Tag Archives: 22901
We covered an awful lot in an hour. Iâ€™ll update this post with edited show notes. In the meantime, you can listen to the podcast at the Charlottesville Podcasting Network.
I like experts. My clients come to me seeking solutions and part of the solution is helping them assemble the right team to help throughout the process. Everyone needs homeownersâ€™ insurance and I tend to recommend Gary - Iâ€™ve found him to be helpful, knowledgeable and willing to share knowledge. I asked him to answer a few questions that most (new) homebuyers have.
Q: What is the purpose of home insurance?
A: For many, your home is the most important investment you make. So it makes sense that you would
want to protect that investment through homeowners insurance. The fundamental basis of insurance is the transfer of risk from one person or entity to another. We make decisions daily about risk in our personal lives, and each of us have a different tolerance for retaining risk compared to our neighbors. As it relates to homeownerâ€™s insurance, the premium we pay speaks to how much of this risk we are retaining versus how much we are transferring to the insurance company.
Q: Tell me more about deductibles.
A: When you file a claim, the homeowner is responsible for a predetermined part of the costs. This is called a deductible. As a general rule, a low deductible will result in higher premiums, and a higher deductible will result in lower premiums. There is no template rule of what deductible to carry. There are some that advocate for the lowest deductible available and some that lean toward the other end of the spectrum, looking for the higher deductible options. Itâ€™s best that you figure out what works best for your particular situation.
To help make this decision, consider your financial situation and personal emergency savings in the event of a large loss to your home.
Q: How are rates set? Do weather disasters in other parts of the country impact the rates we pay here in Virginia?
A: At State Farm, we use claims experience from the past several years to project the cost of future claims. The ratemaking process also factors in trends such as the costs for construction, medical payments and other variables.
Rates are based on each state's claims experience. This means premium dollars stay within the state and do not compensate for losses in other states. So a wildfire in California will not have an impact on our rates here in Virginia.
Q: What about homes that need some work? Is there anything from an insurance point of view you should know when buying a fixer-upper?
A: First, make sure you work with reputable contractors. Get quotes from a few licensed contractors to find the best deal. You also want to make sure the contractor has liability and workmanâ€™s compensation insurance to protect you if someone is injured on the job.
Once you are done fixing up the house, make sure you check in with your insurance agent to see if you need to change your coverage. The upgraded kitchen you added could increase the cost to rebuild if something were to happen, and you want to make sure youâ€™re adequately covered.
What's a CLUE Report? How is it used in the home buying process?
Comprehensive Loss Underwriting Exchange, 7 year database of claim information. Only the owner or the insurer, or lender can access the information. This service is maintained by Lexis Nexis.
When considering making a purchase of a home, involve an insurance company early in the process to run this report. Some carriers may not do this upfront, so be sure to ask if this report is being run at the time of the quote. If there are prior losses on the property, the insurer (and prospective home buyer) will want to research the repairs and get ahead of any potential loss/insurability concerns. I recommend doing this before the home inspection.
Q: Anything else to add?
A: Insurance can be very personal. Meet with your insurance professional on a regular basis to make adjustments to your coverage as needed for updates, improvements, additions, and endorsement review. Our community has many local, reputable insurance agents. If youâ€™re unsure of whom to speak with, ask your neighbor, good neighbors are usually good sources of information.
In February of this year, I wrote my first monthly note. Iâ€™d like to think that Iâ€™ve shared some useful knowledge and insight about the Charlottesville real estate market, the practice of real estate and other, tangential subjects. I know this - one of the most clicked-on parts has been the â€œblog recapâ€ in which I summarize some of the better posts from RealCentralVA and RealCrozetVA. Above all, Iâ€™ve loved writing these notes and I hope I've been able to convey that through my writings. Aside from the writing, the best part has been the one-on-one interaction readers have shared - the format of the note is such there are no comments, but a lot of readers have chosen to reply to the note, and thatâ€™s enormously gratifying.
With that preface, the early outline of Decemberâ€™s note (lamentably, I suspect this will exceed my goal of no more than 1500 words)
- The market (I start all the notes with this)
- An interesting home inspector update
- A great builder anecdote
- Agent reviews (the current hubbub about AgentMatch) - determining the â€œbestâ€ real estate agent for you entails more than data.
- Life after being on the Realtor Board of Directors
- Brief recap of some of my favorite stories from this yearâ€™s notesIf you find subscribing to my blogs by email cumbersome (three-four emails a week from one site would be cumbersome for me too) - please consider subscribing to my monthly note. Update: published late last night; at 2,000+ words, it's the longest ever (and I'll return to sub-1500 words in January). My monthly note really is where I write my best stuff.
Part 2 of 2. Part 1 is here.
Continuing the â€œwhat is usual and customaryâ€ question and answer series â€¦
Whatâ€™s â€œnormalâ€ in the Charlottesville real estate market? Itâ€™s a question thatâ€™s asked of me by buyers coming from other markets (agents, too) and sellers who havenâ€™t sold a house before (or for many years). Note: what you see on HGTV is not what is â€œusual and customaryâ€ in the Charlottesville market. (or any market on Planet Earth).
â€œUsual and customaryâ€ is always changing. Radon inspections werenâ€™t usual and customary a couple years ago; now they are. Heck, buyer agency wasnâ€™t usual and customary 15 years ago.
Q: â€” Who attends the home inspection? Appraisal? Termite/Radon inspections?
A: A buyerâ€™s agent attends all of these, with the home inspection being far more important for them to be onsite than for the termite or radon inspections. Meeting the appraiser can be tricky - sometimes if the appraiser has a lockbox key and MLS access, we never get the call to schedule. I try to meet all appraisers onsite, as I like to pick their brains about what theyâ€™re seeing in the market as they see the market through a different lens than I do.
Q: Recording and possession. Is recording done the same day as closing? Are keys transferred when closing docs are signed or when transaction is recorded?
A: Usually recording and possession happens on the same day, although I advise my buyers to not have a moving truck on the front lawn the afternoon of closing â€¦ Iâ€™ve had this happen, something went wrong and many tears were shed, curse words flew, phone calls made and a few nights in a hotel for the buyer highlighted why I advise what I do. Frequently the keys are given to the buyer at closing, with strict instructions to not enter the property until recordation has occurred.
In response to calls from parents to stop reporting class rankings to college admissions offices, Albemarle County Public Schools is in the process of reviewing its policy.
Currently, Albemarle reports class ranks to colleges and universities in deciles, but many parents feel that doing so paints students below the top 10 percent negatively in the eyes of selective universities.
- Does *not* rewarding kids for achievement disincentivize them from trying harder?
- How could we focus educating kids on actually educating kids rather than passing tests in order to get better ranked?
- When folks are moving to Charlottesville - Albemarle what rankings to they consider in public schools? Do they factor in what percentage of
Update - Charlottesville Tomorrow has a poll - Should Albemarle County report student rankings to colleges?
There is a great discussion at RealCrozetVA.
Sometimes a post in which I pull data to answer a question becomes a bit more than intended. This is such a post.- Do sellers pay closing costs? - Are we at a sustainable volume of closed transactions? - FHA is helping foreclosed buyers.
Do the sellers pay closing costs? Is one of the more common questions I get, whether I'm representing buyers or sellers.
A quick look at 2013 â€¦ so far, 1991 homes have sold in Charlottesville, Albemarle, Fluvanna, Greene, Louisa, Nelson. Of those, 518 have something entered into the "seller concessions" field in the Charlottesville MLS, so presumably, about 26% of transactions this year have had some sort of seller concessions.
Last year those numbers were 1,864, 556 and 29%, respectively.**
But really .. what do "seller concessions" mean?
- The seller "paid" the buyers' closing costs. (not really)
- The buyer is financing the closing costs over the life of the loan.
in other words:
- The seller is accepting a lower net offer
- The buyer is paying a higher net offer.
For example - if a seller is asking $450k and the buyer offers $440k with the seller "paying" $10k towards the buyers' closing costs, the seller is looking at a net offer of $430k. The seller doesn't care how that's structured; they're looking at a net offer of $430k.
** Just because I'm naturally curious, I looked at the number of closed transactions in the Charlottesville MSA in the January - August timeframe in 2007 â€¦ 2,336. And 2006 â€¦ 2,824. So, from a pure volume perspective, our market is down 30% from the peak. As noted in 2012 - Iâ€™ll Know Housing Recovery in Charlottesville When Iâ€™ve Seen It
Transactions â€“ volume of transactions â€“ what is normal volume of sales transactions in the Charlottesville MSA? I donâ€™t know; homeownership rates are declining. Last year, 1755 single family homes sold in the Charlottesville MSA (including Louisa). In 2002, 2479 single family homes sold. Iâ€™d put the â€œsustainableâ€ rate of single family home sales somewhere in between those two numbers.We might be getting close to a sustainable recovery.
One sign of the recovery that I called years ago? Those who were foreclosed on are now eligible for new loans - a year after foreclosure.
Graelyn Brashear's story in C-Ville on the Western Bypass is remarkable; its depth, range, imagery and clarity are outstanding. Take 30 minutes to read it.
Also notable is C-Ville's presentation of the story; it's useful and makes a subject of this breadth easier to digest. I particularly like the Medium-like commenting, which is particularly useful for a story of this length. Really, go see it and read it.
The Western Bypass debate/conversation/saga has been ongoing for so long that it's often impossible for anyone - even long-time residents of Charlottesville (read: Charlottesville + Albemarle + Central Virginia) to fathom or comprehend the scope of both the proposed road and the political/business/transportation dynamics of the Western Bypass (and our region's collective inability to efficiently solve transportation and planning challenges).
The C-Ville story is an outstanding summary.
I know this:
- Route 29 is a disaster. Hydraulic/29 and Rio/29
- For years, many of my clients target their home search locations as either "not North of Rio" or "not North of Hydraulic"
- The current termination of the Western Bypass is silly
â€¦ the current design of the northern terminus is flawed: Northbound traffic from the Bypass is dumped out onto Route 29 just before the light at Ashwood, where the highway narrows from three lanes to two.
I mean, really?
- I've told my clients for years that transportation is one of the Charlottesville-Albemarle area's greatest detractors
- Charlottesville and Albemarle - and the entire region need to be involved in this conversation, not just "the City" or "the County"
Something has to be done, but it really needs to be done 25 years ago. The best solution? I don't know, but I know that the flawed current proposal is severely flawed. If only our system allowed for a reasonable debate instead of politicians and interest groups fighting rather than compromising.
All this as another anti-Western Bypass group motivates.