Ask the Expert: Buyer assurance

Q I have a potential buyer for my house but the buyer wants some guarantees on the appliances. How can I give him peace of mind without exposing myself to all sorts of claims after the sale of the house?
A You need home warranty insurance
Considering what a home warranty plan costs, and the many things it covers, it can be a very good investment for a seller.
For the buyer, it offers peace of mind for their purchase. After all, a buyer might be feeling the pinch right after he buys a house and is in no mood to replace the refrigerator or work on the air conditioning system. Buyers can often come back to the seller and ask that the seller make good on his promise that the air conditioning or refrigerator are in working order. A major appliance that suddenly quits after the sale isn't a very happy prospect for the well-meaning seller or the cash-strapped buyer.
That's why buyers can easily (and relatively cheaply) show their sincerity with the purchase of a home warranty. Plans cost between $250 and $400 for the first year, with an option to renew at a higher cost the second year. The policy will carry a deductible that the new homeowner must pay. Typically, that deductible is from $50 to $150 and will apply to a service call.
Home warranties usually cover built-in appliances such as stoves, dishwashers and garbage disposals, but may also cover a refrigerator or washer. It will cost more for the home warranty if you want to insure a pool, but will probably be worth it.
Because we have a lot of experience with warranty companies, we usually can give our clients good advice on what company to use and what to cover in the policy. In turn we get a lot of cooperation from our warranty companies.

Did you know?

Smiles...we all need more of them

How would you price your home?

How to price the home of your heart
Okay, so you love that house. But just how much is your love worth? That's the question that faces every home buyer during any economic season. Sometimes the answer is easy. In hot markets, the answer can be short and sweet: If you have to ask, you can't afford it. Not too long ago, in the sizzling markets of California, if you even took the time to ask, the property was already gone.Enter the cooler markets. Today, most markets have a good supply of houses and buyers can take a little time to look for the right house at the right price and make a reasonable offer. Still, how you set the bid for your dream house matters.Real estate agents make it their business to know what houses sell in neighborhoods and for how much. That's why asking a real estate agent for a neighborhood market assessment can be such a crucial step in setting your bid price.Agents will compare the sellers asking price to other homes in the area. Typically in volatile markets, agents will look at selling prices for homes in an area during a two to four month period. In stable markets, they might use a 12-month standard.Added to actual sale prices, you can consult Websites such as Zillow or Trullia for a general idea of pricing. Zillow, which does not list houses in every market, gives estimated values for individual properties. Trullia gives estimated home values for neighborhoods. The problem is that no computerized estimate can tell you about the charm of a home –— or how motivated a seller is.You can also consider the home's tax assessment. But this is very often nothing like the whole story since low assessments are rarely challenged.Even knowing what the seller paid for a home doesn't tell you much about current property values. It might, however, tell you something about how much equity and emotional attachment the seller has to a home.Sometimes hiring an appraiser can give home buyers a little comfort since buyers can insist that the house appraise for the asking price. Nonetheless, even in cool markets, an insultingly low bid on a great house will probably not get you into your dream home since, whether there is a buyer or not, a charming home is still valuable and is worth holding for the right buyer. Best case: Do your research and trust your real estate expert's analysis.

Real estate funds recommended

If you'd like to invest in real estate, but don't want the hassle of managing it, try a real estate mutual fund. Money managers with Expansion Funds America in Phoenix say investors should have real estate positions beyond what's in their homes.
Property prices don't move up and down with stock market prices, and they provide diversification. Money managers recommend that you put no more than 25 to 35 percent of their portfolios into Real Estate Investment Trusts (REITs), or real estate mutual funds.
They also recommend gold, which can be held as bullion in gold-mining stocks and gold mutual funds. They recommend a 10 percent maximum for most portfolios.

How to make an offer in Today's real estate market

How to make an offer to purchase real estate in today's market
You've found a house you like, but want to offer a little less than the asking price. What is the best way to do it?
How an offer is made has a lot to do with the outcome:
* Sellers are more comfortable with an offer if they know the buyer is qualified and eager to close.
* A buyer's agent can help. When the agent presents the offer in person, the seller can ask questions that could lead to a favorable decision.
* A real estate agent essentially does the same. Though a real estate agent is working for the seller, the sale is still a primary goal.
* Always present your offer to the seller in person through an agent (don't use a fax)
* Some sellers don't want personal contact with buyers. If you use a buyer's agent, be sure the offer is presented in person to the listing real estate agent.
* When a real estate agent requests that offers be presented in a sealed envelope, ask the real estate agent to prepare a summary to accompany the offer. The summary should tell something about you and highlight positive aspects of your offer, such as an early closing date.
* However your offer is presented, your chances of acceptance are improved by including a copy of a preapproval letter from a mortgage company.
* When multiple offers are involved, some buyers write a letter to the seller to personalize their offer. It won't help if you aren't qualified or if the offer is too low.

New Frankin Downtown Park may be completed soon

Financial concerns hasten downtown Franklin park construction
THE TENNESSEAN • January 27, 2009

FRANKLIN — Work on Bicentennial Park, a city project that's had more discussion than progress since its groundbreaking a decade ago, could finally speed up this year, courtesy of scaled-back options for its construction.
City Parks Director Lisa Clayton is recommending aldermen pursue the use of state greenway money to establish a trail system on the land, which sits along the Harpeth River and North Margin Street, and use city crews to grade and replant grass on the 20-plus acres. Much of the land is in the river's floodplain and includes the site of a former boot factory.

This change would dramatically reduce costs for a park that in 2007 had a $29 million construction budget approved by aldermen. Since the groundbreaking for the park in 1999, architect's plans called for creating space for outdoor concerts, installing jets of water as well as "story panel" murals depicting the area's history.
But financial worries and a change of leadership at City Hall have curtailed those ideas. Mayor John Schroer sees the park's future as being a simple, passive park where families can picnic.
"Hopefully, by this summer, if we can get it all done, it will be grassy and open and people will be able to use it," Schroer said.
Clayton wants aldermen's approval to pursue building a trail system on the east side of the park on the site of a former junkyard. The trail would progress toward Hillsboro Road.
The city could access $730,000 in state greenway grant money by providing matching grant funds of $151,000 to the project, according to city records. City parks crews could also replant grass on the site using topsoil from park work going on at the Harlinsdale Farm park project.
Meanwhile, city attorneys are planning to condemn six tracts of land along Fourth Avenue where the Third Avenue extension will be built. Part of that land will be used in the park's final plan.

Spring is the best time to sell, be ready for a buyer

Staying close to home
A Pew Research Center survey shows that family ties are one of the most important factors in decisions about whether to move out of state.
People move for economic opportunity and they stay put to be near their families. But when you balance the two, family wins out over money in the decision about where to live. Of those who didn't move, 74 percent cited family as the reason.
At 69 percent, the desire to remain in the town where they grew up was the second most important reason for not moving.
Except for college or military service, 56 percent of Americans have not lived outside their birth state and 37 percent have stayed in their hometown, mainly because they want to be near family.
About 27 percent of Americans have lived in two or three states and 15 percent have lived in four or more. Government data for 2008 show graphic mobility to be at its lowest point since 1948.

Credit Score: 8 steps to improve yours in less than a year

First-time home buyers, especially young people, may have never seen their credit score or even considered their credit worthiness, but when they want to buy a home, that changes.
These days, a credit score of 700 is usually considered a good starting point for a home loan. However, FHA loans may be more lenient.
But the most important thing is to start immediately to establish, build or improve your credit.
Here is our One-Year plan for better credit that works for everyone, not just first-time homebuyers:
1 Go to annualcreditreport.com and look over your free annual report from each of the three credit reporting agencies. Look for errors. Then immediately take steps to correct them.
2 Pay your bills on time. You must never be late even once. One of the most common comments bill collectors hear from young borrowers is: I have the money, I just forgot to pay the bill. Stop forgetting. You must establish an ironclad history of paying your bills on time.
3 Work on getting your credit balances below 50 percent of your maximum credit limit. That raises your score. If your balances are below 30 percent, it raises your score again.
4 If you don't have a credit card, look into establishing a secured card. With a secured card, you send the card company a deposit and then they send you a credit card. You can only use the card for the amount on deposit. But when you get the card, you should use it. Buy something, and then make your payments perfectly.
5 Don't apply for a store account every time the clerk says you can save 10 percent. Each time you fill out an application, the company hits your credit report. Inquiries like these count against your credit. Don't make applications for credit unless you actually need it.
6 If you have unused credit accounts, don't close them if you are planning to apply for a mortgage. That can actually make your score drop.
7 During your credit improvement year, don't buy a car. Lenders don't want to see buyers committed to several large credit accounts. Never finance a car before you try to take a mortgage.
8 Plan to open three new credit accounts during your credit improvement year, even if they are secured accounts. Be sure to space your new accounts by three months. Use each account and pay each off COMPLETELY every month. This is the kind of credit management that improves your credit score AND teaches you how to manage credit.

Four reasons why you should stop renting

If you have not bought a house for three years, the United States government is about to hand you $7,500. There is one catch. You have to invest in the American Dream and buy a house. Luckily, if that is what you want to do anyway, you appear to have hit a miniature jackpot. Last year's Housing and Economic Recovery Act offered new homeowners a $7,500 tax credit if they bought a home before June 30. According to that plan the $7,500 tax credit would be repaid over 15 years with annual payments of $500 added from the borrower's income tax bill. The credit is an excellent deal, since it offers home buyers what amounts to an interest free loan. But the Congress and President Barack Obama have vowed to sweeten that deal by extending the credit and delaying repayment. For first time homeowners, this promises to be a one-time bonanza during the best time in history to buy a home. Here are just some of the reasons why the cost of housing will probably never be more economical. 1 Inventory of new homes is tightening. That means there are fewer new homes for buyers to buy. It's basic economics: When the supply goes down, the price goes up. 2 Congress is moving to close off the dribble of foreclosures on pre-owned homes. Again, with fewer houses going on the market via foreclosure, the supply of homes will go down and price increases will soon follow. 3 Interest rates are fantastic right now. The best borrowers can now get 30-year mortgages at rates under 5 percent. 4 Obama's promised new stimulus packages will likely extend and sweeten deals for homeowner. The fact is that now might be the best time in your life to buy a home.