Tag Archives: Buying

Should You Purchase A Home Warranty Plan?

Photo Credit: Judy van der Velden https://flic.kr/p/bUqzYi
Photo Credit: Judy van der Velden https://flic.kr/p/bUqzYi

Generally when you buy a home, the seller will pay for you to have a home warranty plan in force for one year. After that first year, you then have to choose whether you want to continue paying the premiums to extend that plan.   This can be a confusing decision, but one with which we can help!   Below you’ll find information regarding the standard coverages provided by a home warranty plan, along with additional info to help you decide whether you should or should not renew your existing plan.

 

How Much Does a Home Warranty Plan Cost? Plans typically range from $250 to $450, depending on coverage specifics.

 

What is Generally Covered Under a Home Warranty Plan?

  • Air Conditioning
  • Ceiling Fans
  • Dishwashers
  • Doorbells
  • Ductwork
  • Electrical Systems
  • Furnace/Heating
  • Garbage Disposal
  • Inside Plumbing Stoppages
  • Range and Oven
  • Water Heater

 

What is Generally NOT Covered?

  • Compliance Upgrades (aka – bringing water heater up to code)
  • Haul-Away Costs
  • Outdoor Items (sprinklers, fences, etc.)
  • Permit Fees
  • Refrigerators, Washers/Dryers, Garage Door Openers, Faucet Repairs (not all plans cover these)
  • Spa or Pools (unless specific coverage requested)

 

Should You Renew Your Plan?Consider the following:

  • The general age of your items that would be covered by the plan (older items are more likely to fail)
  • Your experience maintaining a home (can you tackle the repairs on your own?)
  • Your resources for helping you fix problems (consider your friends & family…assess the tools you have)
  • Your financial capability to replace items should they fail (are you capable of buying a new dishwasher?)

 

If You Buy a Plan, What Type of Coverage Should You Get?Consider your specific needs. Make sure you pay close attention to whether the home warranty company will pay for repairs to make certain types of systems or appliances compliant with new regulations. We’ve seen water heaters go out with a home warranty plan that covers its replacement. But the plan didn’t cover the $500 in work that needed to be done in order to update the compliance of the system.

 

We hope this helps with your decision about your Home Warranty Plan options.   Feel free to contact us if you have questions about whether you should renew your Home Warranty Plan…we’re here to help!

Location, Location, Location!

http://www.landandfarm.com/property/17_acres_in_Orange_County_California-381303/
http://www.landandfarm.com/property/17_acres_in_Orange_County_California-381303/

I work with a lot of first time home buyers. They are probably some of my best clients. For the most part, they are willing to learn the tricks of the trade. They ask all the right questions and cover their boundaries. In a lot of ways, they are trusting and accept advice easily. However, whether you are a first time home buyer or purchasing your 3rd, 4th or 5th home one rule of real estate always stands firm.

 

Location, Location, Location!

 

Location is one of the first things I discuss with my first time home buyers. As an agent, it is always at the forefront of my mind when touring properties.

When determining a home, and more importantly its value, the location of the property will determine the long term value and stability of that property. This can be said for a large geographic region such as Orange County all the way down to the specific location in a particular neighborhood. Orange County has higher home values than San Antonio, Texas for a reason. The value is in the land, location and proximity to certain desires such as, the beach. The beach may be the obvious determining factor in driving home values in Orange County, but there are many other factors to consider that drive the cost of your home.

 

When buying a home in Orange County, consider these items:

-Proximity to freeways

-Ease of getting to the beach

-Lot size and location

-Proximity to shopping, restaurants and grocery stores

 

Cities such as Costa Mesa, Aliso Viejo and Irvine have all seen significant gains in home values over the last year. One of the common denominators with these cities is the relative ease to freeways or toll roads allowing for shorter commutes to beach cities and work. There is a high demand for spending less time in your car and more time in the sun. All of these cities offer great shopping and dining, as well. As you move further out to Foothill Ranch, Mission Viejo, Rancho Santa Margarita or San Juan Capistrano (all great cities in their own right) you will see slight drops in home values due to their geographic location. They are often associated with a little longer commute and fewer “Town Centers” where you can get all your shopping done. However, when picking a neighborhood regardless of city one thing stays consistent in determining price. Land! For example, think about a neighborhood in Aliso Viejo. The average home price for that neighborhood may be $600,000. If you have a corner lot in that neighborhood, your home may sell for $50,000-$75,000 more just because of the lot. If you can find a deal with a corner lot, snatch it up quickly. It will retain its value year after year. Many people don’t realize that the value of their home is in the land. If you currently own a home, take a look at your next tax statement. Say, your home is in the same neighborhood as the example above. You get your tax bill and your property was assessed for $600,000. Take a closer look at your bill. I would be willing to bet my own home that your tax bill reads “Land Value $425,000” and “Structure Value $175,000”.  The fact is, building a home doesn’t cost a great deal comparatively speaking. The value is in the land and location!

Solar Panels: Are They the Right Investment for Your Home?

Photo Credit: Michael Coghlan https://flic.kr/p/fGwupJ
Photo Credit: Michael Coghlan https://flic.kr/p/fGwupJ

You don’t have to look very far to find information on solar panels. There are all types of products and low financing options that guarantee to save you money. The average home owner may see solar panels as a way to avoid the ever increasing price of energy. I am not here to tell you solar panels are or are not a good investment.  As a Realtor, I am here to give you my professional, unbiased opinion on solar panels in the housing market and how they effect sellers.

How do solar panels work? Solar panels are typically sold on a long-term lease of 20 years with a monthly payment. In turn, the solar company will use the energy captured by the panels to eliminate your monthly energy bill from your existing energy company. If you sign up for a monthly lease of $150 and your typical energy bill is $200 a month, then you save $50/month or $600/year. Multiply that over the term of the lease and you just saved $12,000. Sounds great, right? Not so fast… Remember, you signed a 20 year lease. You are bound to the payments of the long-term contract and based on the example above that would be $36,000. What happens if you decide to move? What happens if technology advances and there are cheaper alternatives?

What happens if I want to sell my home and I have a long-term lease on the solar panels?  If you do want to sell your home, the potential buyer will have to take over the solar panel lease in order to purchase it. OR the new owners could purchase the home without taking over the lease, leaving you responsible for the payments even after you moved out.  At first glance, the monthly savings look great and the innovative technology is a must, but make sure you are familiar with the long term ramifications.

What could the future hold? Pretend it is the year 2024.  You own a home and purchased solar panels 10 years ago. You are halfway through your lease. In that time, technology has advanced and we can capture the same amount of energy on one panel as you can with the 20 rusty panels currently on your roof. In addition, the cost in the solar panel market is a monthly payment of $40 a month. Now you want to sell your home. When you list your home, interested buyers are notified that the home is attached to a 20 year solar lease with 10 more years remaining. Why would the buyer take over a lease at $150 a month when they can get it at $40 a month? Why have 20 solar panels on their home when they could have one? Why spend more for old technology? These are all valid questions that will cause problems in your future sell.

Let’s say you don’t plan on selling in the next 20 years. My initial response would be: 20 years is a long time. Your plan today may not be your plan tomorrow. My second response would be: keep in mind you are leasing solar panels. Once your 20 years is up, you still won’t own them. But you have the option of forking up about $5,000 to buy them at their market value.  Another extra expense…and to add insult to injury, any repairs that need to be done to the solar panels during your lease will be at your own expense. The hidden costs are everywhere.

Know the facts before you decide to lease or buy. Ask yourself one question. Is saving $50 a month worth the long term issues? You may save on the front end, but if you ever decide to move, it will likely cost you. In my professional opinion, if you want to go the solar panel route, purchase them or avoid them all together. Otherwise, your solar panel leasing agreement could be a disaster when it comes time to sell.

Feel free to contact me directly for some personal experiences with solar panels in the housing market.

 

Photo Credit: Michael Coghlan, https://www.flickr.com/photos/mikecogh/9647603520/