All Financial Matters

What is a Home Warranty?

Every home needs protection. At some point during the course of owning your home, you will need to replace, clean, or repair appliances and other structures. A home warranty helps owners to pay the cost when things break down.

A home warranty is a new home buyer’s best friend. It covers the structure of the home and appliances should something go wrong with them. This is especially good news when buying an older home or one that was not built for you.

A home buyer can negotiate the purchase of a home warranty plan. Sellers may pay for the plan as a way of getting their asking price for the home. Both parties could go fifty-fifty. It all depends on what is typically done in your area. Most sellers don’t want to have to deal with calls from buyers about broken appliances after the closing. They may pay for the plan to avoid this.

Home warranty plans can cost as much as $400, which is not expensive when compared to the cost of repairs. You could catch a warranty company when they are running a sale and get a discount on a yearly plan. The policy is paid a year at a time and can be renewed when it expires.

This is how a home warranty plan works when something is in need of repair. If an appliance stops working, the buyer calls the warranty company. They describe the problem and the warranty company then contacts a repair person who can handle the problem. The repair person contacts the buyer to set up an appointment. The repair person will fix the problem if they can; if not, the item in question will be replaced according to the terms of coverage. A service fee is assessed by the repair person for the buyer to pay.

Items that are usually covered by a general home warranty include but are not limited to:
• Hot water heater
• Air conditioning
• Heating system
• Duct work
• Ceiling fans
• Electrical wiring
• Stove
• Dishwasher
• Garbage disposal
• Telephone wiring
• Doorbells

Any item that is included in the plan can still be denied payment under the plan. If that happens, you are liable for charges incurred for the services performed. Contact your real estate agent immediately. Tell him or her about the entire situation. The representative for your agent will contact the warranty company to straighten out the problem and come to some sort of agreement.

Payment can be denied if it is determined that the appliance was improperly maintained or violated a safety code. A buyer who installed the item themselves and did a poor job can invalidate their home warranty.

Check your coverage and upgrade for your needs if necessary. If you follow all suggested uses for the item and only allow professionals to do installation, you should be covered when something breaks down.

Tips to Market Your Own Home

More and more individuals are trying their hand at selling their home without the assistance of a real estate agent. For sale by owner (FSBO) properties do sell but sellers need to make a more concerted effort to do it. What comes naturally to a real estate agent probably won’t be second nature for you. Here are some tips to market your home if you choose to sell it on your own.

1. Advertise in the newspaper. People still read newspapers on a daily basis. Be sure to place an ad in the Sunday edition of the paper as well since people have more time to browse each page on Sundays than on any other day through the week.

2. Get a yard sign. If you live in a higher profile neighborhood, potential buyers probably ride through on the weekends to see if there are any houses for sale. A yard sign increases the traffic to your home. The sign should include your contact information in case potential buyers don’t have time to stop.

3. Get help writing home ads. The trick is to give the best impression of your home in the fewest words. Most ads use the same wording and abbreviations. You will want something more unique. One rule is to show them the house in the ad. For example, instead of saying that the family room is a certain square footage, say that you have a “spacious great room”. This will mean different things to different buyers which is what you want. They will have to check out the house to see if it meets their expectations.

4. Advertise on the Internet. More and more people are searching for homes on the Internet. It is easier and you can set the search parameters to satisfy your needs. One feature is pictures. Pictures give a potential buyer a chance to check out the house or at least a few rooms of it. Don’t take too many. You want the buyer to actually visit the house and not just the listing on the Web.

5. Dress your house. Nothing says “I’m a hot commodity” like a well designed home. Home stagers are artistic professionals who come in after you have cleaned and de-cluttered to the best of your ability. They use their talent to create a mood and theme to your home. Buyers will be blown away by the ambiance.

6. Hold an open house. This is a chance for you to tell anyone who will listen all about your home. Send the kids to a babysitter and get to work. Welcome potential buyers into your home. Be sure to have a sign in sheet so that you can follow up later with them.

Marketing your own home is not easy but it is possible. If you are a motivated seller, you can express that to potential buyers who are interested in a home like yours. Try one, two, or all of these tips to get started, and sell that home.

The Real Estate Contract

The real estate contract is the binding legal document for a real estate deal. Whether you sell the home on your own or use an agent, you will still need a contract. Before signing anything, be sure that the real estate contract includes everything that is required by law.

1. The mutual assent — This is the agreement that was reached by both the seller and the buyer. It needs to be stated in the contract that the two parties have indeed decided on a purchase price. Any contingencies would be recorded in this agreement. The wording must be satisfactory to both as being correct.

2. The names of the parties — The names of both the buyer and the seller need to be in the contract. Include first, middle, and last name. The name needs to be spelled correctly for the title. It is easier to change a name on the contract than it is later on with the title company.

3. Location of the property — The location of the property is important. Description of the property is included here. It should not be a vague description but be as detailed as possible so that there is no question about the property being sold.

4. The purchase price — The price as agreed upon must be written in the contract. This is the price excluding any fees and earnest money already paid during escrow. If the exact number is not known, a close estimate can be written in along with the source of the figure (an appraiser).

5. The consideration — The consideration is the reason that the contract is being drawn up. It is the benefit derived from the agreement made between the two parties. The fact that there is consideration is more important than the amount.

6. Signatures of all required to sign — A contract wouldn’t be legal without signatures. A signature implies agreement with the contract and its terms. The contract doesn’t need to be notarized to be legal. The signatures of all required parties are enough to make it binding.

The requirements for a real estate contract are basically the same for a FSBO and a property represented by an agent. A contract where both parties agree on the stipulations is called a bilateral contract. Unless you deal in real estate investment property or offer a buyer an option to buy, you will use this type of contract.

Before signing a contract be sure to read over it, not just glance at it. Those creating the contract can make mistakes and you don’t want to overlook anything. Later on down the road is not the time to debate a costly mistake. Know what needs to be in your real estate contract.

Ten House Tips before Sale

If you want to sell your home, it’s a good idea to be as prepared as possible. Before you show your home, get it looking the best it can to impress potential buyers. Here are ten quick and easy tips to ready your home for a buyer to see.

1. Curb appeal. The outside of your home is as important as the inside. Buyers will see the yard before they see the house. A mangy yard will send them driving right on past your property. Keep the grass cut and the bushes trimmed. Remove any trash or debris from the yard. Consult with a landscape company or a local nursery to find ways to beautify your outdoor areas, including the back yard.

2. Clean the windows. How many of us actually do this more than once or twice a year? Buyers will be looking to see when you did it last. Windows that tilt in make for easier cleaning. Use a pressure washer for second floor windows.

3. Repaint any problem areas. Paint chips over time. If you have baseboards that are looking shabby or peeling exterior paint, give these areas a fresh coat of paint.

4. Have a huge yard sale. You will need to get rid of anything that clutters closets, the garage, doorways, hallways, and cupboards. To get rid of these things fast, hold a yard sale. What doesn’t sell can be given to charity or taken to the garbage dump.

5. Have carpets cleaned. A professional cleaning gives carpets new life. A deep cleaning of the carpets in all the rooms is recommended.

6. Check your appliances. Be sure that all major appliances are in good working order. Also read the warranty on each appliance that came with the home. Know when they are about to expire and if you have replaced anything, know when that was done.

7. Clean the siding. Siding is more durable than paint on newer homes. But siding does get dirty. Pressure washing removes dirt and grime from exterior surfaces. Use it for the garage, windows, driveways, and siding.

8. Replace light bulbs and broken fixtures. The family may not mind if one globe is out in the bathroom vanity but it is not good for a prospective buyer to see. Make sure all fuses and light switches are working and any broken bulbs have been replaced.

9. Send the pets away for a while. Homes that have had pets are hard to sell. Carpet smells and pet dander are still evident even after cleaning. Start early and have carpets and walls cleaned. Restrict pets to carriers or crates in non-carpeted areas of the home.

10. Add pleasant smells. You don’t want the place to smell like pets or children, but buyers shouldn’t be overcome by ammonia fumes either. Clean a day or two in advance of an open house. Light candles, use candle warmers, or use plug-in air fresheners to blanket the home in sweet scents that will welcome not repulse any buyers.

Selling a home is a lot of work. You can increase the interest in your home by following these tips so that the home is ready for showing.

Seven Tips for FSBO (For Sale by Owner) Selling

So you have decided to sell your home on your own. I applaud your courage and am glad that you are up to the challenge. As a motivated seller, you can move that house using the same tactics that a real estate agent would. Here are seven things that you should know if you have decided to sell your house by yourself.

1. Exposure is the key. Advertising your home increases the traffic to your door. Don’t invest in just one way to get the word out, use all that are available to you. The first thing that people think of is advertising in the newspaper. The newspaper is a great resource, but it is only the beginning. Home buyers search for homes on the Internet, on television, in real estate magazines, and by driving through neighborhoods on a sunny Saturday afternoon. Think of the ways that you would look for a home and be sure to advertise in those ways.

2. Price your home for sale. One of the biggest mistakes that sellers make is to price their home incorrectly. Your home may be worth $250,000, but in a buyer’s market you may not get that much. If you paid $150,000 for it and a buyer offers to pay your asking price of $210,000, you have made a $60,000 profit. You want to get more for your home than you paid and you have done that. The alternative is to ask for the entire $250,000 and get no nibbles.

3. Use staging to prepare your home for sale. Staging is like a magic varnish that makes a good home shine ten times brighter. Artistic professionals will make your home a showplace by rearranging furniture, adding new features, and creating eyecatching displays. Staging can be expensive but it is a plus when trying to sell your home for a good price.

4. Fix any major damage to your home. You want the home to sell on its own merits. Major repairs create negotiation points for buyers to ask for a lower price. Hire someone to fix the leaky faucets, retouch peeling paint, repair siding, and replace the cracked linoleum in the kitchen. The more you can do to prepare the home, the more likely the asking price will be received.

5. Answer the telephone. You put a sign in your yard with your telephone number on it and people will call. Most may not leave a message so it is good to answer when they call.

6. Know the real estate laws in your area. This is especially important concerning disclosures. Disclosing any structural damage is law. A buyer can sue you for not telling them these things.

7. Don’t neglect the yard. We de-clutter the house but forget the yard that people have to see before they reach the home. Trim the shrubs and cut the grass frequently.

Follow these tips and give your home every advantage in the selling arena. For sale by owner homes are marketable if you take the time to learn how to do it correctly.