Uncommonly Asked Questions How is Property Insurance Affecting the Cost of Home Ownership?
Obtaining property insurance is an important component to buying a home. Without it you cannot obtain a mortgage and without a mortgage, at least for most people, a home cannot be purchased.
Some of the reasons that can affect insurance costs, and at times turn-downs, are the credit worthiness of the buyer, the buyer's claims history or even that the buyer may have a certain breed of dog. There are also factors specific to the dwelling like knob and tube wiring, aluminum wiring or 60 amp service. As well as, there's age and condition of roof, galvanized plumbing and heating systems, mould or oil tanks. Any of these aspects can cause transactions to fall, result in delays or expensive retrofits. In the majority of cases, insurance can be obtained at what can turn out to be a substantial increase in cost.
We recommend a condition in the Offer to Purchase that gives the buyer time to research and satisfy themselves as to the potential cost of insurance for the property being purchased. According to insurance agents, however, they will typically commit to insurance only within 30 days from the closing date. Insurers call this the binder period. The recommended condition in the Offer in most cases has to be met prior to that 30-day period. It is, therefore, a way for buyers to educate themselves on the approximate cost of insurance.
A Taxing Effort
When you are considering buying a home, start by determining a monthly and/or annual budget. This might include things like probable mortgage payments, utility bills, home maintenance costs and of course, taxes. Every homeowner pays taxes. City and Regional governments assess property taxes and the money raised is used to run the local government and provide public services. Tax revenue often helps pay for public schools, infrastructure needs like bridges and roads, local libraries and police and fire protection.
How much you pay in property tax is determined by how much your property is worth. The tax assessment office, known as MPAC (Municipal Property Assessment Corporation) determines this amount. Once the market value of your property is defined, it is multiplied by the tax rate to determine what you owe.
The amount of property tax paid by homeowners can vary from municipality to municipality. That is why it is important to research what the tax rate is in the towns where you are looking to buy. Tax payments can run into the thousands of dollars depending on the value of the property and the municipal tax rate. Most homeowners pay their taxes along with their mortgage payments, but the payments may also be made quarterly or semi-annually.
Ask your buyer representative to give you a profile of the local taxes where you are looking. But do not assume that just because a municipality has a high tax rate that it has superior schools and other services. The efficiency and aptitude of the local government has a greater influence on those things than the tax rate.
And remember, government gives homeowners an avenue of recourse when it comes to property tax. Homeowners are allowed to contest the assessed value of their property, which could ultimately lessen the amount owed.
Hiring a real estate professional to help sell your home can make the transaction so much easier. He or she is there to handle things like marketing, pricing, negotiations and more. So deciding whom you will list your property with is a big decision. Here are some things to ask your potential representative.
The Big Picture – Ask the agent to give you his or her perspective on real estate in general--happenings in your marketplace and what he or she believes the role of the agent should be. Look for a philosophy similar to yours.
Experience - See how long the agent has been active in the profession but beware of any signs of complacency. Sometimes a "hungry" new agent can give you the kind of customer service you are looking for. If he or she has changed brokerages, don't be afraid to ask what prompted the move.
Word of Mouth – Once you are serious about signing with someone, ask for a couple of references or ask to see any testimonials they may have from satisfied customers.
Tech Savvy – Determine whether the agent is comfortable with Web and e-mail marketing. Many buyers use the Internet as their first resource for home shopping. You want an agent who is adept at online marketing.
Affiliation – If the sales associate is affiliated with an independent or national real estate company, find out about the benefits of that membership. For instance, CENTURY 21 sales associates have access to first-rate training, professional marketing plans, strategies and materials, and the power of an international brand name that attracts buyers. These things can really work for you during your home sale.