Chance Gates' Blog

http://members.houselogic.com/articles/7-home-owners-insurance-tips/preview/

By: Richard Koreto

Published: December 10, 2010

The new year is a good time to take stock of your home owners insurance coverage.

1. Make sure you can rebuild all, not just part of, your house

Don’t make the mistake of assuming that just because your home’s value has gone down that the cost of materials and labor have gone down, too. For example, home construction costs rose 1.3% from January 2009 to January 2010, according to construction cost consultants Marshall and Swift/Boeckh, even while many homes were falling in value. Make sure your home owners insurance pays you for full rebuilding costs in the event of a disaster.

2. Check your flood insurance

The National Flood Insurance Program can help by making affordable flood insurance available, but there are limits to how much coverage you can get, and it isn’t available everywhere. In addition, the NFIP has only been approved for a series of short-term renewals. (That is, Congress has been extending its provisions for only short periods and has not committed to making it permanent.)  Keep an eye on the NFIP to make sure the program remains in force.

If you can’t participate in NFIP or need more extensive coverage, see if you can buy flood insurance from your existing carrier. Flood insurance rarely comes with a standard home owners policy.

3. What’s new in your life?

If you’re recently divorced, and you got the house, make sure your ex-spouse’s name is off the policy. Did you build a playground for your children? Install a swimming pool? These may change your liability needs. Talk to your agent and compare your life status this year with last year’s to update your home owners insurance.

4. Maybe your valuables are worth more

Your art, jewelry, antiques, and other collectibles may have appreciated in value over the years. If your home owners insurance policy doesn’t have accurate values on these items, your company may not reimburse you for the full value in the event of fire or other home disaster.

5. Tally up any home improvements

Have you made any renovations or additions to the home, such as an expanded garage, new bathroom, or home theater in the basement? Your house may now be worth more and your home owners insurance needs to reflect that. Create a home inventory video and keep it in a safe place outside the home.

6. Give your trees the once-over

Hire an arborist to look at the trees on your property, and check with your home owners insurance agent to see if your policy covers you if one of your trees falls on the neighbor’s car. An arborist can tell you if your trees are healthy and advise whether they should be removed or trimmed.

7. Watch the nickels and dimes

Hunt for any special discounts that can reduce your home owners insurance premiums. For example, you may be eligible for a discount if you have an automobile or valuable articles policy with the same company has your home owners insurance policy.

These home features can also give you discounts on your home owners insurance–but only if your insurer knows you have them:

• Burglar or fire alarms

• Gated community patrol service

• Storm shutters

• Temperature monitoring system to protect against freezing, connected to a central station alarm

• Permanently installed, electrical back-up generator

Richard J. Koreto, a freelance writer, is the former editor of several professional financial magazines and the author of Run It Like a Business, a practice management book for financial planners. He and his wife own a pre-Civil War house in Rockland County, N.Y., and a country house in Martha’s Vineyard.

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As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.comhttp://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable For a free copy of my report   “5 Steps For Reno/Sparks Homeowners To Prevent Foreclosures” go to my about page http://chancegates.com/about and ask for more information on preventing foreclosures. or   to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney

Image by Nicholas_T via Flickr

RISMEDIA, November 15, 2010–As winter sets in, there’s nothing better than hibernating on the sofa with a good book or classic film. But having this spoiled by a home emergency can add a real chill to your winter warmth, especially if it’s preventable.

We’re all familiar with the issues winter forces upon us: the boiler breaking, pipes bursting or a break-in, which can make the harsh effects of winter far more severe.

Planning ahead now can help protect you against these potential problems. Here are some simple tips from John Lewis Insurance to prevent home emergencies from happening. Many of them are relatively quick and easy to do.

Quick fixes:
* Change the battery in your smoke detector or install them if you don’t have any – it’s a simple task that can save your life. And make sure you test them regularly.

* Inspect your roof for missing or cracked tiles. If repairs are needed, get them done as soon as you can.

* Vacuum the coils on the back of the fridge. This will help your fridge work more efficiently and will help you save money on your power bills.

* Turn your mattress regularly. We all spend more time in bed over winter – turning your mattress regularly will extend its life and ensure a more comfortable night’s sleep.

* Get your boiler serviced. If you haven’t had your boiler serviced this year, now is the ideal time to ensure it’s in good working order.

More time needed:
* Oil your power tools and if you have a gas-powered lawn mower, drain the gas from it. They will survive the winter better and be in top shape for spring.

* Check all taps for leaks and locate the main pipe to the water mains. Pipes can burst if they freeze so if you leave home for more than a few days, ideally you should turn off the water and drain the pipes.

* Bleed your radiators by opening the valve until water appears – they will work more efficiently.

* The cold doesn’t deter burglars so be sure to inspect your locks and any burglar alarms – and consider using lighting timers for that lived in appearance.

Worth the effort:
* It may take a day or two to sort out but cleaning your gutters properly will guarantee they won’t get blocked or overflow.

* Trimming back trees is always recommended in the autumn.

* Clean out the garage before anything is stored that can get spoiled by the cold.

Finally, preparing an emergency kit is a great way to make those small and big emergencies as easy to handle as possible. This is what you should have at hand’s reach:

* A small tool bag containing a torch, a roll of insulation tape, spare fuses, spare batteries and a screwdriver

* A radiator key

* A fire extinguisher if you have one, checked or recently replaced

* Important telephone numbers like the police, a trusted plumber, electrician, etc

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.com or  http://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney. For a free copy of my blog titled  “5 Steps For Reno/Sparks Homeowners To Prevent Foreclosures” go to my about page http://chancegates.com/about and ask for more information on preventing foreclosures.

Image via Wikipedia

By Robert Powell

RISMEDIA, November 13, 2010–(MCT)–There are seven keys to a lot of things in life. There are seven steps to heaven and seven types of intelligence and seven habits of effective leaders.

Now we have seven steps to retirement planning courtesy of the Society of Actuaries, which just released a 64-page report with the not-so-consumer-friendly title “Segmenting the Middle Market: Retirement Risks and Solutions Phase II Report.”

“Retirement financial planning requires a methodical approach that identifies and quantifies each important component that affects the asset accumulation, income management and product selection/investment decision processes,” according to the report, which was sponsored by the society’s committee on post-retirement needs and risk and written by Noel Abkemeier of Milliman.

Not surprisingly, Abkemeier says this approach is especially important for middle-income Americans who likely have less than $100,000 set aside for retirement. So what are those steps?

1. Quantify assets and net worth.
The first order of business is taking a tally of all that you own — your financial and non-financial assets, including your home and a self-owned business, and all that you owe. Your home, given that it might be your largest asset, could play an especially important part in your retirement, according to Abkemeier.

And at minimum, you should evaluate the many ways you can create income from your home, such as selling and renting; selling and moving in with family; taking out a home-equity loan; renting out a room or rooms; taking a reverse mortgage; and paying off your mortgage.

Another point that sometimes gets lost in the fray is that assets have to be converted into income and income streams need to be converted into assets. “When we think of assets and income, we need to remember that assets can be converted to a monthly income and that retirement savings are important as a generator of monthly income or spending power,” according to SOA’s report. “Likewise, income streams like pensions have a value comparable to an asset.”

One reason retirement planning is so difficult, according to SOA, is that many people are not able to readily think about assets and income with equivalent values and how to make a translation between the two. Assets often seem like a lot of money, particularly when people forget that they will be using them to meet regular expenses.

Consider, for instance, the notion that $100,000 in retirement savings might translate into just $4,000 per year in retirement income.

2. Quantify risk coverage.
Take stock of all the insurance that you might already have or need — health, disability, life, auto and homeowners. In addition, consider whether you might need long-term-care insurance, especially in light of the cost associated with long-term care and the very real possibility that you might need some assistance at some point in your life.

According to the report, those households with limited assets — say, less than $200,000 in financial assets — may need to spend down their assets and rely on Medicaid, while those with more than $2 million in financial assets can cover long-term-care costs out of pocket. But those households with assets in between $200,000 and $2 million should include long-term care insurance in their plan, according to the SOA. And the best time to buy such insurance is in the late preretirement years.

The SOA also notes in its report the possible need for life insurance, the death benefit of which can be used for bequests or to provide income to a surviving spouse. Life insurance premiums can be expensive if you’re getting on in years. That’s why the SOA report suggests that you continue “existing preretirement coverages during the retirement period.”

Of note, there will soon be many policies that combine long-term-care insurance with life insurance and annuities.

3. Compare expenditure needs against anticipated income.
The thing about retirement is that it’s filled with expenses, which according to the SOA report “can be thought of as the minimum needed to sustain a standard of living, plus extra for nonrecurring needs and amounts to help meet dreams.” What’s more, those expenses are likely to change over time.

So to make your retirement plan work in reality, you first have to make it work on paper. You need to compare whether you’ll have enough guaranteed income to cover your essential living expenses, including food, housing and health-insurance premiums, at the point of retirement and then compare what amount of income you’ll need to cover your discretionary expenses, such as travel and the like (if those are indeed what you might consider discretionary expenses).

Your guaranteed sources of income include Social Security and possibly a pension and annuity. Not so guaranteed: earnings from work and income from assets such as capital gains, dividends, interest and rental property.

No doubt, as you go about the process of matching income to expenses, you might find yourself having to revise your discretionary expenses, especially if there aren’t enough guaranteed sources of income to meet essential expenses.

4. Compare amounts needed in retirement against total assets.
So here’s where your math skills (or your Google search skills) might come into play. Besides calculating your income and expenses at the point of retirement, you need to figure out whether your funds will last throughout retirement. In other words, you need to calculate the net present value of your expenses throughout retirement.

Now, truth be told, finding the present value of your expenses is a bit tricky, especially since there are many factors that can affect how much is really needed, including the date of your retirement, inflation rates, gross and after-tax investment returns, and your life expectancy.

But the bottom line is this: If, after crunching the numbers, the present value of your expenses is greater than the present value of your assets, you’ve got some adjustments to make. And the good news is that there are plenty of adjustments that you can make.

You could, for instance, delay the date of your retirement. You could return to work or work part-time. Those actions might be enough to offset the difference. In addition, you might consider trimming your expenses or consider a more tax-efficient plan to draw down income.

5. Categorize assets.
The SOA also recommends that assets be grouped to fund early, middle and late phases of retirement. Thus, assets for early retirement should be liquid, while mid-retirement assets should include intermediate-term investments such as laddered five- to 10-year Treasury bonds, Treasury Inflation-Protected Securities, laddered fixed-interest deferred annuities, balanced investment portfolios, income-oriented equities, variable annuities and the like. And late retirement assets include longevity insurance, TIPS, balanced portfolios, growth and income portfolios, laddered income annuities, deferred variable annuities and life insurance.

6. Relate investments to investing capabilities and portfolio size.
This should come as no surprise. The SOA recommends that you invest only in things that are suitable, relative to your risk tolerance, investment knowledge and the capacity of the portfolio to accommodate volatility. “In short, a retiree should not invest beyond his investment skills, including those of his adviser,” the SOA report stated.

7. Keep the plan current.
This too might be a bit obvious, but retirement-income plans must not be built and set on a shelf. The plan is a point-in-time analysis that must be reviewed on a regular basis.

Consider, for instance, just some of the things that could change in one year, according to the SOA. Health status or health-care costs could change; your life expectancy might change; your investment returns and inflation might be quite different than your assumptions; and your employment status and expected retirement date might change.

What’s more, you might suffer the loss of a spouse through death or divorce, or perhaps you might not be able to live independently any longer, or perhaps you might need to sell your house or unexpectedly care for dependents, or change your inheritance plans.

Said Abkemeier: “You want to keep your plan current. You need to tie everything together and go back to the start of the process each year. You want to enjoy retirement, but you don’t want to be at rest.”

(c) 2010, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.com or  http://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney. For a free copy of my blog titled  “5 Steps For Reno/Sparks Homeowners To Prevent Foreclosures” go to my about page http://chancegates.com/about and ask for more information on preventing foreclosures.

RISMEDIA, September 3, 2010– With the U.S. economy facing the lowest home sale statistics in fifteen years and home values continuing to slide in many regions, it’s not surprising to hear that housing trends point towards a large percentage of American homeowners looking to improve and maximize their existing property investment versus buying a new home. When deciding to undertake a remodeling project however, there are several invaluable tips to keep in mind as you discuss your home make-over with potential contractors.

Through advice and stories shared by both contractors and consumers, StageofLife.com, a blogging resource for homeowners, discovered 10 important tips on how to find a trustworthy home remodeling contractor to help ensure the right person or company is hired for your next home improvement project.

Tip #1: Does Your Contractor Have Proof of Insurance?
Ask the contractor to have his insurance company mail or fax a copy of his current contractor insurance card to you. If the contractor can’t do this – stay away. Why? If there is an accident at your home, you are then liable. This also applies to any sub-contractor or employee that the contractor may use – those individuals should have active insurance cards faxed or mailed to you as well.

Tip #2: Did You Check References and See Photos?
Ask for at least three references – with two of them being for the same type of project you are planning – and then call the references. Additionally, ask the contractor to provide photos of previous work, especially for the same type of project. If he produces lawn and garden photos and you’re planning a bathroom remodel, you may want to check out another contractor.

Tip #3: Does Your Contractor Take Debit or Credit Cards?
Besides your ability to earn a few points, bonus miles, or cash back on your project, a good sign that a contractor is financially savvy and has a bank behind his business is his ability to take debit and credit cards. This doesn’t just apply to big contracting companies. Many small, one-man shops will take cards if they have a good relationship with their business bank or credit union.

Tip #4: Manners and Appearance?
If the contractor drove his vehicle to your home to give you an estimate, take a look at the way he keeps the equipment and vehicle. Are things clean? Neatly arranged? If not – that’s a big warning. The way a contractor treats his tools is a direct connection to how he’ll treat your home. During the initial meeting, does the contractor present himself in a professional way? Do you feel comfortable around him or his employees? They will be working in your home after all.

Tip #5: Clean Up Policy?
Ask about the clean-up policy. For example, if your home improvement is a multi-day project, will the contractor be cleaning up at the end of every day or will he leave the dust, wood chips, and other mess laying there for day #2? The more mess in your home – the more it gets tracked around. Many homeowners find themselves with mouths gaping wide after the contractor has left for the day and their floors and home are dirty and messy around the project area.

Tip #6: Will the Contractor Put It In Writing?
Is your contractor willing to put both his bid and the scope of work in writing? If not – walk away immediately. You’ll be surprised how many homeowners have been duped by contractors who verbally tell you what’s included in their scope of work, but will then, in the middle of everything, require extra money to finish the remodel, thus holding you hostage with an uncompleted home project.

Tip #7: Availability?
Can the contractor get the job done in your timeline rather than his timeline? There’s nothing more frustrating than if a contractor tells you that a job will be done by a certain date and then it isn’t . On the flip side, if you can’t find a good contractor that’s willing to commit to your timeline, your expectations may be too high and you may need to adjust your timeline.

Tip #8: Does Your Contractor Use “Subs?”
Does your contractor plan on doing everything himself? Or will he “sub out” work to the “trades?” For example, if you are remodeling a bathroom, you may need a plumber, electrician, and carpenter. It’s okay if the contractor subs work out to these specific trades – it shows he wants the work done right.

Also, it’s fair to say that you can expect your contractor to make money off the trades, or other sub-contractors, by marking up those quotes for the project. That is a standard practice to help the general contractor recover costs in the time it takes to manage the schedule. If you don’t want to spend the extra money on your contractor marking up the trade quotes, then you should prepare to project manage the remodel yourself, but know this may limit your options on contractors willing to work with you.

Tip #9: Quoting & Billing Procedure?
Ask the contractor about his quoting procedure. Will it contain general information, or will it be specific? For example – most contractors will charge you for a fuel surcharge, material up-charges, waste removal, labor, etc. Some will show you these exact costs in a line item invoice, but others roll it up into one big bill. How much detail do you want? You should clarify that with your contractor upfront.

Also – what is the payment or billing policy? Is money required upfront? If so, go back to #1 and #2 above to make sure you have the contractor’s references checked and have a copy of his contractor’s insurance.

Tip #10: Did Your Contractor Get the Permits?
Ask your contractor to take care of the permits. Although permits cost you money, the inspection process is meant to protect you from poor workmanship and to make sure that everything is being built to code.

By following these 10 tips for hiring a home contractor, you’ll feel more confident that you’ve found the right contractor for your remodeling job.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  Please feel free to use my back door to the MLS and search house available in the Reno/Sparks and all Northwest Nevada neighborhoods.  I can be reached by email @  chance at ballard-company.com or http://www.myspace.com/chancegates

RISMEDIA, June 18, 2010—E & O insurance is certainly nothing new for Madison, Wisconsin-based HSA Home Warranty. In fact, with its own in-house insurance division since 1986, HSA Insurance Services, risk management and liability insurance is built right into HSA’s corporate structure.

“Back in the day, when we first started offering E & O insurance 25 years ago, it was something of an unknown entity,” says HSA Chief Corporate Development Officer, Gary Lombardo. “We sold home warranties on the basis of it being part of a risk management program. If the warranty didn’t do an adequate job of deflecting lawsuits, you had the safety net of E & O insurance.”

While risk and E & O insurance may have been downplayed during the market boom of the early 2000s, in today’s tumultuous market, risk is at the center of the conversation.

“Today, there’s more risk than there has been in the past 10 years,” according to Lombardo. “In the era of short sales and REOs, there are a lot more activities that create more liability than there’s been in the past. Since HSA has an insurance agency, we have the ability to consult our clients through these more turbulent times when agents and agencies need to protect themselves that much more. We are better poised to address these issues than most of our competitors because we are only one of two companies that has its own insurance agency. At HSA, this has always been a part of our corporate structure.”

At the helm of HSA’s in-house insurance operation is James Candler, president of HSA Insurance Services. With 21 years’ experience in professional liability insurance and real estate liability insurance, Candler is quite familiar with the impact of today’s market and its implications for insurance. In the current real estate climate, says Candler, insurance carriers have become more stringent.

“Carriers perceive more risk in the market building up because of the financial crisis, largely, and are becoming more conservative,” he explains. “Not only do we write insurance for real estate agents, but also for property managers, appraisers and mortgage brokers. Things have been especially tough [for those professionals]. On the real estate side, if it’s a company that’s got some blemishes, carriers are often not willing to give the best pricing…if [they are willing to insure those companies] at all.”

That said, the need for real estate professionals to have effective liability coverage is essential in the current, litigious real estate environment. According to Lombardo, in today’s market, brokers and agents need to review their insurance coverage in great detail to ensure they are prepared.

“It became clear to us how many clients were unaware of the risks their policies didn’t cover,” he explains. “Our industry is under siege right now. We are trying to refocus agents on the big-picture role that warranty and E & O insurance plays in their lives and their careers and how this should be more important to them than the small fee they get for selling the warranty. In recent years, in many of the agent’s minds, the value of the home warranty was measured by the per-transactional remuneration. Chances are, though, they would spend more money on a lawsuit than they receive as an administrative fee. It’s the only over-riding risk management tool they have to shield them from post-litigation liability.”

According to Candler and Lombardo, the risk climate of today’s market is presenting unique insurance issues in terms of short sales and bank-owned properties.

“Many banks are requiring our clients to affiliate with the bank in order to sell these types of properties,” explains Candler. “Banks are requiring real estate firms to carry higher limits and they are trying to get these firms to name the bank as an additional insured on their policy. But agents need to know that when they name an additional insured on their policy, they are then sharing that policy value with the bank. While banks are looking to protect their interests, they really don’t need to be on the agent’s policy, because if the agent makes a mistake, the bank could bring suit against the agent or the real estate firm. If they’re on the agent’s policy, then they become a co-insured, and one co-insured cannot sue another.”

While Candler advises real estate agents to never add a bank to their liability insurance, he does strongly recommend that all real estate professionals make sure they have an adequate amount of quality insurance, despite the financial strain they may be feeling in today’s troubled economic environment.

“Many are focusing more on the money than on the value of protecting themselves from post-transaction litigation,” Lombardo explains. “When you look at the big picture, the cost is such a small percentage compared to the liability reduction we create for people. It’s hard to measure the costs of a lawsuit you prevented. And, more often than not at the brokerage level, if home warranties are being endorsed, they’ll reduce the E & O premium.”

While many agents and brokers are tempted to be led by price alone when buying insurance, Candler stresses that how the insurance company performs is more important. “We have the ability, through our strong relationships with our insurance carriers that if we have a claims issue, we can get to the right people immediately and resolve the problems for our customers.”

Candler recommends firms never buy a policy worth anything less than half a million dollars. “You need to purchase a limit that is realistic for your area,” he adds. “That is the biggest message we’re trying to get across. Money is sensitive, but you don’t want to skimp on what you’re buying.”

According to Lombardo, in today’s real estate climate, seller’s E & O insurance is also gaining popularity. “We are in a cycle now where seller’s E & O insurance is making a resurgence,” he explains. “This provides the seller coverage in the event they are sued.”

In addition to promoting effective liability coverage, Candler stresses the importance of taking the proper risk-reduction steps throughout the real estate transaction.

“From a risk management standpoint, E & O is always going to be there as an umbrella, but real estate agents need to educate themselves to make sure they are providing the proper disclosure and making inspections and warranties available, and communicating all the information they can to buyers,” says Candler. “There are so many properties out there being sold as-is—agents need to disclose what they know about the property’s condition but also should disclose the homeowner’s financial condition and whether the lender has approved the short sale. All of these steps are necessary to keep themselves out of litigation.”

For more information, visit www.onlinehsa.com.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

The Federal Housing Administration will raise the minimum down payment for its least credit-worthy borrowers, the agency announced Tuesday.

The change is among a number of major changes the FHA is making to ensure its long-term financial soundness.

Borrowers with credit-rating scores below 580 will be required to put down at least 10 percent. Those with a credit score above 580 will be able to continue to put down only 3.5 percent. The changes are intended to shore up the agency’s finances.

The FHA also will increase its upfront mortgage insurance premium from 1.75 percent to 2.25 percent. The agency is expected to seek congressional approval to raise annual mortgage insurance premiums, paid by borrowers over the life of the loan, above the current 0.55 percent maximum. The amount it will seek has yet to be announced.

For more information on the FHA changes, inlcuding a summary of all changes, visit

REALTOR.org.

Chance Gates does welcome any questions or comments on the Reno/Sparks real estate market or on any articles that may be posted.  Send your  emails  to  chance at ballard-company.com

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• Harder to get an Uncle Sam mortgage (money.cnn.com)

Buying or selling a home (or other piece of real property) usually involves the transfer of large sums of money. It is imperative that the transfer of these funds and related documents from one party to another be handled in a neutral, secure and knowledgeable manner. For the protection of the buyer, seller, and lender, the escrow process was developed.

As a buyer or seller, you want to be certain all conditions of sale have been met before property or money change hands. The technical definition of an escrow is a transaction where one party engaged in the sale, transfer or lease of real or personal property with another person delivers a written instrument, money or other items for disbursement upon the happening of a specified event or the performance of a specified condition.

Simply stated, the escrow holder impartially carries out the written instructions given by the principals. This includes receiving funds and documents necessary to comply with those instructions, completing or obtaining required forms and handling final delivery of all items to the proper parties upon the successful completion of the escrow.

The escrow must be provided with the necessary information to close the transaction. This may include loan documents, tax statements, fire and other insurance policies, title insurance policies, terms of sale and any sell-assisted financing, and requests for payment for various services to be paid out of escrow funds.

In the transaction is dependent on arranging new financing, it is the buyer’s or his agent’s responsibility to make the arrangements. Documentation of the new loan agreement must be in the hands of the escrow holder before the transfer of the property can take place. A real estate agent can help identify appropriate lending institutions.

When all of the instructions in the escrow have been carried out, the closing can take place. At this time, all outstanding funds are collected and fees such as title insurance premiums, real estate commissions, termite inspection charges are paid. Title to the property is then transferred under the terms of the escrow instruction and appropriate title insurance is issued.

Payment of funds at the close of escrow should be in the form acceptable to the escrow, since out-of –town and personal checks can cause days of delay in processing the transaction.

As a Reno/Sparks real estate professional I encourage all questions and comment on the Reno/Sparks real estate market or any article posted.  I can be reached by email at chance@ballard-company.com or http://www.myspace.com/chancegates

■ For FICO scores between 550-619

■ 3.5% down payment

■ 30-year, fixed-rate FHA financing

■ Purchase and refinance

■ Gifts from close relatives acceptable

■ Job-loss insurance until 2011†

■ First-time homebuyers may qualify for up to $8,000 in

Federal tax credits‡
As a Reno – Sparks real estate consultant I encourage any questions or  comments on the Reno – Sparks real estate market or about any of the articles I post.  You can email me at chance@ballard-company.com

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• Qualify for a loan two years after a bankruptcy
• Qualify for a loan three years after a foreclosure

• Conventional Fixed Rate Mortgages are set for a certain amount of time at a specific interest rate. The interest rate never changes, which means that your mortgage payment remains the same throughout the life of your loan except for fluctuations in property taxes and homeowner’s insurance. Fixed rate mortgages are usually not assumable and often have a prepayment penalty. Fixed rate mortgages are good for people who plan to own their home for a long period of time.
• Conventional Adjustable Rate Mortgages are set for a certain amount of time, but the interest rate changes over the lifetime of the loan. Usually the interest rate is a fixed for the first three or five years, but after that period of time the interest rate will rise and so will your mortgage payments. Adjustable rate mortgages are good for people who plan to stay in their home only for the amount of time that the interest rate is fixed.
• Hybrid Mortgages are similar to adjustable rate mortgages, but the fixed-rate time period is usually longer. For example, a hybrid mortgage may have a fixed interest rate for the first ten years and then the interest rate will increase. Hybrid mortgages are good for people who plan to spend many years in their home but know that they will eventually move into a new home.
• Jumbo Fixed Rate Mortgages are specifically for borrowers who are seeking a mortgage for $333,700 or greater. It is risky for a lender to finance a mortgage this high, so jumbo fixed mortgages are designed for large mortgages that are set for the lifetime of the loan, and the interest rate is usually higher than a conventional fixed rate loan.
• Balloon Mortgages are when a borrower makes smaller payments at the beginning of the mortgage and then pays off the entirety of the loan at a later date. This is good for people who know they will have a large sum of money in the future, or for people who need a lower payment now but expect to make more money in the future.
• Relocation Mortgages are available for people who need a loan to relocate to a new home while their existing home is for sale.
• Bridge Mortgages are similar to relocation mortgages; you can purchase a new home prior to the sale of your existing home. You will have a larger mortgage payment because you will pay for both homes until the existing home sells. However, if there is a home you want to purchase immediately and you are afraid that it will sell while you wait for your existing home to sell, then you can purchase the home with a bridge loan.
• Equity loans allow you to take a loan out on your home based on the existing equity percentage of your home.
• Self-Employed Income Mortgage Loans are available for people who are self-employed, and thus have difficulty showing proof of a steady stream of income.
• The VA’s Home Loan Guarantee Program for veterans is very similar to FHA loan programs. Veterans can get loans through the FHA to buy a home with no down payment, and get money to make home and energy-efficient improvements to their new homes.

These are just some of the many loans available for people who are looking to purchase a home through the FHA

Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.

Send all questions to chance@ballard-company.com

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Provides 100% loan to value financing for existing homes based on appraised value of the real estate.

Available to moderate-income rural households.  Property must be in a rural designated area.

No monthly mortgage insurance required.  One time gaurantee fee at closing, which may be financed above the appraised values.

Benefits:

Provides 100% loan to value financing for existing homes or new construction based on appraised value.

Available to moderate income rural households.  Property must be in a rural designated area.

Less up front cas to close requirements for this program than for  conventionally insured or FHA loans.

No monthly mortgage insurance required.  One time guarantee fee, payable to Rural Development at closing.

Fully amortized 30 year fixed rate loans.

No penalty for pre-payment.

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