NORFOLK, VA, May 06, 2013—Buying a home is a
wonderful feeling. But now that you’re a proud owner, are you also a safe one? Do
you have adequate home insurance? Below, Louis Eisenberg, Associate Broker
REALTOR ABR SFR of Prudential Towne Realty guides us through the ins and outs
of several different types of home insurance.
HO-1
This is bare-bones policy, and has actually been discontinued in several
states. This policy offers liability insurance, hazard insurance and a list of
“named perils”— fire or lightening, volcanic eruption, explosions, and more.
“This protects against several natural disasters and catastrophic events, as
well as your personal belongings,” explains Eisenberg. However, it will not
guard against earthquakes, floods, war, and nuclear accidents.
“Often, your lender may require that you purchase flood or earthquake insurance
if the house is in a flood zone or a region susceptible to earthquakes,” says
Eisenberg.
HO-2
This is an expanded version of HO-1, and includes any structure on your
property, like that shed or pool house. “The list of perils in HO-2 is longer
than HO-1, and includes things like falling objects, freezing, and the weight
of ice, snow or sleet,” says Eisenberg.
HO- 3
“HO-3 is the most commonly used coverage,” notes Eisenberg. “This is most
likely because it protects homes against any damage, so long as it is not
specifically excluded.” This coverage is also called the special form policy.
“It’s important to read your policy thoroughly,” Eisenberg reminds us. “With
HO-3, while your home is covered against anything that is not excluded, your
personal belongings are only covered for the listed perils.” Be sure to
understand what this means, as well as have a grasp on what exactly is
excluded.
Cash Value
“A cash value policy pays owners the original purchase price of whatever was
damaged, but cannot exceed the original purchase price, even if the home is
valued at more,” says Eisenberg.
Replacement Value Policy
This type of policy covers the cost of repairing a house and its belongings,
regardless of the original purchase price. However, it cannot exceed the policy
limit, meaning that a $250,000 policy, will pay for repairs and replacements up
to $250,000.
Guaranteed Replacement Cost Coverage
If you want something more extensive, then Eisenberg notes that the most
comprehensive insurance policy is guaranteed replacement cost coverage.
“This kind of coverage will pay to rebuild your home even if the cost to
rebuild is more than your policy limit,” explains Eisenberg.
Replacement cost coverage is more expensive and can cost from about $400 to
$1,000 a year or more, depending on the area and the price of the home.
However, even if you can afford it, this insurance is not available everywhere
or for every property. For example, older homes may not be eligible. And some
big insurance companies have begun to limit the amount they will pay to 120 percent
of the policy's face value.
For more information on home insurance, please contact Louis Eisenberg, Prudential
Towne Realty at leisenberg@prudentialtownerealty.com, 757-572-7244, or www.LouisEisenberg.com
Monday, May 6, 2013
Friday, May 3, 2013
Home Flipping 101: What You Need To Know
NORFOLK, VA, May 03, 2013—If you’ve been thinking about buying a home, renovating, and selling—also known as house flipping—then you may have a lot buzzing through your brain right now. The market is ripe with investment opportunities, and if you do the research, you can still snag a real deal on a fixer upper. Below, Louis Eisenberg, Associate Broker REALTOR ABR SFR of Prudential Towne Realty outlines what you need to know about house flipping before you sign any dotted lines.
Do Your Research
Don’t just pick up the first property that catches your eye. “Compare houses, prices and markets just like you would if you were buying a primary property,” says Eisenberg.
Crunch Numbers
Talk to someone with experience flipping homes, and really bite into the numbers before you make an offer. Scrutinize your budget. How much can you sink into a home? How much do you think the home needs before it will be ready for resale? How much do you think you can get for it? Will it be worth the time and effort?
Give Yourself Time
“House flipping can be a timely endeavor, especially in today’s market,” Eisenberg reminds us. “And even if you renovate quickly, there is no guarantee you will sell quickly.” If you have to work under pressure for any reason at all, then now may not be the time for a project like this.
Have Cash
Banks are tighter with their loans these days, so if you plan on buying an investment property, plan on having a sizable part of the down payment ready to fork over. This will show lenders you’re serious. Have enough cash to forgo the lender all together? Even better. “Sellers love cash buyers, and you may be able to get a better price if you can pay it all up front,” explains Eisenberg.
Location, Location, Location.
Before you buy the house down the street from your own, research where folks are buying right now, and scrutinize local markets. “Keep an eye out for cities where the markets are on the rise—not stagnant—so that when your property is ready for resale, someone will be ready to buy it,” Eisenberg suggests.
Pick Renovations Carefully
You may want to fix the house up from soup to nuts. But before you start working on that private screening theatre in the basement, tackle renovations with the largest return on investments. “A nice kitchen, up-to-date bathrooms and decent-sized bedrooms are good bets when renovating for sale,” says Eisenberg. “And of course, make sure the roof is in good condition and the foundation isn’t crumbling.” That Jacuzzi tub won’t make buyers overlook the cracked basement walls.
For more information on house flipping, please contact Louis Eisenberg, Prudential Towne Realty, at leisenberg@prudentialtownerealty.com, 757-572-7244, or www.LouisEisenberg.com.
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