Monthly Archives: January 2013

Seven essential factors of homeowner’s insurance | Bedford Corners Homes

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Photo: Thinkstock

You’ve put a lot of work into your home to make it your haven from the stresses of life. But things can happen quickly to upset that peace, such as a fire, theft, or natural disaster.

With that in mind, do you have enough home insurance to protect your home and your precious personal belongings if something bad happens?

You’d be surprised at how many people don’t have enough, says David Isaac, senior product manager at Met-Life, a provider of all types of insurance, annuities, and employee benefit programs.

“I work in insurance, but I have neighbors and relatives who just don’t know what they need to protect themselves. Many times, they end up being surprised that they weren’t covered after a certain incident even though they have insurance,” he says. “It just wasn’t enough, or they didn’t have the right kind.”

To protect your home and family, keep reading to learn about seven factors to consider when determining how much home insurance is enough.

Factor #1: The cost to rebuild your home

When the unexpected – such as a fire or tornado – comes rolling through your home, you want to build it back the way it was before disaster struck, and that’s where your home insurance comes in.

However, 16 percent of homeowners do not have enough insurance to rebuild their home if it were destroyed, according to the 11th annual “US National Homeowners Insurance Study” by market research company, J.D. Power and Associates.

But how can you make sure your house is restored to normalcy?

The Insurance Information Institute (III) recommends you ensure your home insurance covers the price to reconstruct at today’s construction costs – not what you paid for the home originally.

“For a quick estimate of the amount of insurance you need, multiply the total square footage of your home by local building costs per square foot,”  III says. You can get this information from your local real estate agent, builders association, or insurance agent.

It’s also a good idea to talk with your home insurance agent about automatic inflation coverage, which updates premiums and coverage annually to reflect the cost of inflation.

“This coverage’s main purpose is to help customers avoid inadequate insurance coverage,” Isaac says.

But beware – not all insurance companies have this in place. You need to sit down with your insurance agent to see if you do have automatic inflation coverage. That way, you can be sure that you’ll be able to rebuild your $500,000 home for what it’s worth now – instead of for the $200,000 that you purchased it for 20 years ago.

[Think a home insurance update is in order? Click to compare quotes now.]

Factor #2: The cost to replace your personal belongings

Another factor to consider is what your home insurance will cover for the items inside your home if they’re stolen. So if a burglar breaks into your home and takes your television, how much will your insurance company pay you for another?

This can be a tricky question, says Isaac. It depends on what type of television you had, and whether or not your insurance covers replacement cost or the cash value of the item.

With an insurance policy that covers replacement cost, you could receive the latest flat-screen television – even if the set that was stolen was 10 years old. That’s because the policy refers to the original price of the item, regardless of how old or outdated it might be. But with an insurance policy that only covers cash value, you would get only what the television is valued at today. And because of inflation and the advances in home electronics, a television you bought for $2,000 two years ago is likely worth a lot less now.

So, if you’re trying to get the cheapest home insurance policy possible, a policy that covers cash value is a better option – since a policy that covers replacement cost comes with a higher premium, Isaac notes. “But at a time of loss, you will feel in a much better position to replace most of your stuff if you had the more expensive policy that includes replacement of personal property,” he says.

[Is your home well protected? Click to get an updated home insurance quote now.]

Factor #3: The cost to cover your valuables

So your insurance company will cover your personal belongings, but what about more unique – and expensive – items? Let’s say a diamond ring has been passed down to you from your late mother, for example. It’s worth at least $10,000. You cannot find it anywhere. Will your home insurance replace it?

Unless you added what’s called a rider or endorsement policy to your standard insurance, don’t bet on it.

That’s because every standard insurance policy has limits on the coverage for expensive items. For example, jewelry is usually only covered up to $1,000 to $2,000 within a standard home insurance policy, according to III.

But don’t worry – that doesn’t mean your valuable items will have to be left uninsured. For items that are worth more than the amount that your standard policy would cover, there are riders that you can add to your homeowner’s insurance that provide additional coverage beyond the regular policy.

And the rider can be written out for items like jewelry, artwork, watercraft, gun collections, and other valuables that are not covered normally, says Isaac. These items are typically appraised and in the event of a loss, the insurance company will pay you the appraised amount.

[Need some extra coverage for your valuables? Click to compare home insurance quotes now.]

Factor #4: The cost of damage from floods and earthquakes

Floods and earthquakes can be devastating catastrophes that destroy property. But these natural disasters are not covered under a standard home insurance policy, so you need to buy special flood or earthquake insurance for protection.

And not having flood or earthquake insurance can be a risky gamble for certain folks, Isaac says.

“You need to analyze where you live and what is around you,” he adds. “Floods can occur anytime, anywhere with flash floods from heavy rains or dikes breaking.”

Take Hurricane Irene, which came ripping up the East Coast in 2011 and flooded homes, for example. During that year, fewer than one out of 10 homeowners carried flood insurance in New England and the mid-Atlantic states, according to the J.D. Power’s annual insurance survey.

Just like floods, earthquakes can cause devastating damage as well, especially if you live in a state like California, which is notorious for earthquakes.  

So, if you live in a region that is prone to natural disasters, talk to your insurer about what your coverage options are.

[Think you may need some extra coverage? Click to find the right home insurance now.]

Factor #5: The cost to live after a disaster

Here’s another thing to think about: If disaster strikes, whether it’s a natural disaster, a fire, or something else, where will you live and how will you stay afloat financially if your home is destroyed?

You might end up in a hotel or have to rent an apartment, but you’ll still have to make mortgage payments even during the rebuilding period. So where does the money come from for essential living expenses like meals, clothing, cell phones, and other crucial items after you have lost everything?

“Most home insurance policies allow a small amount to help out people with their increased cost of living while they aren’t in their home,” Isaac says. “But they won’t cover you forever.”

In fact, most standard home insurance policies will cover up to 20 percent of the policy on the house, he adds. And in many situations, you can increase the temporary living expenses for a small addition to your premium.

But ultimately, every policy is different, so you really need to talk with your insurance agent about how much coverage you need. Discuss a lot of “what ifs” and understand what will be protected in those situations.

[Click to compare home insurance quotes now.]

Factor #6: The cost if someone sues you

Your sweet little great aunt falls on your stairs and breaks a hip and an ankle. Two weeks later, a lawsuit is delivered to you by her attorney.

You might not believe it, but this kind of scenario happens all the time, says Isaac.

“Accidents happen. Unfortunately, those who are injured can be your neighbors or friends at one point. If something tragic occurs, you need to have enough liability insurance,” he says.

To protect yourself, you might want to consider taking out an umbrella policy or a personal excess liability insurance policy – both of which can often be bought separately from your home insurance. This type of policy can give you $1 million or even more coverage to help pay for judgments against you by a judge or jury in the lawsuit, says Isaac. It saves you from paying out of pocket or having to sell your home or belongings to pay the settlement.

The III states that most home insurance policies provide a minimum of $100,000 worth of liability insurance, but recommends that homeowners have a least $300,000 to $500,000 worth of protection.

via homes.yahoo.com

Housing Starts Make Fitch a Believer | North Salem NY Real Estate

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Just two weeks after declaring home prices are overvalued by 10 percent, Fitch Ratings said yesterday that December’s solid single family housing starts and an unexpected jump in multifamily starts are clear signals that 2013 should begin strongly for U.S. housing.

Single family housing starts came in at 616,000 for December, which was on target with Fitch’s expectations. However, multifamily housing starts vaulted to 338,000. This increase may be attributable to good weather and the aftermath of Hurricane Sandy. However, it should be noted that the multifamily numbers were strong in most regions of the United States.

‘Most housing macros continue to grow, helped by favorable affordability and buyer psychology,’ said Managing Director Robert Curran. ‘The major public builders are pacing the industry as reflected in their net orders and backlog.’

On January 4, Fitch said home prices were overvalued and price growth is not being driven by fundamentals but by technical factors that could easily change. The ratings service said national prices are, but will likely drop by no more than 2 percent due to inflation.

Yester Fitch said its housing forecasts for 2012 have been enhanced since the last quarterly data was released. Fitch estimates that single-family housing starts improved about 24 percent, new home sales rose approximately 20 percent, and existing home sales grew 10 percent. Fitch envisions housing growth to be somewhat less robust this year.

Fitch projects 2013 single family-starts to expand 18 percent, new home sales advance 22% and existing home sales should increase 7 percent.

via realestateeconomywatch.com

 

N.Y. newspaper removes online map of gun-permit holders | Armonk Homes

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A White Plains, N.Y., newspaper has removed an online interactive map that detailed who has handgun permits in two counties. The posting of the map on the paper’s website last month had sparked outrage and prompted changes in state law to give permit holders greater privacy.

The Journal News map showed the names and addresses of people with pistol permits licensed by Westchester and Rockland counties.

Journal News President and Publisher Janet Hasson said Friday the decision to take down the map came in response to a provision in New York’s new gun law that was passed last week. The law also gives permit holders a way to request that their personal information be kept private.

Hasson criticized the new rule as overly broad, but added in a letter that “we are not deaf to voices who have said that new rules should be set for gun permit data.”

Still, a snapshot of the map — without the names and addresses — has been kept on the paper’s website “to remind the community that guns are a fact of life we should never forget,” she wrote.

The new law, signed Jan. 15 by Gov. Andrew Cuomo, also stopped the release of permit-holder data for 120 days. The Journal News had been battling Putnam County to release the names and addresses of permit holders, but officials there had refused.

The state government’s top open-records official had warned that refusing the request would be illegal.

In her letter to readers, Hasson said the paper published the interactive feature using public information after the Newtown, Conn., school shootings, because the “Journal News thought the community should know where gun permit holders in their community were, in part to give parents an opportunity make careful decisions about their children’s safety.”

via latimes.com

“Sand States” are Still the Wettest | Cross River Real Estate

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Some 10.7 million homeowners, or 22 percent of all residential properties with a mortgage, were in negative equity at the end of the third quarter of 2012, down by 100,000 from the second quarter. But the “sand states”, the states that dominated foreclosures for years, still account for a lion’s share of underwater borrowers.

With the addition of 100,000 borrowers, the total number of borrowers who moved from negative equity to positive equity by September reached 1.4 million year-to-date. An additional 2.3 million borrowers had less than 5 percent equity in their home, referred to as near-negative equity, at the end of the third quarter, according to a new analysis from CoreLogic.

Together, negative equity and near-negative equity mortgages accounted for 26.8 percent of all residential properties with a mortgage nationwide in the third quarter of 2012, down from 27 percent at the end of the second quarter in 2012. Nationally, negative equity decreased from $689 billion at the end of the second quarter in 2012 to $658 billion at the end of the third quarter, a decrease of $31 billion. This decrease was driven in large part by an improvement in house price levels. This dollar amount represents the total value of all homes currently underwater nationally.

Rising home values also pushed the equity Americans have in their homes higher than at it was at the onset of the housing crash five years ago, according to the December HUD Scorecard. Homeowners’ equity reached $7714.3 billion, a 5.2 percent increase over the second quarter and an 18 percent increase over the level of $6526.9 in the third quarter of 20011. In 2007, homeowners’ equity reached $1.02 trillion, but fell to $7050.9 billion in 2008, according to the quarterly Federal Reserve’s Flow of Funds report.

Negative equity has been a major cause of foreclosures and short sales. Even three years after the height of the foreclosure flood in 2010, a handful of states that were reasonable then for the majority of the foreclosures are the same states that today are home to an overabundance of underwater homes.

Nevada had the highest percentage of mortgaged properties in negative equity at 56.9 percent, followed by Florida (42.1 percent), Arizona (38.6 percent), Georgia (35.6 percent) and Michigan (32 percent). These top five states combined account for 34 percent of the total amount of negative equity in the U.S.

Of the total $658 billion in aggregate negative equity, first liens without home equity loans accounted for $323 billion aggregate negative equity, while first liens with home equity loans accounted for $334 billion.

Third quarter highlights included:

  • 6.6 million upside-down borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $214,000. The average underwater amount is $49,000.
  • 4.1 million upside-down borrowers possess both first and second liens. The average mortgage balance for this group of borrowers is $298,000.The average underwater amount is $82,000.
  • Approximately 41 percent of borrowers with first liens without home equity loans had loan-to-value (LTV) ratios of 80 percent or higher and approximately 61 percent of borrowers with first liens and home equity loans had combined LTVs of 80 percent or higher.
  • At the end of the third quarter 2012, 17.1 million borrowers possessed qualifying LTVs between 80 and 125 percent for the Home Affordable Refinance Program (HARP) under the original requirements first introduced in March 2009. The lifting of the 125 percent LTV cap via HARP 2.0 opens the door to another 4.6 million borrowers.
via realestateeconomywatch.com

Luxury Sellers Hang Tough on Prices | Waccabuc Real Estate

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Even though the time it takes to sell a luxury property has increased to as long as 260 days in Chicago, 287 in Miami and 197 nationally, fewer sellers are cutting prices.

Wintertime sluggishness has slowed luxury markets across the nation. Days on market have been increasing in nearly every major market tracked by the Institute for Luxury Home Marketing, and inventories are at a seasonal low, down from 27,600 properties in June to 18,400 in January.

Rather than falling with the end of the summer buying season, low inventories have placed upward pressure on prices, which have risen from a median of 1.11 million in September to 1.23 in January, according to ILHM data.

Perhaps as a result of strong prices, sellers are not responding as they normally do in the winter by cutting prices to generate interest among buyers. In fact, fewer are reducing prices today than when days on market were lower last summer.

The percentage of homes on the market that have lowered their asking price at least once over the past 90-day period has fallen 10 percentage points since the end of the summer, from 31.4 percent of properties to 24.4 percent. This statistic illustrates how many listed properties may be behind the “price curve” – listed at a price above what the market is willing to pay for similar properties. Even in strong seller’s markets, the percent price decreased will be 10-12 percent, so some repricing of individual properties is common in any market. In weaker markets, this value begins rise into the teens, 20 percent, 30 percent, and higher. Percent price decreased is an insightful gauge of demand levels in the residential housing market.

The National Association of Realtors reported that sales of luxury homes spiked in the final months of 2012 as high-end homeowners rushed to take advantage of lower tax rates before January 1.

Many sellers wanted to cash in on their homes before a widely expected capital gains hike — to 20 percent from 15 percent — that was part of the fiscal cliff budget deal. According to the National Association of Realtors (NAR), sales of homes valued at $1 million or more spiked 51% in November compared with a year earlier.

via realestateeconomywatch.com

My 10-in-1 Content Creation Strategy | Katonah Real Estate

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Content creation calendars and schedules are the bane of most serious bloggers’ and content managers’ lives, depending on which side of the creative block you’re on.

I straddled this fine line on many occasions until my Eureka moment. Having amalgamated my home radio and video studios I realised that I could double up on content creation with my business-consultant partner, a content reservoir of genius proportions.

Soon we had discovered a 3-in-1, then a 6-in-1, and finally a 10-in-1 content creation strategy.

When I say “radio and video studio” (actually my third bedroom), be assured it’s not exactly state of the art, although I have slowly acquired suitable equipment and created a workable dual studio.

In saying this, anyone with a computer, some sort of USB audio interface/mixer, a reasonable microphone and digital video camera or DSLR can achieve the same results. In this article I assume you are familiar with your gear so I’m not going to go into any detail on how to use each piece of equipment in the process.

Time costs!

One of the most valuable, and rarest assets of a successful business consultant is time. To maximise the genius of my partner, when time is in such short supply, is a hectic operation usually resulting in a minimal flow of great content. This is where my Eureka moment has paid incredible dividends and saved many hours in the generation of multiple pieces of content at once.

Because we use a joint audio and video, green-screen studio, when we sit down and record a session, we create both an audio and a video recording simultaneously. The following ten points outline the quality content that we create from each five-minute recording session.

We now have this down to such a fine art that we can do six, five-minute recordings in 40 minutes. For me as the content creator, this is heaven, as it enables me to work in my genius. (A little side note here: your genius is simply working in your passion and talent, and I believe you need to be doing this for 80% of your working time.)

How it works

So, it all starts with one content creation session—just one!—where we have learned to maximise both time and genius. Of course there is preparation required to make the session go smoothly, and a good knowledge of your field of expertise is essential, but once we’re in studio, this is how the magic happens.

  1. The primary piece of content is a video for uploading to our YouTube channel and if we choose, we upload it to iTunes as a video podcast. We also embed the same video on our blog at MurrayKilgour.com. A well-prepared, quality video is the basis for this whole process. We use either a script or a series of bullet points to make the recording. I personally enjoy using a script with a DIY teleprompter, because of my radio background. Cheesycam.com is an awesome resource for DIY ideas and equipment—a lot of it DIY or reasonably priced new gear.
  2. The recorded audio track becomes a podcast which is embedded on our blog, and most often is uploaded to our Living on Purpose iTunes podcast channel as well. There are many other podcast sites to upload to, but we choose just iTunes. If you are unable to create video, the podcast can become the audio for a Slideshare video presentation, so give the audio the same good preparation as you would a video.
  3. We send the mp3 audio recording to a transcription contractor hired through eLance.com for transcription at $2 per recording. From this transcript, we create a blog post for our site, a guest post for another website, or an article for a site like ezinearticles.com. This invaluable piece of text is also used as a caption or transcript with our videos on Youtube for SEO purposes. Because it’s accurate, we gain the additional traction of having hearing-disabled people able to enjoy your video using the Youtube subtitles feature.
  4. The video we have created, if it’s not placed on our YouTube channel, can now form part of a multi-part video ecourse. We use an Aweber autoresponder to give this away for free and gain subscribers to our blog, but it can be monetized in the form of a paid video ecourse. You can determine the value or purpose of the content here.
  5. We again take the transcribed text and repurpose it into a ten-part ecourse delivered in the same way as the video ecourse: as a bonus for signing up as a subscriber to the blog. This method has been extremely successful—we’ve signed up thousands of subscribers to our blog this way.
  6. The transcribed text now adds real value when it is compiled into a section or chapter of an ebook to be used as a giveaway or sold on the blog as a free download. This is where the value of the method comes in, because many bloggers battle to get into writing an ebook. We edited, added and modified a lot of the text to create an ebook, but what this method did was give us a great quantity of raw material to work with. We had created more than 140 podcasts by the time we woke to the fact that we could compile a quality ebook using that material.
  7. I am in the fortunate position of being a breakfast show producer for a local radio station, so the podcast becomes a regular slot on our community radio station, Radio CCFm, which has 250 000 listeners. But before you say this is a privileged position, I can assure you that, as a producer, I can say most local radio stations are always looking for quality content, especially if it is free. So short podcasts with a good intro and outro may become a regular feature on radio stations and give good traffic to a website.
  8. With the advent of HD video DSLRs it is possible to produce high-quality video footage for TV programs. We repurpose our five-minute content creation session again in the form of a short TV program for a local community TV station, Cape Town Television. If it’s quality content and free, TV stations will take your show—especially if it’s relevant to their viewers.
  9. When we repurpose the transcribed text into an ebook, the audio becomes part of an audio book. You might say that this is pushing it, but I use the audio as a companion free audio book to the photography ebook I sell on my website. It’s a bonus for the buyer and for me, because I didn’t have to do anything extra to create it.
  10. Finally, blog posts, audio, and video make an amazing weekly or monthly newsletter. I do this using Aweber templates, which are free with the subscription. We try to do it on a two-weekly basis, as we don’t always have enough content for weekly mailings. It works perfectly for a monthly newsletter and I would advise this when you’re starting out. The amount of content you generate will determine the frequency.

Ten points sounds good, and I thought that adding an eleventh point might be a bit much, but here’s a bonus idea. What we’ve done is created a boxed DVD set for offline and online sales as training modules. Not all people are excited about online, and some like a physical product in their hands. In our business we use all of the above content in its different forms as part of a DVD boxed series for sale to our coaching clients. They love it and we love it—especially the time it takes to create!

Unlimited content

There are no limits to how you can use your content if you begin with the end in mind, but the emphasis must be on quality content. When you sit down in front of the camera and microphone, think “end product,” and design your process to get the most out of the content creation session. I’m sure that most people can easily create seven of these ten pieces of content out of just one five-, ten-, or even 30-minute recording session.

So, think big in your content creation, begin with the end in mind, and maximize your time and effort to produce content that will attract the best traffic and convert those people into buyers. Your success will result from the quality of content you produce. So give it your best!

via problogger.net

Hedge Funds Shrink Foreclosure Discounts | Pound Ridge Real Estate

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Demand for foreclosures is so great and supplies are so low in some of the nation’s hottest foreclosure markets popular with investors that the price differences between REOs and full-price homes have virtually disappeared.

According to data from Home Value Forecast, during 2012 foreclosure discounts shriveled in some but not all of the markets suffering the greatest record foreclosure activity in past years. Foreclosure inventories have declined in these markers, largely due to residential real estate investors, both individual and hedge funds, who buy up foreclosed properties to convert into single family rentals. While full-price homes and short sales have appreciated slightly in these markets, REO prices have zoomed, a sign that investor demand-especially hedge funds who have been buying up thousands of REOs since the end of 2011-is driving the decline in foreclosure discounts.

Foreclosure discounts are critical to most investors’ business plans. To bring foreclosures up to market-ready or rent-ready status, investors spend a media of $7500 per property, or $9.2 billion per year according to a survey of investors by BiggerPockets.com and Memphis Invest. Should the foreclosure discount evaporate, it will be cheaper simply to purchase a full-price home that needs no repair.

Foreclosure discounts also have toxic effect home values. Their reduced values often are used by automatic valuation models and by appraisers in calculating comparable sales values for full-priced properties, resulting in lower appraised values.

In Las Vegas, the discount between full price homes and foreclosures was only was only 1 percent in the third quarter of 2012, and price differential between full-price properties are REOs has fallen to only $2000. Third quarter 2012 data from Home Value Forecast provides trend lines for REO, full-pricne and short sale prices, sales volume and time on market.. HVF provides insight into the current and future state of the U.S. housing market, and delivers 14 market snapshot graphs from the top 30 CBSAs. Home Value Forecast was created from a strategic partnership between Pro Teck Valuation Services and Collateral Analytics and uses numerous data sources including public records, local market MLS and general economic data.

The foreclosure discount in Phoenix has shrunk to about 5 percent. REO prices have risen to a median of $88,000 from $62,000 in January 2011, and today are only $6000 less than the median full-price home in the Phoenix market. At $70,000, short sales trail both REOs and full-price homes.

In Orlando, REO prices have been rising throughout 2012, but they still trail full-price homes by $17,000. The discount in the third quarter was still sizeable, about 21 percent, but down significantly from 33 percent in 2009. Tampa also saw in increase in REO prices at the same time that full-price homes rose, keeping the discount at about 32 percent.

Yet in Detroit, a major source of foreclosures but not a popular market for most inestors, the discount actually grew. REO prices in the third quarter were at the same level, $26,000, as they were in the third quarter of 2011, while full-price homes rose from $41,000 to $50,000.

The massive amounts of money hedge funds are spending on foreclosures clearing impacting the real estate economy. Last year several dozen investment firms backed by $6 to 8 billion in private equity hedge funds announced plans to purchase between 40,000 and 80,000 previously foreclosed homes. In September investment bankers at Keefe Bruyette and Woods estimated the dollars raised so far may only trim 15 percent of the foreclosure supply and there is room for even more growth that could last for years.

Just last week Blackstone Group LP, the largest U.S. private real estate owner, accelerated purchases of single- family homes as prices jumped faster than it expected. According to Bloomberg, Blackstone has spent more than $2.5 billion on 16,000 homes to manage as rentals, deploying capital from the $13.3 billion fund it raised last year, said Jonathan Gray, global head of real estate for the world’s largest private equity firm. That’s up from $1 billion of homes owned in October, when Blackstone Chairman Stephen Schwarzman said the company was spending $100 million a week on houses.

“The market is moving much faster than anybody thought possible,” Gray said during an interview in Blackstone’s New York headquarters. “Housing is much stronger than people anticipated.”

Santa Monica-based Colony Capital LLC, last week raised at least $45 million to finance additional REO purchases. It has invested $355 million in the REO-to-rental business since July, according to regulatory filings.

Meanwhile, Colony, Blackstone, Waypoint Real Estate Group LLC and American Homes 4 Rent have reportedly converged on Atlanta in search of low-priced properties to buy and rent out, after helping drive prices up 34 percent in Phoenix from a year ago.

via realestateeconomywatch.com