Once you’ve navigated through finding a home and made it through the final closing paperwork, the last thing you want to worry about is a broken dishwasher or faulty plumbing. As such, understanding the intricacies of home warranty programs is an important step of the home buying experience.

From costs to what is covered, home warranty programs can vary extensively. The variables that shape cost and coverage are often determined by location, detail of coverage and the current age of the home. When speaking to a home warranty company, you will want to ask questions regarding different options and evaluate what type of coverage you will need based on your home’s condition and your priorities.

In general, regardless of the plan you select, policies usually work in a similar way from a process standpoint. If you encounter a problem, such as a broken dishwasher, you call the warranty company. The warranty company then reaches out to its provider, sets up an appointment for the provider to come to your home, and ultimately the provider fixes or repairs the problem. Depending on your policy, the fee you pay will vary.

As mentioned, all policies differ in what they cover, but for the most part, here are some of the items typically covered and not covered in a policy:

Typically Covered:

• Air conditioning/heater
• Dishwashers
• Garbage disposal
• Indoor plumbing
• Ceiling fans
• Stove/oven
• Telephone wiring

Typically Not Covered:

• Outdoor items, such as sprinklers or faucets
• Spa/pools, unless specifically requested
• Permit fees

It is very important to remember that improper care of an item or improper installation can sometimes cause typically covered items to not be covered. In addition, keep in mind that all policies fluctuate and may cover items that another provider does not.

There has been no shortage of foreclosures on the market over the past several years, so it’s no surprise that unscrupulous individuals are finding ways to intervene in these transactions and ultimately take advantage of homeowners. As such, the Federal Government recently released a list of tips for homeowners to help them avoid being taken advantage of by foreclosure scam artists.

Tip #1 – Work only with a HUD approved counselor

If a homeowner is being foreclosed upon, the federal government recommends working only with their recommended counselors.  These counselors have been assessed and approved to handle foreclosures and have been deemed credible.

Tip #2 – Don’t overpay for services

Most HUD sponsored foreclosure counselors offer free or very low cost services.  Homeowners should never be lured into spending excessive amounts of money on foreclosure counseling.  Individuals requesting such high fees can often be a red flag for scams.

Tip #3 – Be cautious of guarantees

A reputable foreclosure counselor will not promise the homeowner  that the foreclosure will be stopped for them.  Specific circumstances ultimately determine the fate of a foreclosure, and, therefore, anyone who makes guarantees should not be trusted.

Tip #4 – Know what is being signed

Homeowners should never allow a counselor to fill out or sign paperwork on their behalf, and unfortunately this happens more frequently than many people realize.  Clients get pressured and overwhelmed and suddenly they have signed their home away.

Tip #5 – Unbelievable deal?  It probably is.

As the old adage states, if it’s too good to be true, it probably is.  If a homebuyer encounters an amazing solution from a supposed foreclosure counselor, and it sounds like too great of a deal to be true, it probably is. Be wary of “perfect solutions,” as they generally do not exist.

Homeowners insurance is an important component of the home buying process. What is covered? Are their items not included that you need? Are there items included that you do not need?

One common item that comes up time and time again is mold coverage. Although on most occasions mold is completely harmless, there are certain situations in which it can cause a homeowner’s insurance claim to be denied.

There are several things that determine if mold damage is covered by homeowner’s insurance. Most often the decision is made based on where the moisture that caused the mold came from initially.

Most policies exclude damage caused by fungi and bacteria, but typically cover damage caused by “emergency situations”, such as a pipe bursting. Other situations that also cause claims to be rejected are negligence to the home, including ongoing water leaks and exposure to humidity.

The most definitive way to avoid a denied claim is to keep mold to a minimum, as preventing mold is critical when it comes to protecting your home’s value. Here are a few ways in which you can work to protect your home:

• Use household cleaners that have mold killing properties
• If you have carpet in the bathroom or kitchen, ensure that it is never wet for long periods of time
• If you have a pool and carpeting indoors, ensure people are not tracking water throughout the house on a continuous basis
• Clean outdoor gutters to ensure that they aren’t overflowing
• Use dehumidifiers and air conditioners to lower humidity indoors

These are just a few tips that can assist in protecting your home. In addition, your real estate agent will also be an immense asset in helping you though this process as well.

If you are in the process of purchasing or selling your first home, the escrow process is something that might come across a foreign territory to you. It is definitely understandable, as the terminology and steps involved are often extremely detailed oriented and must be completed in a strategic fashion.

Knowing that you have an experienced escrow officer and real estate professional on your team will obviously be an extremely valuable asset for you during this process, so you’ll want to ensure that you have a reliable team on your side as you move throughout the transaction.

The Beginning Stage: Opening Escrow

The beginning stage of escrow deals with basic information that must be collected prior to delving into the processing of the escrow. Information collected during this phase entails conditions that pertain to the property, general details about all of the parties involved in the transaction, and the organization of assets. Once this information is collected, instructions are devised and are used as the roadmap in moving forward. The homebuyer, home seller, escrow offices and Realtors are involved in this stage and may be called upon to provide information.

The Middle Stage:  Processing Escrow

Additional information gathering normally takes place during this stage as well, although much of the information is more specifically related to specific parts of the escrow process, including obtaining signatures on important documents, determining funds needed to move forward and obtaining a preliminary Title Report. All of these tasks must be completed in a specific order and by a specific date. This is where your escrow officer and Realtors expertise will come into play.

The Final Stage: Closing Escrow

Closing escrow is may seem like the finish line, but there are various items that must be completed in order for the close to be successful. Paying off loans, the preparation of documents and ensuring that all of the instructions have been fulfilled are just several of the actions that take place during this time. Once these items are complete the property is transferred and the escrow closes.

If you are interested in learning more about the escrow process or are seeking an experience and expertise from an escrow officer, please feel free to contact us!

Buyers and sellers often find residential real estate statistics confusing. In this blog we will shed some light on these numbers. We’ll take a look at the most widely used statistics and we’ll review each one to better understand them.

What are the some of the more important statistics?

“Existing-Home Sales” is one of the commonly used statistics. This number represents completed resale transactions of single-family, townhomes, and condominiums. New homes are not included. This statistic is prepared and reported monthly by the National Association of REALTORS (NAR) and is considered to be a good indication of trends in residential real estate. NAR’s “Housing Affordability Index” is also an important statistic. NAR develops this index by expressing the typical monthly mortgage principal and interest payment as a fraction of gross household income. A low index indicates very good housing affordability. The “Median Existing Home Price” (reported by NAR) is reported both nationally and by region, and represents the sale price at which half of all homes sold at a higher price and half of all homes sold at a lower price. NAR also reports its “Total Housing Inventory” which is an accounting of existing homes that are available for sale. This number is then divided by the current sales pace (homes being sold per month) to establish the current number of months of supply of homes for sale.

The U.S. Census Bureau and the Department of Housing and Urban Development (HUD) jointly release their monthly estimate of “Sales of New Single-Family Houses” and the “Median Sales Price of New Homes Sold” and “New Houses for Sale.” All of these numbers arseasonally adjusted, and the “New Houses for Sale” statistic is used to develop an estimate of the number of months of supply of new houses in inventory on the market and available for sale.

San Diego-based DataQuick monitors real estate activity nationwide and each month reports “New and Resale Houses and Condos Sold” nationally, statewide, and by metropolitan area. Another important statistic prepared by DataQuick is its monthly-reported “Median Price Paid for a Home.” DataQuick also provides statistics on distressed property sales (foreclosures, short sales) and “Typical Mortgage Payments” by home buyers.

Zillow Inc prepares and reports quarterly its “Home Value Index.” This number is widely used to demonstrate possible trends in improving or deteriorating home prices.

“Inventories of Unsold Homes” is shown in the Wall Street Journal’s quarterly survey of housing market conditions in 28 major metropolitan areas. Inventories are expressed as the number of months of supply of homes listed for sale in each market at the current sales pace.

What should I look for when reading these statistics?

“Existing Home Sales” is a good number to follow to get a good broad sense of the direction and strength of the market. If the month-to-month number is generally rising, this would indicate an improving sales pattern, and if the number is falling it would indicate a deteriorating sales pattern. The same is true for DataQuick’s “New and Resale Houses and Condos Sold.” The rate at which it rises or falls will indicate the relative strength or weakness in the market.

Also watch the “Total Housing Inventory” and the “Inventories of Unsold Homes.” A large inventory would typically indicate a weak real estate market and a small inventory would indicate a strong market. A balanced market typically has a six-month supply. And, for an understanding of price appreciation or depreciation, watch the “Median Existing Home Price” and the “Median Price Paid for a Home” and the “Home Value Index.”

With all of these numbers, always be attentive to local statistics, not to national or even state-wide figures. This is because real estate markets can vary substantially across the nation, across your state, and even across metropolitan areas.

On March 18^th HUD issued important information pertaining to how mortgage loan originators comply with the Real Estate Settlement Procedures Act (RESPA) with regard to the Federal Reserve Board’s Loan Originator Compensation rule, effective April 1^st. This information clarifies RESPA requirements related to proper disclosure on the GFE and HUD-w settlement statement.

The guidance addresses:

(1) mortgage broker transactions where the broker is compensated indirectly from the lender by means other than an amount that is computed based on the interest rate, such as by a flat fee or an amount that is based on any other computation;
(2) no cost transactions where the credit for the interest rate chosen covers third party settlement charges;
(3) using a credit/charge calculation prior to completing Block 2 on the GFE; and
(4) payments by lenders to borrowers to correct tolerance violations in transactions involving a mortgage broker.

Click Here to view the complete guidance.

Here at the Coachella Valley Escrow blog, we post Technology Tips designed to help you, the REALTOR®, grow your business, keep up to date on the latest technologies, and move you forward into the new era of real estate.

It’s interesting to think that just over a year ago no one had an iPad. After its release in the US in April 2010, Apple has sold more than 15 million iPads (including the just released iPad 2). With over 65,000 apps in Apple’s App Store, the iPad makes it easy and fun to work while you’re on the road. Have you considered purchasing an iPad for your business? The days of lugging around a heavy laptop are over!

There are thousands of apps to download in Apple’s App Store, but where do you begin? We took a look at some of our favorite apps for business and chose our Top 5:

Dropbox: FREE
With no complicated interface to learn, you can easily transfer files from your computer right to your iPad. Dropbox is the easiest way to store and share files online, without having to email anything. No matter where you are, files saved on one computer can be viewed on multiple devices, such as other computers (Macs or PCs), phones, and your iPad. When a file is updated on one computer, Dropbox will automatically save the changes on all other devices. It’s a must-have app for any real estate agent.

Keynote: $9.99
Apple says Keynote is “the most powerful presentation app ever designed for a mobile device”, and we’d have to agree. If you spend a lot of your time sitting down with clients, Keynote is the simplest way to run a powerful presentation. Keynote allows you to view and easily edit your presentation, share by exporting to Microsoft PP or PDF format, arrange objects on your slides by simply dragging them on the canvas, create sophistic animations, and more.

GoodReader for iPad: $4.99
The super-robust PDF reader and #1 selling non-Apple app for the iPad last year in the US. Read virtually anything, anywhere. With GoodReader for iPad, you have the ability to mark-up PDFs and sync your files with remote servers. In addition to handling PDF & TXT files, GoodReader supports MS Office, iWork, HTM and Safari web archives, hi-res images, audio and video.

HootSuite: FREE
HootSuite is the perfect social media tool combining Twitter, Facebook, and Foursquare into one elegant and powerful interface. Spread messages, monitor conversations, and track results right from your iPad. With HootSuite, you have the ability to send and schedule Facebook and Twitter posts, manage campaigns, schedule updates, and see click-through stats for all of your social networks.

Noterize: $3.99
Noterize allows you to view and annotate any available PDF or PowerPoint document. The built-in web browser enables direct importing of files from the web, while integration with Box.net and Dropbox makes transferring documents between your computer and iPad as simple as can be. The app currently supports distribution via Facebook, Twitter, Google Docs, Box.net, Dropbox, and email. You can even choose which specific pages of a document you would like to share, and the order of those pages in the document.

In a commercial property foreclosure, the lender will usually ask the judge to assign a Receiver to take “control” of the property. Receivers are normally nominated by the lender; however, they are considered agents or officers of the court and are a neutral third party. The Receiver (typically individuals, companies, or attorneys) will “protect, preserve and secure rents” and aid in restoring order to the business after a loan default on the foreclosed property.

Receivers have authority to:
Hire tradesmen to maintain the building
Make decisions about the operation of the property and the business
Notify tenants of the receivership
Execute leases
Collect Rents
Pay Taxes
Pay Utilities
Maintain insurance
Hire a real estate broker to list and sell the property

To learn more about foreclosure and receivership laws, visit: www.receivers.org

Several months ago, the California Department of Real Estate issued a publication regarding Short Sale Fraud.  Due to the increase in Short Sales in the market today, instances of fraud are continuing to grow.  Typically, fraud occurs when there is an intentional failure to disclose information to the short sale lender.  This will result in lenders approving the sale based on false or purposefully excluded information.

Click here to download and learn more about Short Sale practices and the growing fraud in this area.

Effective April 18^th 2011, the FHA will raise the annual mortgage insurance premiums by “25 basis points” (or one quarter of a percent of the total value of the loan) for borrowers on primary, 1-4 unit properties. This change will not affect Title 1 loans, the HECM loan, the HOPE loan, and existing FHA mortgages.

Upfront premiums will not be affected, and FHA will continue charging an upfront premium equal to the following percentages of the mortgage:

• Purchase Money Mortgages & Full-Credit Qualifying Refinances – 1%
• Streamline Refinances – 1%
• Home Equity Conversion Mortgages – 2%

With the new changes effective, on a $250,000 sales price, the buyer will end up paying about $50 more in their total monthly mortgage payment. And, when looking at qualifying buyers, this could lower their purchasing power by around $9,000. Meaning, they will only be able to afford a $241,000 home, instead of a $250,000 home.

FHA borrowers will be paying about twice as much for mortgage insurance on a 30-year loan than if they were paying for Private Mortgage Insurance on a non-FHA mortgage. By putting at least 5% down on a 30-year mortgage, borrowers will pay an annual insurance premium of 1.10% of the value of the loan. Any down payments smaller than 5% will end up paying about 1.15%.

The chart below illustrates how much more a mortgage payment will increase based on the new changes:

*Information provided by mortgageloan.com