10 Questions to Ask Before Hiring a Real Estate Agent to Sell Your Home

What do you need to know when it comes time to sell your house? Maybe you’re ready to downsize after the kids have grown. Or perhaps you’re family is growing and you need more space. No matter the situation, here are 10 questions to ask before hiring a real estate professional to help you sell your home.

Why Work With a Real Estate Pro in the First Place?

The idea of putting up a “For Sale, By Owner” sign has obvious appeal because there’s no commission to pay. But most buyers themselves typically use agents and a buyer’s agent might hesitate or even refuse to show your property unless another professional is helping to make a deal happen.

“There are only two reasons why I show an FSBO: Either there is no other inventory available, or the price is ridiculously low,” said Bruce Ailion, a realtor with RE/MAX Greater Atlanta. “Many experienced brokers have been burned by an FSBO transaction where the seller did not pay the full, agreed commission, or any commission at all, to the agent who brought the buyer.”

It’s within a real estate professional’s self interest to spread such opinions, but it also reveals a big risk when going the FSBO route. Being guided by a professional, especially if you are selling for the first time, makes a lot of sense.

Is Your Real Estate Professional a Licensed Agent, a Broker or a Realtor? 

There’s a difference—in qualifications required and services offered—among agents, brokers and realtors, even though the terms seem to be used interchangeably.

  • Agents, also called associates, are a starting point for real-estate professionals who have passed all required real-estate classes, along with any state-mandated licensing exams.
  • Brokers have additional qualification requirements, but can also work as agents on their own.  
  • Realtors are members of the National Association of Realtors, who abide by association standards and practices, and agree to uphold a code of ethics.

Why Is Real Estate Licensing Important?

There are other positives to using an agent. Most of the reasons have to do with saving money. Specifically, agents can help you:

  • Keep your own emotions out of the bargaining process
  • Save time; it’s often time consuming to sell and buy property
  • Find a bigger pool of buyers
  • Weed out unserious buyers who are “just looking”
  • Analyze the positives and negatives of your property
  • Protect clients from lawsuits if something goes awry

Licenses also a certain amount of protection for consumers via authorities such as the Better Business Bureau. License requirements for real-estate professionals vary from state to state. While academic degrees are not necessarily required, they still can be helpful:

Completing a degree gives agents a solid foundation in the basics of buying and selling of real estate, allowing you to make more informed decisions about properties, mortgages, interest rates, and stay on top of the latest trends in the industry.

In addition, holding a degree often makes potential agents more attractive to real-estate brokerage firms.

Here’s a recent list of real-estate agent requirementsfor each state. 

How Long Has the Agent Been in Business?

Experience matters. It’s likely the more sales an agent has completed, the more they have learned about the business—what and how to do it, and what to avoid. Inexperienced agents might have more time to concentrate on selling your house because they haven’t stockpiled clientele. But they also haven’t been around the block (literally and figuratively) as much as you might like.

What Strategy Will the Agent Use to Sell Your Home? 

With occasional exceptions, there’s more to moving property than sticking a “For Sale” sign in the front yard (although that could be part of it). What is the strategy? Where and how frequently will your agent advertise? Is it appropriate to use direct mail? What about online marketing? What steps do you need to take to prepare your home for sale? On that note: What about the house’s physical condition to improve to help its potential for sale?

How Good of a Negotiator Is Your Agent? 

Real-estate markets fluctuate. There are “buyers markets” and “sellers markets” that depend on all sorts of economic factors—interest rates, notably—but there are many variables. An agent’s list-price to sales-price ratio can be a helpful statistic to know. A strong listing agent should have a track record for negotiating sales prices close to list prices—the closer to 100 percent, the better.

Can the Agent Help Find Other Professionals Who Are Necessary to the Sale of a House? 

Mortgage brokers, home inspectors, title companies all are part of buying and selling a house. Agents should be able to supply you, in writing, with a list of vendorswith whom they work, along with reasons why they endorse these particular professionals. A word of caution: “Affiliated,” could mean the agent and their broker receive compensation for using a particular vendor, which means you could be paying a premium. 

In addition, get an advance copy of any legal documents is helpful to being better informed.

Can the Agent Produce Referrals? 

If the agent has many online reviews, this step might not be necessary, but no matter how you do it, it’s important to research an agent or agency’s references to inform your opinion. A questionnaire should give you a good start on how to go about doing this.

What Does a Real Estate Agent Cost? 

It is said that sellers typically pay the freight when it comes to real estate commissions, which tend to be 5 to 6 percent of a home’s purchase price. While it’s really a technicality based on how real-estate transactions work legally, fees split between the agents of buyers and sellers typically do come from the seller’s end, which obviously impacts what the list price will be. Therefore, knowing what a listing agent charges becomes an important consideration.

What Topics Might I Have Forgotten?

Selling a home is a process. It’s possible that during your first meeting you might not have all of your questions resolved with answers. Or, you might come up with more questions as the process unfolds. Being comfortable with an agent who listens is vital. It’s especially true if you’re in the process of selling one home and buying a new one. Will your agent be able to answer all your questions to your satisfaction?

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Insurance 101 for House Flippers

Flipping houses hit an 11-year high in 2017. It’s no secret why. Television shows such as “Flip or Flop” and “Rehab Addict” flaunt how flipping houses can provide a lucrative career or side hustle. But it’s not always an easy one. Many things can go south during a flip, including stolen materials or structural damage while the house sits empty. Mishaps that eat into potential profit. 

Most people go into a flip thinking about asking price, cost of renovations and earning potential. It’s important to add insurance coverage to the early list of considerations. 

Below we answer four common insurance questions from flipping newbies. 

What Type of Insurance Policy do I Need for my Flip? 

New house flippers may think general homeowner’s insurance will cover their needs. The type of insurance policy needed for a flip depends on the stage of the project. Here are four policies to consider. A Bond Insurance Group agent can help determine the best policy for each stage of your flip.

Builder’s Risk Policy – A builder’s risk policy covers the property during construction. Work with your insurance agent to ensure all of the needed items, such as an installation floater for materials, are included in the policy. Once you complete construction, secure another type of insurance.

Dwelling Policy – A dwelling policy covers the home’s structure, not the personal belongings inside. This makes it an ideal policy for flippers, whose renovations do not contain personal belongings.

Liability Insurance – Liability coverage protects the owner and investors in the event an injury occurs at their property. 

Vacant Home Insurance – If the property will sit empty for 30-60 days purchase a vacant home insurance policy. Vacant homes pose a higher risk because no one is present to catch big problems, such as flooding. And vacant homes are also more susceptible to theft and vandalism. A standard homeowner’s insurance policy does not include coverage during times of vacancy. If there are delays in the rehab schedule or the house sits on the market empty for months instead of weeks, vacant home insurance provides protection.

How Much Insurance Coverage Do I Need? 

In general, obtain enough insurance to cover the cost of the home after renovation. This accounts for both the replacement of the home at the cost you paid, as well as renovation costs.

When Should I Get Insurance for my Flip?

Don’t wait to contact an insurance agent. Many policies must be in place before a certain percentage of the renovation is complete. Talk to an insurance agentearly in the process, before making an offer, to determine policy options.

Can I Purchase One Policy for Multiple Houses? 

A policy covering multiple pieces of real estate can be especially appealing for investors looking to flip more than one home. This type of coverage does exist but may be harder to come by. An insurance agent can help research and find the right fit.

Ensuring proper insurance covered at each stage of the project is key to protecting your flip. Guard your investment. Contact a Bond Insurance Group agent before jumping into a flip to learn more.

Disaster Strikes Your Second Home: Are You Prepared?

Once you decide you’re financially ready to buy a vacation home, one important step is insuring your new pad. It’s different than buying insurance for a primary residence. Factors such as where it’s located, who stays there and what amenities are available will help determine your home insurance needs.

Your Vacation Home Versus Mother Nature

For many people, the whole idea of a vacation home is to be closer to a sandy beach or among the crisp mountain air. That perfect location for rest and relaxation may come with some additional insurance costs.

Hurricane season and intense rainstorms underscore the importance of knowing your coverage. The point applies to primary residences and vacation homes. When hurricane Florence hit in September 2018, more than 30 million people were under a flood watch and media outlets reported only about 3 percent of North Carolina and South Carolina homeowners held insurance policies

And the cost from homeowners without insurance can be significant. When assessing the aftermath of 2017’s Hurricane Harvey, the Texas Department of Insurance reported the average cost of flood damage caused was $80,000.

You can purchase a policy through the National Flood Insurance Program (NFIP), which is run by the Federal Management Agency (FEMA), or private insurance companies.

Other natural disasters or risks associated with a given region should be considered, as well. 

For areas where earthquakes or other seismic activity are common, supplemental policies to cover these risks are available. If you live in California, you also can receive it through the California Earthquake Agency (CEA). 

But Hawaii homeowners affected by volcanic eruptions and related damage were less likely to find coverage.

Whether it’s one of the aforementioned risks or another threat like wildfire, the area in which the home resides can result in higher deductibles for your property.  

Insuring Your Vacation Home for Guests

Renting out your vacation home is becoming more common. Homeowners do it to recover their investment and earn extra income. Unfortunately, guests can inadvertently hurt themselves or, inexplicable as it may seem, intentionally damage the property.

Don’t have enough insurance — or the right coverage? Additional headaches could follow. So, if you go this route, you’ll want to consider the potential insurance needs.

Before renting out your vacation home and selecting insurance, you’ll want to determine how often you’ll rent out the property and what service you’ll use.

Many insurance carriers will make a distinction based on how often you rent the property. If you plan to rent your vacation home occasionally, your carrier may offer a rental rider to add to your existing homeowners policy. These typically provide limited property and liability coverage. 

If regular renters seem more likely, your needs could warrant business insurance. 

The other important consideration is what service, if any, you will use to rent your property. Because of its large community and ease-of-use, Airbnb is a popular choiceAirbnb offers an insurance program to hosts. It would be easy for a homeowner to think they’re completely protected by the program. That would be a mistake.

It does provide coverage up to $1 million for property and liability claims. But there are still gaps. It doesn’t cover certain liability scenarios, such as assault, or protection for your valuables. 

Having rental guests? Don’t guess. Contact a Bond Insurance Group licensed agent to know what coverage you need. 

Insuring Your Vacation Home From Itself?

First, similar to how coverage works with your primary residence, the home’s specifications and features will affect how much your insurance costs. 

How old is the home? And what materials make up its construction? A carrier will review these factors when pricing coverage.

The style of home also could dictate cost. A four-bedroom, single-occupancy house on the beach may cost more to insure than a condominium two streets away. 

Not only would construction and age affect the costs, but how the property is managed could, too. Features or services provided (or not) by a property’s homeowners association, such as security, may affect cost.

Speaking of features, amenities that pose a risk could increase premiums and the need for more liability coverage. Pools and hot tubs are a prime example. 

Other Implications and Getting Help

When adding up the factors that go into insuring your vacation or second home, the costs can be greater than that of your primary residence.

Keep in mind the implications. If disaster strikes and you don’t have the right coverage, your insurance company could deny your claim. Additionally, in certain scenarios, they might decide to cancel your current policy or request you switch to a business policy. The latter may lead to higher premiums. 

Can Your Smart Home Save You Money?

There’s a definite “cool factor” to the idea of a smart home. The ability to turn lights on and off with your voice, get notified if there’s someone on your porch, or have your smoke detector alert the fire department if it detects a problem seems futuristic. It’s reminiscent of the Jetsons and Iron Man.

Smart home devices definitely are cool – but they’re also practical. Many of the devices aren’t just about convenience, they’re also about safety. Lights that turn on and off automatically when you’re on vacation can deter burglars, smoke detectors that call the fire department can save lives and property, and doorbells that capture porch activity can help serve justice if your belongings are ever stolen.

Even beyond peace of mind, smart devices can help you save money. It goes beyond smart thermostats that monitor the temperature of your home to save you money on utilities. 

It’s time to start looking seriously at how certain smart home devices can help you save money on homeowners insurance. Many insurance companies offer premium discounts of 5 percent to 20 percent for policyholders who install smart devices. The decreased revenue from premiums still costs less than the costs to repair or replace lost or damaged property. 

If you have or plan to install any of the following smart home devices, check to see if you’re eligible for any insurance discounts on the product itself, the installation or your premiums. 

  • Home Security Monitors

  • A small, weatherproof tower with a camera that surveys your home and property. It regularly sends photos to your smartphone. Your insurance company can use these photos to assess any damage that occurs rather than sending out a surveyor. It may allow the insurer to pass along those savings to you in the form of a discount.

  • Video Capture Doorbells

  • Notifies you of motion at your door so you can not only view the activity but communicate two-way with your visitors. These doorbells may be eligible for discounts not only on premium, but on purchase of the device and installation. 

  • Smart Smoke Detectors

  • These devices not only test themselves regularly and notify you of the results, they also alert you and/or the fire department if it detects smoke or carbon monoxide and lets you know where the problem originated. Insurance companies may offer discounts to policyholders with smart smoke detectors installed, since they can help the insurers save significantly on repairing property damaged by smoke or fire. 

  • Interior Fire Sprinklers

  • No longer just for commercial buildings, interior sprinklers can help prevent the spread of any fire that may occur, especially for homes in more remote areas. 

  • Water Sensors Coupled With Auto-Shut-Off Valves

  • Designed to detect flooding that isn’t caused by weather and turn off the water supply to the problematic area. This means if you leave for the weekend and a frozen pipe bursts, you won’t have water gushing into your home the whole time you’re away.

  • Smart Lock Systems

  • Can be controlled manually provide extra security while you’re away from home. Can’t remember if you locked the front door or shut the garage? Just check the app and make sure you’re all locked up. 

In most instances, installing smart home security devices like these won’t negate their purchase prices – you’ll still be paying more than you’re saving in insurance discounts. However, any discounts you receive can help you justify their installation. After all, if you can save a few bucks on your homeowners policy and feel a bit more like Iron Man, why wouldn’t you? 

Any discounts you get on your insurance premiums from installing a smart device is icing on the cake. After all, if you can save a few bucks on your homeowners policy and feel a bit more like Iron Man, why wouldn’t you?

9 Reasons Homeowners Insurance Claims Are Denied

Year after year, you send that premium payment for your homeowners policy. When accidents happen, you expect the insurance company to cut a check for the full extent of the damage to your home, no matter the amount or what caused it.

It doesn’t always work that way. What you think you’re entitled to under your policy and what the carrier believes they owe you are often two very different dollar figures.

Don’t take it personally. Remember, carriers have to price your coverage based on statistics, probability and risk. They can only pay to the extent a claim is based in cold, hard facts, policy language and evidence. 

If your claim falls under one or more of the criteria below, there’s a good chance it will be reduced or denied altogether. But alas, insurance companies don’t take claims personally, either. We’ll follow with ways to ensure your property is covered properly and recovered adequately.

Why Are Homeowners Insurance Claims Denied?

  • Not Enough Information

  • As the homeowner, it’s your responsibility to file and prove your claim. Insufficient documentation of damage to your property won’t help your case. Neither will a lack of a complete inventory of valuables on or in your property prior to the loss.

  • Taking Too Long to File

  • If you take too long to file the claim, your chances of a satisfactory payment go way down. Policies typically contain time-sensitive requirements for filing the claim and documenting damage.

  • Late Payments

  • If your premium payments are late and result in any lapses in coverage, you run the risk of property damage occurring when your policy is exempt due to non-payment.

  • Threat of Fraud

  • Unfortunately, insurance fraud is a predictable reality. Therefore, your carrier will send their own claims adjuster to investigate almost every claim. Anything that raises questions—whether in the claim or in your initial application—could be game over. If your losses are serious, particularly if the policy covers your business, consider hiring an independent adjuster. 

  • Claim Type Not Included in Coverage

  • No homeowners policy covers the entire house and everything in it, nor does it cover against every possible source of damage or loss. Common policy “exclusions” include earthquakes, floods and water/sewage backup, or other regional risks. 

  • Loss is Close to Your Deductible

  • A typical homeowners policy deductible—the amount you pay before the claim kicks in—is $1,000. If the estimated loss is close enough to your deductible level, carriers will deny the claim, though in that scenario you wouldn’t want to file one. 

  • Perilous Claims May Not Be Covered

  • In insurance speak, “perils” refer to things like fire, theft, lightning and hail. “Occurrences” speak to the actual losses, such as a destroyed kitchen, or soaked carpet and furniture. Lower-end policies only cover a certain number of perils, others cover all of them. 

  • Somebody (or Something Else’s) Fault

  • If it was your contractor’s negligence that collapsed the foundation or your neighbor’s tree that totaled your SUV, your insurance company isn’t responsible—and your policy doesn’t apply. 

  • Excessive Wear

  • Imagine an insurance carrier paying to fix a rusted-out car bumper after an accident. Doesn’t happen. Same goes for an old roof full of worn shingles and leaks. If a claims adjuster finds evidence of poor maintenance or excessive wear-and-tear of your property, chances are the claim will be denied. 

Avoid the Dreaded Denial

  • Document all damage and file a detailed itemized claim to your insurance
  • Notify your carrier as soon as possible (even if in the middle of the night) of any loss and know the time limits for filing a claim
  • Don’t miss a premium payment
  • Know what your policy covers and excludes; obtain adequate coverage for more “perils” if available
  • Do everything possible to maintain the property before an event, and to mitigate the damage until an adjuster assesses the damage