Save on Homes

It is no secret that it is very expensive to buy a home these days. It’s not cheap to sell a home. Therefore, it doesn’t matter how much a home sells for, it is unlikely that the seller will leave the table with the exact amount. This article will give you a breakdown of the costs involved in selling your home, and offer some tips to keep them from spiraling out of control.

Remodeling Your Home

A home’s “curb appeal” is often referred to by real estate agents. This refers to how it looks to potential buyers. You must take a thorough look at your property from the outside. Are the paints in good condition? Are the bushes well trimmed? Is the garden weeded and trimmed? You should invest time and money to fix any areas that fail to pass.

Once you have made your home attractive enough to potential buyers, it is time to update the interior. Are the wallpaper and paint still in good condition? Are there obvious repairs needed?

Sellers are increasingly staging their homes to improve their marketability. This could mean anything from decluttering to renting or buying new furniture. A professional stager can be hired or a realty agent can give tips.

A 2021 National Association of Realtors report estimates that professional services could cost $1,500. This is a significant amount, and in many cases will be more than the cost of the service itself. According to the NAR survey, 23% of agents who staged sales reported an increase in their selling prices of 1% to 5%. 29% reported an increase of anywhere from 6% up to 20%.

According to NAR, living rooms (90%), kitchens (80%), master bedrooms (78%), and dining rooms (69%) are the most staged rooms.

While small, inexpensive improvements can make a big difference in a remodeling project’s success, they are not as effective. Remodeling’s 2021 Cost and Value Report found that not one of 22 remodeling projects would be able to recoup their full costs at the time of sale. A minor kitchen remodel averaged 72%, while a major project averaged 54%. The only project that was worth the money was to replace a garage door with one made of steel. It cost 94%.

Buyer incentives

A home may receive multiple offers in a strong housing market. Sellers don’t have to offer additional incentives to buyers to make their homes more competitive. However, in a weaker housing market, there may be some incentives that make a difference.

Incentives include paying points towards the buyer’s mortgage (also known as a seller-paid point), covering closing costs, or leaving behind furniture and appliances.

Pay Off Your Mortgage

You will need to pay off any mortgage debts that you have. To make the deal go through, you will need to have a letter or statement from your lender. This will include information about how much you owe your lender and any prepayment penalties.

If your lender has an escrow account, they should apply the amount to your outstanding debts or refund it.

Real Estate Agent Commissions

Selling a house is expensive. Often, the commissions paid by real estate agents are the largest expense. It may surprise some sellers who are first-time buyers that the seller usually pays both their agent’s and the buyer’s commissions.

How much does a real estate agent cost? The standard commission split between seller and buyer agents is 6%. However, commissions can be negotiated and some agents will accept a lower commission. 

Discount brokers may charge sellers a flat fee or a lower percentage (often between 1% and 2%) These include both online brokerage sites and local realtors. There are tradeoffs and you might not receive the same level of service or attention if you pay a higher rate. You may also have to pay a standard commission for the buyer’s agent.

Selling your home yourself can save you commissions. You will still need to pay the buyer’s agents and you will have to do a lot of the work your agent would. It works for some sellers.

The bulk of closing costs for sellers is covered by the costs of real estate agents’ commissions. While some people choose to sell their homes without an agent to save money, you will still need to do a lot of work and pay the buyer’s agent.

Hiring a lawyer

Although the law in each state may differ on whether you are required to hire a lawyer to sell your home, it is often a good idea to do so. The lawyer representing the seller at closing can draft and review the sale contract. 

The price you pay will vary from one place to another, but it is likely to range from several hundred to several thousands of dollars.

Other Closing costs

The bulk of closing costs that the seller has to pay will be covered by the commissions paid by real estate agents. However, there may also be other expenses. The seller must pay transfer taxes that some states impose on property transfers. The association may also charge a transfer fee if the property is part of a homeowners association.

These rules can also vary from one state to the next. In many cases, the buyer and seller can negotiate who will pay a specific closing cost as part of the contract.

Income taxes

Federal income taxes may apply if you make enough money from the sale of your home. If you meet the following two requirements, you can exclude a portion from your profits: The home must have been yours for at least 2 years and it must have been your residence for at least 2 years of the last 5.

If you are eligible, you can exempt up to $250,000 as an individual and $500,000 as a married couple filing joint tax returns. Keep in mind that your profit is not based on the amount you paid initially for the home but rather on your adjusted cost basis. This is the sum of the amount you paid for your home and any improvements that you have made over the years. 

For example, if your home has a new roof or central air conditioning system, these expenses will increase the basis and decrease your profit. It is possible to add some of the closing costs you incurred when the house was purchased to the basis.

You should also consider the time you lived in your home and how much capital gains tax it will result in. Your profit, if any, will be treated as a long-term capital loss if you own the home for less than a year. It will be subject to the potentially much higher tax rate for short-term capital gain if you own it for less than one year.

What Closing Costs Must a Homebuyer Pay?

The fees that homebuyers must pay are numerous. Make sure you bring enough checks to your closing. The typical closing costs include a mortgage origination charge, title search fee and title insurance premium. These fees can be negotiable, and sellers may offer to contribute as part of your agreement. The average closing fee for a buyer is between 3% and 6% of the sale price.

Is Closing Costs Exempt from Tax?

Tax deductible closing costs are rare. Mortgage interest (including points), and real estate taxes are exceptions. This is only if either the seller or buyer itemizes deductions in their tax returns for the year. Sellers can add some of the original closing costs to their adjusted cost basis for their homes to reduce their tax liability.

What is a no-closing-cost mortgage?

No-closing-cost mortgages are those in which the lender adds the borrower’s closing cost to the loan amount, or charges a higher interest rate. This means that even though you don’t need to pay closing costs at first, they will be added to your loan amount over time.

The Bottom Line: Know the Costs Before Putting Your Home on the Market

You can easily feel overwhelmed by the costs involved in selling your house. These costs can actually increase the resale price of your home and help you sell it faster. Not only will it save you stress, but also make your home more attractive to potential buyers. 

The bottom line is that most of the costs of selling your home are, like home ownership itself, often a wise investment. If you are unsure of the costs involved in putting your home up for sale, you may benefit from asking a professional real estate agent to help with the process.

Unless their home is damaged or someone is injured on the property, homeowners insurance isn’t something most people think about. Good homeowners insurance can make all the difference between financial security or disaster.

You don’t have to stay with the same carrier; it is actually recommended that you shop around for lower rates. There are countless websites that compare the rates of numerous homeowners insurance companies, and you may find a suitable carrier among them that charges you less. Premiums for homeowners insurance are constantly rising which may become a problem in the future as these premiums are consistently rising.

Patterns that Affect Homeowners Insurance Costs

Pricing for the coverage of your residence–a large portion of your homeowners insurance–is determined by the cost of repairing or rebuilding your home. Contrary to popular belief, home insurance premiums don’t correlate with home prices. Therefore, real estate inflation experienced by many areas in the past year will not affect home insurance costs. These other trends may also have an impact:

• Epidemic-related shortages: Building materials, including roofing materials, are in short supply while the demand by contractors and DIYers for them has risen. This has led to price inflation. Lumber costs, for instance, tripled between April 2020 and June 2021. Computer chips, which are the brains of many technical parts of the home, have also been affected. These forces have an impact on the cost of rebuilding or repairing homes and, consequently, insurance. 
• Natural disasters: Large-scale natural disasters have had a significant impact on home building prices in recent years. Significant floods in the Southeast as well as wildfires in Western states have actually better ramped up demand for structure materials, increasing prices to reconstruct. 
• Rise in insurance claims: In states that have experienced considerable disasters over a period of years, insurance companies have actually been permitted by state regulatory authorities to raise rates to compensate for those cases as well as for the greater risk. Even homeowners who have not filed any claims can be affected by the increases. In some cases, insurers may leave an area due to rising claims or drop policyholders which forces homeowners to search for new coverage.

In such an atmosphere, you might be questioning exactly how to cover your residence effectively, reduce your premiums, and also handle your present insurer– or discover a brand-new one. These suggestions might help.

Research Reputable Insurance Companies

How well an insurer handles claims is the best way to judge an insurance company. Some state insurance departments publish rate comparisons which can usually be found on the company’s website. Some insurance companies may also take surveys on customer satisfaction. 

Customer satisfaction was best predicted by companies’ damage estimates. Lower-rated insurance companies often tended to have a greater percentage of consumers who disagreed with their damage price quotes and also felt that their last settlement was not large enough.

A large number of homeowners indicate that they have changed carriers within the past three years. Over half of those who switched to another carrier said that they did so because they were offered a lower price. Not to be confused, however, is the fact that select top-rated companies use their own agents and their homeowners insurance is not included in online shopping. To get quotes, you will need to contact each company separately.

Find the Right Coverage For You

Homeowners coverage is not subject to state mandates, unlike auto insurance. If you have to rebuild your home, being underinsured could result in you being responsible for large sums.

On the other hand, you don’t want to buy too much coverage. For example, it would be an error to assume that you require coverage equal to the market value of your home. This value also includes the land on which your home is built, which will not change even after a disaster. This is why your home’s value will usually be greater than its cost to completely rebuild. It is recommended to have enough insurance to cover the cost of the labor and materials required to rebuild your home. This is called the replacement value, or replacement cost. This amount can be calculated by your insurance agent. 

Standard homeowners insurance policies provide “loss-of-use” coverage. This policy pays a fixed amount per day to allow you to live in another place while your home is being built. Rebuilding can take longer if certain building components are difficult to find which could mean that you may spend more time outside of your home than usual. It is suggested that you discuss this coverage with your agent in order to ensure that you have sufficient funds going forward.

Protect Your Assets

Standard policies will be more expensive if you add on options or have separate coverages. This could save you money over the long-term. Remember that not all carriers will offer these extras in their basic overage option and some may charge extra premiums. These are some add-ons you should consider:

• Additional replacement cost: This will pay 20-25 percent over the limit of coverage in case building costs rise after a major catastrophe. The state and the insurance company will determine which benefits are available, so make sure you read the fine print before signing up. Keep in mind also that this only covers the cost of typical building supplies. Other custom features, such as stained-glass windows, will need to be covered by a different policy. Many insurers who sell policies for high-end houses offer guaranteed replacement cost coverage which covers the entire cost of repairing a home destroyed by a natural disaster. 
• Inflation protection: Check that your policy has an “inflation guard” feature that automatically increases your coverage to cover annual homebuilding cost increases.
• Specific weather damage: Many homeowners who have filed a damage claim have indicated that hail was the most common cause of damage. You may need to either pay an additional deductible for hail damage, or purchase stand-alone coverage depending on where you live. 
• Replacement costs for home contents: Standard policies may only cover the “actual cash value” of home contents that have been stolen or damaged. You can opt for replacement cost coverage to avoid paying the difference in replacing your possessions. You can document the contents of your house by taking a video inventory and storing it somewhere safe.
• Other valuables: Homeowners’ policies typically set dollar limits that put a cap on what an insurer will pay to replace valuables like firearms and jewelry. To replace jewelry stolen from you, you could get up to $2,500. These lower limits are often only applicable to theft. There are different policies you can purchase to cover more expensive items.
• Sewage backup: This insurance could protect you if there is a sewage backup into your home. It costs around $40 to $100 annually and policy limits typically range between $5,000 and $25,000. Be aware that this type of coverage is not offered by all insurance companies. Homeowners policies typically do not cover a septic tank on your property. However, it will cover any damage to your home from a serious septic problem. On the other hand, the septic tank is not part of the policy so it will be the homeowners’ responsibility to get it repaired or replaced.
• Law and endorsement: This add-on offers additional coverage to cover the cost of rebuilding in accordance with current local building codes which is also true for older homes that need to be repaired or replaced.

Increase Your Liability Protection

Homeowners policies usually include a liability insurance limit of $100,000 to cover damages and costs resulting from lawsuits. Depending on where you live you may be sued for all of your assets, including investments and real estate. Boost your limit if the worth of your assets goes beyond $100,000.

It is best to purchase coverage that is at least equal in value to your assets. This extra protection can be provided by umbrella or excess liability coverage. In the event of a lawsuit for property damage or accidental injury, it will increase your liability protection beyond what is provided by your home policy. You may also be protected from lawsuits for libel and slander, but you may need to increase the liability coverage limits of your homeowners insurance before you can get it. An umbrella liability policy for $1 million typically costs only a few hundred dollars every year. Getting more umbrella coverage can help you save money.

Think About Flood Insurance Even if Your Area is Low-Risk

Flooding will not be covered by homeowner’s insurance if it is caused by a pipe, or another system in your home. Flood insurance must provide protection against flooding or mud flows from the outside only. Even if your property is not at risk, this coverage can prove to be very cost-effective. It has been proven that a portion of flood losses paid by insurance companies have taken place in low-risk flood areas. 

You can purchase flood insurance coverage through any insurance agency that sells homeowners or car insurance. You can purchase flood insurance through the National Flood Insurance Program or through a private insurance company of your choosing.

Discover Ways to Make Your Premium Cheaper

• Combine coverage: Bundling homeowners and auto insurance from one company can save you up to 30%. Adding your boat or motorcycle could help you save even more. This can even make the bill paying process easier!
• Increase your deductible: Higher deductibles mean reduced premiums. Increasing your deductible will actually save you 25% of your money in the long run.
• Search for home improvements: Replacing old pipes, adding security systems, and including gas-leak detection sensors in the home can all result in insurance savings of up to 2 to 6 percent! In some states, replacing a roof with one that is impact-resistant can result in even higher savings of up to 35%. You can even get a discount on your premium by removing the dry brush surrounding the homes located in fire-prone areas!! It is also recommended that you find ways to build your home more energy efficient as this may give you a discount.

Become a Professional at Submitting Claims

Multiple claims within a short time frame will likely result in a rate increase, or worse, your insurer may not renew your policy. There is not a significant number of homeowners who have seen an increase in their insurance rates after submitting a claim so there isn’t much to lose by filing one claim. 

If you don’t file a lot of claims, your insurer won’t raise your rate or decline your renewal request. However, you should not make claims for less than the deductible. This could result in you losing any discounts that you are entitled to for infrequently filing claims. Before you report, talk with your insurance agent about the pros and cons of filing a claim.

Getting Dropped By an Insurer

There are many reasons why insurance companies drop customers, including:

• Cancellation: If you are a new policyholder, the insurer can cancel your policy at any time within the first 60 days. After 60 days, an insurer can cancel your policy if you fail to pay your premiums or if you are found to be a greater risk to the insurer. This can happen if the insurance company finds out you’ve done something that is not covered by your policy. The notice period for cancellation varies from one state to the next.
• Nonrenewal: Your insurer may decide not to renew the policy after it has expired. This can be due to you filing too many claims even if they were small. Your insurer can also decline to renew your policy if the company determines that it is not profiting from insuring homeowners in your area. Your insurer will usually give you notice within 30 days if your policy isn’t renewed.

Talk to an agent if you have been dropped and cannot find coverage through a private insurance company. You can also contact your state insurance department or go online to get a list of local insurers.

Cost effective roofing materials are those that provide long term or permanent solutions and can be applied on commercial, residential, or industrial properties. Many factors are taken into consideration when deciding the right roofing materials for the building. The main thing that is looked at is the design and the purpose of the roofing. The cost of these roofing materials depends on the materials chosen, the design, its installation, and its maintenance. Whether you are doing your roof yourself or using a roofing contractor, you want to choose roofing materials that will withstand the climate in your area.

Asphalt Shingles

Asphalt is one of the most cost effective roofing materials you can use on any roof. When properly applied, asphalt shingles are able to provide superior protection against the elements while providing superior aesthetics. Because asphalt shingles come in such a wide variety of colors, designs and styles you are sure to find the right roofing style and color that will fit perfectly with your home’s design and structure. By using the right roofing professional you can be sure to get the job done correctly and cost effectively.

Wooden Shingles & Shakes

Over the last few decades, wooden shingles have become very popular for homes around the country. There are many advantages to wooden shingles and one of them has to do with energy costs and the environment. It seems that now and then, people want to be more environmentally conscious and these shingles are an easy way to do that. In addition to the low cost and the energy benefits, wooden shingles are also a visual delight for the eyes. They bring a sense of old tradition to a home and when done correctly, they can really add to the look and the architecture of a home.

There are many different types of wooden roofing materials, including shakes and shingles. Each one of these brings its own benefits to the table. For example, wooden shakes are usually made of pine bark that has been ground into a powder and mixed with water and then poured into mold. These shakes are then installed by float or shake roofing contractors so that the final product is a very durable and long lasting one.

Metal Roofing

The cost of metal roofing is almost half that of wooden roofing. The main reason behind this is that metal is a more durable material than the other roofing materials. It is very easy to install as well. This metal roofing can also withstand extreme weather conditions and is ideal for those who live in areas that get heavy snowfall and high temperature. They’re also better at resisting hail damage which is an additional roofing problem that can drive up the cost of roofing repairs.

Solar Glass Roofing & Solar Roof Shingles

Some roofing systems today that are very popular include solar glass tiles, solar roof panels, and solar roof shingles. Each of these systems has its own advantages and disadvantages in terms of building your home more energy efficient. The solar glass tile is very durable and strong, however, it is the most fragile and needs to be properly installed by a professional roofing contractor or a skilled electrician. The solar roof panels are more easily installed, but you have to have a good amount of knowledge about electrical wiring and have plenty of experience in installing solar panels.

One of the biggest advantages of using solar roof tiles is that they are a much more affordable way of going solar than having to purchase all of those separate solar panels. The roofing material can often be purchased for less than $200. For the cost of just a couple of solar roofing panels, you can save a huge chunk of money on your energy costs every month which can help also you save money for your mortgage. In addition, if your roof is damaged due to a storm or hurricane, the solar roofing material can actually provide some roofing solution by providing some additional strength to the roof structure.

Conclusion

You can’t afford to leave shingles on your roof for any length of time as they begin to deteriorate and become extremely vulnerable to the elements. When choosing a roofing contractor, you should ensure that they have a proven track record and are able to provide you with a warranty on your roof. It’s best to get a few estimates from roofing contractors prior to deciding on one as their services can vary dramatically.