Coastal Home Owners Need to Brace for Hurricane Season

It seems the storms get more severe every year and the financial toll keeps climbing with every hurricane season. For many Americans, the hurricane season is something they only see on the news. But for owners of coastal homes, it is a part of life. The hurricane season runs from June 1st to November 30th. Some years are worse than others, but people living on the coast or planning to purchase a coastal home must always be prepared for the worst case scenario.

Before the hurricane season
A below-normal hurricane season doesn't mean people living near the coast are going to avoid the catastrophic impact tropical storms can cause. The should always be ready to respond quickly and have some basic supplies readily available.

• Know what evacuation route you will use. Keep in mind that thousands of other drivers will probably be using the same roads.
• Have a disaster kit for each family member and be sure they know where it is. It should include a flashlight, batteries, first aid supplies, food, cash and identification. It is a good idea to have a crank charger and spare battery for cell phones and flashlights.
• Be prepared to remain in your home for several days without power or supplies from the store. You may want to seriously consider a backup generator that is capable of powering the entire home.
• During times of crisis, communication is always difficult and cell towers are pushed to their maximum capacity. Prepare a family communication plan well in advance of any emergency.
• Many coastal communities have alert systems to send emergency notifications by text or email. When moving to a new area sign up for these alerts by searching the community name plus "alerts" on the internet or contacting the area fire department and first responders.

Preparing your home
A person's home is often their place of comfort and protection during life's many storms. But these well-built structures are vulnerable to forces of hurricanes and severe storms. Some advanced planning can reduce risks and minimize the financial toll when storm damage occurs.

• Evaluate your home insurance policy for adequate coverage. Most standard policies do not include flood insurance. You should also add coverage for any exterior buildings or other features that could be costly to replace.
• Routinely inspect your rain gutters and down spouts. They should be clear of debris and securely attached to properly divert water away from your home during heavy rains.
• Have wood cut to size for quickly boarding up windows. Storm shutters are the best protection, but more costly. Taping windows and doors provides absolutely no protection.
• Doors should have multiple locking mechanisms to prevent them from flying open during a storm. Open windows and doors increase internal pressure under the roof and can lift it off the house.
• Consider installing hurricane straps that will securely attach the roof to the rest of the structure for added strength.

The inevitability of hurricane season does not mean people can't enjoy the many benefits of living near the coast. Everyone has to prepare for emergencies. Everyone's life has some storms. There are lessons to be learned during sunny weather and things to learn during storms that will enhance a person's life. In addition to protecting your own home and preparing your family for emergencies, participate in community events and take part in helping others prepare for hurricane season. A strong and resilient community needs your participation. By participating in community activities, you help minimize the disruption a storm can cause and help thing get back on track sooner. Remember to include your pets in the disaster planning and have some extra food on hand for them.

Home buyers should consider each loan type prior to viewing homes

As the home market improves, many buyers are considering a purchase in the near future. Despite the responsibilities that come along with owning a home, for most people, it is more rewarding than renting can ever be. The type of mortgage many buyers used during the run up to the housing market collapse is what lead to them being in trouble when the economy began to sour. Before looking at any houses, home buyers should know which mortgage is best suited for their goals and plans. Here is a bit of information on the most common types of home loans.

30-year fixed rate mortgage

Because it allows buyers to purchase the most home with affordable monthly payments, the 30-year fixed rate home loan remains the most popular. On September 1, 2015, the rate was at 3.75 percent. That is up slightly from the previous week and the number of applications increased by more than 11 percent due to positive economic news. In addition to the standard 30 years, fixed rate loans are available in terms of 10,15, and 50 years. The interest rate remains constant for the life of the loan and home owners know what their monthly payments will be regardless of inflation or other fluctuations in the economy.

Adjustable rate mortgages (ARMs)

Many home buyers were caught holding adjustable rate mortgages during the housing crisis. They had planned to refinance or sell their home prior to any increase in their interest rate and monthly payments. When the housing bubble burst, they were unable to sell or refinance and many were unemployed or getting by on less household income.
The rate and monthly payment is adjusted at specific times during the life of an adjustable rate mortgage. The increase or decrease is typically tied to market behavior. Buyers can get the same house as with a fixed rate mortgage for a lower initial payment. The adjustable rate loan remains popular with buyers who do not plan to remain in their home more than five years. Anyone considering an adjustable rate loan should be sure they can comfortably afford their monthly payments, even if the interest rate increases to the maximum possible amount.

Interest only loan

Another loan that lead to trouble for many home owners during the Great Recession was the interest only loan. For a predetermined amount of time, the home owner is only required to pay interest on the loan amount. The interest may be fixed or adjustable. At the end of the term (typically 5 or 10 years) the home owner must refinance or begin paying both the interest and some amount toward principle. Just as with an adjustable rate loan, home buyers should plan for a worst case scenario of not being able to sell their home or refinance.

Federal Housing Administration loan (FHA)

Contrary to what many home buyers believe, an FHA loan is not a government loan. It is written by a privately owned company and insured by the federal government. The qualification requirements for an FHA loan are more lenient than the requirements for a conventional loan. The down payment and closing cost are also much lower for buyers who are purchasing their primary residence. For first-time buyers the down payment can be as low as 3.5 percent. The loan is available on site built homes and mobile homes. There are also special programs for seniors.

U.S. Department of Veterans Affairs (VA loan)

This loan is available to veterans or their widows/widowers. The number of years in service affects the requirements and terms of the loan. Which type of discharge the veteran received from their branch of the U.S. Armed Service also impacts their eligibility requirements and loan terms. Most people who qualify for a VA loan can also obtain a conventional loan with similar interest rate. The main benefit to veterans is that they can get a VA loan with no down payment.

Home buyers should plan for their home purchase months in advance. It is best to review credit scores prior to meeting with loan officers or mortgage brokers to avoid any surprises that could hinder them from qualifying for the best possible loan.

Home owners, winter storms and falling trees

During the fall and winter months, hundreds of trees will be falling in yards and on houses across America. The problem begins during hurricane season and continues through winter. Heavy snows and ice storms frequently get the best of century-old trees. The odds of your home (and you) been struck by a falling tree increase based on the age of the trees nearest your house. Here are a few other things to know and to help you in the event your house is struck by a falling tree.

Who is responsible?

If a tree falls on your house, most likely your homeowners insurance will have to pay for damages. If a tree falls in your yard and does not damage your home, most likely you will be responsible for the clean up out-of-pocket. Even if the tree was located on your neighbor's property, you could still have to make the claim on your policy, pay the deductible, and be responsible for any cost not covered by your policy. If your insurance policy is basic and for your residence only, it may not cover damage done to outbuildings, fencing, pools, or your lawn. The reverse is typically true if a tree from your yard falls on a neighbor's house. The exceptions are when the tree fell due to disease or was properly documented as being a hazard.

Identifying diseased trees

Just like people, as trees age, they become more susceptible to disease and falls. During the first 25 years of a tree's life, it should not lose a notable amount of limbs. As it gets older, limbs fall off more frequently and the size of the falling limbs increases. This is why the Arbor Day Foundation recommends having a trained arborist inspect older trees and advise on proper care. Some basic identifiers indicate a diseased tree:

Uneven growth patterns: previous damage from storms or wind can cause trees to grow lopsided and be a higher risk for falling.

Decay: Because decay often begins inside the tree, look for signs like mushrooms, fungi, and soft crumbly wood. Mistletoe is also a fungus. Its presence indicates some internal decay.

Dead wood: Occasional dead branches are normal for any mature tree. Any large branches that show signs of dryness and bark loss should be removed immediately.

Cracks: Deep splits in limbs or spots with missing bark indicate the tree's structure is failing.
Documenting a hazardous tree

Start by discussing your concern with your neighbor. It is a good idea to document your request that they remove a hazardous tree. Additionally, photos and an assessment of the situation by a tree professional may help your case in the event the problem tree does tumble. It is still possible your home insurance will have to pay for damages, but having the documentation improves the likelihood that your neighbor will have to foot the bill. It is far better than just you saying "I knew it was going to fall" after the fact.

If a tree falls on your home

Falling trees may also bring down power lines. If you are inside the home, cautiously exit the structure. The weight of the tree against your house is causing continuous pressure. The roof and other support structures do not always give way immediately. If power lines are down, call the police, power company, and then your insurance company.

Do not try to make repairs during a storm or rescue personal items. Understand that emergency services are stretched thin during inclement weather, and there are numerous other people in a similar situation. If a tree falls on your automobile, it is going to be a matter for your auto insurance and probably covered by comprehensive insurance. When it comes to falling trees, a few hundred dollars in prevention can be worth tens of thousands of dollars in repair.

The Importance of a Proper List Price

Who makes the decision about list price and sales price? The home's owner.

Who suffers when the list price is too high? Everybody: the seller, their agent, the buyer's agent, the buyers. An improper list price can cause problems at every point of the transaction. Even when (if) buyers and sellers reach an agreement on price, an appraisal for less than the contract price creates headaches for everyone. One of the most difficult and often unpleasant responsibilities for listing agents is having an honest and direct discussion about the market value of the seller's home.

Sellers must understand market value
Market value is often less than the seller's perceived value of their home. Spending thousands of dollars and hundreds of hours on a water feature in the backyard does not necessarily increase the home's value by the amount invested. It can increase the home's appeal, but not always the value. Market value is different than the assessed value for taxes.
The National Tax Payers Union (NTU) reports that about 60 percent of all properties in the United States are assessed at an amount above their current market value.
Market value is determined by homes that have sold recently in the area. How far the home is from things like schools, shopping, medical services, and work centers also factor in. The impact of future construction projects and road development should also be considered. The local economy is perhaps the most influential factor in a home's market value. Despite the recent housing market crash, it is still difficult for many home owners to accept that real estate values do not always go up year-after-year.

Home value estimators
There are several online Home Value Estimators. While technology has improved the lives of Realtors in many ways, these automatic home value estimators often make their jobs more difficult. Without actually naming any of the available online options, some are better than others, but there is a huge error rate with all of them. For individual sellers, the disparities between these computer generated estimates and an informed opinion of value from a knowledgeable agent are often significant.
When agents discuss market value with their clients, they must learn to incorporate the tax assessed value and estimate from online estimators into the discussion. They can encourage the sellers to view these things as a starting point and to use all available information together for making an informed decision about their listing price.

Why listing price is important
A larger pool of potential buyers: Most interest and activity takes place in the first few weeks a home is listed in the MLS. To maximize the exposure to ready, willing, and able buyers, it is crucial that the price is not too high. Even in a seller's market, qualified buyers should be viewed a valuable. A high list price can instantly scare away potential buyers and result in the home remaining on the market longer than it should.
The price directly impacts days on market: There is no need to add wording like "bring all offers" and "highly motivated seller" when the list price of a home is competitive. Buyers often have spent several weeks or months comparing homes and prices in the area. They know how much house they can get for the same price elsewhere. When a home has an unreasonably high list price, contract negotiations typically take longer and are more contentious. This leads to a reluctance by both parties in working together for a successful closing.
Some sellers are not going to get the sales price they hoped to achieve. As a result, they often resent every penny that is deducted from the sales price (namely the real estate agent's commission) and lowers their net proceeds. When they are prepared well in advance of the negotiations and closing, they have time to understand and accept that reality. They make the decision. A tactful and honest Realtor will go over a reasonable estimate of market value prior to listing the home. Otherwise, the seller can feel misled, trapped, and forced into a situation they do not like.

Home Improvement Projects That Add Value To Your Home

Buying a home is exciting and loaded with possibilities. For the seller, it can be a highly emotional and stressful experience. The place that they have called home for many years is heavily scrutinized and picked apart by potential buyers, real estate agents, and inspectors. There are some smart upgrades every seller can make that will not cost a lot of money and can improve their likelihood of getting the sales price they want.

The most important room in the house?
What room do you think of when asked that question? For most people, it is the kitchen. There are entire TV channels devoted to home cooks. More families are opting to prepare meals at home rather than dine out. In addition to saving money, cooking from home is healthier, more rewarding and improves the family dynamics. Many buyers head straight for the kitchen when viewing possible houses. They are looking for the kitchen that "just feels right" and that they will enjoy spending time in.

Industry experts agree that it is well worth an investment of a few hundred dollars to upgrade kitchen faucets and lighting fixtures. Sellers should choose energy-efficient lighting and make sure that it adequately illuminates all areas of the room. There are several options for kitchen cabinets. Some companies specialize in refinishing the cabinet boxes and replacing the doors and drawers. Short of that, homeowners can give cabinets an updated look with a fresh coat of paint or thorough cleaning. The most important thing is that the kitchen is clean and looks reasonably up-to-date. It is expensive to renovate. Sellers can still make a few low-cost improvements. The seller wants the buyers to envision themselves cooking in the kitchen, not thinking about the cost of upgrading the entire room.

Appliances
Buying all new appliances is not recommended, but sellers may be able to freshen up the look of existing units by purchasing new doors or face panels. Many dishwashers have panels that are easily reversible or changed out. Home sellers want to go for a cohesive look and minimize any concerns buyers may have for unexpected expenses. If the old appliances are in the final stages of their useful life or there is no way to freshen their look, sellers may want to offer an allowance for new appliances to be part of an accepted contract. The buyers can choose the appliances they want, the seller does not have to pay the allowance until the closing of an acceptable offer. Laws regarding such agreements vary by state and allowances can be easily misunderstood. Real estate agents representing each party should carefully review wording for legal compliance and be sure their client understands the terms. But it can be beneficial to both parties.

Bathrooms
Second to kitchens, bathrooms are important rooms and can be costly to to completely update. A new toilet seat, vanity, or pedestal sink are easy to install and can greatly improve the look of any home's bathroom. Dingy looking tile and grout makes buyers think the house is unclean and needs renovating. If possible, re-grout and replace any chipped or missing tiles. It is much less costly than completely replacing the old tile and makes a big difference.

Painting

If sellers are going to do only one thing, they should paint. Most real estate agents and industry analyst agree that painting provides sellers with the best return on investment. The payback can be as much as 300 percent. Sellers should spend a bit of time discussing which colors are current with their Realtor. They should go with neutral, tasteful colors more so than their own thoughts on what looks good.

Curb appeal
It is an old truism that applies to homes and people: "You only get one chance to make a good first impression." The entry should be fresh and clear of any dirt, cobwebs, or overgrown shrubbery. If time and money for painting is limited, make painting the door and entry area a top priority. Also, worn out door knobs and locks convey that the house is also worn out. An impressive bit of hardware on the front door signals that the home is solid.
Just as buyers should begin planning for their purchase months in advance, sellers who make a written plan and break it down into manageable projects have the best chance of being in control of their transaction from start to finish. With the guidance of a knowledgeable Realtor, selling a home can be a rewarding accomplishment they look back on proudly for many years ahead.

Multigenerational Housing Trends

Living in multi-generational households is common in many cultures. It has long been stigmatized in the United States. When the Great Recession led to significant unemployment numbers for young adults, many reluctantly moved back to their childhood home to live with their parents. Once there, many have warmed to the idea of keeping family under one roof to maintain more control over their finances.

Aging Americans

As the economy began to recover, the percentage of multi-generational households continued to increase. The rising cost of retirement home living and in-home health care providers has led many older Americans to move in with children or spend some portion of the year living with each offspring. With improvements in medical science and statistics showing increased life expectancy, one might think older Americans were the group driving multi-generational housing number. But, since 2012, young adults between 25 and 35 have been the group most likely to live in a multi-generational home.

Numbers increased in all age groups but one

Though the percentage of homes that have more than one generation residing there has increased at a slower rate post-recession, the increase continues across all ethnic, racial groups, and genders. For seniors, the women who outlived their husbands are most likely to be living in a multi-generational home. For young adults, men are way more likely than women to be living under the same roof with their parents. According to the Pew Research Center, the only age group that has had a decrease in the percentage of people living in multi-generational homes is people ages 65 to 84. They had a very small decrease between the years of 2010 and 2012.

Numbers have doubled since 1980

According to an analysis of data from the U.S. Census Bureau, Pew Research Center finds the number of individuals with a multi-generational home increased from 28 million in 1980 to 57 million in 2012. The numbers have increased steadily each decade, going from 35 million in 1990 to 42 million in 2000. For the first decade of the 21st century, the number of people residing in multi-generational houses increased from 42 million to 54 million. The upward trend has slowed, but numbers continue to increase.

Will continue being a significant portion of the housing market

The National Association of Realtors reports that 14 percent of homes purchased in 2014 were for the purpose of accommodating multiple generations of occupants under the same roof. Just under 25 percent of those buyers said it was due to boomerang kids. That is people over the age of 18 who once moved out and then moved back home to their parents. That number is 33 percent for buyers aged 59 to 67. Thirty-eight percent of those multi-generational home buyers between 49 and 58 bought to accommodate their boomerang kids.

What it means to the housing market

The traditional 3 bed, 2 bath house is less desirable to more buyers. More buyers want two master bedrooms on the main floor. The ideal design is a split floor plan with bedrooms on the main floor and added privacy for the living area of family members. More buyers seek large dining rooms than large kitchens. The dining room was almost considered obsolete a few years back. It now provides and additional room for the extra occupants to create their own little home within the home. It frequently serves as a second living room, where the family member(s) can have their own TV, computer, etc.
Regional and national builders are already mindful of the impact multi-generational home buyers will have on the real estate market. They change house designs to match the current economic conditions and trends. Home sellers and real estate agents should also consider how they can make room for this growing segment of home buyers.

The Importance of Home Inspections

People often have strong opinions about home inspections. There are some builders who hate home inspections and don't care much for the people who do them. Many sellers think it is just a ploy to further whittle away at their asking price. A comprehensive and thorough examination of the condition of a house by a professional inspector is sure to reveal some defects. It takes time and can be unsettling to both the buyer and seller. Both parties might be fearful that something uncovered will derail the transaction. Sellers do not respond well to the notion that they allowed some defect to remain untreated. Buyers, who have found their dream home, do not want to walk away from the purchase of a home that meets all of their criteria in ever other way. But home inspections are important and should not be skipped.

Why sellers should have home inspections

A pre-listing home inspection will establish a more stable negotiating platform for the seller as they consider and respond to all offers. Historically, home inspections take place after an agreement on price and terms has been reached. When issues are found, it results in re-negotiations and often repairs that are the seller's responsibility. Sometimes, when the seller is already at their lowest price, the transaction will fall apart if the repairs are needed for financing. The buyers may not be willing or able to cover the cost of repairs themselves. When the seller is planning their next home purchase based on the sale of their current home, unexpected defects that are only discovered after contracts are written can be disastrous.

When people live in a residence for a long time, they become accustomed to the property's condition and they do not always notice the minor issues that can add up and lower the overall value of the home. A defective light switch or faulty outlet that the family never used anyway will become an issue to potential buyers. The old HVAC system has probably been working just fine for the past 15 years. But it is really at the end of its useful life and will cost the next owner thousands of dollars to replace.

Having an objective evaluation of the house by a licensed professional before putting it on the market helps sellers know what issues will come up during negotiations. It will help them remain in control of the transaction and keep it moving in the direction suitable for the seller.

Why buyers should have home inspections

Sellers are legally bound to disclose any known defects with the home they are selling. New construction is covered by at least a one-year warranty. But sellers do not always know about damage caused by termites or carpenter ants. They may have a growing mold problem in the crawl space, a small leak that is damaging insulation and sheathing in the attic, or a minor problem with the HVAC system that will soon cost big bucks to repair. Many builders have numerous houses under construction at the same time. When they get one under contract, they will shift focus to other projects or rush the completion. This can result in shoddy workmanship and latent problems that will only become an issue years down the road.

It is better to uncover potential problems prior to closing the transaction. A builder is much easier to reach before you take ownership of a property than they are after you have moved in. Being legally entitled to getting something repaired does not eliminate all of the aggrevation and inconvenience involved in forcing a builder to make something right. Moisture problems and many other issues may not be noticed by homeowners until after the first year. This can further complicate matters.

A home inspection provides an added layer of security for all parties involved in the real estate contract. For buyers, it helps them have more confidence in the condition of the house, whether it be from a private seller, builder, or a bank foreclosure. For sellers, a home inspection empowers them with a full understanding of how their home measures up to the competition. It will help both buyers and sellers prepare for their future and feel good about the transaction for many years to come.