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10 home maintenance tips for spring

April 7, 2012 By
Tree - leaf canopy

From Inman .com

The sun is peeking out and the plants are starting to blossom, so it must be about time for spring chores again. Here’s my annual spring checklist of important issues to tend to around the house.

1. Roofing repairs: If you suspect winter storms may have damaged your roof, it needs to be inspected. (If you’re not comfortable with the height or steepness of your roof, hire a licensed roofing contractor for the inspection.) Look for missing or loose shingles, including ridge-cap shingles.

Examine the condition of the flashings around chimneys, flue pipes, vent caps, and anyplace where the roof and walls intersect. Look for overhanging trees that could damage the roof in a wind storm, as well as buildups of leaves and other debris.

If you have roof damage in a number of areas, or if older shingles makes patching impractical, consider having the entire roof redone. Also, remember that if the shingles have been damaged by wind or by impact from falling tree limbs, the damage may be covered by your homeowners insurance.

2. Check gutters and downspouts: Look for areas where the fasteners may have pulled loose, and for any sags in the gutter run. Also, check for water stains that may indicate joints that have worked loose and are leaking. Clean leaves and debris to be ready for spring and summer rains.

3. Fences and gates: Fence posts are especially susceptible to groundwater saturation, and will loosen up and tilt if the soil around them gets soaked too deeply. Check fence posts in various areas by wiggling them to see how solidly embedded they are.

If any are loose, wait until the surrounding soil has dried out, then excavate around the bottom of the posts and pour additional concrete to stabilize them. Replace any posts that have rotted.

4. Clear yard debris: Inspect landscaping for damage, especially trees. If you see any cracked, leaning or otherwise dangerous conditions with any of your trees, have a licensed, insured tree company inspect and trim or remove them as needed.

Clean up leaves, needles, small limbs and other material that has accumulated. Do any spring pruning that’s necessary. Remove and dispose of all dead plant material so it won’t become a fire hazard as it dries.

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Sharon Johnson Shared This Article “Banks Tempt Underwater Home Owners with Cash — Would You Take It?”

March 4, 2012 By

A short sale might be worth more than avoiding a foreclosure on your credit report. For some, it means cold hard cash.

If your lender offered you as much as five figures to move out of your home because you couldn’t make your mortgage payment, would you do it or wait for the lender to foreclose?

The answer would seem to be a resounding “hell, yes.” But many people sit tight.

When Bank of America offered short-sale incentives of $5,000 to $20,000 to 20,000 Florida home owners late last year, only 3,000 home owners expressed an interest in participating.

One reason? Folks can often live rent-free while the foreclosure process winds its way through the red tape.

But, a cash “bonus” paired with a short sale that lets you avoid a foreclosure on your credit history can be a sweet deal.

An incentive payment might be as little as $3,000 via the federal government’s Home Affordable Foreclosure Alternatives program. But private lender programs offer 10 times that much, depending on where you live, which short sale program you use, and which company holds your mortgage, says BusinessWeek.

“Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt, and in some cases providing large cash incentives,” Moody’s Senior Credit Officer Bill Fricke told the magazine.

Of course, incentives have their catches. You have to:

1. Help the bank sell your home. In a short sale, you find someone willing to buy your home for less than what you owe on the mortgage and your lender agrees to take the sale price.

2. Move on without a fight.

3. Probably live in a state where it takes years, rather than months, for the bank to foreclose. In those areas, it’s cheaper for the bank to pay you to do a short sale than to pay the cost of a multi-year-long foreclosure.

If you bank makes an offer and you bite, these four steps will ensure the smoothest possible process:

1. Make sure the lender can’t come after you later to collect any shortfall between what you owe on the mortgage and what you’re selling your home for. Some, but not all, states prohibit that.

2. Talk to an attorney and a tax adviser so you know what will happen financially after the short sale. If you sell now through the end of 2012, the tax rules for short sales say you won’t owe any income tax on $1 million (singles) to $2 million in forgiven mortgage debt (married couples). Those tax rules, part of the Mortgage Forgiveness Debt Relief Act, expire at the end of this year and only apply to your primary residence.

3. Hire a REALTOR® experienced in short sales to handle the transaction. Look for an agent who’s earned the SFR (short sales and foreclosure resource) designation.

4. Figure out where you’re going to move and sign a lease now because your credit score will likely drop if you stop paying your mortgage and short sell your home. A low credit score can make it difficult to get a rental home.

By the way, you can ask your bank if it’s willing to work with you on a short sale, but asking for an incentive too? That’s not how it works. Banks choose you for an incentive program, and how they decide isn’t clear, though they’re less likely to offer cash in states where it only takes a couple of months to foreclose.

So would you take the cash and short sale, or hold out?
By: Dona DeZube Published: February 17, 2012

Sharon Johnson, Realtor


Office: 419-891-0888
Cell: 419-260-1752
Fax: 419 891-1092
VM: 419-897-2700 ext. 240
sharonjohnson@wellesbowen.com

You can find Sharon’s website by clicking here.

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Homeowners Insurance: Time for an Annual Check-Up

January 27, 2012 By

An annual check-up on your homeowners insurance can result in a healthier policy and a healthier pocketbook.

What type of coverage do I have?

The most effective type of coverage is known as “replacement cost,” which covers, up to your policy limits, what it would take today to rebuild your house and restore your belongings, says Jerry Oshinsky, a partner at Jenner & Block in Los Angeles who has represented homeowners in litigation against insurers.

“Extended” replacement cost coverage provides protection to your policy limit, say $500,000, and then perhaps another 20% of the cost after that. Percentages vary, but in this example you could recoup up to $600,000 on a $500,000 policy, assuming your losses reach that high. Extended coverage can compensate for any unanticipated expenses like spikes in construction costs between policy renewals. Now harder to find due to the industry shift toward extended replacement coverage, “full” or “guaranteed” replacement coverage covers an entire claim regardless of policy limits.

A less attractive alternative is “actual cash value” coverage that usually takes into account depreciation, the decrease in value due to age and wear. With this type of policy, the $2,000 flat-screen TV you bought two years ago will be worth hundreds of dollars less today in the eyes of your claims adjuster. Kevin Foley, an independent insurance broker in Milltown, N.J., favors replacement cost coverage unless you can save at least 25% on the premium for going with actual cash value coverage instead.

Even if you have replacement cost protection for your dwelling and personal property, don’t assume everything is covered. Structures other than your home on your property—such as a detached garage or swimming pool—require separate coverage. So too do luxury items like jewelry, watches, and furs if you want full replacement cost because reimbursement for those items is typically capped.

How much coverage do I really need?

OK, now that you’re clear on what type of policy you have, you need to figure out how much policy you truly require in dollar terms. Let’s say you purchased your home five years ago and insured it for $200,000. Today, it’s worth $225,000. Simply increasing your coverage to $225,000 may nonetheless leave you underinsured. Here’s why.

The key to determining how much dwelling coverage you need isn’t the value of your home but the money you’d have to pay to rebuild it from scratch, says Carlos Aguirre, an agent for Liberty Mutual Insurance in Arlington, Texas. Call your local contractors’ or homebuilders’ association and inquire about the average per-square-foot construction cost in your area. If it’s $150 and your home is 2,000 square feet, then you should be insured for $300,000.

There’s no rule of thumb for how much your homeowners insurance should cost. Insurers use numerous factors—age, education level, creditworthiness—to determine pricing, so the same policy could run you more than your neighbor. In recent years the average annual premium was $804. Oshinsky advises against scrimping on insurance because big increases in coverage probably cost less than you’d think. He recently purchased a liability policy that cost $250 for the first $1 million in coverage. Adding another $1 million increased his premiums only $12.50 more.

How can I lower my premiums?

The higher your deductible, the amount you pay out of pocket before coverage kicks in, the lower your premium. Landing on the appropriate deductible level requires remembering that insurance should cover major calamities, not minor incidents, says Foley, the independent insurance broker. Most homeowners should be able to absorb modest losses like a broken window pane or a hole in the drywall without filing claims. If you can, then you’re wasting money with a $250 deductible.

Foley’s rule: If you’re a first-time homeowner and don’t have a lot of savings, moving up to a $500 deductible will probably stretch your budget. However, if you live in a ritzy home and drive an expensive car, then you should be able to afford a $1,000 deductible. In Milltown, N.J., for example, the premium for a $200,000 home with a $500 deductible would be $736, according to Foley; moving up to a $1,000 deductible drops the annual premium to $672. That’s $64 in savings.

Every major insurer offers discounts to various groups, such as university employees or firefighters. Figure about 5%. Ask which affiliations would entitle you to a discount and how much. If an AARP membership would result in a $50 savings, pay the $16 dues and pocket the $36 difference. Many insurers also offer discounts ranging from 1% to 10% or more for installing protective devices like alarms and deadbolt locks, for going claim-free for an extended period, or for insuring both your car and your home with the same carrier.

By: G. M. Filisko

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Joan Rogge Presents – A Financial Plan for Your Home

September 16, 2011 By

Joan Rogge

JOAN ROGGE, REALTOR, WELLES BOWEN TOLEDO OFFICE

Office:         419-535-0011
Cell:             419-944-3129
Fax:             419 535-7571
VM:             419-539-2700       ext.125
joanrogge@wellesbowen.com

Visit Joan’s website by clicking here

Article From HouseLogic.com

By: Richard Koreto
Published: August 28, 2009

Your home is probably your biggest investment. To manage it, create a financial plan that takes into account repairs, upgrades, mortgages, insurance, and taxes.
Do you pay each home-related expense as it comes? If so, you’re missing opportunities for upgrades, or much worse, heading into a financial crisis when a slew of surprise maintenance items hit. So take a holistic look at what it costs to operate your house and set up a home financial plan.
Use our home financial plan budget worksheet, and start by writing a list of expenses, such as:
•Mortgage

•Taxes

•Home insurance, including liability

•Repairs and maintenance, such as new furnace, roof, painting

•Voluntary upgrades, such as a swimming pool, a premium range, a new powder room

What will you learn from this home financial plan weekend exercise?
•How much you have to spend

•How much you need to allot in the short- and long-term for necessary maintenance and voluntary improvements

With this new found grip on your home’s expenses, you can create a home financial plan that’ll help you there for years with maximum enjoyment and minimum anxiety.
The mortgage: Pay it–and then some
Yup, you already shell out a lot for your mortgage, but can you pay more? Even a little extra each month can add up to an earlier payoff. Let’s say you have $200,000 in outstanding principal and a 20-year fixed-rate mortgage at 5%. Your monthly payment is $1,319.91. But if you can manage to pay another $100 a month, you’ll save $14,887 in interest.

Run the numbers (http://realestate-calc.com/Mortgage_Calculators/Mortgage_Calculator_Input_Add_Payment.asp) yourself for your home financial plan.

Advantages of an early payoff, says Alan D. Kahn, a financial planner in Syosset, N.Y.:
•Less debt means more money to spend later.

•It feels darn good to own your house outright as soon as possible.

•Minimal tax loss. Toward the tail end of the life of a loan most of your payment goes to the principal, not the interest, so you’re getting only a small tax break anyway.

Of course, if you’re still saving for retirement, put the 100 bucks elsewhere:
•A retirement plan

•An account for the inevitable home repairs

•An account for discretionary improvements, which can raise your home’s value

Insurance: Protect your property
Your vegetable garden is pointless without a fence to keep out rabbits; likewise, your home financial plan will come to nothing without an insurance “fence”:

Homeowner’s insurance. Basic coverage (http://www.houselogic.com/articles/homeowners-insurance-are-you-over-or-underinsured/) for your home and everything in it. The average cost is $636 per year but this varies widely by state.
Liability coverage. Protects you from a lawsuit if someone gets hurt on your property, for example. Your best bet: An umbrella policy (http://www.houselogic.com/articles/umbrella-insurance-and-homeowner-liability/). For about $300 a year you can by a typical $1 million policy.
Various disaster insurance policies. Optional policies (http://www.houselogic.com/articles/insuring-against-natural-disasters/) cover flood, earthquake, and hurricane damage. As part of your home financial plan, you have to research to see what disaster coverage, if any, you need in your area, and what your standard policy already covers. For $540 a year you can buy flood insurance, for example.
Don’t under- or overbuy insurance
For your basic policy, get homeowners insurance with full replacement coverage (http://www.houselogic.com/articles/homeowners-insurance-time-for-annual-check-up/) in case your house burns to the ground.

That sounds simple, but heads up on calculation. Remember that you own a house as well as the land on which it sits. So even though you bought your home for $300,000, it may cost only $100,000 to rebuild it. Your policy limits should reflect this. This difference will vary widely by region.

Another heads up: Don’t make the common and potentially disastrous mistake of thinking that because your home has fallen in value you need less insurance. If you bought a $1.2 million townhouse in Florida during the boom, it’s true it now may only sell for $600,000. But the replacement cost of the townhouse hasn’t changed much, so you can’t improve your home financial plan by cutting insurance costs that way.

Other ways to cut your insurance budget:
•If you make structural improvements, such as adding storm shutters, your insurer may give you a break.

•If you belong to certain groups, such as AARP or veterans’ organizations, your premiums may be lower.

Repairs and renovations: By choice or necessity
You own a home, so you’ll be spending money on everything from a new faucet to-surprise!-a new roof. Freddie Mac and other authorities say as part of your home financial plan, you should be prepared to spend 1% to 3% of the market value of the home annually on maintenance. To be extra-prudent, open a savings account and make regular payments until your account reaches 1% to 3% of your home’s current value.

To help you budget:

Start with the inspection report you received when you bought the house. Did the inspector indicate that you would need a new roof in five years? A new furnace in 10?

Keep a log of your major appliances’ age so you can estimate when they’ll need replacing. Some estimated life spans:
•Roof: 20-25 years

•Heating systems: 15-20 years

•Range/ovens: 11-15 years

•Water heaters: 8- 13 years

Then get estimates on what replacements will cost and start saving.

Consider ongoing non-emergency maintenance, too. Do you live in New England? Price a snow blower and get bids from plow services.

Resist the siren call of the home equity loan (http://www.houselogic.com/articles/a-guide-to-equity-loan-options/) to take care of everything. That just defeats your efforts to pay off the mortgage early.

Separate out what you want from what you need. A $50,000 kitchen remodel is nice, but you’ll recoup only 76% of the project cost your home’s resale, according to Remodeling magazine (http://www.remodeling.hw.net/2009/costvsvalue/national.aspx).

If you can afford to redo, go for it. Just don’t confuse your necessary repairs (new oil furnace-about $4,000) with your discretionary upgrades (Viking range-$6,000 and up).
Taxes: (Almost) no way around them
Even if your lender handles your property taxes from an escrow account, you need to budget for them in your home financial plan. They creep up almost every year, it seems. Take responsibility for tracking the changes in your area: Look over past tax bills to get a sense of how quickly they’ve risen in the past.

Or if your lender handles escrow and you haven’t saved your bills, ask for an accounting. The median annual property tax payment is $2,198, but that hides the enormous range in medians from state to state:
•New Jersey: $6,320

•New York: $3,622

•California: $2,829

•Alabama: $383

•Louisiana: $188

You can generally deduct property taxes on your federal return. A tax pro can tell you how much of a tax break you’ll get, to help you fine tune your home financial plan.

You may be able to reduce your tax burden by getting a reassessment. Do your homework first: Are comparable houses taxed less than yours? Ask the local assessor what formula is used to set tax rates. You can challenge the assessed value (http://www.houselogic.com/articles/appeal-your-property-tax-bill/) and get yourself a rollback.

If you’re in a special group, you might get some help from state or local programs. Check around to see what’s available in your area. New York State, for example, has its Star Program (http://www.orps.state.ny.us/star/index.cfm) for giving senior citizens some relief from school-related property taxes.

Richard J. Koreto is a managing editor of finance, taxes, and insurance at HouseLogic. He has been editor of several professional financial magazines and is the author of “Run It Like a Business,” a practice management book for financial planners. He and his wife own a pre-Civil War house in Rockland County, N.Y.

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