For Buyers Archives - Page 9 of 16 - Boulder Real Estate

The Important Details of Homeowners Insurance

by Neil Kearney | Sep 15, 2010 | For Buyers, For Sellers, General Real Estate Advice

The recent fires in our area bring to my mind the importance of homeowners insurance. During my 19+ years of selling real estate in and around Boulder homeowners insurance has never been a big part of the transaction. Years back it was a last minute detail, many times lined up the day before closing. Now there is a specific deadline on the contract in which the buyer has the right to cancel the contract if reasonable (in the buyers subjective opinion) homeowners insurance is not available for the property they want to purchase. Usually this contingency period is 10 – 14 days after an accepted contract.

Most people think about insurance in two ways. For 99% of the time they want to know they are covered without paying too much (that’s why the save 15%… commercials have mass appeal). Having coverage brings peace of mind. Once you have a claim your perspective changes. If you have good coverage you are thankful and if you don’t you kick yourself for being cheap. Just think of the 166 families who have come home to their home and possessions which are now a pile of ashes. The pit in your stomach is deep enough without the nagging fear that your coverage is lacking.

So, with this in mind I asked my friend and insurance agent Ryan Brooks from Allstate to give some quick tips on making sure you are adequately covered. Here are a few tips:

Don’t just shop for the cheapest plan out there. Yes it will save you on a monthly basis but this approach is penny wise and pound foolish. In case of a catastrophic loss you could be lacking some important coverages.
The best scenario in setting up a policy is to sit down with an agent (not online) and go over your specific situation. Ask questions and tell them about your personal situation. Do you have art, expensive jewlery, memorbilia? Telling the claims adjuster after a fire will not fly, it needs to be disclosed in advance.
Here are a few items that you want to make sure you have on your policy.
Cost of Living – this coverage gives you money to live in a home of similar size and quality while your home is being re-built or repaired. If you don’t have this coverage it can quickly cost you tens of thousands of dollars.
Adequate Liability Coverage – Make sure you have enough liability coverage. In most cases this is $1,000,000 or more. This covers you if someone would slip and fall off your deck during a party, etc.
Building Codes Coverage – This coverage is especially helpful in the case of an older home. This allows for modification of the house to meet current code if the covered repair needs to be re-worked in order to meet code. Think of an old home with a steep pitched roof.
Condo Coverage – If you are a part of a homeowners association there is most likely a master HOA policy which covers the structure. However, this policy does not cover the individual owners possessions, or the interior finishes (drywall, plumbing , cabinetry, carpet). Make sure your condo insurance has adequate building structures coverage which will rebuild the interior of the unit. Many times this is capped out at 10% of the contents coverage and this is not enough.
Loss Assessments – Speaking of condos. Loss assessments coverage covers you if a covered loss (roof, liability) on the part of the HOA results in a special assessment. This coverage runs around $10 a year and is well worth it.
Sewer and Groundwater – Losses from sewer backup and water coming into the home are not usually covered unless there is a specific rider on the policy.
Personal Property – Make sure the limits on your policy grow over time. The amount of personal property a typical household has grows ever time. We have much more in our home when we are 60 years old than when we were 20.

Once good insurance is in place you can rest easy. Many pay insurance their whole life and never take out, but for those who have a significant loss, insurance is well worth it.

Tip: Take an extensive video of your home, including closets, drawers, garage etc. and store either online (private Youtube) or in a safe deposit box. This will be a good inventory of personal property and will allow you to remember items that would have slipped your mind. Everything has value make sure your homeowners insurance is up to snuff.

The Code of Ethics – It’s Why You Work With A REALTOR

by Neil Kearney | Aug 11, 2010 | For Buyers, For Sellers, Real Estate 101

A recent advertising campaign had the slogan “Make sure your agent is a REALTOR”. The campaign was paid for and developed by REALTORS who wanted to differentiate themselves from those real estate agents who are not REALTORS. Still, I don’t think the public gets it fully. “Aren’t all real estate agents REALTORS?” the public may think. This is like saying “aren’t all colas Coke” or “isn’t all tissue Kleenex?

Currently there approximately 35,000 people in Colorado with a license to sell real estate. Of those people approximately 23,500 are REALTOR, meaning they are a member of the National Association of Realtors (NAR). So what is the difference and why should you care.

To start the explanation we go back to 1913 when The Code of Ethics (The Code) was first adopted by NAR. The Code is a document to which all REALTORS swear to abide by and be held to. The backdrop of the creation of The Code was an era of the fraudulent subdivision, the fake city addition, the multiple “first” mortgage, the “net” listing, and a myriad of other “get rich quick” schemes involving the sale of land.”1 It was a time before state regulations regarding real estate and the time when “buyer beware” really meant something. The Code was written on the premise that REALTORS should serve the public and being a REALTOR meant that you upheld a higher standard of business practices.

Nearly 100 years later The Code of Ethics is still going strong. It is a living document meaning that it is in a constant state of review and revision. Each year new interpretations and or Standards of Practice are added to The Code. It is as relevant now as it was 97 years ago.

The Code works because it includes both the ideals on which we should base our real estate practice and a mechanism for hearings, education and discipline where needed. The Code gives the public and our real estate peers a way to stand up for principle and make a stand for what is right.

The Code of Ethics is a document which includes 17 Articles organized under three main headings; ‘Duties to Clients and Customers’, ‘Duties to the Public’, and ‘Duties to REALTORS’. Each article is further explained by specific Standards of Practice which give clarification to the intent of the articles. The basis of all articles in The Realtor Code of Ethics is the Golden Rule “Whatsoever ye would that others should do to you, do ye even so to them”.

So what happens when in your opinion a REALTOR acts unethically? The public as well as fellow Realtors can file an ethics complaint with the local REALTOR association in which the offending agent is a member. There is then a pre-defined procedure in which the complaint is processed. The complaint is taken very seriously and is handled confidentially by a panel of peers. The first step is the Grievance Committee which determines if a hearing should take place. The Grievance Committee acts as a grand jury. If the complaint is determined to be valid, the next step is a full hearing which replicates a court of law. The outcome is not criminal but an offending REALTOR can be punished.

So, what does it matter if your agent is a REALTOR or not? Both are licensed and can help you buy and sell real estate but only a REALTOR has pledged to serve the public ethically and consistently, and is willing to be upheld to this standard by a panel of their peers. To me it is more than that. REALTORS have made a commitment to serve the public and to conduct business in a way that the public expects.

I am privileged to have been chosen to be the chairman of the Grievance Committe for the Boulder Area REALTOR Association this year. To me how business is conducted does make a difference.

To read The Code online click here.

1 – Article – “The Realtor’s Code of Ethics – A Gift of Vision, 1978 William D. North.

Claiming Tax Credit and Other Homebuyer Tax Credit Details

by neil kearney | Mar 11, 2010 | For Buyers

The Homebuyer Tax Credit is a big part of our market. The deadline to place a property under contract is April 30th and as of today buyers who want to take advantage of this unprecedented opportunity have just 50 days to get it done. There are many sources of information out there on this opportunity but I have found that the best source of information comes directly from the source, the IRS.

The first logical question anyone can ask about the tax credit is “Am I eligible?”. To find out go to http://www.irs.gov/newsroom/article/0,,id=206291,00.html

I get many questions that are a bit out-of-the-box. What if one spouse qualifies and the other doesn’t? Am I still eligible if I get a co-signer who does not qualify? What if I got a divorce and lost the house in the settlement? Answers to these types of questions can be found at http://www.irs.gov/newsroom/article/0,,id=206294,00.html

Now the fun part. If you do in fact qualify and you have closed on a home within the specified time frame your tax credit is just a step away. If you purchased a home in 2009 you can claim the tax credit on your 2009 tax return. But did you know that you can claim a property purchased in 2010 on your 2009 taxes? Claiming the tax credit seems pretty straight forward. You attach form 5405 to a long form 1040 and include documentation regarding the sale. To see a full explanation on the process go to http://www.irs.gov/newsroom/article/0,,id=218698,00.html

Customer Service – Quack or Soar

by neil kearney | Feb 5, 2010 | For Buyers, For Sellers

I’m in the customer service business. Real estate is not a business of monopolies. I know that if I don’t provide my clients a great experience they can and will use someone else. At last count, there were over 1,200 Realtors in the Boulder area. I don’t take my business for granted and work hard at what I do. I strive to give my clients prompt, honest, intelligent and enthusiastic service.

The story below from Harvey Mackay gives a great example on the difference between poor service and extraordinary experience.

Harvey Mackay tells a wonderful story about a cab driver that proved this point. He was waiting in line for a ride at the airport. When a cab pulled up, the first thing Harvey noticed was that the taxi was polished to a bright shine. Smartly dressed in a white shirt, black tie, and freshly pressed black slacks, the cab driver jumped out and rounded the car to open the back passenger door for Harvey. He handed my friend a laminated card and said: “I’m Wally, your driver. While I’m loading your bags in the trunk I’d like you to read my mission statement.”

Taken aback, Harvey read the card. It said: Wally’s Mission Statement: To get my customers to their destination in the quickest, safest and cheapest way possible in a friendly environment. This blew Harvey away. Especially when he noticed that the inside of the cab matched the outside. Spotlessly clean! As he slid behind the wheel, Wally said, “Would you like a cup of coffee? I have a thermos of regular and one of decaf.”

My friend said jokingly, “No, I’d prefer a soft drink.”

Wally smiled and said, “No problem. I have a cooler up front with regular and Diet Coke, water and orange juice.”

Almost stuttering, Harvey said, “I’ll take a Diet Coke.”

Handing him his drink, Wally said, “If you’d like something to read, I have The Wall Street Journal, Time, Sports Illustrated and USA Today.” As they were pulling away, Wally handed my friend another laminated card, “These are the stations I get and the music they play, if you’d like to listen to the radio.”

And as if that weren’t enough, Wally told Harvey that he had the air conditioning on and asked if the temperature was comfortable for him. Then he advised Harvey of the best route to his destination for that time of day. He also let him know that he’d be happy to chat and tell him about some of the sights or, if Harvey preferred, to leave him with his own thoughts.

“Tell me, Wally,” my amazed friend asked the driver, “have you always served customers like this?”

Wally smiled into the rear view mirror. “No, not always. In fact, it’s only been in the last two years. My first five years driving, I spent most of my time complaining like all the rest of the cabbies do. Then I heard on the radio one day that if you get up in the morning expecting to have a bad day, you’ll rarely disappoint yourself. He said, “Stop complaining! Differentiate yourself from your competition. Don’t be a duck. Be an eagle. Ducks quack and complain. Eagles soar above the crowd. That hit me right between the eyes,” said Wally. “That was really talking about me. I was always quacking and complaining, so I decided to change my attitude and become an eagle. I looked around at the other cabs and their drivers. The cabs were dirty, the drivers were unfriendly, and the customers were unhappy. So I decided to make some changes. I put in a few at a time. When my customers responded well, I did more.”

“I take it that has paid off for you,” Harvey said.

“It sure has,” Wally replied. “My first year as an eagle, I doubled my income from the previous year. This year I’ll probably quadruple it. You were lucky to get me today. I don’t sit at cabstands anymore. My customers call me for appointments on my cell phone or leave a message on my answering machine. If I can’t pick them up myself, I get a reliable cabbie friend to do it and I take a piece of the action.”

Wally was phenomenal. He was running a limo service out of a Yellow Cab. I’ve probably told that story to more than fifty cab drivers over the years, and only two took the idea and ran with it. Whenever I go to their cities, I give them a call. The rest of the drivers quacked like ducks and told me all the reasons they couldn’t do any of what I was suggesting. Wally the Cab Driver made a different choice. He decided to stop quacking like ducks and start soaring like eagles.

Just remember…Ducks Quack, Eagles Soar.

Do I quack or soar? hmm

Buying a HUD Home

by neil kearney | Feb 2, 2010 | For Buyers

According to Hud.gov, a HUD home is “a 1 to 4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.” It is a home that is for sale by the government and is sold via auction.

In order to make an offer or view a property owned by HUD a buyer must work with a broker certified for HUD home sales. I just happen to be certified and would be happy to help you see or make a bid on a HUD home.

To search for a HUD home in Colorado click on the photo below.

Search for HUD Homes Here

Real Estate Negotiation Tips

by neil kearney | Jan 27, 2010 | For Buyers, For Sellers, General Real Estate Advice, Real Estate 101

A good negotiator is someone who always gets what they want. Right? I say, not always. Being a good negotiator to me is someone who can give themselves or their clients the best chance to achieve their goals. Giving you the best chance does not always mean you will get exactly what you want. In order to achieve sustained success, a negotiator must go for Win-Win, not Win-

Lose. A successful negotiation substantially meets the goals of all parties involved.

Right now in the Boulder area real estate market buyers have the perception that they may be able to get a great deal on a home. It is true that there is more inventory out there and a portion of those sellers are quite anxious to sell. I have seen lately many offers well below full price and it takes a delicate touch to try to meet somewhere in the middle. Here is what I try to do to give the offer the best chance to come together.

Do our homework – find out what is reasonable. What have other houses actually been selling for? How much is the average negotiation off of full price?

Establish goals – What would be an acceptable outcome. Begin with the end in mind and you have a much better chance to get there. Be realistic.

Understand the situation – Try to understand what situation your counterpart is in. Understanding is power. With every contact, I try to learn a bit more about where the other people are coming from. Many times, after making an offer, it is the first counter that gives you the most information.

Keep the lines of communication open – As a Realtor I need to represent my clients to the best of my ability, but I have found that being adversarial to the other side doesn’t get you anywhere. I try to keep on very good terms with the other agent. I find that this helps in coming to a successful closing. If we become adversarial along the way it is very hard solve all of those little details that come up between contract and closing. I try to treat other Realtors well, so the next time we are working together they can tell their clients I am easy to work with and to expect a smooth transaction.

Remember that every situation is different – You never know what other people are thinking. You can guess someone’s motivations but you never know what are the true motives. Don’t try to guess, try to learn, understand and adapt.

Anticipate – I find that I am really able to help my clients by anticipating what may happen during a certain transaction. If we can talk about different scenarios before they happen they are easier to solve when they come up.