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The Important Details of Homeowners Insurance

The Important Details of Homeowners Insurance

by | Sep 15, 2010 | For Buyers, For Sellers, General Real Estate Advice | 0 comments

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

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

by | Aug 11, 2010 | For Buyers, For Sellers, Real Estate 101 | 0 comments

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.

Getting Your House Ready to Sell

Getting Your House Ready to Sell

by | May 25, 2010 | For Sellers, Real Estate 101 | 0 comments

Deciding to sell your house is a big decision. Once you have decided to place your house on the market putting your houses ‘best foot forward’ is one important step to getting it sold. Here is a link to an article which addresses this subject. Of course I’m always happy to come out and take a look at your house and let you know what I think needs to be done. In my experience you are much better off doing the work in advance than waiting for a negotiation with a buyer that might never come.

Visit houselogic.com for more articles like this.

Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®

Customer Service – Quack or Soar

by | Feb 5, 2010 | For Buyers, For Sellers | 0 comments

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

Getting Your House Market Ready

Getting Your House Market Ready

by | Nov 10, 2009 | For Sellers, Uncategorized | 0 comments

In order for a house to sell in today’s market it must have a lot going for it.  The competition is intense and a successful seller is one who competes and wins on many different fronts.  This article will provide the prospective seller tips, ideas and best practices that will help you sell your home, not just list it.

Curb Appeal

No matter how beautiful your home is on the inside, the first impression will always be made by how the house looks from the street.  Many times if the house does not look up-to-snuff on the outside buyers will chose to not go inside.  You don’t get a second chance to make a first impression.  Here are some tips to make the exterior of your house look its best:

  • Cut the grass,
  • Trim the hedges.
  • Rake the leaves.
  • Sweep or shovel the sidewalks.
  • If you have rocks around your house make sure it’s not 1 part rock and 2 parts old leaves and    sticks.
  • Trim and remove any dead flowers, or shrubs.  Dead and dormant are not good buyer thoughts as they wait for their Realtor to open the door.

Cut The Clutter

People tend to accumulate things.  The mail arrives and we make a pile.  Grandma gives you a chair and we squeeze it in.  After a few years, what is imperceptible to the owners is a maze of furniture, junk and accessories.  You have to cut the clutter!  Buyers will love to see Sally’s photo montage from kindergarten to marriage but they will remember Sally’s dress and her husbands blue tux and won’t remember that this is the house with the beautiful wood floors.  Remove 7/8ths of the personal photos.  I realize it is still your house but buyers have a hard time picturing themselves in “your” house.  The rooms will look bare and not “homey” to the seller but believe me, this is how buyers like to see a house.  They want to be able to picture their stuff in the house.

Staging

Once you cut the clutter it is time to think about staging each room.  The idea is to make each space pleasing to the eye.  Work from the perspective of a buyer at the entrance to each room.  There should be a balance to the room in terms of weight of the furniture (you don’t want everything piled in one corner) and hardness.  By hardness I mean that there should be a balance of hard and soft surfaces.  If a room has hardwood flooring there should be a rug to soften it up a bit.  If there is a couch, a love seat and a lazy-boy the room is probably too soft and you will need to add a coffee table or replace the lazy-boy with a harder chair (think Windsor).  I am not a staging expert but I know people who are and even if you have plenty of your own furniture it is worth a couple of hundred dollars to have an expert come over to put it in the right place.  Beware, sometimes the right place for some of your stuff is at the curb.  In order to get it right you sometimes have to hear what you don’t want to.

Clean Like You Have Never Cleaned Before

Buyer’s look at your house differently than you do; they are comparing it to all of the others out there.  Not only are they looking for the facts of a house (number of bedrooms, square footage, etc.) they are waiting for an emotional connection with a house.  It is hard to get emotionally attached to a house that has flies in the window tracks, a dusty top of the refrigerator (just because you can’t see it doesn’t mean a buyer can’t see it) or a ring around the toilet.  It takes near constant vigilance to keep a house in pristine showing condition.  The idea is to have the buyer ask if someone actually lives there.  Before you put your house on the market it’s time to wash all of the baseboards, clean the silver in the hutch and wash the windows.  It’s also time to clean the window wells, dust the light fixtures and shine the sink.  Your going to love your house so much you are going to hate to leave.  But then again, it’s hard work selling your house and you will be relieved when that offer gets accepted.

This is not an exhaustive list but it will get you thinking along the right lines.  Time and time again I hear from my clients who get the highest and quickest offers that this happens to them each time they sell.  Why does this happen?  Are these people lucky?  No, these people have the knowledge, planning and persistence to put their house in great showing condition.  Call me whenever you need an extra pair of eyes to check over the progress.

Lease Purchase

by | Sep 14, 2009 | For Buyers, For Sellers, Real Estate 101 | 1 comment

As I drive around in my market I tend to see homemade signs posted at major intersections with houses advertised as “Rent to Own”. In this post I’d like to layout a typical rent to own deal as well as show how the unscrupulous can take advantage of an unsuspecting buyer.

First terminology; rent to own is the same as a lease purchase. It is a combination of a lease and an option to buy a house for a certain price. This type of deal attracts people who are not quite ready to buy but are willing to bet that they will be able to purchase in a relatively short period of time. Most of the time the attracted buyers are either just getting started or are starting over after a bankruptcy or other credit issue.

Here are the main features of the deal:

  1. Buyer and Seller agree to an option price and the time for which the option is good (usually 3 years or less but is negotiable).
  2. Buyer pays an non-refundable option fee upfront to Seller (usually 1% – 5% of purchase price) . If they exercise the option the option fee goes toward the purchase price of the house.
  3. Buyer agrees to pay monthly rent to the Seller. Usually, the buyer pays a premium on the market rate rent and that premium also pays down the option price of the house.

Advantages for Seller:

  1. Expands the pool of possible buyers to their house. This is especially helpful in a slow market.
  2. Option money is upfront and payable to the Seller.
  3. They can usually collect above market rate rent.

Advantages for the Buyer:

  1. They are able to lock in a sales price on a house.
  2. They are able to pay down equity each month they pay rent.
  3. They are given time to accumulate a down payment, sell a house or repair credit.

Buyer Beware:

There are situations where the Seller is just looking for a victim. There have been many instances where sellers are just looking for the upfront money and premium rent and then find a technicality to evict the buyer/renter before the option can be exercised.

Seller Beware:

The deal can get sour quickly if the buyer cannot perform. The good news is that the Seller ends up with some money but they also have to ask the Buyer to move out and deny the pleas for an extension.  The other variable is the condition of the house.  If the Buyer can’t make the deal work they won’t necessarily keep the house in great condition.  Something to think about.