The right home coverage

Here are six ways to make sure you get the right coverage and consequent compensation for your home:
1) Maintain a Security System and Smoke Alarms: A burglar alarm that is monitored by a central station, or that is tied directly to a local police station, will help lower the homeowner's annual premiums, perhaps by 5% or more. In order to obtain the discount, the homeowner must typically provide proof of central monitoring in the form of a bill or a contract to the insurance company.

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Smoke alarms are another biggie. While standard in most modern houses, installing them in older homes can save the homeowner 10% or more in annual premiums. Of course, even more importantly, in case of fire, they could save your life!

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2) Raise Your Deductible: Like health insurance or car insurance, the higher the deductible the homeowner chooses, the lower the annual premiums. However, the problem with selecting a high deductible is that smaller claims/problems such as broken windows or damaged sheetrock from a leaky pipe, which typically will cost only a few hundred dollars to fix, will most likely be absorbed by the homeowner. (To read more about deductibles, see Shopping For Car Insurance, Fighting The High Costs Of Healthcare and Tax Deductions For Rental Property Owners.)

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3) Look for Multiple Policy Discounts: Many insurance companies give a discount of 10% or more to their customers that maintain other insurance contracts under the same roof (such as auto or health insurance). Consider obtaining a quote for other types of insurance from the same company that provides your homeowners' insurance. You may end up saving on two annual policy premiums.

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4) Plan Ahead for Construction: If the homeowner plans to build an addition to the home or another structure adjacent to the home, he or she should consider the materials that will be used. Typically, wood-framed structures (because they are highly flammable) will cost more to insure. Conversely, cement- or steel-framed structures will cost less because it is less likely to succumb to fire or adverse weather conditions.

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Another thing that most homeowners should, but often don't, consider is the insurance costs associated with building a swimming pool. In fact, items such as pools and/or other potentially injurious devices (like trampolines) can drive annual homeowners' insurance costs up by 10% or more. This may seem like a small price to pay given the joy these items bring, but it is still something that should be considered by the homeowner prior to purchase or construction.

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5) Pay Off Your Mortgage: Obviously this is easier said than done, but homeowners that pay off their mortgage debts will most likely see their premiums drop. Why? The simple reason is that the insurance company figures that if you own the home outright, you'll take better care of it.

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6) Make Regular Policy Reviews and Comparisons: Investors should, at least once per year, compare the costs of other insurance policies to their own. In addition, they should review their existing policy and make note of any changes that might have occurred that could lower their premiums.

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For example, perhaps the homeowner has disassembled the trampoline, paid off the mortgage, installed a burglar alarm or installed a sophisticated sprinkler system inside his or her home. If this is the case, simply notifying the insurance company of the change(s) and providing proofs in the form of pictures and/or receipts could significantly lower insurance premiums.

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Look for changes in the neighborhood that could reduce rates as well. For example, the installation of a fire hydrant within 100 feet of the home, or the erection of a fire substation within close proximity to the property may lower the homeowner's annual premiums.

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Additional Items

The following are characteristics that all homeowners' insurance policies should carry:

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Guaranteed Replacement Value Insurance: All homeowners should buy "guaranteed replacement value" homeowners insurance. This means that their home will be rebuilt in the event of a disaster - no matter what the cost. Of course, many of you may be thinking that this is what would happen anyway, right? Wrong. Because home values have increased substantially in recent years, it probably costs more to build a house than when you originally purchased your home and your insurance policy. The good news is that guaranteed replacement value policies will absorb the increased costs and provide the homeowner with a cushion if construction prices increase.

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Endorsements: Legally speaking, an endorsement is an amendment to the basic homeowner's policy. Practically speaking, it is a way for homeowners to ensure that their high-priced possessions will be insured in the event of a disaster.For example, a woman wanting to insure her diamond engagement ring would obtain an endorsement to her homeowners' policy in order to prove not only that she owned the ring, but also its value. She would do this by obtaining a formal appraisal of the ring from a jeweler, and then sending the appraisal to the insurance carrier for special notation on the insurance contract. Formal endorsements such as these will help in the claims process and ensure that the homeowner gets the full dollar value of the item if it is lost, stolen or damaged in a disaster. Typical items that are endorsed in addition to jewelry include furs, antiques and collectibles.

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Wrapping It All Up

To avoid any discrepancies and any delays in receiving your insurance money for your home, make sure you document everything. Photograph and videotape the entire contents of your home and the home itself. Then store these photos and videotapes in a fireproof box. In addition, consider storing a copy of the photos at a relative's house, and/or in a safety deposit box. Doing this will help homeowners compile an inventory of their possessions (which is what the insurance company will demand) after a disaster. It will also, by extension, dramatically shorten the length of the claims process if a disaster does occur.

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Homeowners' insurance is a necessity. There are ways to save money, but there are also some features that homeowners shouldn't skimp on. Make sure you know the difference.

Bad credit refinancing

Many people that have bad credit are looking to refinance their home. They should know that it is really not that hard to do and is not impossible. Contrary to belief, there are lenders out there that are bad credit mortgage lenders and offer bad credit mortgage refinance to consumers. They can tell you about all the many types of loans that you could qualify for, even if you have bad credit. If your credit is not too bad, they can also help you finding financing options as well.

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There are many lenders that are reluctant to loan any money regardless of the type of borrowing you are looking for, especially when you have a less than perfect credit history. When you find yourself in a situation of bad credit rating, there are still lenders who have expertise in finding you a mortgage refinance option even with bad credit. Sourcing these lenders might not be easy but with a bit of effort it is possible.

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Any type of loan, with bad credit will have a higher interest rate along with higher closing fees compared what you could get for having good credit. You may even have what is called a pre-payment penalty that could last up to three years with a large amount of interest that you may have to pay for a couple months before being able to pay off the loan.

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Homeowners with bad credit can be helped by these companies to source and make loan applications with an improved outlook in getting the refinance approved. With thorough research lenders can be identified to remortgage or purchase the property, and if care is taken when deciding on the options available the repayments can be decreased by a considerable amount over the duration of the loan. The more affordable payments will mean that because success in meeting the repayments is more likely, then the homeowners credit ratings could improve, this has the benefit that the interest rates on the loan could be reduced further and therefore improving the burden on the individual.

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Expect that the lender will perform extensive checks when applying for a refinance with bad credit. The homeowner's personal situation will be investigated and a credit rating established, along with the details of any debts that the homeowner has. The lenders will need to know the employment history of the applicant including financial details. This will have to be backed up with proof in the form of bank statements and or payslips for a specified period, also confirmation of credit score will have to be proven.

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Since you are trying to refinance with bad credit, the lender may also be looking at how much cash you actually have to hand at the time of refinancing. Of course the lower that your credit score is, the more cash you are going to have to have to hand to secure the home loan or a bad credit mortgage refinance. You may have to have a pretty hefty down payment, this can be anywhere from 20-25% down payment instead of the usual 10%. Doing it this way will let the lender know that there is not as much risk when it comes to lending you the money for a bad credit mortgage refinance.

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There are untrustworthy lenders in the market whose priority is not about the welfare of homeowners looking to refinance their mortgage, but rather looking to exploit their financial predicament for their own gains. For this reason care should be taken when choosing the mortgage provider and particular attention should be paid to the finer details of any financial agreement entered into. Be aware of any possible fees and penalties involved in the future should you have trouble meeting your obligations. When investigating what options are available for a mortgage refinance be sure to look at all the options thoroughly before making any decisions.

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Finding yourself in a situation of having bad credit is not uncommon even to the most careful of planners. Especially in the current economic climate, circumstances can change without control, leaving families in financial difficulties. This is reason the bad credit mortgage refinance market exists. But when considering the option of refinancing a mortgage due to bad credit, be careful with any decisions you make as the consequences could stay with you for a long time and actually make the situation worse if the wrong choices are made.

Home buyers rebate

Fueled by Internet access to information that was previously limited to members only, the changes are inspiring real estate brokers to offer more competitive options that could be worth thousands of dollars to home buyers and sellers!

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Discount real estate brokerages are operating on the basis that many consumers will use the Internet technology to take a more active role in their real estate transaction. The time saved by the broker equates to a financial savings for the customer.

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Most people shop for the best value on products or services, and will take advantage of specials or discounts in order to save money. Striving to save a few dollars on just about everything, except for perhaps the most expensive transaction. When selling or buying a home, thousands of dollars are typically spent on sales commissions, which could otherwise be saved, providing that consumers have access to the right information and the available options.

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Consumer access to the online network of home listings and research information has created a more competitive market for alternative real estate services offering new options for discounts on home listings, and cash rebates for home buyers.

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Multiple Listing Service

The Multiple Listing Service, or MLS, is a database, or directory of homes that are listed for sale by real estate brokers or agents. When a home is listed for sale in the MLS, the listing provides the maximum exposure to real estate brokers and agents that may have clients as potential home buyers. Specific property types and detailed information in the database can be quickly located and matched to the criteria of potential buyers.

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Because this directory is so comprehensive, it has become the most powerful marketing tool in the real estate industry. In many areas, up to 85% of home buyers first learned about the home they bought, through a listing in the MLS. More homes are sold through the multiple listing service than by any other medium.

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Prior to the Internet, access to the MLS database of home listings was available only to licensed members, and as a result had limited the alternatives that were available to the traditional listing and sales approach. Now, with the advent of easy access to this powerful database, consumers can choose money saving alternatives to the traditional sales commission.

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Alternative Real Estate

As a result of the change in real estate technology, there are a growing number of real estate brokers who are offering services at substantially reduced commission rates. The innovation of alternative real estate services, combined with easy access to Internet listings and research information, offers consumers the benefit of money saving options to choose from.

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Another option that is becoming popular is a fee-for-service brokerage, which provides the un-bundling of services for each separate option as needed by the consumer. For example, when a broker is paid to perform specific services such as, negotiate purchase offers, but not all the other aspects of a full service broker. The advantage for the consumer is the ability to choose which services are needed for a particular transaction. The unbundling of specific services can provide lower overall costs, however, the individual services would have to be compared to other service options to determine the best value. While saving money is usually the primary goal, consumers should of course also compare the level of service when choosing a real estate broker.

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Although real estate commissions are negotiable, and are not fixed by law, the industry has maintained a commission level of around 6% for a traditional full service listing, but the trend for reduced sales commissions is picking up speed as more consumers become aware of the options, and as more real estate brokers adjust to the change in business.

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Discount Home Listing

Brokers with reduced commissions typically offer two types of home listings: A flat fee type of listing, which has a fixed flat fee that ranges from about $500 to $2,500, depending on the level of broker service and involvement. The other type is a discount listing based on a reduced commission as a percentage of the sales price, which ranges from about 1% to 1.5% of the final sales price of the home. When compared to a traditional full service sales commission typically paid to a listing agent, the savings can be very substantial.

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The following is an example of a traditional 6% home listing, which is usually split between the listing agent and the selling agent at the close of escrow:

• $400,000 Sales Price
  
• 3% Commission to the Selling Broker = $12,000
  
• 3% Commission to the Listing Broker = $12,000

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Here is an example of the savings from a flat fee listing compared to a traditional listing with a 3% commission paid to the listing agent:

• $400,000 Sales Price
  
• 3% Commission to the Selling Broker = $12,000
  
• Flat Fee to the Listing Broker = $500 to $2,500
  
• Savings Compared to a Traditional Listing = $11,500 to $9,500

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The next example shows the savings from a discount listing based on a percentage of the final sales price:

• $400,000 Sales Price
  
• 3% Commission to the Selling Agent = $12,000
  
• 1% to 1.5% Commission to the Listing Broker = $4,000 to $6,000
  
• Savings Compared to a Traditional Listing = $6,000 to $8,000

Home Buyer Rebate
For home buyers, many brokers and agents are now offering home buyer rebates of 1% to 2% of the final sales price, which can be paid, or credited to the costs of the home buyer at the close of escrow. Again, when compared to a traditional full service sales commission paid to a selling agent, the savings to the home buyer can be high.

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The following is an example shows the potential savings from a home buyer rebate compared to the traditional 3% selling agents commission:

• $400,000 Sales Price
  
• 3% Traditional Commission to the Selling Agent = $12,000
  
• 1% to 2% Rebate to the Home Buyer = $4,000 to $8,000
  

In a typical home buying transaction, the selling broker would receive a 3% commission for their service, and would rebate the agreed portion of the commission to the buyer when escrow closes. The rebate can be applied to the buyers down payment or closing costs, or taken as cash, providing there are no lender or state restrictions, or the amount of the buyers rebate can be deducted from the final sales price of the home.

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For Home Sellers:

Selling Exposure

Statistics can show that up to 95% of MLS listings are not sold by the listing agent, but are sold by cooperating brokers or agents that show the MLS listings to their clients. The most important aspect of listing a home for sale in the MLS is the broad exposure to thousands of selling brokers and agents that may have clients as potential home buyers. This exposure essentially creates a large commission based sales force with the goal of selling the homes listed in the MLS database. It generally does not matter to the selling broker whether the listing commission is discounted or not, as long as the listing offers the usual 3% sales commission to the broker that sells the home. In a discount listing, the savings to the home seller comes from the listing broker's reduced commission.

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Discount Listing Brokers

As mentioned before, a discount listing broker usually offers their service as either a flat fee, which could be a required up-front expense, or as a percentage of the sales price, which would be paid at the close of escrow. In general, the amount of the fee is relative to the type of service that the broker provides to the seller. An important note about offers for discount listings - some brokers may only offer to place listings in their own online database as a basic service, however, for maximum selling exposure, the seller should choose a service that includes the listing in the MLS, which will appear in the Realtor.com database, as a minimum. When sellers are comparing broker services and fees, there are some suggested minimum services that should be provided.

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The discount listing broker's basic service should include the following:

• Input the home listing, including a photo into the MLS database
  
• Provide information and support about selling procedures
  
• Assist with all purchase offers and counteroffers
  
• Provide all the required selling contracts and disclosures
  

Additional services may be offered for an increased fee, such as:

• Provide a home for sale yard sign
  
• Hang a lock box to facilitate showings
  
• Hold open houses for potential buyers
  
• Provide additional advertising
  
• Schedule showing appointments
  
• Order the necessary home inspections
  
• Set-up and monitor the escrow and closing process
  Each discount brokerage will have their own policy and procedure for the listing services offered. The home seller will need to decide their own comfort level when choosing the different service options available.

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Taking more control over the process in a discount listing means that the seller could have responsibilities that the broker would normally have, such as: some of the additional service items as listed above, or perhaps researching comparable sales to determine the listing price. Also, instead of personal meetings, discount brokers may provide the necessary information and support, using the phone, email, and fax, as the primary contact. Home sellers should confirm the specific procedures of their selected broker, and discuss what the seller's responsibilities will be, to ensure a smooth transaction.

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For Home Buyers:

Finding a Home to Buy

The primary difference in service when using a discount broker to buy a home is, that the buyer would do their own house hunting, instead of the broker pouring over listings, and driving around to show property. In place of personal meetings, the broker may provide the necessary information and support, using the phone, email, or the fax, as the primary contact. In addition to the prospect of receiving a large cash rebate, many buyers may find this method of house hunting to be a very comfortable and convenient way to do business.

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The process of house hunting has been simplified now that the MLS listings are available online. Instead of waiting on agents to provide lists of homes for sale, buyers can turn on the computer and find the homes that meet their criteria. A convenient online search for listings can provide detailed property descriptions and photos. Some listings even offer a virtual tour, which is a 360-degree online video presentation showing the room interiors. Homes that match the buyer's desired features can be researched, mapped, and printed out for reference.

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In addition to homes for sale, buyers can also find helpful research information, which provide details of various places to live, including: the costs of living, crime statistics, education, economy, health and climate. A cost of living feature can compare two cities in various categories such as, taxes, housing, food, and other costs. A salary calculator can project what a buyer's salary should be to maintain the same standard of living for a different location.

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New Home Developments

The home buyer rebate may apply to some new home developments, depending on the builder's policy for cooperating with brokers. Before visiting the model homes, or the sales office, the buyer can call the builder and ask if they work with real estate brokers, or if they offer a broker co-op. If the builder does, they will probably require the buyer's broker to be with them on their first visit. The agent may be able to accommodate a meeting with the buyer at the sales office to satisfy the builder's requirement.

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Viewing Homes

The procedure for viewing homes can vary depending on the policy of the discount broker. A common way is for the buyer to call the listing agent to schedule an appointment, and let them know that they have an agent, but they are not available to show the home. The listing agent should not object to showing the home to a potential buyer, since they are paid a commission to sell the home.

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Other brokers may offer to schedule appointments for the buyer, or perhaps even meet the buyer at the property. The buyer will need to consider their comfort level for scheduling their own showing appointments when they are choosing a broker, and discuss the procedure.

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Each listing in the online database should provide the contact information for the listing agent in order to schedule an appointment to view the property. If the listing does not provide the property address, the buyer can contact the listing agent, or their broker for the information.

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If you don't have a real estate broker to work with, another option is to ask the listing agent if they will rebate a percentage of their selling commission if they were to also represent you as the buyer's agent. Most agents should be willing to work with you since they would be earning a sales commission, in addition to the listing commission that the seller pays them.

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The rest of the buying process should be mostly standard procedure, such as, having your broker submit offers, negotiate terms, provide required disclosures, guidance, and support!