Quick Guide to Buying the Best Homeowners Policy Part 1

When shopping for home insurance, remember this: Insure your house for the cost to replace it (meaning reconstruction costs), not its real estate "market value", and don't factor in the value of your land. 

Also know that a home insurance policy covers much more than damage to your house. 

There are additional coverages within a home insurance policy with limits often set as a percentage of the dwelling's coverage amount. (Check your own policy for limits.)

• Your belongings. (Often 50 percent of the of the dwelling amount.)    

• Certain structures outside your house, such as your garage or fence. (Often 10 percent of     the dwelling amount.)

• Loss of use, meaning additional living expenses you incur if you can't live at home due to damage.     This could include hotel bills, restaurant meals and laundry costs. (Often 20 percent of the dwelling  amount.)

• Liability, for cases where you are sued for damages or injuries to someone else.

• Medical bills for people injured on your property or by your pet.

  Other items may be covered under your home insurance, with specific limits for each, so check your   policy or ask your agent:

• Downed trees.

• Replacement of lawn, trees and shrubs.

• Debris removal.

• Power outages, including food spoilage.

• Grave markers.

• Unauthorized charges to your credit cards.

    

You may also need special add-ons for valuables such as jewelry, your computer equipment, antiques and other pricey possessions, where their value exceeds the coverage limit of your policy.

Home insurance does not cover earthquakes or floods - you'll need to buy separate policies for those if you want coverage for those disasters. And in some areas of the country you need to buy windstorm coverage  separately. Now go to the Part 2 Guide.

Lending institutions usually require mortgage customers to purchase home insurance. Don't rely on the coverage levels mandated by your bank or mortgage company. Those levels are designed to protect the  house itself, but not necessarily your possessions. That's why it's important to check with your agent or  insurance company to make sure you have adequate coverage.

Have questions about your Homeowners' policy, call (773) 614-3201

  

What You Need to Know Before Making a Home Buying Offer

Your home is likely going to be the greatest asset you have and what you can leave to your posterity. 

Once you decide upon the home that you want, your next step is to negotiate about what to include in the offer or purchase commitment.

 In most states, your Realtor will help you determine what to say or even say it for you. Some states may require an attorney to take part in the transaction.

If possible, ask your Realtor to let you see a blank copy of a purchase agreement when you first begin looking at homes. 

This is the document that you will present to the seller, and where you offer a price and any conditions you have for the purchase. That way, you will have time to think about what you want your agreement to cover. 

Be sure to include in your agreement a stipulation that the purchase depends upon a satisfactory professional inspection. If you have any doubts about the results of the inspection, ask for another one.

Here is What You Need to Know Before Making a Home Buying Offer:

1. Get recent selling prices of similar homes in the area to justify your offer price.

2. Be careful not to let your feelings rule. Remember, if the offer is turned down, there are (usually) other homes to your liking.

3. Do a background check on the property. How long has it been on the market? Why is it being sold? What are its good and bad points? Doing your homework will help you make an offer that meets the needs of both buyer and seller.

4. Check out the neighborhood and speak to neighbors.

5. Consider the home's resale value.

6. Negotiate about the offer price and other items to be covered in the offer before you sign any formal papers.

When your offer is formally accepted, you sign the purchase agreement which is a legal contract. It covers many items, such as the price, total down payment, and closing date. (The closing date is when you sign the closing or settlement agreement that officially makes the home yours. 

This date may change if all the necessary paperwork is not finished. The offer also states which party (buyer or seller) will pay for which settlement costs, the type of loan you are applying for, and the interest rate. 

Keep in mind that earnest money or a good faith deposit is required when the offer is accepted. This is a cash deposit towards the down payment and shows your commitment to buying the home. 

Ask your real estate agent how much money is needed for a deposit and use your pre-qualification certificate to back up your offer.

Again, to protect yourself, be sure that the purchase agreement is conditional. This means that you can cancel it if you do not secure the loan or if the inspection identified major problems that can't be corrected before closing.

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