Should you buy a home warranty for your new home?

A one year home warranty is standard issue from a builder on new construction in Connecticut, but what if your home was built in 1980 or 1950 or 1900? Some buyers are not even aware that home warranty policies exist and are available for virtually any home, regardless of age.

What do home warrantees cover? It depends on the policy. but you can usually expect the warrantee to cover repair or replacement to appliances and the heating system, plus minor electrical repairs- all with deductibles. There are usually add-ons for swimming pools, well pumps, and septic system cleaning.

Can the seller pay for the warrantee? Some sellers offer a home warrantee with their property, otherwise you can purchase one, or your agent may negotiate one paid for the seller on your behalf.
 
How do you contact a reputable company ? The companies that I have worked with in the past are American Home Shield and Choice Home Warranty. There are others, and its best to check out their rating through the Better Business Bureau, reand get referrals through other clients, if available. Prices on coverage  and exclusions to the warranty  are important to know before you decide on a company. You can expect a policy pricing  to start at around $350 depending on your home's size, age, condition and coverage. The peace of mind may very well be worth it, and it's worth looking into, if for that reason alone.

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Do you know what your real estate agent can't tell you?

Are you aware that there are some questions that  your agent is not allowed by law to  answer? Your agent is not avoiding your question because of lack of knowledge or lack of professionalism.

Just yesterday, I wrote about schools. Real Estate agents are not allowed to give our opinion on schools. Seems harmless enough, but- that's the law. We can refer you to sources that can answer your questions, and that's about it.

Steering and blockblusting will cause an agent to lose their license, and we cannot answer any questions regarding  any protected classes. A few  examples of protected classes could be what the racial makeup of a neighborhood is, or  even the age of the residents on the street. I have had clients ask me if there are any children on the street because they have kids and would like to know that there would be some other children for their children to play with, and the only way I can answer that question is to tell them to check out whether or not there are swing sets in the yard, or take a drive by after school gets out to look for themselves.

We also cannot answer questions about crime rates- and when I say we cannot answer, I mean we cannot answer as per law. If  a client wants to know if it's a "safe" street, or what the crime rate is, I will refer them to the town's local Police department who can tell them of any activity on the street, and the area.

Another question we cannot answer ethically is what a house has gone under deposit for. Yes, it's a big secret until the closing.The listing agent does not share this with other agents, or buyers and there's good reason for it. If that particular transaction falls apart, then that fallen through sales price becomes the new asking price. Let's suppose the home was listed at $750,000 and the seller accepted a $700,000 offer that you knew about. What would be the probability of you submitting an offer greater than $700,000? Slim, right? What if you were that seller? ...So you understand.

I will go out of my way to answer whatever questions I can legally and ethically answer for my clients, and for other agents for that matter. And when you need an agent that you know will go the extra mile for you, all you have to do is pick up the phone or send me an email :)

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Buyers Remorse - is it a "sign" to back out of the deal?

Buying a home can be very exciting. There are ups and downs when you are looking for that perfect home, and when you finally find it, and write up the offer, that first night can be pretty nerve-wracking.

I usually tell my clients that if they experience any kind of anxiety the night we write up the offer not to worry, that it's normal- and it is! It's a big change in your life, and  there's nothing wrong with feeling a little anxious. If I feel at any time that my clients are unsure about moving forward, I will not write up an offer until we have resolved their concerns. I'll tell you a story to hopefully help you determine whether or not your fears are anything to be concerned about regarding your pending purchase, and hopefully make you feel better

Personally, I get a little nervous every time that I purchase a home, too. Remember that I have been in real estate for 27 years, and have helped hundreds of families move. I have moved a number of times, and personally stared at the ceiling in the middle of the night, and have had to watch old black and white movies just to try and  fall asleep. Honestly, I should be "immune" to that feeling. and I'm not. So truly, I understand what you are going through. A lot of it is just nerves.
 
A couple of things to  think about :

• Are you worried that the monthly payment is too high?  -TRUTH: If the bank has pre-approved you, then they feel that you can afford the payment based upon your credit  and work history, The bank will not give you a loan if you are not qualified- period, end of story.

• Do you think that something better might come along? How many homes have you seen, and how many of those home stack up as well as this one? What was it that prompted you to want to move to this home, enough to write up an offer, and give a deposit check? Writing an offer on a property is a conscious decision and that's  pretty hard to do if you are unsure. It's probably the jitters.

• Is the home missing the particular "wow" factor that you were hoping for?  We all want the best that we can possibly get, and not knowing what's coming on the market, and moving forward with a house that doesn't have everything you want may seem a little premature. Maybe the house has everything that you wanted , and yet you still feel that it's missing something, you just don't know what it is. Sometimes we have "champagne taste" and a "beer pocketbook".  Nothing is going to really get you that big wow factor, unless it's out of your range. Nobody says that you will be living there in 10 years, and by the way- the Natinal Association of Realtors statistics show consistently that people move approximately every 7 years. The easiest way to gain equity is to own a home, and  that will help get you to the next step which is that "champagne taste" house. You can't get to the second floor, unless you climb the steps. If you never take that first step, you'll never get to the top.

• Were you pushed into writing the offer, by your spouse, significant other, family member or friend, or (I hate to say this) by your Realtor?  Okay, well this is different. DO NOT EVER let anyone push you into doing anything that you are unwilling or unready to do. You need to talk this out with your agent, and whoever pushed you into action. What  are your concerns over the property?- are they real, or can they possibly be unfounded? Be brutally honest with whoever you  have this conversation with. It shoudl be your top priority and  it's important for that relationship, whether it be a professional one, or a personal one. The house is secondary.

These are tough questions that only you can answer- you just might need some help figuring out where that concern or those concerns come from.  My clients know that I am here to help them, and they can talk to me anytime about anything. Real estate or otherwise.  Relax, take a deep breath, think about it, and talk about it. That's the best thing- and remember- feeling anxious about your move is very normal.

How can you save money on closing costs?

You  get your Truth in Lending Statement from the bank and it says your closing costs are WHAT???? Yes, that piece of paper can certainly be a shocker, but here are a few ways that you can save thousands on closing costs, and try to relax, that number is intentionally high.

The bank estimates a number of fees at worst case scenario, such as your attorney costs- so the first thing to do is to look at those figures.  They may not coincide with your legal fees.  They may also include POC fees. ( P.O.C. means Paid Outside of Closing)  and that most likely, you have paid aready, so subtract those fees off the total

Did you know that the actual day of the month that you purchase your home also affects your closing costs?  That's right!

• Tip: 1:  If your mortgage payment will be $4,000 for example,  the day that you close can affect your closing costs by up to $4,000. If you know that the bank collects mortgage  payments for the month ahead, then it would make sense to you that if you close on the 2nd of the month, the bank (in this example) would require $3733. for the remainder of the month at closing. If you closed on the 30th of the month before, that same line item charge would be less than $134.  There's over $3,600 savings just  because you closed on your purchase 3 days earlier.   

You may have heard that you are supposed to close at the end of the month- now you know why. A few times, I have had clients that needed to close in the first few days of the month, and they would have incurred that big expense. What I will tell you is sometimes, but not always, you can negotiate  with the bank to NOT take this amount at closing. The result would be that your first mortgage payment would be due  the 1st of the next month, instead of the first of the following month .

Then, there are pro-rated taxes. The bank likes to have a two month share of taxes in escrow, even though the taxes are included in your actual payment, which leads me to my next closing cost cutting measure:.

• Tip: 2:  Each town collects taxes from the bank in their own manner- some collect every 6 months, some collect every 3 months, and here's where it can get somewhat complicated.  If you are closing on a home in the most inopportune month of the cycle in a town where tax collections are made from the bank every six months,  the bank will require more of an escrow (holding account) at closing.

In some cases , there  can be  7 months worth of taxes to  include in your closing statement.  Closing on the same house in a different month  will only cost 3 months of taxes in advance. If the monthly taxes work out to be $500 per month, which is still fairly cheap, your timing alone on this item alone can save you $2,000  in this minimal scenario.  When every penny counts, speak with your mortgage broker to discuss the tax collections and anticipated closing costs for the town that you are planning to move in.  Most realtors do not know about this cost-saving measure, and to be honest, I only found this out about 15 years ago- so talk to your mortgage broker or your attorney regarding  when is the most cost effective time to close on a home in the town(s) that you are interested in moving to.

• Tip: 3: Fuel costs.  If the home you are purchasing has oil heat, or propane heat, there will be a storage tank for the fuel on the property. You re-imburse the seller at market rates for the fuel that is left in the tank. So kindly ask the seller NOT to fill up the fuel tank(s), and only have the minimum delivery if they are low. New clients can often work out a deal with a fuel company, and I can almost guarantee you that the price you pay for fuel will be less than what you will need to re-imburse the seller for. Depending on the size of the tank, your estimated  re-imbursement costs can save you upwards of $500 at closing.

As always, consult professionals regarding the purchase or sale of your home. We are available 7 days a week, nights and weekends, and you can even set up an appointment online for the date and time that's most convenient for you.

What happens if the house you want to buy does not "appraise", and you can't get a loan because of it?

The bank sends an appraiser out to a property to ensure it is worth the amount you are willing to pay. Consider it an additional unbiased  check on the value. If you require a $500,000 mortgage on a property that is deemed to only be worth $500,000, the bank may  not give you a loan (It would be considered 100% financing) The bank looks at lending  money that is secured on a property as an investment. There would be no equity in the house on that particular scenario, and in case of a default, the bank would have a hard time recouping its investment.

Three  things can happen in this instance. The seller can reduce his price to what the bank feels that its worth. The buyer can put more of a deposit down, or the buyer can walk away from the transaction, with no penalties. Incidentally, there would be no penalty for the seller, either.

Sometimes, if and when an instance like this occurs, the seller may opt to hire an independent appraiser (that is certified through the buyers bank) for another opinion. Appaisers sometimes make mistakes, too- but don't worry too much about this- it's a rare occurrence these days. Years ago, buyers were not represented by agents. All realtors worked for the seller, even if they wrote an offer for the buyer. With buyer representation, the contracted agent holds a fiduciary relationship with the buyer. Justr another good reason to hire an agent to represent you in yuor purchase