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Cedarcrest Realty, INC. Congratulations to Our 2014 Top Performers
Buying a Condo: Understanding the HOA
Buying a Condo: Understanding the HOA
When you make the decision to purchase a condo, you also commit yourself to a relationship with the condo association, sometimes referred to as the homeowners association (HOA). Your ownership in the development automatically makes you (along with other owners) a member.
The condo association is responsible for anything not directly related to the inside of your unit. This includes the common areas in the buildings and on the property, upkeep, maintenance, and insurance for the general property and portions of the building not covered by member condo policies.
Covenants, Conditions, and Restrictions (CC&R)
This is where a lot of new homeowners become confused – and sometimes surprised and upset. The condo association (or homeowners association) actually has quite a bit of control over what you can and can’t do around your unit. While some are more laid back, others are very controlling. They may dictate the color you paint the outside (not usually an issue in a condo), the color of the window fixtures you put up (so the building looks uniform from the outside), and what you can and can’t do to your outside landscaping if you have a yard area of your own.
The good news is that you can get a copy of your condo association’s covenants, conditions, and restrictions before you decide to make a purchase. Do so, and make sure you read them carefully. Question anything you don’t like. Negotiating terms before a purchase might be possible. After? Not so much.
Condo Association Fees
You will end up paying a fee to your condo association – monthly, quarterly, or yearly depending on how yours is set up. This fee will be on top of your mortgage payment and it is also non-negotiable. Condo association fees help to pay for the association’s general property and liability insurance, for maintenance, and for the upkeep of the common areas and recreational facilities. From time to time you may also find yourself billed for your share of things known as capital improvements; for example, a new roof or new sidewalk.
Make sure you read the documents to get a clear understanding of when and how often your condo association can increase fees and for what reasons. Those on a tight budget find condo ownership is not feasible primarily due to the extra fees that may come without warning.
There are a lot of benefits to buying a condo, including added security and less responsibility for maintenance and groundwork; but the drawbacks can be pretty significant, especially financially. Make sure you understand exactly what you are getting into and talk to your real estate agent about all of your options before making a final decision.
What Type of Homeowners Insurance Do I Need for a Condo?
What Type of Homeowners Insurance Do I Need for a Condo?
The purchase of a condo is just as exciting as the purchase of a house. You own your own property with the added benefit of common areas, extra amenity access, reserved parking, and outside maintenance. What you also end up with is a very unique insurance need.
Understanding the HO-6 Policy
When you purchase a condo policy (HO-6), you are only purchasing a specific part of the building where your unit is located. For the purposes of an insurance policy, you are responsible for covering everything “from the walls in.” In other words, the drywall (interior walls) and anything attached to it inside your unit is your responsibility while everything from the studs outside your unit and throughout the rest of the building is the responsibility of the condo association. The dwelling portion of your policy will cover the aforementioned portions of your physical condo much the same way a homeowners insurance policy would cover a standalone dwelling.
Your condo policy (HO-6) will also provide protection for your personal property – or the things you can pick up and move. This includes your furniture, electronics, clothing, and just about anything else you own that the policy does not formally exclude.
Loss of use coverage comes into play when your home is damaged and becomes unlivable. This coverage will pay for you to stay elsewhere while your home is being repaired. The limit is usually about 40% of your personal property limit.
Finally, your policy will include personal liability and medical payments coverage. Medical payments coverage will help to pay the medical bills of someone who is injured while in your condo. This is a good-faith type of coverage that is designed to cover small bills without filing a claim against your personal liability coverage. A personally generally has to sue you in order to access the personal liability limit on your policy.
You’ll need to talk to your insurance agent to discuss the amount of coverage you need for each of the above portions of your policy. Underinsuring could leave you in a bind if you have a major loss, but overestimating your needs will only result in higher premiums for coverage you don’t actually qualify for.
Finally, make you get a copy of your condo association’s master policy each year. The master policy is something you’ll be paying for with your condo association fees and it covers the remainder of the building and liability for the common areas.
Talk to your real estate agent and mortgage broker about whether or not your condo insurance premiums can, should, or need to be rolled into your mortgage payment. It may or may not be required, at least for the first few years of your mortgage.
Why Winter is the Best Time to Sell Your Home
Why Winter is the Best Time to Sell Your Home
A lot of people find winter to be one of the most difficult times to sell a home. Truth be told, the entire winter season, from before the holidays through the end of February, is generally the slowest in the real estate industry. But that doesn’t mean the winter is a bad time to sell your home. The winter months, particularly February, can actually be beneficial to the seller.
Why You Should Sell in the Winter
One of the reasons the winter is considered a difficult time to sell is because there aren’t many buyers. After all, who wants to fight holiday traffic, brave the bitter cold, or slip on ice to view homes? During the colder months, potential buyers are making their plans but most of them aren’t in any real rush to make a purchase. A lot of people will even take their homes off the market in December, allowing their contracts with their showing agents to run out, thinking they’ll get a fresh start in the spring.
But here’s the deal – people who are looking to buy homes during the winter months are usually very motivated. They have a reason they’re moving, even if it’s snowing or the weather just plain stinks. They’re relocating because of a new post or new job; or for some reason that makes a move necessary right now.
According to Redfin, “74% of homes listed in February sold within 90 days, and 13% of them sold for more than the list price.” These buyers need good homes and they don’t have as much to choose from.
Preparing Your Home for a Winter Sale
The need of the buyer doesn’t mean you can slack off with home preparation work, though. Your home needs to look just as inviting as it would during the warmer months, which honestly means a little more effort on your part. Some ideas include:
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Shoveling and salting the walks frequently; for an inviting atmosphere and for safety;
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Make the home look brighter by removing unnecessary window treatments;
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Emphasizing parts of the home that make it appealing in the winter – like an attached garage or a mudroom;
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Emphasize conveniences near the home – close schools, regular plowing and city conveniences, close stores;
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Decorate the home. Even after the holidays, plain wreaths with adornments look much nicer than an empty doorway.
Regular interior staging rules apply, of course. Cleaning and decluttering are important, as are making necessary home repairs. Just know that selling a home during the winter months isn’t impossible, and leaving the home on the market while others are pulling them can up your odds of selling considerably.
Put the Duct Tape Away: Home Selling Mistakes to Avoid
Put the Duct Tape Away: Home Selling Mistakes to Avoid
A lot of people are shocked at the amount of work it actually takes to sell a house. The real estate agent comes in and starts talking about repairs and staging and suddenly your world is spinning. Some might try to cut corners, making simple fixes that aren’t designed to last, but that’s not the way to go. Here are some mistakes you’ll want to avoid during the home sale process.
Testing the Market without Making Repairs
Sometimes sellers think they can “test” the market by putting the house up right away. They think they’re testing, but they’re really trying to figure out if they can sell the house as-is. They probably can’t, and you can’t, so don’t bother. Make sure the home is properly cleaned, make sure any needed repairs are done completely (no duct tape or temporary fixes), and clear out the clutter. Take the process seriously from day one.
Cleaning the Inside but Not the Outside
Spending hours inside your home while ignoring the outside is a complete waste of time. Pull the weeds from your garden, mow the lawn, and spruce up your gardens. Make sure the front door is painted, the trim isn’t flaking, and that the gutters are in good repair. And please – please, please – clean up after your pets.
Not Monitoring Pets and Children
Speaking of pets, make sure they are off-premises (or at least crated) during home visits. Make sure your kids are away or quiet as well. Potential buyers need to visualize themselves in your home and screaming children, messy playrooms, and animals don’t help the situation – especially if your potential buyer has a pet fear or allergy.
Keeping Secrets
Secrets are bad in the world of real estate. Tell your real estate agent if your faucet is dripping or if one of your walls just showed signs of a leak somewhere. Better safe than sorry. You can make a repair, but you might not be able to handle a lawsuit if a buyer comes after you later for withholding important information.
Setting Poor Price Points
Be realistic when pricing your home. There is a lot of competition out there and your home will need to have some very special features to compete. Talk to your real estate agent about appraising your home to find the actual sale price. She’ll also be able to give you information about the pricing on comparable homes in your area.
Lacking Patience
Not every person or couple who walks through your door is “the one.” They may seem really excited about your home and then go to the next one, which they think is even more exciting. Patience means trusting your real estate agent’s process, being willing to leave your home during showings, and having realistic expectations.
The process of selling a home is full of intricate details and isn’t one to take lightly. Talk to your agent if you aren’t sure where to start, or how to avoid mistakes that will cost you a sale.
Cedarcrest Realty, INC. Congratulations to Our 2014 Fourth Quarter Top Achievers
Moving Costs Money: How to Budget for Moving Expenses
Moving Costs Money: How to Budget for Moving Expenses
Nothing like stating the obvious, right? Moving costs money. But it’s not just the cost of a down-payment on your mortgage or security for a rental. There are quite a few hidden costs associated with moving that can really add up.
Insurance Changes
We’re talking about both automobile and homeowners. You need to call your insurance agent right away to make sure things are set up for your move. If you are buying a new house, you’re going to need to have a new policy written. If you’re a renter, you’ll need to have your address updated. The same goes for your automobile insurance. Unfortunately, a change of address means a change of “territory.” For some that might mean a decrease in premiums but for others it may equal an increase. Find out early so you can shop around, if necessary.
Fixes to the Old Property
Odds are you’ll need to make at least a few repairs to your old residence, whether you own it or rent. The agreement you made with your buyer, or the terms of your lease if you rent, will dictate what needs to be done. Do you need to hire a plumber for a repair? Do you need to steam the carpets?
Utility Changes
The utility industry often charges at least a small fee for transferring service from one area to another. Make sure your existing company serves your new area because you may have to start with a new company. Consider your water, sewage, electricity, gas, and even internet, cable, and phone services.
Boxes and Packing Supplies
We often think we can get enough packing supplies from stores and friends, but there never really are enough boxes to go around. Plus, you’ll need some specialty items to keep your fragile pieces safe – like bubble wrap or special containers. While you may be able to borrow, and your mover may provide some supplies, you’ll likely need more than you can initially get your hands on. Put some money in your budget for extras so you don’t end up losing any of your valuables.
Hiring a Mover
It’s not a necessity, but if you are making a big move with children and pets you may find it’s simply safer (and saner) to hire a moving company to help. Yes, it costs money but they will also insure your move against damage and do all of the heavy lifting. This means lower potential for injury for you, less stress, and an overall more pleasant experience. You’ll want to get quotes from different movers in advance; and check reviews.
Leaving your old place and buying a new home isn’t always easy, but it’s worth it in the end. Add a few of these line items to your budget in the months before your move and you won’t have nearly as much sticker shock as you get closer to the big day.
Have You Considered a Fixer Upper?
Have You Considered a Fixer Upper?
It’s hard to separate the gems from the duds when shopping for a new home. A lot of people will search for months, never quite finding that perfect match. Others will spend a little more time searching but not necessarily for the house but for the house they can make into their own – the perfect fixer-upper.
The Benefits of a Fixer-Upper
Buying a fixer-upper comes with a number of benefits. The most obvious is that you can spend the money you didn’t put into the actual sale into renovations and remodeling in order to make the home exactly what you want. There are other benefits, too, though. Sometimes going with a home that needs some work will allow you to buy a bigger home. You can also be a bit pickier about the neighborhood you buy into, whether you’re looking at a specific area or school district.
Another benefit is that the FHA 203k loan will allow you to roll the cost of your home and the finance cost for major repairs and renovations into one mortgage loan. This means you can still borrow the amount you need to get the job done and only have one loan payment to make each month.
Of course, whether you do that or not, the repairs you do make will almost immediately increase the equity you have in your home. Whether you leave in a few years or stay for the rest of your life, you’re guaranteed a great return on your investment.
What to Consider
You should make some careful considerations, of course. How much of the repair work can you realistically do on your own, keeping in mind that some DIY projects are a lot harder than home improvement shows make them look? Can you get estimates for the repairs you’ll need before you make a final offer on the home? Will the cost of permits put your projects over the top?
Does the home need structural work? This is often one of the biggest deal-breakers as structural repairs can cost a ton. Spending $500 or more on a structural engineer’s inspection before making a final offer could ultimately save you tens of thousands of dollars in headaches. If you do decide to buy, make sure the discount you’re getting for purchasing a fixer-upper reflects the costs you’re going to incur to make it livable.
Don’t only have a structural engineer visit, but a contractor who can do regular home inspections as well. Your offer should always be contingent on the results of a home inspection so you can get out of the offer if there is something major or otherwise undisclosed discovered.
A fixer-upper can be a major benefit, especially to a young couple starting out. You get to buy your dream home, a seller gets to move on without a hassle, and everyone is happy at the end of the day.
What to Look for When Choosing a New Neighborhood
What to Look for When Choosing a New Neighborhood
When searching for a new home, a lot of people get caught up in the price and the features they want to see in the house themselves. Then they move into a neighborhood and realize they aren’t near anything useful, hate the school system, and have questionable neighbors. When preparing to move, it’s helpful to do some research on the neighborhoods you’re considering before narrowing down your home choices.
Safety Comes First
Always, always check the safety statistics for a new area. While there is no sure-fire way to guarantee you’ll never be the victim of a crime, you can decrease your odds but choosing a neighborhood that doesn’t have high crime rates. If your potential neighborhood is in the news every day, you may want to consider looking elsewhere. You should also check the national directories for registered sex offenders; especially if you have children.
Proximity to Important Destinations
Where do you go on a regular basis? Work? School? A long-term care facility where a loved family member lives? To visit family and close friends? How far away from these things will your new neighborhood put you? Would you mind being further away from work if you could be closer to family?
Other important destinations to consider include shopping malls, grocery stores, banks, gyms, and any other entertainment or shopping venue you consider important. It’s one thing to buy a quiet home in the suburbs and quite another to realize you have to make a full day-trip to do any sort of affordable shopping.
What is the Cost of Living?
This is especially important to consider if you are moving a distance. You are going to find that the cost of living can be different in varying areas of the same state. There are quite a few cost-of-living calculators online. Use them to calculate the cost of moving to several different localities.
Do You Use Public Transportation?
Is public transportation important to you, or necessary? If so, make sure the area you are considering has a reliable system. Do you prefer taking the bus or train to work? Maybe you want to move to a neighborhood that is considered bicycle-friendly. Check out schedules, paths, and anything else important to your day-to-day routine.
Make a list of priorities before you start house hunting. Determine which things you’d like to see in a neighborhood are absolute must-have items and which are simply desires. Make sure you share this list with your real estate agent as well. Try to find an area that is affordable and meets as many of your needs as possible. You may have to compromise a bit, but the time spent will make you much happier in the end.
How to Make Your Home More Appealing in the Winter
How to Make Your Home More Appealing in the Winter
It’s cold. It’s dreary. Half the time the sun isn’t shining. People who aren’t particularly motivated to move for a real reason aren’t as excited about going out to house hunt during the cold winter months. We’ve actually known people to take their houses off the market for a few months simply because they’re frustrated at the lack of prospects. This isn’t necessary, though. All you need to do is take a few steps to make your home look just as appealing during the winter as it looks on warmer, sunnier days.
Basic Home Maintenance
There’s nothing like the bareness of trees and the emptiness of the gardens to point to glaring deficiencies in your home’s paintwork or general landscapes. Selling a home in the winter months means taking extra care when it comes to making outside repairs, cleaning the yard, and doing basic touch-up work.
Stage the Home to Make it Feel Warm
Occupied or not, the home needs to feel warm and cozy. Your visitors need to be able to walk in and immediately feel as though this place could be home. Turn the thermostat up a few degrees. Light a fire if you have a fireplace. And, as usual, make sure the home is free of clutter. If you have any, leave out an album of photos of what your landscape looks like during the summer months. This will help your prospective buyers imagine what the home is like throughout the entire year.
Light Makes a Difference
It’s harder to get a feel for how much light a home could get during the winter months. Maximize your home’s potential by getting rid of some of the window treatments. The windows will look larger and each room will be brighter, even if the sun isn’t shining directly in.
Keep the Walkways Clear
There is absolutely nothing worse than showing a home where the potential buyer has to tread on ice or muddle through snow. Keep the walkways clear of snow and ice. Make sure they’re salted and safe for visitors. This eliminates safety issues, adds to curb appeal, and ensures your potential buyers won’t change their minds about coming in to see the house.
Highlight Cold Weather Perks
Make a cold-weather house hunter feel good about your house by showing off some of the things that make living in your home in the winter likeable. Does the house have an attached garage? Do you have a brand new HVAC system? Maybe you have skylights that make the home warmer and more inviting. Showcase anything that proves your home is livable during the winter months.
Selling a home during the winter season is not impossible. Even during the months of January and February, when numbers are typically low, there are still closings. Make sure yours is among them.
