18 Jun 2020
By Kevin Gahagan

Should You Buy A Home Warranty?

Mortgage

Should You Buy A Home Warranty?When you buy a new house, the first thing you want to do is protect your investment. You already have property insurance. Should you also buy a home warranty?

What Is A Home Warranty?

A home warranty is not the same thing as insurance. Home warranties are service contracts. If a covered item breaks down and it is covered in the terms of the warranty, the home warranty company will pay to fix or replace that item.

What is Covered Under A Home Warranty?

Every home warranty contract is different but generally, a home warranty may cover items like major kitchen appliances, HVAC components, sump pump, in-home sauna or spa tub, and/or ceiling and exhaust fans.

Often, a homeowner can get an extended warranty contract that covers items like the washer and dryer, garage door opener, septic system and swimming pool components.

Understand The Costs

A basic home warranty costs between $350 and $500 annually, depending on what coverage you get. However, if something does break, you will also be on the hook for incidentals like service call fees or a deductible.

Know The Benefits

There are considerable benefits to having a home warranty contract in place, especially when something expensive breaks down, like a furnace. There is a lot of peace of mind knowing that you will be able to quickly get something fixed in your home.

You Might Already Be Covered

Your homeowner’s insurance policy might cover some of the same things that are covered with a home warranty. So you could be paying for duplicate coverage on some items. However, your homeowner’s insurance likely will not cover a dishwasher that needs to be replaced or a fridge that suddenly goes out.

There Are Alternatives

Finally, before you pay for a home warranty, remember that there are alternatives. For example, most HVAC companies offer financing options to buy a new furnace. Most appliance stores also offer financing on major purchases like refrigerators and dishwashers. You could save your $500 or so a year and put it in a savings account for a rainy day instead of gambling that you might have a major repair or purchase that year.

There are pros and cons to home warranty plans. Just be sure you fully understand both sides of the issue before you sign on the dotted line.

 

17 Jun 2020
By Kevin Gahagan

How To Tell If A Home Has Been Well-Maintained

Mortgage

How To Tell If A Home Has Been Well-MaintainedAs a homebuyer, your real estate agent will do their best bring you to see homes that meet the criteria you asked for. However, there’s no guarantee that a home will have a history of being properly cared for.

Your real estate agent can choose the homes you see, but they have no control over the property owner’s homeownership habits.

Why Home Maintenance Matters

Home maintenance should matter to you as a homebuyer and later on as a homeowner. A home needs consistent and proper maintenance in order to run efficiently, and that doesn’t only apply to moving parts like the HVAC system. If a home isn’t looked after, it begins to run down and then break down.

Just as a poorly maintained vehicle will eventually strand its owner on the side of the road, a poorly maintained home will eventually fail to properly house its occupants.

How To Tell If A Home Has Been Well-Maintained

A home that hasn’t been cared for will easily give up its secrets to a discerning homebuyer. Conversely, you can tell if a home has been cherished and well-maintained over the years.

  • Home maintenance warranties in place would be a selling feature and indicates the owner understands the power of proactive maintenance.
  • Solid, quality flooring indicates that the owner has shored up the subfloor beneath tile, removed carpet spills expeditiously and replaced cracked, peeling or missing planks or tiles.
  • No signs of basement water damage may signify that owner has installed sufficient sump pump or other drainage solutions, applied basement waterproofing or taken other steps to ensure a dry basement.
  • Finished basement shows that owner has taken care to improve the home where possible and that the owner trusts their basement possessions will be safe from water damage.
  • Straight roof lines mean that there is likely no sagging roof problem that hasn’t already been addressed.
  • Mature, healthy plantings are a sign that the owner has given thought and care to the surrounding landscape over a long period of time.
  • Sound gutters in good condition show that the owner has taken steps to ensure proper roof drainage to water damage.

These are all positive signs for a prospective homebuyer. Of course, you must still pay attention to the home inspection report. But odds are if you see all these signs, you’re probably looking at a new home that will serve your needs for many years to come.

 

16 Jun 2020
By Kevin Gahagan

The Most And Least Expensive Cities In America

Mortgage

The Most And Least Expensive Cities In AmericaThe cost of living in America varies widely in different parts of the country. In general, it is less expensive to live in the country than in the cities.

However, there are many cities where the cost of living is modest compared to others where the money needed to live there is outrageous in comparison.

These rankings came from comparing the monthly cost of renting a one-bedroom apartment, utilities, the price for gasoline, and the cost of groceries.

The Ten Lowest-Cost Cities For Renters

From Texas and Ohio to New Mexico and Arizona, there are some nice cities in this low-cost group.

The top ten lowest-cost cities are:

  1. El Paso, Texas
  2. Lincoln, Nebraska
  3. Toledo, Ohio
  4. Wichita, Kansas
  5. Louisville, Kentucky
  6. Tulsa, Oklahoma
  7. Memphis, Tennessee
  8. Lexington, Kentucky
  9. Albuquerque, New Mexico
  10. Mesa, Arizona

For the top ten lowest-cost cities, the total monthly expenses for two adults ranges from just under $1,200 per month in El Paso to just over $1,500 per month in Mesa. These cities are a great deal when compared to other cities.

In America, the median rent of $1,566 per month is more than the total amount needed to live in these low-cost cities.

The Ten Highest-Cost Cities For Renters

It is not surprising that the biggest metropolitan areas are on the high-cost list.

The top ten highest-cost cities are:

  1. San Francisco, California
  2. New York, New York
  3. San Jose, California
  4. Oakland, California
  5. Boston, Massachusetts
  6. Jersey City, New Jersey
  7. Washington, D. C.
  8. Los Angeles, California
  9. Seattle, Washington
  10. Irvine, California

For the top ten highest-cost cities the total monthly expense for two adults ranges from just over $2,000 per month in Irvine to over $4,200 per month in San Francisco. For those wanting to live in the “City by the Bay” of San Francisco, both of the people in a couple better have an incredibly well-paying executive position to be able to afford to live there.

What About Home Buying?

The national median home price in America is $229,000. The city with the highest median home price is San Francisco at $1,352,000. New York is only $672,000 in comparison. The median home price in El Paso is $129,800; however, El Paso does not have the lowest-priced homes in the country.

The Top Ten Cities With The Lowest-Priced Homes

There are many cities where the homes sell at bargain prices for under $100,000, these include:

  1. Detroit, Michigan — Median home value: $42,800
  2. Dayton, Ohio — Median home value: $66,500
  3. Cleveland, Ohio — Median home value: $67,600
  4. Lansing, Michigan — Median home value: $77,100
  5. Buffalo, New York — Median home value: $77,800
  6. Toledo, Ohio — Median home value: $78,600
  7. Rochester, New York — Median home value: $79,400
  8. Akron, Ohio — Median home value: $80,100
  9. South Bend, Indiana — Median home value: $81,100
  10. Brownsville, Texas — Median home value: $85,900

Conclusion

There are bargains to be found in many parts of America for those that do not have to live in the big cities.

Many younger people are now part of the “gig” economy. They do all of their work online and can work from anywhere that has a decent Internet connection. For these young people, finding a lost-cost city in America to live in and finding a modestly-priced home to buy is not limited to any particular area.

11 Jun 2020
By Kevin Gahagan

Buying A Home: You Might Be Able To Skip The Home Appraisal – But Should You?

Mortgage

Buying A Home: You Might Be Able To Skip The Home Appraisal - But Should You?When someone is thinking about buying a home, one of the key parts is the home appraisal. The appraisal ensures that the buyer is paying a fair price for the home while also protecting the mortgage lender against taking a loss.

On the other hand, an appraisal is also an added cost of the buyer can be a serious source of stress for both sellers and brokers.

Recently, government agencies have passed a rule saying that home appraisals are no longer going to be required on homes that are less than $400,000; however, many lenders will still require them.

Therefore, when should someone consider skipping a home appraisal to save some money?

Appraisals And Mortgages

One of the first ways to take a look at the value of a home appraisal is by comparing it to the mortgage. The two go hand in hand. Appraisals are important because they protect not only the seller and buyer but also the lender. The lender wants to make sure they know what the property is worth.

Therefore, an appraisal is more about valuing the property and not about the price of the home.

In addition, lenders make loans based on either the sale price or the appraised value, whichever is lower. Lenders do this to make sure that buyers have invested enough in their own property.

Borrowers And Appraisals

In addition to considering the lender, it is also important to consider the borrower. An appraisal is helpful for the borrower because this prevents someone from overpaying for a property.

Therefore, they act as a form of consumer protection. On the other hand, they also cost the borrower a few hundred dollars. If money is tight, this can be a serious problem and could dull the appeal of a home.

Choosing Between The Two Options

In the end, people should consider skipping the appraisal if it saves them money. Lenders might still require someone to obtain an evaluation as a form of protection. If the buyer is not confident in this evaluation method, then a traditional evaluation might be a better approach.

It is important for people to feel confident in the sale price, regardless of how this happens.

10 Jun 2020
By Kevin Gahagan

7 Reasons To Buy A Home In The Summer Months

Mortgage

7 Reasons To Buy A Home In The Summer MonthsIf you’ve been putting off your house hunting, it’s time to head out. Summer is the best season to go shopping for a new home, for a variety of reasons. 

1. More Inventory

Homeowners list their homes for sale in the summer more often than any other season. When you shop for a new home during this time, you’ll have a much wider selection of homes to choose from. 

2. Better Prices

More inventory in summer often turns the local real estate scene into a buyer’s market. Home sellers may have to compete with other sellers on the same block or even down the street. This gives buyers a nice position of leverage to possible get a better price on a new home. 

3. More Neighborhood Activity

There’s no better time to get a true sense of the neighborhood than summer. In summer, kids are out playing, homeowners are out tending lawns and friends are gathering for backyard BBQs. These are all activities that can give you an accurate portrayal of the neighborhood culture. Take advantage of summer weekends, too; you’ll find even more neighborhood activity then. 

4. More Visibility

By summer, all the snow, ice and autumn debris has either melted or been cleaned up by homeowners. You’ll have more visibility to view the condition of the roof, siding, deck, lawn, driveway and walkways. Under the cover of snow and ice, you might miss important issues.

5. Evidence Of Any Flooding Problems

Spring rains produce evidence of any flooding issues with water lines along foundation walls. Summer is the best time to go home shopping because this kind of evidence will be fresh and easily identifiable. Flooding isn’t always a reason not to buy a home, but it helps to know what potential issues you could be facing.  

6. More Free Time

Most people have more free time in summer than any other time of year. 

It is more relaxing to go home shopping when you know you aren’t taking valuable time away from work. On your summer vacation, you also don’t have to take unpaid days off to view homes with your real estate agent. 

7. Easier School Transition

When you do go ahead and buy in summer, your kids will have an easier time of transitioning to a new school. Instead of breaking up the school year, your kids can end one grade in one school and start the new year at the new school.

Buying a home in summer just makes good sense. Contact your local real estate agent today so you can hurry and take advantage of the summer real estate market in your area.