house and sell it to satisfy the debt.

Generally, the reasons for foreclosure include: 

Non-payment of a mortgage/home equity loan.
Inability to meet a balloon payment.
Failure to pay property taxes.
Inadequate insurance coverage for the property.
Inability/failure to maintain the property.

The foreclosure process involves three stages:

Pre-foreclosure – This is the period between the time the homeowner stops making payments and when the land is put up for sale at auction. Investors typically deal with the homeowner during this time.

Auction – This is when the property is taken from the homeowner and sold to the highest bidder. Either the county sheriff or a trustee handles this phase, depending on the state.

Real estate owned (REO) – If no one buys the property at auction or if the lender is the highest bidder, the home becomes “real estate owned” by the bank. Banks usually sell REO properties on the open market through a real estate agent or third-party marketing company.

The most common method of buying a foreclosed property is during a sheriff’s auction or trustee’s sale. These auctions are held on a weekday morning. Investors cannot pay with credit cards, personal checks or IOUs, and they must make a sizable deposit or pay the entire sum for the property on the spot. Typically, potential buyers are not allowed inside the house before bidding begins. The only information prospective buyers have on which to base a purchase decision is what is available through public records searches and a curbside appraisal.

A second risk in sheriff’s auctions and trustee’s sales is that the homes are not guaranteed to come with a clear title. This makes the title search a critical, necessary part of your public records research. If a previous owner with a valid claim surfaces at a later date, you can lose everything you invested.

Also, homes sold at auction sometimes have liens that weren’t erased by foreclosure, such as an IRS debt, that could wipe out any profit you thought you would see from the resale of the property. Procedural errors and court rulings also could stop a foreclosure sale after you have invested time and money. Furthermore, some states have a statutory redemption period, during which time the original homeowner can repay what is owed, regain ownership and leave you with nothing.

Despite all of these potential drawbacks, buying an auctioned home isn’t always a perilous undertaking. Homes foreclosed by reputable lenders who are the first lien holders can be a fairly safe investment. If the deal is completed properly, and you have title insurance, there’s an excellent chance of getting a good title. Properties foreclosed by a government agency, such as the Department of Housing and Urban Development or the Veterans Administration, present less risk. These auctions are conducted online through a marketing company.

Buyers are permitted to examine the homes in advance, conduct inspections and obtain title insurance. The biggest drawback to government auctions is the limited availability of homes. Consequently, available properties attract a large number of interested buyers, which makes it a very competitive market with prices only slightly discounted off current market value.

If you are considering the idea of investing in real estate through buying foreclosed properties, prepare yourself by learning the ins and outs of the process and legal issues, and gathering whatever information you can on the property and parties involved. In doing so, you’ll help to minimize the risk that is inherent with this type of investment.

A burglary happens every 15 seconds in the United States with thefts averaging $1,725. Protect yourself, your family, your home and your peace of mind when you implement eight top home security tips.

Install an alarm.

Noise is a top deterrent to criminals. Install a whole-house alarm system if possible. Otherwise, post an alarm company’s sign in a prominent location to warn thieves away.

Make the house look occupied.

An empty house is an easy target, so make your home look occupied at all times.

• Use a timer to turn on outdoor and indoor lights at the same time both day and night.
• Ask a neighbor to pick up mail and newspapers if you’re on vacation.
• Don’t advertise travel plans online.
• Keep a car parked in your driveway.

Turn on the lights.

Burglaries can occur in broad daylight, but thieves also like darkness. Install plenty of outdoor lighting around your property and near all doorways. Set your lights on a timer, too, so they go on and off at the same time each day, giving thieves the illusion that you are always home.

Secure the doors.

An unlocked door is an open invitation for burglars, and exterior doors are the most common point for burglar entries. Be sure to buy sturdy, wooden or metal exterior doors with deadbolts and auxiliary locks, and keep them locked even when you’re home. If you have a sliding door, secure it with a metal bar. You should also change the locks after you move into a new house and after you lose your keys.

Secure the windows.

Keep your windows locked at all times. If possible, purchase multi-pane windows with reinforced glass or acrylic. You can also add security film for additional protection.

Don’t hide a spare key.

You may be tempted to store a spare key under the doormat, on the door frame, in your mailbox or in a false rock. Instead, give it to a trusted neighbor where it’s inaccessible to a burglar.

Trim the bushes.

Overgrown bushes, shrubs and other landscaping provide the perfect cover for a thief. Trim the landscaping around your home. You can also plant thorny or spiked plants under windows to deter criminals.

Secure the garage door.

It’s surprisingly easy to break into a garage, so always lock the door. Install a motion sensing light in the garage, too, to alert you and neighbors of suspicious activity. You should also remove your automatic garage door opener from your vehicle overnight.

These top eight home security tips protect you, your family and your valuables. For additional security tips, talk to your insurance agent.

Those wanting to give a home an update or remodel often also want to know what will give them the most return for their invested dollar should they ever want to resell. The results of one new report might cause some surprise.

According to the 2010 Remodeling Cost vs. Value report by Remodeling Magazine, the greatest return on a remodeling investment (costing more than $10,000) is installing new fiber-cement siding, with an average cost of $13,382 and an 80% return on the investment. The survey, done in partnership with the NAR (National Association of Realtors) and HomeTech Information Systems, compared the average cost of the 35 most popular remodeling projects and the value each retains during a resale.

However, when compared with 2009 data, all the renovation jobs, even the fiber-cement siding installation, returned a lower percentage of the cost to complete in additional home value. In other words, most individuals planning a remodel to their home are looking to pay a lot more to complete the job than they would get back in a return from selling the property. In general, the report estimates that homeowners would only recoup 60% of 2010 remodeling costs.

Even so, curb appeal seems to remain a predominate concern for buyers, as the report showed that most exterior improvements were better performing returns than those on the interior of a home. With such a large current inventory and wide selection in the current housing market, curb appeal is more important than ever to catch the buyers’ attention and urge them to look at what the inside might hold.

The cost to value equation of home improvement has actually been becoming less attractive for several years, but the 2010 percentage decline has been especially significant. On average, homeowners recouped 16% less on a typical remodeling job than they did in the previous year. For example, the cost of adding a new middle-of the-road bath was about $15,000 in 2003 and it returned almost 100% of the cost during resale. Today, however, the exact same mid-range bath will cost around $40,000 and only return about half of that cost during a resale.

Although the 2010 numbers showed the sharpest change in the nine year history of the survey, oddly enough, 2010 also saw the first construction cost decline since 2004.

As a general rule, the more spent for a remodel job, the lower the percentage of return will be during resale. Take kitchen remodels for an example. Middle-ranged kitchen remodels will generally cost around $60,000, yet return around 70% of that cost during resale. Move up to a top of the line renovation that costs around $113,000, and it will return just 60% of its cost.

Overall, the report showed the lowest return was with middle-ranged home office renovations, with an average cost of $28, 888 and returning only 45.8%.

In the lower than $10,000 home improvement bracket, exterior door replacement does very well, with a cost of $1,218 and return of 102%. As far as the best returns in the more than $10,000 price bracket, a new wood deck, with a cost of $10,973 and return of 72.8%, and a minor kitchen remodel, with a cost of $21,695 and return of 72.8%, came in right behind the fiber-cement siding.

Personal umbrella insurance can be a valuable tool in your insurance portfolio since it protects your assets. Before you purchase this important protection, though, understand if you need it.

What is Personal Umbrella Insurance?

Your auto and homeowners or renters insurance policies cover your liability if you’re in an auto accident or cause property damage. The liability coverage of these policies limited, though.

Use your personal umbrella insurance policy to increase your liability coverage and protect your personal assets. Personal umbrella insurance policies are typically available in million-dollar increments between $1 and $5 million.

In addition to supplementing your auto and homeowners or renters insurance, a personal umbrella insurance policy can cover:

• Personal injury claims of slander, libel or defamation of character
• Vacation rental liability protection for scooters, boats, jet skis and other rentals
• Defense coverage for attorney and legal fees
• Incidents that occur while you’re traveling abroad

How Does Personal Umbrella Insurance Work?

Here’s an example of personal umbrella insurance in action.

You cause an auto accident that injures the other driver and causes property damage. Because the driver cannot return to work for several months, you are also sued for lost wages.  Your total liability is $1 million.

Your auto insurance will pay up to its bodily injury and property damage limit, which is typically capped at $500,000. The remaining $500,000 is your responsibility.

How will you cover what you owe? You may need to cash out your financial accounts, including your retirement fund or college savings account, or sell property, including your house or vehicle. If you don’t own adequate resources, a judge could stipulate that your future earnings will go toward repaying your debt.

A third option is personal umbrella insurance. It covers your liability and protects your current assets, lifestyle and future financial security.

Do you Need Personal Umbrella Insurance?

You may think that you don’t have enough assets to warrant a personal umbrella insurance policy. However, experts suggest that if you earn a living you should purchase this insurance.

Consider these guidelines when purchasing personal umbrella insurance.

• Assets exceed $1 million and income is $100,000 per year – purchase at least $1 million in umbrella coverage
• Assets exceed $2 million and income is $200,000 per year – purchase at least $2 million in umbrella coverage
• Own rental property – purchase $3 to $5 million in umbrella coverage

Where to Buy Personal Umbrella Insurance

Are you ready to purchase personal umbrella insurance? Contact your insurance agent for more details. They will help you examine your assets and purchase the right coverage for your needs, financial security and peace of mind.

Anyone that has ever moved can attest that the process has a considerable impact on everything from transportation to and from work to how and where free time is spent. When considering a move, one change that’s often overlooked is insurance coverage. Often a move will affect whether or not various insurance coverage policies are still adequate.

Homeowners insurance is usually a concern when moving. For the average person, a home will be one of the largest investments they make in their lifetime. What was adequate for previous housing might not apply to the new home. The homeowner will need to assess the differences in their new home versus their previous location carefully to determine if a new policy or transferring previous coverage is best; for example, the new home might be in a flood area or other high-risk area or contain more property to cover. It’s always prudent to research the rates and coverage from several insurance companies.

Auto insurance is also usually impacted in moves further away or closer to employment. A move closer to employment or to a suburb might translate to a lesser risk. Safer driving conditions could mean lower rates. Conversely, a further distance equals a greater amount of driving time. And, this is an equation that insurers view as the driver being a greater risk. A drive that now involves a more congested roadway may also translate to a greater risk.

In any event, when an insurer views a driver as a greater risk, higher rates soon follow. In the event that rates are increased from a move, there are a few steps that can help return the premiums to the previous level or at least lower them. The driver might consider increasing the deductible, buying multiple policies through the same insurer for a discount, or installing anti-theft hardware on the vehicle to lower the overall cost of the insurance.

After attending to Homeowners insurance and Vehicle insurance, the next insurance that should be examined is Life insurance coverage. How moving affects Life insurance coverage might not be so obvious as Homeowners and Vehicle insurance. Those that are upgrading their home or purchasing a home with a much higher price tag will most likely no longer have adequate Life insurance. The coverage ideally should be adjusted to account for the increased monetary commitment of a higher mortgage and household expenses. Yes, this is an added cost, but necessary to prevent leaving loved ones unable to maintain the home.

There are several steps you can take to ensure you are getting the best Homeowners insurance rates possible for the coverage you need:

Before purchasing a home, it is wise to learn about its insurance loss history. If there have been past losses, be sure to inspect the home closely to determine if proper repairs were made. The CLUE and A-PLUS databases enable insurers to check the claim history of the property as well as that of the homeowner.

Raising your deductible is a great way to reduce your premiums. Higher deductibles on your Homeowners insurance could produce savings of 25% or more.

Consider upgrades to your home. Do you need to modernize your heating, plumbing, and electrical systems to reduce the risk of fire and water damage? Are there upgrades you could make that would reduce the risk of damage in windstorms and other natural disasters? You might be able to save on your premiums by adding storm shutters, reinforcing your roof, or buying stronger roofing materials.

Older homes can be retrofitted to make them more capable of withstanding earthquakes. If you do make home improvements, be sure to make your insurer aware of the changes.

Improve your home security. You typically can get premium discounts of at least 5% for installing a smoke detector, burglar alarm or dead-bolt locks. Some companies will cut your premium by as much as 15% or 20% if you install a sophisticated sprinkler system and a fire and burglar alarm that signals the police, fire department, and other monitoring stations.

These systems are not inexpensive and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost, and how much you would save on premiums.

Buy your Home and Auto policies from the same insurer. Some companies that sell Homeowners, Auto and Liability coverage will take 5% to 15% off your premium if combine policies with them.

Maintain a good credit rating. Most insurers use credit-based insurance scores to determine Homeowners and Auto coverage premiums. All else being equal, a person with a good credit score will pay much less for insurance than someone with a lower score.