Say it’s the fifth day of temperatures over 98 degrees in South Carolina during a summer of record heat.
Your air conditioning system has kept you cool through it all — until now. The unit is still spinning, but the air coming out isn’t cool. The temperature in your house starts to climb.
What do you do?
If you are like most people, you Google “AC repair” and start making calls. But you don’t want to pay service fees to three different companies just to come see what the problem is, so getting comparative estimates won’t work.
Besides, the whole family insists they are “dying” from the heat. You quickly pick a company to fix the AC and that’s that.
Once you get through the AC crisis, you start to wonder if maybe you should get home repair warranty insurance. But is it a good deal?
My family has had a home repair warranty on our 28-year-old home for about 10 years. Initially it ran us about $300 a year with a $35 fee per repair visit.
The premium and the visit fee increased every year until recently, when I took the time to shop around and find a better deal. However, even with lower rates, looking at the math over the last 10 years, the numbers alone don’t support the wisdom of that purchase.
So why do I buy a home warranty?
Peace of mind
What the numbers don’t show is the peace of mind the warranty gives me.
When something breaks, the home repair warranty company (let’s call it “Fictional Warranty Co.”) sends a repair company to my house to fix it. I pay $45 each time I schedule a visit, but there is no cost for the rest of the repair.
I don’t think this saves us money on repairs overall, but I like the fact that Fictional Warranty Co. calls a repair firm (“The Repair Shop”) and then monitors how much is charged.
So if my refrigerator breaks, for instance, I am protected from Bob of The Repair Shop trying to inflate the price. Instead of telling me it will be $400, when it’s really only $200, Bob has to report the price to Fictional Warranty.
Fictional Warranty also helps me resolve a situation in which The Repair Shop doesn’t do the work correctly, handling the additional cost and repairs on my behalf.
Appliance and system repairs are rarely necessary at my house, so I don’t have a network of contractors I know and trust. But Fictional Warranty vets the companies for me, manages what is charged, and resolves any problems.
That’s worth the yearly warranty cost to me.
Warranties get mixed reviews
But when I did some research, I found no consensus on whether home warranties are a good idea for older homes (all the sources I read said to avoid them for new homes).
Consumer Reports recommends avoiding warranties because of the hundreds of dollars these contracts can cost.
“It makes much more sense to buy reliable products and maintain them as the manufacturer recommends,” it says. Instead, Consumer Reports suggests placing the money you would have spent on a service contract into a savings account or repair fund.
However, other personal finance experts also point to the added benefit of peace of mind, which can make a home warranty worth the cost for some people. And your personality and risk tolerance will, of course, factor into your decision-making, as will your existing network of repair companies.
From a risk standpoint, if you typically avoid risk, you’ll probably feel more comfortable knowing your maximum out-of-pocket yearly repair costs.
Also, if you don’t know much about appliance repair and don’t know whether to trust the repair companies in your area, you may like having a home warranty.
On the other hand, if you are kind of handy and can do some work on the house yourself, or you are confident you can find service providers you like and trust, you may want to forgo the warranty.
Shop around
If you decide you want a home warranty, shop around and compare options.
Consumer Affairs provides a useful comparison of features, costs and companies that offer home warranties. Call the companies you like and ask for the price of each home visit and the yearly cost.
Then you can buy the warranty of your choice online or over the phone. Revisit your choice each year to make sure you keep getting the best deal.
NerdWallet is a Lake Homes Realty / LakeHomes.com content partner providing real estate news and commentary. Its content is produced independently of Lake Homes Realty and LakeHomes.com.
Every real estate market, in any economy, has a number of homeowners dismayed about their home not selling. These houses just sit on the market. They become stale inventory, frustrating the home seller, real estate agents, and even buyers (yes, buyers).
Over the last three years, I’ve had the very unique opportunity to travel to a number of states and have multi-hour, face-to-face conversations about local real estate markets with scores of real estate agents. Some work with our brokerage, many with other brokerages.
These agents may work in urban, suburban, or rural markets. A lot of these agents work in my niche of real estate: lake homes and land. However, I have also spent a very significant time with agents who focus on typical primary residential homes.
The Two Reasons for a Home Not Selling
One topic I find interesting to discuss is the number of homes listed for sale for long periods of time, longer than should be expected. What factors lead to a home not selling? Here is something I’ve learned, something that is very consistent across every market.
There are ONLY two reasons for a home not selling in a reasonable amount of time. Only two. Either:
1. The home lacks proper market exposure and/or
2. The home is not priced appropriately.
That’s it. Every other issue will fall as a subset of one of these two reasons.
Lack of Proper Market Exposure
One reason for a home not selling is it has not been marketed correctly. The homeowner and their agent are trying to sell a secret! If the potential buyers of this property don’t know it exists, the price is irrelevant. You can’t even give away something if no one knows about it.
By “not marketed correctly,” I don’t necessarily mean not marketed at all. The home must be marketed to THE RIGHT prospective buyers.
For instance, a “For Sale” sign in the yard may look great but the neighbors and their friends are rarely going to buy that home. How do you reach the buyer who is somewhere else than around the corner?
Lack of precision marketing is one of several reasons why For-Sale-By-Owner homes are typically much slower to sell. These homes may not be on the local MLS (Multiple Listing Service) which feeds a host of real estate websites. Even if the home is listed in the MLS, there may not be enough other marketing efforts to break through the thousands of homes typically for sale in each market.
While in a few markets an open house may be a viable marketing tool, this typically makes the seller feel happy but often does little to find the right buyers. The same can be said about much of the local print advertising.
What Creates Proper Market Exposure
The most productive marketing in today’s world of real estate is online marketing coupled with strong agent presence. By online, I’m not limiting this to a Multiple Listing Service and websites like Zillow and Realtor.com.
I’m talking about very focused marketing for homes directed at the correct potential buyers.
This targeted marketing uses an understanding of the age, financial status and motivation of the right buyers for each particular home.
Highly targeted online marketing can include specialty websites, targeted online ads, and targeted and boosted social media engagement. And these are rarely free, even if it is just the significant time required to present the home and community correctly to the targeted buyer population.
Want to sell a home? First, make sure the most likely buyers can easily learn about it.
Home is Not Priced Appropriately
When I say a home is not priced appropriately, I don’t necessarily mean that it must be the lowest price in its local market. (Although rare, I’ve seen instances were even underpricing created problems. But that is a story for another day).
Instead, an appropriately priced home will be seen as reasonably priced when all other factors are considered.
Those factors include house condition, neighborhood, school system, local real estate market conditions, location, lot size, traffic, next-door neighbors, house age, nearby culture/restaurants/shopping/parks, historical significance, public services and a host of other items.
If there are problems with the home, smart pricing can overcome those issues. No matter how bad the issues are with a home, pricing can still make the home appealing to someone.
Let’s consider a home for sale with reasonable market exposure.
If that home has been on the market for a period as short as two weeks without much buyer interest, the market is speaking. No, correction… the market IS YELLING! The market is letting the seller know the home is not appropriately priced. Period.
Buyers Understand Prices (Better than Most Sellers)
Today’s buyers are savvy. They research online, they watch home prices, and they know an overpriced home quickly. You WILL NOT fool these buyers into even touring a significantly overpriced home. Their time is valuable and house hunting starts at home (or, admit it, at work) on the Internet.
Even if you do fool buyers into coming to see an overpriced home with careful photography and crafty descriptions, if the home is much less than the buyers expect, you will piss them off for wasting their time. They will feel deceived and likely never make an offer.
Buyers are often much better than sellers at understanding the reality of homes not selling. When setting the price of a home, the smart seller will work hard to think like the informed buyers, avoiding the emotional (and false) price justifications.
The Danger of Starting High then Cutting the Price
A home seen as overpriced will be left by buyers to soften… or rot.
Even if price drops begin, this signals to the home buyers they can continue to wait. They know more price drops will be coming (even when the seller has not realized it yet).
As more time passes, even with price cuts, the home now develops a compounding problem. “What’s wrong with it? Why has it been on the market for so long?”
A high number of “Days on Market” can lead even newly interested buyers to avoid the home, regardless of price, out of doubt or fear of an unknown issue.
Repeated price cuts also suggests to buyers that the seller is willing “to make a deal.” So when buyers finally do decide to make an offer, they will often make a very low offer, genuinely expecting the seller to continue price cutting.
Over time, multiple price drops signal that price cuts are (finally) acceptable to the seller, so buyers will expect another big price cut before they buy. And the seller has themselves to blame for the home not selling, as they repeatedly helped train the buyers to think this way.
Even in markets with a large number homes that are not selling, many buyers can and will wait until the market prices adjust downward.
Sellers who believe they are smarter than the market (that is, smarter than the buyers) often win the “prize” of keeping their house (and its associated expenses) for even longer.
How To Get a Home Sold
There are many factors that can help sell a house quickly and for a satisfactory price.
The key is that, when all things are considered, the home is directly marketed to the correct potential buyers and the price makes this house one of the best values in that neighborhood.
If you use a real estate agent, don’t just pick a friend or a friend-of-a-friend. Evaluate them. Find out how they really will market the home. See if they know who the likely buyer will be AND how to reach them. Your agent should have a process, a success history, and be able to communicate all of this very clearly.
Forget the emotional “logic” of house pricing. Use current market data about SOLD homes (not list prices) to set a price the buyer will believe is reasonable.
Want a higher price for your home? Then do real improvements to increase the real and perceived value. Make sure the home and yard is in great condition, clean, well-staged, smells great, and feels bright. Be sure the right buyers know all this through accurate and truthful marketing. Hire an agent who can target market and is up-to-date on marketing techniques.
Even when done right, finding a home buyer for your home can take some time. Increase the odds of a timely sale by pricing appropriately and marketing directly to the right buyers.
Greater Challenges when Selling a Lake Home
Niche property, such as lake real estate, can make the market exposure and pricing challenges become even more obvious. The buyers for such property are rarely local, so exposure to the right buyers in other cities and states is critical.
Furthermore, lake home and land values vary more than in typical residential real estate markets. This makes it very hard for home owners (and inexperienced lake agents) to determine the correct marketable price.
If you have a lake home or land you are simply considering selling or your home is not selling, you may need more expert help. The nation’s largest lake-focus real estate company, Lake Homes Realty, has agents in many lake markets. These lake real estate agents and brokers can give you market-specific advice and expert guidance.
A Lake Homes Realty agent can also help you determine if now is a good time to sell and provide unique information about the current market price expectations. They have access to technology to help your home be found by buyers from other cities and states (as many buyers for lake real estate are not local). You can learn more at Selling a Lake Home.
Whether a home is located downtown, in the suburbs, in a rural market or in a specialty niche like lake real estate, the reasons a home does not sell are rarely complicated. The right buyers have to know about it AND the property has to be priced within the market’s current and real expectations. Period.
Trying (or rather pretending) to sell otherwise is usually a waste of time and, typically, money.
According to the FBI, property crimes are decreasing – possibly due to better home security. The rate of burglaries in an area drop when people take certain low cost home security precautions.
To ensure that your home security is top-notch, follow these low-cost tricks.
Light Up Your Home
A home that is well lit is harder to maneuver around unseen. Areas with fewer dark hiding spots are less likely be a target for burglars.
Installing motion detectors on the outside of your home deters thieves by giving the idea that someone is home. Additionally, indoor lights can be used as a deterrent when on a timer.
Indoor lights simply plug in to the timers to add an easy, low-cost home security feature.
Keep Your Yard Nice
While you are gone it is important to give an appearance that people are home.
Consider hiring a friend, family member, or company to ensure that your yard is taken care of while you are gone.
Overgrown bushes provide thieves with a place to hide during a burglary. Keeping bushes properly trimmed eliminates such opportunities.
Think About Your Doors
A door that has a handle lock is a very easy mark for a thief with a credit card. They are able to use simple flat objects to break into your home.
Installing a deadbolt lock increases the difficulty of breaking in through the doors. Most deadbolts ensure the use of a key to unlock a door.
Secure the Keys
When going out of town, make sure that you do not leave an emergency key in any obvious location such as fake rocks or under door mats.
For the best homes security do not leave a key hidden outside.
Provide a trusted person with a key while you are gone to check mail and take care of other household chores.
Also consider investing in an electric door lock. These are equipped with keypads on which those wishing to gain entrance to a home must input a code.
Watch the Windows
Windows are the weakest of security points in a home, especially when left open or unlocked. Ensure that all of the windows are closed and locked before you leave.
Covering the windows with curtains keeps others from being able to see inside. When intruders cannot see inventory in the house, they are deterred from breaking in.
Window coverings will also keep them from knowing if someone is really in the home or not.
Hide Expensive Inventory
Put your jewelry box in the closest and hide anything else that is light and valuable. This will decrease the risk of thieves breaking in and finding your valuables.
While these tips decrease your risk of having a break in, it is also necessary to avoid posting your vacation location on social media platforms.
Have you ever needed to sell your home while buying a new one?
This happens often when your family outgrows your house or when you or your spouse changes jobs and moving to a new city is necessary.
Recently, USAToday.com featured a Nerd Wallet article by Hal Bundrick which shared tips from Glenn Phillips, CEO at Lake Homes Realty, and several other prominent real estate experts.
In the article, Phillips describes the process of buying and selling at the same time is “twice the adventure.”
“Be aware of the market,” he encouraged. ” Typically when it is easier to sell, it is hard to buy. And vice versa. Know which market you’re in, then work on the hardest part first.”
Think snowmobiles, ice skating, skiing and other outdoor activities if that’s what people tend to do in your area during that time of year.
For those in a warmer climate, snowbirds looking to escape the bitter cold, experience the natural beauty and local wildlife, and just get away from it all, will probably be your demographic.
Provide Valuable Information
Since the Internet, we have access to all kinds of information, and this is where the majority of people will start their search for a rental.
People will research all available options, so make sure you have as much information available about your property.
When it comes to marketing your vacation lake home, take a few minutes and make a list of all the things that people can do around that area in the winter time.
For instance, if bird watching is popular, provide a list of birds that are local, and include the best areas to see them.
Other examples of local activities and attractions could include local hunting lodges, boat rentals, marinas, fishing guides or anything else that would be of interest for potential renters.
List the Rental As Many Places as Possible
There are many rental websites available out there, and to maximize your exposure you should make sure you are listed on all of them.
Whether it is a niche rental website specifically for lake homes, or a more general site like Airbnb, create a detailed description of your property and provide plenty of quality photos.
Some of these websites charge to advertise, but many of them will only take a percentage off the back-end of a rental, so you only pay if the website provides a renter.
While you may be tempted to cut out the middle man and create your own website, keep in mind that you will never be able to compete with these websites when it comes to web exposure.
They will always be on the front page of all search engines; organically and in paid ads.
Be Active on Social Media
Everyone understands the power of Facebook and other social media platforms. So put them to good use.
Some social media networks focus on images, like Pinterest and Instagram. Spend a few minutes each day posting images and following other people who might be interested in what you have to offer.
Leave a link to your website, or a phone number, so people can get in touch easily.
Post images on Twitter, and use good hashtags to target people.
And, of course, Facebook is a great place to post and tag your photos. Find Facebook groups that have people looking to do activities in your area, and share your information.
Run Specials and Have Reasonable Rates
If you are in the South with no nearby ice skate or skiing, there probably isn’t a high demand in the colder months.
Recognize this, and lower your rates accordingly. You can also encourage rentals through specials such as, “Rent my home for 5 days, get the weekend free!”
Test out different promotions, such as a free weekend giveaway.
To enter the drawing require that people on social media like your page, and share your content. This will grow your future customer base and could lead to more steady booking in the future.
Encourage Feedback and Reviews
Follow-up with your customers after each stay, and find out about their experience.
If they had a positive experience, politely request that they provide an appropriate review of your lake home on the website on which they found it.
If they do give you a 5 star or glowing review be sure to send them a thank you card, or even a small token of your appreciation, such as a small gift card.
If they had a negative experience, hopefully they will have contacted you during their stay and given you a chance to remedy the problem.
If not, apologize, let them know you will be fixing whatever they experienced immediately, and actually follow through.
Keep it Current
Keep your photos on rental websites and social media-up-to date.
Yes, your carpet was absolutely gorgeous 5 years ago, but now it is faded and frayed.
Putting out the 5-year-old picture may get your more rentals, but you immediately lose their trust and any future business. Keep your pictures up to date and all of your descriptions honest.
Pass the Buck
Most areas will have real estate or rental agencies who will handle the entire process for you, but at a cost.
This can be a great option for anyone who doesn’t have time or just doesn’t feel like putting up with the headache of marketing, renting, cleaning and maintaining the property.
These are just a handful of ways to help market your lake home and keep it rented during the winter.
If you’d like to share any strategies that have worked for you please post in the comments below!
You’ve found the lakeside home of your dreams. You put in a bid on it, but the next thing you know you’re in a bidding war for the home. How does this happen? What should you do next? Perhaps more importantly, what shouldn’t you do next? Here are a few tips to help you out if you find yourself in the middle of a bidding war.
Bidding wars are most common in popular areas or cities, but can also happen on lakes which often have limited inventory.
As the economy recovers in areas where properties are scarce, it’s harder to find desirable homes. With reduced inventory comes increased competition, hence the bidding war.
Now, here are some tips to help you get the home you want.
1. Do your homework and hire an experienced real estate professional. You will want someone who is familiar with not only the area, but the lake in particular. Their knowledge of the local market, real estate regulations, and the overall process will be invaluable throughout the experience.
2. One tactic that can get you ahead of the competition is to get your loan pre-approved. Pre-qualification is not the same thing, as it just means you could get a loan for a given amount. Pre-approval, on the other hand, means you have the finances ready. So when you make an offer, you can pay for the home.
3. Another piece that can help you is if you have a significant down payment. Having that cash on hand shows that you are a serious buyer, and puts you ahead of the potential buyers who are not as financially set. Your offer should be firm, and your best one. If it is, the seller will be more likely to think of you first.
4. If you have done your research on homes in the area, you know what similar homes have sold for, so you can put in an accurate bid. It keeps you from low-balling, or from coming in too high.
5. When you make your offer, try to keep out any extraneous restrictions or requirements. Those can slow down the process and frustrate the seller, putting your offer at the bottom of the list. If there are legitimate things you need to have addressed, like repairs to the home, that is a different matter.
6. That said, you should have a proper inspection conducted on the house that is thorough enough to check all structural issues and things like plumbing and wiring. That can help keep you from looking at properties that will need much work done. It would be best if you planned on paying for this yourself and not put that cost onto the seller.
7. Come back to the home after doing your first walk-through to see if you still love it. It could even be at a different time of day to check how the light looks in the evening, or what that brown paint does on a rainy day. This step helps you be rational about your bid instead of getting swept up in the emotion.
8. Have your agent find out from the seller what the magic trigger is that would make them close now. Is it a matter of changing the closing date? Should you include closing costs to help the seller out? What is the key motivating factor for the seller to complete the sale?
9. Don’t get caught up in a bidding frenzy that takes you out of your budgeted range. Stay calm and logical. Do your best to keep your emotions in check.
It takes some strategizing, and a great real estate agent will prove invaluable, but you can be successful in a bidding war, and come out ahead with the home you have always wanted.
As a homeowner, one of the best real estate investments you can make is in waterfront property. Homes on the water make excellent retirement or vacation homes because of their location and natural beauty. They also present special challenges though when it comes to endangered or protected animal species.
Before deciding to purchase a home (lakefront or not), one of the most important things you must do – one that buyers often forget – is to speak to the homeowner’s association (HOA) before buying.
The homeowner’s association is the organization that sets the regulations and rules for the community. Regulations and rules that often affect what you can and can’t do with your property.
Because of this, the following are a few questions that you should be sure to ask the local homeowner’s association before deciding to purchase any new house:
1. What are the rules?
You won’t want to break any rules simply because you don’t know what they are. Not to mention, it’s good to know what the rules are up front in case they end up restricting you from doing something that you wanted to do.
For example, some homeowner’s associations won’t allow you to build any additional structures onto your property. Such a restriction would be problematic if you were looking to add a deck, patio, or porch area.
There are smaller rules to be on the lookout for as well, such as whether you’re allowed to have pets. What a disaster it would be if you bought a home only to find out you’re not allowed to keep your dog there! Be sure to take a look at the list of restrictions that the homeowner’s association has put into place.
Somecommonly covered guidelines in homeowner’s association rules and regulations include:
The home paint color
The ownership of pets
Where you are allowed to park
Whether you can build decks or patios
Whether you can run an at-home business
What type of landscaping you’re allowed to do
Whether you can have satellite dishes
How high your fence can be
Whether you can have a fence on your property
Whether you can put up mailboxes, flags and other items in your yard
2. How much are the dues?
If you live in a neighborhood that has a homeowner’s association, then you’ll have to pay dues. These dues vary from one homeowner’s association to another in both cost and how often payment is due. Typically, dues are paid monthly, quarterly, or yearly. As soon as you become a homeowner within the community, you’ll be legally obligated to pay these dues. It’s important to figure out what the dues are ahead of time so that you can better plan out your financial arrangements.
3. How often are the dues increased?
Find out how often HOA dues are increased and by how much. If dues don’t change often – and when they do they are by a small amount – then you won’t have to worry much. However, if the dues regularly increase and by a large amount, then this is a factor you need to take into account when deciding on the purchase of the home.
4. How much are the assessments?
You’ll also have to pay for assessments that cover work such as snow removal or trash collection as well as for maintenance for community areas, such as playgrounds or pools. Just like knowing what your association dues will be, knowing how much the assessments will cost is integral to figuring out your finances and whether or not you can afford to live within a specific community.
5. What is the current state of the homeowners association?
Find out if there are any issues between the HOA and any of the homeowners. Are there a lot of ongoing issues between them? Has there been a history of litigation or other issues? You may not want to deal with an HOA that has a bad reputation amongst residents in the community. Ask the homeowner’s association if you can see notes on a previous meeting. You can often tell by the notes whether they are picky about the rules or lenient. Be sure to walk around the neighborhood and ask some of the homeowners for their opinion on the homeowner’s association as well.
6. What do their reserves look like?
Ask to see financial statements for the last few years as well as the current and future budgets. You should look at the reserves for things such as sidewalk repair as well as at the maintenance contracts to make sure that they are reasonable. You’ll want to make sure that the dues and assessments that you will pay will be put to good use, after all.
These are some of the things that you’ll want to ask the homeowner’s association before you make the final decision to purchase a new home. Neglect speaking with them and you could end up having some real issues in the future as a homeowner within the community.
Buying a home can be exciting. It can also turn normally sane people just a little nuts. Ask any real estate agent.
While the average real estate professional may handle several home sales each and every month, the average consumer only buys a few homes in his or her lifetime.
It’s understandable that the process can be unfamiliar and thus, stressful. However, there are a few things you’ll want to avoid doing if you want to stay on the good side of your real estate agent.