You’ve got house insurance, and assume your property is covered for any type of detrimental occurrence that can possibly take place.
However, not all homeowners are aware that home insurance policies don’t necessarily cover damage related to a flood, as the risks are too great. As a result, homeowners must purchase flood insurance through a private company.
Floods are one of the most common hazards in the US, costing billions of dollars in damage to properties every year.
Since this is a common issue lately, the federal government updating these policies currently so please talk with your real estate professional or local insurance company for the most up to date information.
What Is Flood Insurance?
Flood insurance policies are typically made available to homeowners in flood-prone areas. The majority of insurance policies cover some form of water damage, from things like leaking faucets to bursting plumbing pipes.
However, such policies don’t cover water damage as a result of flooding of rivers or sewers that cause water to ruin a home.
Specific flood protection is provided by the National Flood Insurance Program (NFIP), which is run by the Federal Emergency Management Agency (FEMA). Standard flood insurance policies cover “direct physical damage” to a property resulting from floods.
A separate policy must be purchased to protect the belongings inside the home or building. Homeowners can buy up to $250,000 in coverage for the home, and up to $100,000 in coverage for possessions. Even renters are permitted to purchase flood insurance to cover their possessions.
How Does Flood Insurance Work?
Flood insurance isn’t sold by FEMA directly, but rather is sold to customers through private insurance agencies. Premium rates are determined by the government, and they remain consistent from one insurer to the next.
How much a homeowner pays for their own specific flood insurance depends on a number of factors, including how prone the neighborhood is to floods and how much coverage a homeowner wants. The average annual premium is approximately $520 for $100,000 worth of coverage for a property with no basement, and approximately $615 annually for a property with a basement.
Filing A Flood Insurance Claim
The claims process is like any other insurance claim. Once the claim is filed, the damage will be analyzed by an adjustor assigned by the insurance company. A “proof of loss” form will need to filled out and submitted to the insurer within 60 days of the flood occurrence.
Do You Need Flood Insurance?
It’s necessary to find out if you are eligible for flood insurance before buying it. For residents of a community to be eligible, the community needs to enforce floodplain statutes to lessen the chances of flood damage, after which FEMA ensures that such regulations are followed.
Only those who reside in a community that participates in NFIP can buy insurance – today, about 20,000 communities across the country participate in this program.
FEMA offers maps that outline what areas are at high risk for floods, and those that are at moderate-to-low risk. The law requires homeowners to have flood insurance if the properties are located in a high-risk zone and have a federally-backed mortgage. This is because properties located in these high-risk areas have a 26 percent chance of suffering flood damage during the 30 years that it would take to pay off a mortgage.
Homeowners are not required to buy flood insurance if they reside in a moderate-to-low-risk zone, though it may be a good idea to purchase it anyway. Properties outside the high-risk areas make up over 20 percent of NFIP claims. Homeowners in these areas can purchase up to $200,000 in flood insurance.
The bottom line is, even if you don’t necessarily live in a high-risk zone, this doesn’t mean your home won’t ever get flooded. Many conditions can result in flood damage, including clogged drain systems, flash rainstorms, and damaged levees.
Do you remember when you were buying your first home?
You may have looked at dozens before you settled on the perfect home for your family to live and grow in. Perhaps another home came in a close second, but you ultimately settled on that house or apartment – the one you’re now selling.
Chances are you don’t remember anything much about most of the homes you viewed, and the things that stand out are the best (that bedroom with a fireplace!) or as bad as they can be (remember the sofa placed over the cigarette burn in the carpet?).
When you’re staging your own home and giving tours to prospective buyers, it’s important to give them something to remember, and saving the best for last is one way to do it.
First In, First Out
When it comes to memories, older isn’t necessarily better.
In fact, research shows that the brain clears out older memories to make room for new ones. That’s why what you did today is fresh in your mind, but things get hazy when you think about last week or try to remember life as a child.
If you show off the best rooms in the house toward the end of the tour, it will stick in the buyer’s mind after she leaves.
Just like you make sure the first impression is good – this is known as ‘curb appeal’ – you’ll want to end on a high note. This helps sell your home faster.
Doorway To The Mind
Entering a new room causes you to forget why you’re there in the first place. Researcher Gabriel Radvansky from Notre Dame completed a year-long study about this phenomenon, which is also known as ‘event boundaries.’ In essence, your brain compartmentalizes data to a specific location.
When you’re indoors, the walls around you literally become mental boundaries. As soon as you step through a doorway, you forget that you meant to put the phone back on the hook. For home buyers, every new doorway acts as an event boundary.
If you put the bedroom with the fireplace or the outdoor jacuzzi in the first half of your tour, buyers will walk through a lot of doorways after seeing some of the best parts of your home.
Every doorway is an opportunity for their brains to forget something that might help you when it comes to getting the sale closed. Put fewer doorways between the strongest architectural or design features and the end of the tour to make the biggest impact.
If you have further questions about staging, contact your real estate agent today for advice and strategies.
The purchase agreement is a vitally important document that outlines the provisions, terms and conditions for the transfer of property.
It should be read carefully and any ambiguities should be clarified prior to signing. It is a legally binding contract between the buyer and seller.
The purchase agreement may vary depending on the location. Most real estate agents use a form that has been approved by a state Realtors® Association.
The seller may have a different version that was drawn up by an attorney. It should not be assumed that they are all the same.
Typically, the purchase agreement will include an inspection period. This allows the buyer time to verify the conditions stated on the purchase agreement. Three of the most important stipulations in the contract are listed below.
All Owners Must Sign the Purchase Agreement
In most cases, the purchase agreement should be signed by the legal owner of the property.
If there is more than one owner, each owner should sign the agreement. In many states, both parties in a married couple have an interest in a property even if the title is held in one party’s name alone. Therefore, the purchase agreement should be signed by both parties of a married couple.
In the event the property is being sold by a corporation, verify that the person signing the agreement is authorized to commit the corporation to the sale.
List All Fixtures to be Transferred with the Sale
The purchase agreement should list all items that are to convey with the property. “Fixtures” are considered items that are attached to the property.
Legally, they should be included with the sale, but more than a few buyers have been dismayed to find the property stripped of countertops, appliances and window coverings. Any fixtures and personal property that are part of the sale should be included in the purchase agreement.
Verify Zoning Ordinances
The purchase agreement may contain various stipulations. One should include the right to cancel the contract if zoning prohibits the use of the property as planned.
Zoning ordinances may restrict the use of buildings or land. This may prove to be an obstacle for someone who intended to include a workshop on the property. The buyer should be able to withdraw from the contract if they discover that zoning prohibits the intended use.
These agreements can be complicated, so be sure to check with a local real estate agent if you’re unsure about how to proceed.
Irritating any potential buyers is the last thing you want to do when selling a house because it is can be a challenging and sometimes lengthy process.
The buyer is going to have a wide array of options when deciding on a new home, so they have no problem going somewhere else if they see something they do not like.
While there are a plethora of ways for a seller to irritate a potential home buyer, these are the four most common – and most costly.
Pricing The House Too High
There is nothing worse you can do when trying to sell a home than pricing it too high. While you may think that it gives you room for the buyer to counter at a lower price, they are more likely to simply ignore your listing entirely even if the home is a good fit. The best way to keep this from happening is by pricing your home in the same price range as the rest of the neighborhood.
Not Making Home Repairs
Buyers are going to be immediately turned off if they walk into the home and see a state of disrepair. Not taking the time to make small visible fixes is going to make the buyer think that the house is going to have major issues. Taking the time to get the house in great shape before showing it at an open house will ensure the house sells faster.
Leaving Your Stuff Everywhere
Buyers want to feel like they could move into the house as soon as the purchase is finalized. They also want to envision themselves living in the home, and this is almost impossible if you have your personal items throughout the house. This is more difficult to pull off when selling a home you are currently living in, but it is best to stage the home with as few personal items as possible.
Getting Emotionally Invested
While you may have lived in your house for years, you have to drop any emotional attachment to the home the second it hits the market. You can’t take it personally if the buyer wants to make a major change to the house after the purchase. Their idea of a perfect home is not going to be the same as yours. The best way to make sure you do not insult the buyer when they bring up their vision of the home is by letting your agent handle home viewings. If you have become too attached to your home or are guilty of any of the other three things on this list, then you make sure they are corrected before your next open house.
Last week’s economic news brought little housing-related content, but several economic reports in other sectors contributed to overall perceptions of the economy.
In a speech given in Sweden, Fed Vice President Stanley Fischer noted that the economy might be in a period of “secular stagnation.” This condition is expected to keep interest rates low for longer than expected.
A survey of small business owners showed that confidence increased by 0.70 in July. Job openings for June increased from 4.60 million to 4.70 million. Readings for several reports fell shy of expectations and new jobless claims were higher than expected.
Economic Readings Lower Than Expected, Weekly Jobless Claims Rise
Retail sales for July were flat and fell shy of June’s reading of 0.20 percent, which was also the expected reading for July. Retail sales except autos were also lower in July with a reading of 0.10 percent against the expected reading and June’s reading of 0.40 percent.
Weekly jobless claims were reported at 311,000 against expectations of 300,000 new claims and the prior week’s reading of 290,000 new jobless claims. According to the U.S. Department of Commerce, this was the highest reading since June.
New jobless claims were close to pre-recession levels which suggested a slower pace of layoffs. The four-week average of new jobless claims, which presents a less volatile reading than for weekly reports, rose by 2000 new jobless claims to a reading of 285,750.
Mortgage Rates Lower
Freddie Mac’s weekly survey reported lower mortgage rates last week. Average rates were as follows: 30-year fixed rate mortgages had a rate of 4.12 percent and were two basis points lower than the previous week.
Discount points averaged 0.60 percent against the prior week’s reading of 0.70 percent. The average rate for a 15-year fixed rate mortgage was 3.24 percent as compared to the prior week’s reading of 3.27 percent. Discount points were unchanged at 0.60 percent.
The average rate for a 5/1 adjustable rate mortgage dropped by one basis point to 2.97 percent with discount points unchanged at 0.50 percent.
A couple of good news bytes from last week included an increase in small business sentiment in July. The National Federation of Independent Business Index for July increased from June’s reading of 95.00 points to 95.70 points.
The federal government also reported that job openings increased from 4.60 million in May to 4.70 million in June.
Several housing-related reports are set for release this week. The National Association of Home Builders (NAHB) will release its Home Builder Index for August, which measures builder confidence in market conditions for newly built homes.
The Department of Commerce will release Housing Starts for July, and the National Association of REALTORS® will release its Existing Home Sales report for July. The Federal Open Market Committee (FOMC) of the Federal Reserve will release the minutes of its most recent meeting on Wednesday; this could provide details concerning the Fed’s recent monetary policy decisions, which include the wind-down of asset purchases under the current quantitative easing program.