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How to Negotiate and Find the Right Home For YOU!
Home Systems: Did you know that the age of your home and what it takes to run the home affect your insurance?
Electrical: If it is not up to date and in working order, this can be an underwriting concern for insurance companies.
“Working Order” – this does not only mean that it has been checked on but updated to maintain a safe environment. Electrical work such as knobs and tubes, extension cords, and fuse boxes are risks that insurance companies can deny due to their underwriting guidelines. The reason that they would reject the items listed above would be due to the fire hazard they pose.
Plumbing: Once again, working order is excellent, but it can affect your insurance rates or eligibility with insurance carriers, causing your premium to spike or become ineligible with a carrier.
Plumbing to watch out for Galvanized Steel, Cast iron, and polybutylene, all plumbing types that might make a property ineligible or cost you an increased premium.
Furnace Age: The last time the furnace was replaced and the heating type of a home can determine a lot about potential claims in the future and cause your eligibility and insurance premiums to be higher.
The furnaces to watch out for are wood stoves, pellets, coal, stand-alone, space heaters, and fireplaces as primary heat sources.
Also, it is much better if a dial or a smart home system thermostatically controls the heat.
Roof Age: The roof age will qualify you for several discounts on your home insurance! A new roof protects the inside of your home from further damage, thus lessening the blow of a larger claim payout.
When a roof is outside the 15-year-old mark, consider putting a new one on yourself or face potential claims/out-of-pocket expenses for which you may not be ready. This could make your roof’s Actual Cash Value(= market value – depreciation) depending on how old the roof is. This can lead to a deductible plus the depreciated value of the top that you now owe besides your selected deductible.
ACV or actual cash value can lead to more unexpected costs you might only have been aware of once it is too late!
These items can help your clients choose a property that works for them and their expected budget. Negotiating on a contract might help your borrower save money on the purchase price and keep more money in their pockets! This is also excellent knowledge when prospecting with your real estate agents to help them stand out amongst a crowd and be the best they can be! Please let me know if you have any questions, and feel free to ask!
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4 Replies
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I get insurance with an older roof and windows and after I get the new roof and windows done, will my premium be lower?
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Insurance carriers are not really concerned about windows. Getting a new roof can certainly help you qualify for a lower rate and give you more carrier options!
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Great information and thank you for sharing, @Brent . This topic is so important. Most homebuyers, a home is its single largest investment in their lifetime. Negotiating the right home for you involves several key steps and strategies to ensure you get the best deal possible. Here’s a guide to help you negotiate effectively:
Know Your Budget: Understand your financial situation thoroughly. Determine how much you can afford to spend on a home, including down payment, monthly mortgage payments, closing costs, and ongoing expenses.
Research Market Trends: Familiarize yourself with the real estate market in the area where you want to buy. Understand the current trends, average sale prices, and how long homes typically stay on the market.
Identify Your Needs and Wants: Make a list of your must-haves and nice-to-haves in a home. Consider factors such as location, size, number of bedrooms and bathrooms, amenities, and any specific features you desire.
Get Pre-Approved for a Mortgage: Having a pre-approval letter from a lender strengthens your position as a buyer and signals to sellers that you’re serious about purchasing a home. It also gives you a clear idea of your purchasing power.
Work with a Real Estate Agent: A good real estate agent can provide valuable insight, guide you through the negotiation process, and represent your interests. They can also help you find suitable properties and navigate paperwork.
Research Comparable Sales: Look at recent sales of similar properties in the neighborhood to gauge the fair market value of the home you’re interested in. This information can serve as a basis for your negotiation strategy.
Make a Reasonable Offer: Base your offer on market research, the condition of the home, and your budget. Avoid making lowball offers that could offend the seller, but don’t overpay either. Your real estate agent can advise you on a suitable offer price.
Negotiate Terms and Contingencies: In addition to the sale price, negotiate other terms such as the closing date, inclusion of appliances or furniture, repairs, and any contingencies (e.g., home inspection, appraisal, financing).
Be Prepared to Compromise: Understand that negotiation is a give-and-take process. Be open to compromise on certain aspects of the deal while holding firm on others that are non-negotiable for you.
Stay Patient and Flexible: Negotiations can take time, especially if there are multiple counteroffers involved. Stay patient and flexible throughout the process, but also be prepared to walk away if the terms aren’t favorable or if you’re unable to reach an agreement.
Review the Contract Carefully: Once an agreement is reached, review the purchase contract carefully with your real estate agent or attorney to ensure that all terms and conditions are accurately reflected before signing.
By following these steps and strategies, you can negotiate effectively to secure the right home for you at a price and terms that align with your needs and preferences.
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Great information and advice. Thanks for sharing my friend.
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