What is a Tallahassee Home Warranty Plan?

We offer a free Home Warranty to all our first time buyers.  I’d like to go over what exactly and Home Warranty is and what it covers.

The last thing a home buyer wants to worry about after closing is what could possibly break or malfunction in her new home. Since that can cover a multitude of items and systems, for peace of mind, it’s a good idea to get a home protection plan. It’s especially a good idea to obtain a home warranty if you’re a first-time home buyer with no experience maintaining a home.

Who Pays for the Home Warranty?

Now, whether the seller pays for the home protection plan and home warranty coverage or whether the buyer pays for it, will depend on your local customs. It varies. In many locales, it’s normal for a seller to pay for the coverage because it’s a seller benefit. Why? Because then the buyer won’t be calling the seller after closing if something breaks. Many real estate agents will also give buyers a home warranty as a gift at closing.

How Much does a Home Warranty Cost?

They are fairly inexpensive, typically ranging from $250 to $400, depending on coverage. Home warranty companies sometimes run special sales and either discount policy prices or offer additional coverage for the same price. The policies are prepaid for a year in advance, at which time they expire or can be renewed.

How Do They Work?

Although specific plans provide for specific types of coverage, most operate the same way.

* If a home system or appliance breaks or stops working, the home owner calls the home warranty company.

* The home warranty company calls a provider with which it has a business arrangement.

* The specific provider calls the home owner to make an appointment.

* The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.

* The home owner pays a small trade service fee (less than $100).

Types of Coverage

Because all plans differ, you will want to ask specifically what is covered. Ask your real estate agent if upgrades are available. Pay close attention to whether the home warranty company will pay for repairs to make certain types of systems or appliances compliant with new regulations.

What If I Disagree With the Diagnosis?

Sometimes a service provider will deny a claim. (See below.) If that happens or if you are unhappy with the service provided, call your real estate agent and complain. Your real estate agent, if she has a good working relationship with the representative from the home warranty company that is covering your home, well, she can seek resolution for you. Agents all over the country are going to be very upset at this suggestion, but it works. If my client calls me with a problem, I call my rep, and she eventually finds a way to work out a solution acceptable to all the parties involved.

In short, don’t take “no” for an answer! Call your real estate agent.

What is Not Covered?

* Outdoor items such as sprinklers

* Faucet repairs are not covered under all plans

* Not all plans pay for refrigerators, washers & dryers or garage door openers

* Spa or pools, unless specific coverage requested

* Permit fees

* Haul aways

What Can Cause Denial of Payment?

* Improper maintenance

* Code violations

* Unusual wear and tear

* Improper installation

General Coverage

* Air conditioning

* Dishwashers

* Doorbells

* Furnace / heating

* Water heater

* Ductwork

* Garbage disposal

* Inside plumbing stoppages

* Ceiling fans

* Electrical systems

* Range and oven

* Telephone wiring

Magic Words: I want to make a low-ball offer

Quote yourself when you want to make a key point

Magic Words

(CN), when I got into this business I said to myself, “I’m going to help people make triple-win decisions because it’s the right thing to do.”  So before we start to negotiate a lower price, what happens when you imagine this home making your (5-6-7) come true?  (CN), stop and say to yourself, “I don’t want to scare the seller, casuing them to think we are not serious.”  Instead let’s look at the facts and make the right offer based on the average list price to sell price, __%.  That would be a tripe win.

Tallahassee Home Buying from A to Z

Every state requires slightly different steps to buying a home, although they are basically very similar. Since I am most familiar with the way Tallahassee does it, here is the path to home ownership in Tallahassee, broken down into simple steps:

1) Hire a Buyer’s Agent

* A buyer’s agent will represent only you and have a fiduciary responsibility to look out for your best interests.

* Buyer’s agents may ask you to sign a buyer’s broker agreement, but it is the seller who pays the commission.

* Interview agents until you find an agent you trust and with whom you feel comfortable.

* Once you have settled on an area, try to hire a neighborhood specialist.

2) Get PreQualified / Preapproved

* Order a free credit report online and fix mistakes, if any.

* Ask your agent for a referral to a mortgage broker, but also compare rates offered by your own bank and / or credit union.

* Ask the lender to give you a loan preapproval letter, which means it will verify your income and pull a credit report.

* Determine your maximum loan amount, but choose only a mortgage type that you understand and a payment level with which you feel comfortable, which may very well be less than the maximum for which you are approved.

3) Look at Homes for Sale

* Ask your agent to look at homes for you before showing them to you.

* Narrow your search to those homes that fit your exact parameters to find that perfect home.

* Ask your agent to give you MLS print-outs of comparable sales in your targeted neighborhood.

* Consider all homes on the market, including fixer-uppers, REOs, foreclosures, short sales and those overpriced homes with longer DOM.

* Observe open house etiquette.

* Tell your agent which online home listings you are interested in previewing and ask for additional input.

4) Write a Purchase Offer

* Consider writing seller’s market offers in sellers markets and buyer’s market offers in buyer’s markets.

* Select a home offer price based on the amount you feel a seller will accept or counter.

* If you are considering a lowball offer, ask your agent to substantiate this price for you.

* Prepare for multiple offers if the home is considered desirable in a hot location.

* If your offer is rejected, ask your agent to explain why and don’t repeat that mistake with your next offer.

5) Negotiate and Write Counter Offers

* Expect the seller to issue a counter offer.

* If the seller counters at full price, continue to negotiate.

* During offer negotiation, share personal information about your family to give the seller a reason to care about you.

6) Make an Earnest Money Deposit

* When your offer is accepted, deposit your earnest money check with the appropriate party.

* Do not ever make your check payable to the seller.

* Your offer should contain contingencies that will return your earnest money deposit to you if you cancel the contract.

7) Open Escrow / Order Title

* Your agent or transaction coordinator will open escrow and title, if the listing agent hasn’t already done so.

* Ask for the escrow officer’s name, phone and escrow file number.

* Give this information to your lender and your insurance agent.

8) Order Appraisal

* Your lender will require an advance payment for the appraisal.

* If you receive a low appraisal, discuss options with your agent.

* Ask for a copy of the appraisal.

9) Comply With Lender Requirements

* Lenders may ask for additional information.

* Do not make home buying mistakes such as altering your financial situation while in escrow.

* When the file is complete, the lender will submit it for final underwriter approval.

10) Approve Seller Disclosures

* Read and question items you do not understand on the TDS, Seller Property Questionnaire, natural hazard report, pest inspection / completion and other documents such as a preliminary title policy.

* Realize you have 10 days to cancel if lead paint is a health hazard.

* Read every document in its entirety; ask questions about all seller disclosures.

11) Order Homeowner’s Insurance Policy

* Order your homeowner’s insurance early.

* Sometimes previous claims by a home owner can make it difficult to get insurance.

* Get replacement coverage.

12) Conduct Home Inspection

* Hire a reputable home inspector.

* Bring a home inspection checklist with you.

* Attend the home inspection.

13) Issue Request for Repair

* If the home inspection turns up health and safety issues, issue a request for repair by asking the seller to address those issues or give you a credit for them.

* Realize no home is perfect, and the inspector will find faults.

* Be reasonable.

14) Remove Contingencies

* By default, California C.A.R. contracts give you 17 days to remove contingencies.

* Make sure your loan is firm and the appraisal is acceptable before removing your loan contingency.

* If you do not remove contingencies, the seller can issue a request to perform and then cancel the contract, on top of demanding your deposit.

15) Do Final Walk-Through

* Do not pass up doing a final walk-through.

* Inspect the property to make sure it’s in the same condition as when you agreed to buy it.

* If you find a serious issue, address it now before you close.

16) Sign Loan / Escrow Documents

* In southern California, you will sign escrow documents shortly after opening escrow.

* In northern California, you will sign escrow documents along with your loan documents near closing.

* Bring a valid picture ID.

17) Deposit Funds

* Bring a certified check payable to escrow.

* Expect escrow to pad the amount, so you will receive a refund after closing.

* Consider asking your bank to wire the funds to escrow, saving you the hassle of waiting in line at the bank.

18) Close Escrow

* Your property deed, seller’s reconveyance and deed of trust will record in the public records.

* Title will notify you and your agent when it records.

* After recordation, unless your contract specifies otherwise, the property is yours — change the locks immediately.

How to buy a house

From Seth Godin:

Actually, how to think about buying a house.

You don’t see a lot of ads trying to sell you on spending too much money on a house. It’s more subtle than that. The marketing is all around us, and has been for years. The enormous social pressure and the expectations that come with it lead to misunderstandings and confusion. Here’s my advice to someone in the market:

In an era where house prices rise reliably (which was 1963 to 2007), it was almost impossible to overpay for a house. It was an efficient market, and rising prices cover many mistakes. Investing in houses in the USA was a no-brainer. More leverage and more at stake just paid off more in the end. This consistent, multi-generational rise taught us more than an ad every could: buy a lot of house with as little downpayment as you could.

A house is not just an investment, it’s a place to live. This is the only significant financial investment that has two functions. Things like cars and boats always go down in value, so most of the time, if you’re investing, you’re doing it in something that you don’t have to fix, water, fuel or live in. You shouldn’t fall in love with a bond or a stock or a piece of gold, because if you do, you won’t be a smart investor. The problem (as people who sell and fix and build houses understand) is that you just might fall in love with a house. What a dumb reason to make the largest financial investment of your life.

The psychology of down markets is irrational. Rising house prices might be efficient (many bidders for a single item lead to higher prices), but when there aren’t so many bidders, irrational sellers (see #2) don’t lower their prices accordingly. So, inventories get longer and it’s easy for the prospective buyer to think that a certain price is the ‘right’ price because so many people are offering houses at that price. Just because someone offers a price, though, doesn’t mean it’s fair in a given market.

To read the rest visit Seth Godin’s Blog.

House Marketing Mistakes & Bloopers

When Tallahassee real estate markets cool down, typically inventory increases and the number of buyers decrease. Slowing market conditions make it more difficult to sell homes, yet some homes still sell. So, why do some homes gets offers and others sit on the market? The answer has very little to do with the home itself, as I’ve heard real estate agents claim. More likely it lies within the poor quality of the marketing efforts. Here are mistakes I see sellers and their agents repeat over and over. Don’t let it happen to you.

BAD MARKETING: Uploading Badly Shot Photographs Online

Pictures speak volumes and are noticed before the written word. Since it’s the first thing a potential buyer will see, why leave a bad first impression? The job of a photo is to entice the buyer to want to see more of the home in person. It should not give the buyer a reason to cross the home off her list. Don’t publish photos like these:

* Pictures too dark with drapes / blinds closed

* Photos turned sideways

* Photos of cluttered rooms

* Uncropped photos with unnecessary elements in the pictures

* Photos of pets sleeping on the sofa

* Not submitting enough photos — or uploading only one unflattering photo of the front of the house

* High resolution photos without adjusting pixels for the Internet

BAD MARKETING: Withholding Important Information or Descriptive Comments

When there are tons of homes on the market, simply tossing out a property address while noting the numbers of bedrooms and baths is insufficient information for a home buyer. It doesn’t tell a buyer why she should make an appointment to see the home. Good marketing tells a buyer why this particular home is better than the dozens of others on the market. Sellers should focus on:


* What makes the home unique?

* What was the motivating factor that made the seller buy the home in the first place?

* How can a negative factor be addressed that will accentate its positive attributes?

BAD MARKETING: Underestimating the Importance of Broker / Agent Previews

Just like buyers, agents don’t have the time to look at every home on the market. So, what can you do to entice them to come see yours? Because agents are more likely to sell a house they have toured, sellers need to attract selling agents.


* Catered lunches. Go beyond the ordinary sandwiches and bottled water. Food motivates, and don’t let anybody kid you about this. Be creative with culinary selections.

* Offer drawings for small gifts or gift certificates.

* Give online certificates Compare Prices that can be immediately e-mailed.

BAD MARKETING: Restricting Access for Showings

If an agent can’t easily show your home, she is going to show another agent’s listing instead. Don’t give an agent a reason to pass up your home. Any of these can hamper showings:

* No lockbox on the property

* Restricted hours to show

* 24-hour notice

* By appointment only


* Call first, lock box

BAD MARKETING: Offering Less Commission Than Other Listings

It’s not that agents are greedy creatures who show only high-fee listings–which is against the law, although some are highly motivated solely by income–but agents tend to view lower-commissioned listings as those in which the seller isn’t very motivated to sell.

* If the seller isn’t motivated, it could mean the seller isn’t willing to negotiate on price.

* In slow moving markets, buyers expect to negotiate.

* Agents whose buyers want to negotiate will show only listings where negotiation is possible.

BAD MARKETING: Not Including Buyer Incentives

Some multi-million-dollar listings offer sports cars as a home buyer incentive, but it doesn’t have to be anything that expensive. An incentive doesn’t even need to cost the seller if the home price is structured to account for the discount. Here are typical incentives:


* $$ credit toward the buyer’s closing costs

* Home protection plan

* Pre-paid homeowner association fees for a year

* Buy-down mortgage interest rate

* Weekend getaway for two

BAD MARKETING: Saying No to Print Advertising

You can’t keep your home sale a secret and expect to sell it. Whether you pay for advertising or your agent does, you need to let everyone know it is for sale. The best way to do that is to advertise.


* Sunday classifieds in daily newspaper

* Picture classifieds, if offered during the week

* Local weekly or bi-weekly newspaper

BAD MARKETING: Saying No to Virtual Tours

Buyers today begin their home searches online. There is no better way to initially view a home than in the comfort of one’s own pajamas at home in front of the computer, looking at a 360-degree tour. Some buyers won’t even consider a property listing if it doesn’t include a virtual tour. Basic requirements are:


* Minimum of two spins and preferrably more if space lends itself.

* High resolution photos that buyers can print themselves.

* Ability to download photos so buyers can e-mail the pictures to friends / family.

Benefits to Buying a Tallahassee Home

If you’re like most Tallahassee first-time home buyers, you’ve probably listened to friends, family’s and coworkers’ advice, many of whom are encouraging you to buy a home in Tallahassee. However, you may still wonder if buying a home is the right thing to do. Relax.  Having reservations is normal. The more you know about why you should buy a home, the less scary the entire process will appear to you. Here are eight good reasons why you should buy a home.

Pride of Ownership

Pride of ownership is the number one reason why people yearn to own their home in Tallahassee. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Tallahassee Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future.


Although Tallahassee real estate moves in cycles, sometimes up, sometimes down, over the years, Tallahassee real estate has consistently appreciated. The Office of Federal Housing Enterprise Oversight tracks the movements of single family home values across the country. Its House Price Index breaks down the changes by region and metropolitan area. Many people view their home investment as a hedge against inflation.

Mortgage Interest Deductions

Tallahassee Home ownership is a superb tax shelter and our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment.

Property Tax Deductions

IRS Publication 530 contains tax information for Tallahassee first-time home buyers. Tallahassee Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. In California, the passage of Proposition 13 in 1978 established the amount of assessed value after property changes hands and limited property tax increases to 2% per year or the rate of inflation, whichever is less.

Capital Gain Exclusion

As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the “over-55” rule does not apply. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit–subject to limitation–free from taxation.

Preferential Tax Treatment

If you receive more profit than the allowable exclusion upon sale of your Tallahassee home, that profit will be considered a capital asset as long as you owned your home for more than one year. Capital assets receive preferential tax treatment.

Morgage Reduction Builds Equity

Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500 in principal, bringing that balance at the end of your first 12 months to $99,500.

Equity Loans

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home’s equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.

Required Home Buying Paperwork

When you begin shopping for a mortgage, make sure you compare identical loans to each other and ask for a good faith estimate (GFE) from each lender. This way, you can compare costs for each mortgage loan type. Your buyer’s closing costs will probably include a loan point or two.

Before Talking to a Mortgage Lender

Pull a copy of your credit report and examine it. You are entitled to a free annual credit report from each of the three credit reporting agencies. If you find a mistake, contact the creditor to get it fixed. Note delinquencies. If you have too many late payments, your FICO score will be adversely affected.

Realize that if you have a low FICO score, you can still most likely obtain an FHA loan, which does not rely on FICO scores. FHA loans also require down payments as low as 2.85% of the sales price.

To begin processing your loan, a lender will verify your employment through a verification of employment form. Give your employer a heads-up to expect to receive that form. Ask your human resources department to send it back right away. In addition, the lender will want the following paperwork from you:

Documentation Needed to Buy a Home

* Current Pay Stubs.

Your last two pay stubs will suffice. Make copies and don’t hand out your originals.

* W2s.

This is your wage and tax statement, issued by your employer for a calendar year. It is what you attach to your tax returns. Lenders generally want the last two year’s of W2s from both of you.

* Federal Tax Returns.

If you haven’t yet filed your tax return for last year, then find the two previous year’s of tax returns. Make copies. Include all schedules. Tip: Make sure the tax returns are signed by you.

* Bank Statements.

Some lenders want two months, while others will demand the last three months of bank statements. Make a copy from each lending institution. Include every page of each bank statement.

* Asset Statements.

If you own stocks, bonds, mutual funds or retirement accounts, make a copy of each statement. Lenders prefer hard copies over those printed online but will accept online statements if that’s how you receive your statements. Make copies.

* Copy of Current Driver’s License.

If you are meeting with the lender in person, you can bring your driver’s license with you for identification and reproduction. Otherwise, copy your license on a scanner or copy machine and include it. Your license should have a photograph of you.

* Ask About Upfront Costs.

Many lenders will request a credit report fee, but some do not. Generally, appraisal and credit report fees are paid in advance when you are ready to accept the loan. Do not pay any fees to a lender until you have elected to use that lender.

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