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What Does the Builder’s Warranty Cover?

Buyers of newly-built homes are often interested in warranties. Known as a “builder’s warranty,” this agreement promises that the builder will repair or replace certain elements of a home if things go awry. Some of these warranties may be backed by the builder directly, while others are purchased by builders from independent companies that may assume responsibility for specific claims. In some cases, a homeowner will purchase coverage from a third-party warranty company as a way to supplement coverage provided by the builder.


Before investing in this type of warranty, it is essential to understand what’s covered and what is not covered. Additionally, you should understand the claims filing process; disputes may arise, and you should prepare to defend yourself if necessary.


In the case of newly constructed homes, most warranties will offer limited coverage on factors like workmanship and materials as they relate to components of the home. This may include windows, sliding doors, roofs, plumbing, electrical, and HVAC systems. A warranty will generally provide coverage for one- to two years, but separate components may have their own timelines. The warranty itself will define how and by whom repairs are made.


So, what’s not included? Warranties will not cover household appliances, and they rarely cover tile and drywall cracks and irrigation systems. Most builder’s warranties exclude expenses that may be incurred as a result of the repair, such as household storage.


However, you should understand that all warranties are different. Before you close on a new home purchase, ask your builder or third-party warranty provider the following questions.


  1. What does the warranty cover?
  2. What is not covered by the warranty?
  3. What is the claim process?
  4. What is the extent of your liability?
  5. Where are some of your previous projects so I can speak with owners there?


Additionally, before signing, check with your state’s Attorney General Office or contractor licensing board to ensure your builder is offering all warranties they are required to provide.


How to Deal with Counteroffer Negotiations

An initial offer does not guarantee a sale. In fact, it does not even guarantee a price. A lot can happen between the initial offer and closing day. Enter: The Counteroffer.


Negotiations are one of the more stressful aspects of the homebuying process. The negotiation itself is driven by the counteroffer: the rejection and counter to an offer made by a member of the negotiation. These offers are often handled between real estate agents, but they are incredibly time-sensitive, inducing stress in all parties involved.


So, why were you countered? If the initial offer was below list price, the counteroffer is expected. If there are several offers, the listing agent will present all options to the seller and notify the buyers of any choices. In addition to disputing final price, a seller may counter a proposed closing date. If they need to move out quickly, they may want an earlier time; if they need to take their time with the moving process, they may push later. Price and date are concomitant, and a disagreement on one can mean a failed deal or negotiation.


If your offer is countered by the seller, it is essential to have an experienced real estate agent review the material. This professional will allow you to put yourself in a better position to counter the counter. Carefully review every aspect of the deal and consider every aspect of the sale, including both old and new information. If you offered above the list price, remember that the appraisal may come in low. To that end, consider undertaking an appraisal or inspection before settling on a price and time. If you’ve offered before these processes, prepare yourself for a future counteroffer.


If you are experiencing negotiations, carefully plan and establish your baseline with a real estate agent. Understand the point at which you are able to walk away from a sale, and don’t allow yourself to be lured above your comfortable price point.

What Does it Mean to be “House Poor”?

If you’re a current or aspiring homeowner, you’ve likely heard the phrase: house poor. This situation occurs when a person spends a large proportion of their total income on home ownership, which likely includes mortgage payments, property taxes, maintenance, and utilities. As a result of high home ownership costs, these individuals are short on cash for discretionary items and may experience difficulty meeting other financial obligations, such as vehicle payments and childcare services.


In most cases, being house poor is a result of “buying too much house.” Put simply, the homeowner has overestimated the amount of financial contributions they are able to make toward a home. Purchasing smaller homes or waiting to save money are great ways to prevent this situation, but it is not uncommon for a homeowner to bite off more than they can chew in a mortgage agreement. This may be the result of total cost underestimation, but it may also be the result of a lost job or decreased income.


The best way to prevent becoming house poor is to clearly and strategically budget. Experts say consumers should plan to spend approximately 25% of their income on home expenses. If a homeowner has other expenses and no additional debt, they can potentially spend up to 30%. In all cases, it is important to start a savings account to help save each month to address issues around the home.


Unfortunately, even the best budgeting can’t prevent job loss or emotional trauma. Changes to a household’s spending outlook may create difficulty in making mortgage payments. There are ways to reduce spending, such as canceling vacations or downgrading vehicles. Many individuals choose to pick up a second job to pay additional housing bills, while others choose to simply sell the home and purchase or rent a smaller property.


Though becoming house poor is a scary concept, many American homeowners are experiencing the phenomenon. As a result, it is important to only spend within your financial limits—especially when it comes to large investments, like homes and cars.


5 Strategies: Get Your Security Deposit Back

Though this site’s primary purpose is to provide advice for homeowners, we want to acknowledge the population of Americans currently renting their residences. This group is significant; according to the Pew Research Center, more U.S. households are renting now than they have at any point in the past fifty years. Many of these leases require a security deposit, and retaining those funds serves as a point of stress for most renters. Below, we have detailed a few strategies for getting your security deposit back.


Have a plan when you move in. Take necessary precautions when decorating your new apartment. If you have a security deposit, you may want to consider using poster putty and removable hooks to hang items rather than drilling holes into the wall. Use felt pads to protect wood floors from scratches and put carpets under rolling chairs to limit damage.


Document everything. When you move in, photograph every room in the apartment. This will allow you to use evidence if the landlord disputes your later claims. If you notice anything wrong with the apartment when you move in, alert the landlord immediately—even if it is just a simple hole from a hung picture.


Clean thoroughly. If you want all of your deposit money back, plan to do a serious deep clean before moving out of the apartment. This includes behind and beneath appliances, plus small details like light switches, door frames, and baseboards. You may want to hire a professional.


Complete necessary repairs. Replace light bulbs, fill nail holes, and unclog drains. Paint a coat of the original paint color on walls with scuffs or holes; if your security deposit is more than what a professional asks, it may make sense to hire someone to complete the painting job.


Research local laws. Most states require a landlord to provide explanation for withholding security deposit funds. Research local renter’s rights related to security deposits at the city, county, and state level. Start your research on the website of the state’s attorney general and the U.S. Department of Housing and Urban Development.


Best Ideas for Increasing Your Home Value

Whether you’re planning to sell, increase your investment value, or simply improve your home, increasing a property’s value is an excellent strategy. No matter your budget, there’s always an upgrade that can significantly impact the home’s resale value and strength. These home improvements could be for potential buyers, but they can also be for you and your family. Below, we have detailed a few projects that are sure to make a difference.


Kitchen Renovations—This is the biggest way to add value to a home. Adding seating, such as an island with barstools, is an excellent way to update the kitchen without purchasing new appliances. However, investing in a new appliance will also draw interest, even if you plan to take them with you during the move. Replacing countertops and flooring can help you get the most bang for your buck.


Bathroom Updates—Adding a second bathroom or upgrading an existing bath are great ways to improve the “quality of life” in your home. Spend a bit more on the details, such as a high-quality towel rack and upgraded hardware. If you’re not in a position to remodel, re-grouting tile will instantly give your bathroom a fresher look.


Lighting Upgrades—Brighter rooms feel bigger, and if you’re selling, you want every space to look as big as possible. LED lighting changes everything, and investing in something as simple as under-cabinet lighting, recessed, or pendant lighting can make all the difference.


Paint—A new coat of paint will allow your space to feel cleaner and brighter. Use neutral shades, and—if you’re short on time—tackle trims and entryways. This is an excellent and cheap way to improve the way your home looks to both guests and potential buyers.


Landscape Improvements—If your home has a yard or private entry, spend some time cleaning up. If you don’t have the time and money for planting, put down dark mulch in targeted areas. Additionally, pay special attention to the entry. This could include anything from concrete paths and porch plants to a fresh coat of paint or a new doorknob.

An Introduction to Mortgage Loans

A mortgage loan—most commonly known as, simply, a mortgage—is used to raise and deliver funds for the purchase of real estate. This is done by putting a lien on a property—a security interest to secure the payment of a debt. The loan is secured on the borrower’s property through a mortgage origination—a specialized subset of loan origination in which the lender works with the borrower to complete the mortgage transaction.


A mortgage borrower can be an individual mortgaging their home or a business mortgaging commercial property. In most cases, the lender is a financial institution, such as a bank, a credit union, or a building society. Over the past century, the mortgage loan has grown in popularity—few individuals have the savings or liquid fund available to purchase property without financial assistance. This popularity has led to the development of mortgage markets worldwide.


There are two basic types of mortgage loans: a fixed-rate mortgage (FRM) and an adjustable-rate mortgage (ARM). In a standard fixed-rate mortgage, the rate of interest accumulation remains fixed for the duration of the loan. In an adjustable-rate mortgage, this rate is fixed for a period of time, but will then shift periodically according to some market index.


Several factors contribute to a choice in the most appropriate loan. For example, the interest rate itself is an essential characteristic to consider when choosing your loan. Moreover, the term of the mortgage will often determine whether fixed- or adjustable-rate is best for your transaction. Payment amount and frequency, as well as prepayment amount, should also be considered.