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As a homeowner, do you have appropriate homeowners insurance coverage?

Given the increase in home values of the last several years, it is important to be sure that your insurance would cover the cost to rebuild, in the event your house was destroyed by fire.

One insurance tracking firm estimates that the average under-insured shortfall is approximately 20-25%. Even if you have guaranteed replacement or an extended replacement policy, you can still face coverage gaps. Check with your insurance carrier to determine if you have adequate coverage in the event of a loss.

Also, remember that your regular policy typically does not cover losses as the result of a flood. If you live in a flood plain, you need flood insurance. To do so, contact the National Flood Insurance Program at (888) 379-9531 or visit their web site.

Helen Lynch

Senior Vice President

Managing Broker, Sandy Springs office

Did you know that Georgia State Law requires you to sign an Exclusive Buyer Brokerage Agreement when working with a real estate agent? Signing this allows you to establish an agency relationship with your real estate agent. The agreement must be in writing and it creates a client relationship between you, the buyer and the broker.

If you wish to not sign this agreement, you will be treated as a customer.  There is a big difference between the level of service provided when you are acting as a client and when you are acting as a customer.  If you are a customer, the real estate agent can simply provide ministerial acts such as giving you the names of vendors, writing the purchase and sale agreement and giving you the comparables for homes which are presently listed and those which have sold over the last 12 months in a specific neighborhood (which is actually public information).  The agent should always disclose material defects that are known to them, whether there is an agency agreement or not.   

In a client relationship, the agent can give you his or her advice and counsel, point out reasons not to buy a house, help the buyer develop a negotiating strategy, help them decide what price to offer based on a Comparable Market Analysis, and keep the buyer information confidential, except as required by law.  In other words, when you have a client relationship, agents can use their “minds” and give advice, as opposed to a customer relationship, where the agent can simply use their “hands and their feet” performing ministerial acts. 

It is for this reason that we strongly suggest that you have representation when purchasing a home.  This is something that you should discuss with your Jenny Pruitt agent at the start of your home search.  

The 2006 NATIONAL ASSOCIATION OF REALTORS® Profile of Home Buyers and Sellers describes the characteristics and motivations of recent home buyers and sellers and in so doing helps real estate professionals track the changing demands of consumers in a dynamic market.  We thought you might be interested in some of the snippits from this important research.  

CHARACTERISTICS OF HOME BUYERS

• The typical home buyer was 41 years old. Among first-time buyers, the median age was 32.
• More than one-quarter of buyers reported a 2005 household income of at least $100,000.
• Sixty-one percent of recent home buyers were married.
• For repeat buyers, the most important reason for their purchase was a desire for a larger home.

CHARACTERISTICS OF HOMES PURCHASED

• One in five homes purchased by recent buyers was newly built.
• Three-quarters of homes purchased were detached single-family homes.
• Neighborhood quality was the most important factor for buyers in selecting a location.
• The typical buyer purchased a home that was slightly more than 1,800 square feet in size.

THE HOME SEARCH PROCESS

• Eighty-five percent of home buyers used a real estate agent during their search for a home.
• Nearly three-quarters of buyers viewed the Internet as a very useful tool in their home search.
• A majority of buyers reported that they drove by a home viewed online.
• Typical buyers searched for eight weeks before finding the home they
• purchased.

HOME BUYING AND REAL ESTATE PROFESSIONALS

• Over three-quarters of buyers used a real estate agent to purchase their home.

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After having been pre-approved for a mortgage by your Jenny Pruitt Mortgage Representative you are ready to start the emotional and exciting home buying experience. When your real estate agent shows you that near perfect property you have been searching for it’s time to begin the process.

After your agent has helped you negotiate the best deal possible for you and the seller of the property and the sales agreement has be accepted by all parties, the real work begins. Most likely the buyer will have a home inspection performed by a home inspector to discover any glaring defects the property may have. After the lender has appraised the home and all loan requirements have been satisfied the deal should be ready to close.

Are we missing anything? Maybe. Are you quite sure where the boundary lines are located for the lot which you are purchasing? If there are fences surrounding the property, do they belong to you? Does the large 50 year old oak, which appears to be dying, belong to you are your adjoining neighbor? Are there sewer or utility easements on the property you are purchasing? If you want to make additions to your new home or build a garage do you know what the set back requirements are? Will the underground utilities allow you to build that swimming pool your family has always wanted?

The above questions can all be answered by having a reputable surveyor complete a survey on the property you are purchasing. The cost for a survey will vary from $400 and up. Most lenders do not require a survey but for the many reasons you should. If you are buying a vacant property on which you plan to build you may wish to have your surveyor provide a topography study along with the survey. This will help you decide the absolute best place to build your house or other structure.  

Happy House Hunting,

Rob Owen 

Senior Vice President, Managing Broker
Buckhead office