Phil's Real Estate Corner

Should you worry about hazard insurance on a property before you actually take title? By all means! Although the purchaser may not be the record owner, he has an insurable interest as soon as the agreement of sale is executed by both the buyer and seller. As a matter of practice, however, buyers do not usually place insurance until papers pass and it should not be necessary if the agreement of sale is properly drawn. Most agreements provide that the property will be insured for a specific amount and this is very important and in the interest of both parties.
From the buyer’s point of view it is important that an adequate sum be stipulated and the agreement not read “as now insured” which is an all too common practice and usually indicates that the seller does not want to bother to increase his insurance.
As a rough rule of thumb the amount of insurance on the buildings should equal price less the value of the lot.

If you accept a new job or transfer to a new location, most companies, large or small, will pay your basic moving costs. Big companies generally have formal policies on what’s covered. Smaller companies will usually pay IF ASKED.
You have your best shot at full reimbursement if you talk about this problem before taking the job. The more eager the company is to have you, the more it will be willing to pay the transfer cost – even if it means payment beyond the written rules. Transferred employees often get more help than people newly hired. Again, it depends on what you ask for and how strongly the company feels about hiring you. On your moving request list should be house hunting tips for you and your spouse; packing, moving, and unpacking; furniture storage and interim living expenses.
Moving a family is an important cost factor when transferring to a new job and should be treated as a legitimate expense.

Buying a home is not simply a financial decision. It is also a very emotional decision. Buying a home is not like buying a share of General Motors or investing in a mutual fund. A home, particularly your first home, reflects the yearnings, the hopes, and the pride of a lifetime. Buying a home is “investing with your heart.”
True, it is an important financial investment – perhaps the biggest in your life. You will have to decide whether you can afford the down payment, the closing costs, the carrying costs. In actuality, your lender will probably have most of the answers for you when you apply for a loan.
Your first questions should be the most important – and it is not financial. Ask yourself if this is REALLY the home you want to live in. A house is an investment. A home is where you live. When buying a home, if you don’t think you will be happy in it, the financial considerations will be meaningless.

The best investment you can make is the roof over your head. Not only does Uncle Sam Subsidize your investment with fantastic tax breaks, but you can invariably count on a gratifying profit when it comes time to sell. In recent years, some of those gains have been spectacular.
How does the government subsidize the home buyer? First, you might be able to get a federally backed mortgage through the FHA or VA. Even if yours is a conventional mortgage, you get the biggest tax break of all. Uncle Sam says the interest you pay on the loan is tax deductible. This can be a huge deduction. For the first seventeen years you own your home, over 85% or your monthly payments amount to interest. When you sell after two years, there is no capital gains tax on the first $500,000 profit from the sale, if you are married and $250,000 if single.

Sylvia Porter, a household name in financial wisdom in major newspapers gives this advice to home sellers.
(1) Consult your local Realtor who is well informed on local property values.
(2) Don’t try to sell the house yourself and save the Realtor’s commission. The sale involves a great deal more time, financial know-how and red tape than you can imagine.
(3) Ask your Realtor to give you an estimate of value of your house or hire an independent appraiser to give you an appraisal.
(4) Beware of the firm whose estimate is thousands of dollars higher than others. They may only by trying to get your listing and may never produce at buyer at the inflated price.
(5) After setting the fair market value, don’t add thousands to as it may sit for months, get shopworn and end up selling for less than it would have – had it been priced correctly from the start.