Category Archives: Residential Real Estate

Your Insurance Questions Answered

Building, Buying, Financing, Insurance, Investing, Real Estate Agent, Remodeling, Residential Real Estate, Selling, Tips, Uncategorized, , , , , , , ,
Photo Credit: http://www.aiche.org/resources/member-services/member-only-insurance-plans
Photo Credit: http://www.aiche.org/resources/member-services/member-only-insurance-plans

Insurance is one of those “love ‘em and hate ‘em” expenses in life. It is absolutely necessary to protect your financial future. Remember, the purpose of insurance is not to make you rich in the event of loss. It is to transfer the risk of major loss from you to the insurance company, in exchange for policy premiums.

 

So which types of insurance do you need? Which are a waste of money?

 

MUST HAVE’S

  • Medical Insurance – this is now mandated by our government. And for good reason. Health expenses are the number one cause of foreclosures and bankruptcies in our country. You don’t want to be thinking about financial consequences while you battle cancer. You must protect your health.
  • Home Insurance – your home is often your greatest asset; it must be covered against major loss. Liability insurance is a key ingredient with home insurance, be sure to cover your assets against accidents. Click here to learn more.
  • Auto Insurance – a certain level is required by law. You’ll also want to be sure you have liability coverage (consider “umbrella” coverage with your agent)
  • Life Insurance – how would your family fare financially if you died tonight? If you don’t know the answer to that question, life insurance is your answer. Click here to learn more.
  • Disability Insurance – your ability to earn an income is often your greatest asset. Disability insurance protects your income in the event your employer doesn’t have worker’s comp or a policy in place to cover you. Self-employed people need to pay special attention to this. This is often the most forgotten insurance.

 

NICE-TO-HAVE’S

  • Pet Insurance – recent progress with medicine makes it more likely a pet’s health can be restored with advanced procedures. Pet insurance can help you avoid having to make the very difficult decision of whether to pay for that $5,000 surgery. Click here for more info on different kinds of pet insurance, and what you should consider.
  • Identity Theft Insurance – most people waste money on credit monitoring, but have no plan for how they will recover their identity in the event it is stolen. It has been estimated that 600 hours is the average amount of time spent on recovering from an ID theft occurrence. Most people don’t have that time to waste. Click here for more info on credit monitoring vs. ID theft Insurance.
  • Long-Term Care – this is a tough one. It’s not for everyone and should be assessed on a case-by-case basis. It is expensive, but necessary to receive good care and protect assets. Talk to a trusted agent.

 

DON’T HAVE

  • Mortgage Life Insurance – the only reason to have this is if your health prevents you from acquiring regular life insurance. Otherwise, you will badly overpay for this scheme.
  • Private Mortgage Insurance – there are many home loan options these days to help you avoid private mortgage insurance. Click here to learn more.
  • Insurance on Small Electronics – as mentioned in the opening paragraph of this article, insurance should be acquired to protect major loss. The loss of small electronics like headphones, iPods, etc. would not financially cripple you. This is where a reserve fund is handy. Keep a maintenance savings account to handle these small incidents. Don’t go broke insuring them!

 

This article was not intended to give you an all-inclusive tutorial on insurance, but rather to make you aware of the types you should consider and research further. We hope this helps!

 

What are your thoughts on insurance? What types of coverage do you have? Any that we didn’t include above?

New Credit Scoring Model For Homeowners

Buying, Financing, Investing, Residential Real Estate, Uncategorized, , , , ,
Photo Credit: www.mentalhealthy.co.uk
Photo Credit: www.mentalhealthy.co.uk

FICO, the primary credit scoring system used in lending, is releasing a new scoring model at some point this fall. This new 9.0 model has been advertised to contain major changes that are expected to be a big help for consumers. However, there are some things many aren’t considering with the new release.

 

The newest FICO model has revised previous versions to no longer penalize consumers for medical collection issues. This would seem to be big news for millions of consumers who are victim to the imperfect credit reporting systems of the medical industry. Consumers caught in this medical collection web will often find their credit scores are significantly impacted in a negative way.

 

Because of this, some aren’t able to qualify for home loans; and the others who are able to qualify usually take a significant hit to their mortgage rates.

 

So one would think this new model would be of tremendous benefit to consumers, since more would have improved qualifications for home purchases based on their new higher scores.

 

However, what the media hasn’t shared with us is that most mortgage lenders don’t even utilize the most current FICO scoring model in their underwriting process. The fact is Fannie Mae, Freddie Mac and most other lending institutions still use scoring models developed by FICO over 10 years ago. Many creditors haven’t even adopted the most recent FICO model that came out over six years ago. So it’s likely creditors won’t be jumping to this new model any time soon.

 

There are several reasons why lenders don’t leap to adopt new systems. A change in their scoring model results in a significant system overhaul, costing lenders tons of dough. The system changes also have to correlate with all the other government disclosure requirements. So the sheer cost and logistical nightmare likely won’t be worth the benefit of helping a few extra consumers. Because banks have to be profitable, we can assume their agenda would take precedence before the consumers’ needs.

 

SO WHAT DOES THIS MEAN?
Don’t sit on the fence, waiting for this prospective change to revolutionize your credit situation. It likely isn’t going to happen! You might as well do whatever else you can to accomplish your dream of purchasing a new home.

 

We have spent over 10 years analyzing the credit scoring system. We may have other ways to bump up your credit scores to help you through the home buying process. There is a lot of misinformation about credit scoring, including the myths surrounding credit monitoring (click here to learn why this is a waste of your money).

 

Every situation is unique…we’re happy to help!

 

NOTE: This new model is likely to take effect more immediately with consumer & revolving reports. These entities are faster to act with their adoption systems.

What’s Your Secret Weapon?

Buying, Investing, Residential Real Estate, Selling, Tips, Uncategorized, , ,
CB Pic for Oct Post
Source: http://transactionsbybrent.wordpress.com/2012/08/14/services-offered2/

Written by a guest Transaction Coordinator

 

In an earlier post, we talked about the amount of paperwork involved in a Real Estate transaction. Can you imagine being a top producing Agent and having to handle all of the administrative tasks and paperwork flying solo? Think about how valuable your time could be spent with family and growing your business if someone else was crossing your “Ts” and dotting your “Is” to ensure your file was compliant with the DRE and the requirements set by your brokerage.  Well, who should you hire?

 

The person who can assist with processing the Real Estate file to gather and follow up on all the necessary and contractual items would be your definition of a Transaction Coordinator (TC).  Part of their job duty is to ensure that all mandatory disclosures are completed by checking all signatures, initials, and dates.  Important dates and timelines would also be sent as a reminder to all parties involved. The TC will also QC and provide a preliminary audit of the file for the managing broker to review. If all looks perfect, the Agent is worry free because he/she will be paid on time when the escrow closes.
This person can be licensed or unlicensed and will be your secret weapon so that you, as an Agent, can provide a higher level of service to your clients and do what you are meant to do – sell real estate.  A Transaction Coordinator will help you stay organized!

Commission Contradiction! Who pays a Realtor’s commision?

Buying, Investing, Residential Real Estate, Selling, Tips, , ,
Photo Source: Richard Busch https://flic.kr/p/6nWRCM
Photo Source: Richard Busch https://flic.kr/p/6nWRCM

It is often assumed in a Realtor’s day-to-day interactions that home buyers and sellers understand who is paying the Realtor fees and commissions. As of late, many buyers have expressed to me that they went with Realtor X because he or she was not charging them a commission when helping them find a home. While this is true, it is often a deceptive sale for some realtors to gain a client.

Here are the facts: BUYERS NEVER PAY A COMMISSION TO A REALTOR. Commissions are always the responsibility of the seller. Typically, the commission is broken down into two parts.

 

1) 2.5% – 3% to the agent who is listing the home

2) 2.5% – 3% to the agent who is bringing in the buyer.

 

Depending on the market, this could range from 5%-6% of the total purchase price. This payment is solely the seller’s responsibility. It is important to note as a homebuyer that when you turn around to sell your place 5 years down the road, you will be responsible for these costs.

 

Often agents will take advantage of homebuyers who do not understand the commission structure. Buyers who do not understand the commission structure agree to work with them and it typically is the beginning of a rocky home search.

 

Another disconnect with buyers / sellers and Realtors is that it is believed that a Realtor’s job is solely to sell the home or help the clients find a house.  At Iseley & Walsh Real Estate Group we know the job does not stop there! Realtors earn their commission on the level of services they provide. Our team has a 4-page document outlining important tasks that need to be done once escrow opens. This could be anything from ordering HOA docs to negotiating request for repairs. A good Realtor’s value is in their ability to quarterback all the responsibilities of escrow to assure a successful close. Just because you agreed to a purchase price, doesn’t mean the deal is done.
I cannot express enough how many times buyers or sellers have tried to cut corners with Realtor fees or discount shops only to receive poor service, feel lost in the transaction and ultimately lose a coveted property. Trust me, seeing someone who was already emotionally attached to a place lose the property due to “going cheap” is not an easy conversation to have.
In closing, I think it is important to focus on two things when picking an agent. First, understand that the seller pays all commissions. Second, understand your Realtor’s roles and responsibilities. Feeling comfortable communicating with your agent should be at the top of your list. You want to know that person has your best interests in mind, will be there to answer any question you have and ultimately will help guide you to a successful close of the property.

Less Space, Less Mess, Go Green!

Residential Real Estate, Uncategorized, , , , ,

paper pileEver been a party to Real Estate transaction? Whether you were the Broker, Agent, buyer, or seller, you know the amount of paperwork that is involved. It’s practically a paper intensive industry and never ending, right?  Save time and money with less to print by going paperless!

 

What exactly does going paperless mean? One meaning behind it is to have an online filing system to manage your transactions such as DotLoop, Dropbox, SureClose, or Transaction Point to name a few. These management platforms will help you stay organized and in compliant.  Of course, it’s an expense to go paperless; however, an Agent or Brokerage can save money in the long term with printing, gas, document storage, and cost to fax/copy.  Just think how convenient that would be to have your client’s documents ready for them at a moment’s notice.

 

Another definition to going paperless that I have seen become very popular with Agents is E-signature. This sure saves Agents money and time! Clients have the privilege to sign anywhere and anytime.  Worried you won’t get that last document signed for closing while your client is on vacation? Here’s an example of how well this comes into play.

 

file_climbLet’s reduce the paper waste and start saving. Having these simple tools are definitely beneficial.

 

Content Credit to one of Iseley & Walsh Real Estate Group’s Transaction Coordinator.