Have You Done a Home Inventory?

How old is your bedroom furniture and what did you pay for it?  Don’t know?  That’s okay, let’s try an easier question.  When did you buy the TV in your family room and is it a plasma, LCD or a LED?
Whether you are the victim of a burglary, a fire or a tornado, most people are comforted they have insurance to cover the losses.  However, unless you’ve filed a claim, you may not be familiar with the procedures.
The adjustor will want to know the date and how the loss occurred.  Assuming you have contents coverage, the claim for personal belongings is separate from damage to the home.
You’ll be asked to provide proof of purchase, like receipts or cancelled checks, or a current inventory.  If they’re not available, you can reconstruct an inventory from memory.  The challenge is trying to remember things you may not have used for years and may not miss for years more.
Relying on memory can be a very expensive alternative.  A prudent homeowner will create a home inventory with pictures or videos while all of their belongings are in the home and they can see them.
Download a home inventory to make your project a little easier.

Homeowners At A Young Age

Fannie Mae, in a recently released study, states that consumer attitudes continue to be favorable about homeownership, particularly with the younger generations, ages 18 to 34. Slightly over half of them think that owning makes more sense than renting when comparing the financial and lifestyle benefits.

90% of aspiring owners expect to purchase a home someday and slightly over half think they’ll do it within five years. The primary challenges are having sufficient savings and the difficulty of getting a mortgage today. Younger renters see renting as a temporary stepping stone toward homeownership.

Homeowners are far more likely than renters to be “very positive” about their housing experience. Some of the benefits identified are:

• Having control over what you do with your living space 
• Having a sense of privacy and security 
• Having a good place for your family or to raise your children 
• Having the best investment plan 
• Living in a nicer home 
• Building up wealth 
• Saving for retirement 
• Living in a place where you and your family feel safe 
• Feeling engaged in your community

To satisfy a buyer’s doubts about qualifying for a mortgage, make an appointment with a trusted mortgage professional. If you’d like a recommendation at no cost or obligation, please contact me at kexcell@triplettcompanies.com.  Check out this Rent vs. Own to see the real cost of owning a home.

For more information about the Fannie Mae survey in presentation form, Click Here.

Insurance Premiums

The cost of personal home and auto insurance is on the rise.  For the past several years, many insurance companies have collected less money from the insurance premiums being paid by clients than they have paid out in client claims.

Insurance premium rates are a function of both the individual and group costs and claims environment.

A portion of the insurance premiums collected by an insurance company are set aside and invested.   When a claim is incurred by an insured, monies are removed from the pool to pay the claim.  If an insurance company incurs more claims than the insurance premium funds it has collected and invested, it will be forced to raise the rates it charges for its insurance.

Of course, insurance premium increases must be approved in advance by the state regulatory body overseeing insurance companies.   But, in the past few years (2010-2012), many national insurance companies have incurred losses in excess of their set aside, invested premium funds.  Hence, many insurance companies are asking their state regulatory body for increased insurance premiums.

If you have experienced an increase in insurance premiums, please do call 515/232-5240 and ask for Andrea Shearer, Tessa Everman, or Burton Heginger at Triplett Companies for advice and help reducing your current premium.

Home Buyer/Seller

One of the most common reasons buyers want to deal directly with the seller is because they feel they can save the commission. It’s a valid consideration but interestingly, it’s the same reason the seller isn’t employing an agent.
Both parties cannot save the commission. The buyer feels they have earned it because they’ve had to find the home, determine its value and negotiate with the seller. They had to arrange their own financing, title and inspections.
The seller equally feels that they have earned the commission because they too have had to research value, financing and title work.  They have incurred all of the marketing expenses and have invested hours upon hours to be available to show the property, hold open houses and answer inquiries. 
There is certainly value in all of the things that buyers and sellers are willing to do.  However, only one person can save the commission assuming the buyer and seller can reach a written agreement.
The Profile of Home Buyers and Sellers survey reports that 14% of sales were For-Sale-by-Owners in 2003 and 2004 compared to just 9% in 2012. The trend shows that agent-assisted sales rose to 88% in 2012 from 82% in 2004.
The three most difficult tasks identified by for-sale-by-owners is attracting potential buyers, getting the price right and understanding and performing the paperwork. When surveyed, sellers most value the home selling in an anticipated time frame and for an expected amount.
Experienced, third-party advocates helping buyers and sellers is a valuable contribution to the transaction which may determine whose commission it is.

PROPERTY INSURANCE REPLACEMENT COST

“Replacement cost” insurance is a type of property insurance coverage that generally pays for the “depreciated” value of the damaged property.

 

Subsequently, the actual cost of restoring the property would most likely require additional funding from you to renew the property to its condition at the time of the loss.

 

If you find yourself in this situation, be sure to complete the repairs on the damaged property as soon as possible as most policies have a time limit for payout.  Also maintain accurate records regarding all expenditures incurred in the restoration of the property.

 

Contact your favorite insurance agent (Mike Carter, Andrea Shearer, or Tessa Everman) at the Triplett Companies (515/232-5240) today for additional insight and information regarding the “replacement cost” clause of your property insurance policy.

Should You Become a Homeowner??

How much evidence is needed to make a decision to get out of the rent race and become a homeowner? Compare your rent with a mortgage payment on a similar size property. If you want a larger home than your current one, use the rent that property would require instead of what you're currently paying. If it's considerably cheaper, you may not need any further encouragement. By the time you consider the principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you're paying. The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation. The equity is part of your net worth and an investment in your family's future. The income tax savings can be an additional financial consideration if the combined interest and property taxes exceed the allowable standard deduction. Trends are showing that both tenants and homeowners are staying in their homes longer. It's been said that whether you rent or own, you're paying for the home. Do you really want to buy the home for your landlord? Check out your numbers on a Rent vs. Own.

NATURAL DISASTER INSURANCE

Natural disasters may be defined as involving Mother Nature and her fury!  Natural disasters particularly often include wind damage and flood damage.  Of course, hurricanes and cyclones often cause additional damages due to power outages.

 

Flood insurance is available through both private and government programs.  The dollar premiums for such insurance coverage however are becoming more and more expensive as storms become increasingly prevalent.

 

Generally speaking homeowner insurance policies do not cover flood damage caused by a natural disaster.  Flooding caused by frozen pipes may or may not be covered in a homeowner policy, but reimbursement for such damages is normally accompanied by a homeowner cost-sharing mechanism, known as the deductible!

 

Wind damage is normally covered by homeowner insurance policies, but wind damage cause by a hurricane or cyclone may involve deductibles based on a percent of the home’s actual insured value.

 

Several points to remember about natural disaster insurance coverage and claims you submit for reimbursement for that damage.

 

1.  Review your coverage with your insurance agent so you fully understand the coverage you have for flood, hail, wind, etc. damage.

2.  Review the type of deductible you have for any “natural disaster” insurance coverage.

3.  Record your insurance policy number and your insurance agent information in several places other than your home.

4.  Maintain an accurate record of the contents of your home detailing the type of

possession, the cost of the possession, and when and where it was purchased.  This
record could be both a video and fact record.  An online application that might help
guide you in this effort is available at the Insurance Information Institute’s website
 >www.iii.org/software<.  Search for the home inventory” application. 

5.  Maintain an accurate, written record of your conversations with the claims adjuster who reviews the natural disaster to your home and personal property. 

 

Understand your insurance coverage and how to proceed when a disaster occurs. Contact your favorite insurance agent (Mike Carter, Andrea Shearer, or Tessa Everman) at the Triplett Companies (515/232-5240) or more information.

 

PROPERTY INSURANCE REPLACEMENT COST

“Replacement cost” insurance is a type of property insurance coverage that generally pays for the “depreciated” value of the damaged property.

 

Subsequently, the actual cost of restoring the property would most likely require additional funding from you to renew the property to its condition at the time of the loss.

 

If you find yourself in this situation, be sure to complete the repairs on the damaged property as soon as possible as most policies have a time limit for payout.  Also maintain accurate records regarding all expenditures incurred in the restoration of the property.

 

Call or e-mail Mike, Andrea, or Tessa at the Triplett Companies today for additional insight and information regarding the “replacement cost” clause of your property insurance policy.

Sooner Is Better Than Later

Buyers who have delayed purchasing a home due to concerns about what might happen to the tax laws affecting home ownership should feel comfortable about getting back in the market. The recent legislation passed by Congress and signed by the President continues to value homes as a favored investment.
For a summary of specific real estate provisions in the "Fiscal Cliff" bill, click here.
Whether the delayed purchase is for a home to live in as your principal residence or to use as rental property, taking action sooner is better than later.
Reasons to buy now:

1. The house payment with taxes and insurance is probably cheaper than the rent.
2. Rents will continue to rise making the difference even greater in the future.
3. Lock-in the principal & interest payment with a fixed-rate mortgage.
4. 30 year mortgage terms are available to most borrowers.
5. The mortgage interest deduction is intact for the majority of taxpayers.
6. The capital gain exclusion for principal residences up to $500,000 remains in place.
7. Prices are going up due to lower inventories and several years of low housing starts.

Contact me about any specific questions you have or information you need.