All Wet and Wondering Whether To Buy Flood Insurance

By Bill Primavera

The Home Guru

As I sit in my home office, I keep saving this document in case the electricity goes. The lighting is crackling outside my window and the rains have been coming down with such force that the crushed bluestone in my driveway is developing deep ruts, and that rarely has happened since I’ve lived in my home for over 30 years. It’s amazing what the force of water can do.

But today, where water and flooding is concerned, anything not experienced in the past is no guarantee that it won’t happen in the future. In the aftermath of Irene, we saw so many victims of flooding interviewed on the television news, saying that they had never before experienced flooding of their basements or their entire properties in many years of living in their communities and homes.

“Everybody is in a flood zone,” said Lynn Hillmann, my insurer at Eifert, French & Ketchum, when I called to ask whether I should have flood insurance. “Many people are surprised to find they are in a higher rated flood zone than they thought,” she added.  The reason is that FEMA (the Federal Emergency Management Agency) has recently re-configured the flood zone maps after more than 30 years and, during that time, the development of new roads and other non-pervious surfaces has increased to the point where water in many areas in our region no longer has the same mitigating land features that absorbed it in the past.

Hillmann told me that I could check one of several websites dedicated to informing homeowners about their status and whether they’ve progressed from low to moderate to high risk. But the terminology and conditions of insurance can be quite confusing and disparate. For instance, I went to two different websites to assess my property’s risk for flooding and when I typed in my address, one of the sites claimed I was in a “low risk” zone, although I was close to a flood zone, but the other said that I was in a “high risk” zone.  The one I’d probably rely more on was recommended by Hillmann. It is www.floodsmart.gov (the one that placed my home in higher risk) where you can rate your own flood insurance requirements.

I asked Hillmann, should I get flood insurance since there are so many surprises that Mother Nature is reaping upon us? She responded that she felt it was a good idea for property owners to get a flood quote and be informed, no matter their flood zone status, if they want to feel more comfortable about any eventuality.

Also I mentioned a fear that many homeowners have about flooded basements. My home is on a high water table as most homes are in this region, and I wondered if there were a disruption of electrical service and my sump pump didn’t work, would I be covered if my basement flooded? The answer was no, “because there’s a qualification to be insured for floods that specifies that two adjacent properties or two acres surrounding the person’s home must be underwater,” she responded. So, who knew?

“And it doesn’t necessarily have to be a disruption in electricity,” she added. “With all the rain this spring, the water was coming into some peoples’ basements with such force that the sump pumps just couldn’t handle it.  However, there is an endorsement which can be added to a regular homeowner’s policy that insures back-up of sewers and drains.”

Even then, homeowners should read their policies very carefully because, in basements, only utilities such as boilers, water heaters, air conditioning units, and washer and dryer, are covered, and not carpeting, walls or furnishings.

Another restriction is that a basement is defined for coverage as having all four walls underground, totally below grade, rather than the “walk-out” style of basement that many of us have, which is treated differently. That is not considered a basement by the flood insurance program, according to Hillmann.

There were some other surprises along the way of my modest investigation, such as learning that the  maximum amount of residential flood coverage I can get is $250,000  and somewhat alarming to know that nearly 25 percent of all flood insurance claims come from medium or low-risk flood areas.

Both homeowners and real estate agents alike have concerns about what the impact of flood zone reclassification will have on insurance coverage.  If the cost of insurance increases, it means that home ownership becomes more expensive for both new home buyers and existing home owners in affected areas. As it is, the mortgage lender must by law require home buyers to buy flood insurance as a condition for receiving a federally backed loan.

Because there are so many variable conditions and policies to consider, the best advice I could give about flood insurance is to go to the website mentioned, www.floodsmart.gov, to learn more. And, then, call a home insurance agent. Lynn Hillmann, for one, can be reached at 914-250-2500.

 Bill Primavera is a licensed Realtor® (www.PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (www.PrimaveraPR.com). For questions or comments about the housing market, or selling or buying a home, he can be reached directly at 914-522-2076.

Home Warranties Are More Important in Tough Times

 By Bill Primavera

The Home Guru

Sometimes you just don’t know what you don’t know. But when I find out something new in the real estate busines, I usually I like to hear a compelling endorsement or case history to drive it home. That happened a short while ago when I learned that home warranty programs make good sense, especially in hard times. 

A manager’s meeting was held last week by Donna Riniti, the new manager in my office at Coldwell Banker, devoted to all the paperwork real estate agents have to complete each time we list or sell a home. One of the forms we are asked to bring to the attention of a seller when taking a listing allows the client to either accept or reject a home warranty program.

If you are fuzzy about the difference between a home warranty program and homeowner’s insurance, it’s a pretty clear distinction. While a homeowner’s insurance policy covers damages due to a natural occurrence like the recent Irene, a home warranty program offers a contract that covers the repair or replacement of the most frequently occurring breakdowns of home system components and appliances due to normal wear and tear.

It’s not all that expensive, averaging about $500.00 a year with most companies (at Coldwell Banker, the program is administered by American Home Shield at about that range, depending on the options taken.)  Very honestly, while I thought it was a good enough program, I never felt particularly compelled to promote it to clients.  But at the manager’s meeting, I happened to be sitting near Barbara Bodnar, an associate broker in our office, and her relating her experience with suggesting home warranties made me sit up and listen.

“I would say that 95 percent of my sellers have taken the home warranty insurance, and it’s for a good reason” Barbara said. “Remember, we’re not in the business of selling insurance and we get no compensation if a seller chooses to purchase it. We simply offer it as a service to sellers and it’s totally their choice to accept it.

“With this program, the seller is covered for the home’s systems and appliances during the course of the listing,” she continued, “and, at closing, the buyer is covered for a full year of service.  For the seller, it helps make the listing stand out among others, and for the buyer, it gives a feeling of confidence that the situation will be covered if something goes wrong.

“Of course, there are limitations, and there are some things that are not covered, and that’s why it’s very important to read the contract carefully,” she cautioned. “For instance, there is a service charge each time a supplier comes to fix something, but overall, it can save the homeowner or the buyer lots of money if something does go wrong.”

“Just recently, some issues came up at an inspection just before a closing that had to be addressed,” Barbara said, “and it was a good thing that no money had to be exchanged to get the work done. The buyer was able to call the insurance company after the closing and get the problems taken care of.”

“A home warranty gives the buyer peace of mind and it also demonstrates the seller’s commitment and good will to the buyer,” she said. Barbara also noted that, at the end of the year of coverage for the buyer, the policy can be renewed

Options and coverage can vary by the insurance company. Most would cover major systems like heating, ventilation, air conditioning, plumbing, electricity and appliances like refrigerator, dishwasher, oven, washer and dryer. Other coverage options might be pools, spas, and extra refrigerators, according to the unique needs of the homeowner.

Besides the benefit of avoiding unexpected repair or replacement costs, a warranty company provides a network of independently insured service contractors so that the homeowner doesn’t have to deal with identifying the best supplier for a particular job. The service charge to have a technician visit can vary from $65 to $100 for each service work order.

Especially when budgets are strained, for the buyer, there is a feeling of confidence that there will be no expensive surprises after the purchase of the house.  And for the seller, it offers a marketing point to make the listing more attractive. So, everybody wins.

Such warranties are also available for short sale, foreclosure and auction properties. Homeowners should know that a home warranty policy is not limited only to sellers and buyers in a real estate transaction. Any homeowner can sign on.

An especially important point about home warranties was made by Leila Chapman, vice president of real estate sales for American Home Shield, who said, “A home warranty is budget protection against the unexpected that can help keep owners in their homes.”

To know more about the American Home Shield Protection Plan, visit www.ahswarranties.com or call 1-866-797-4788..

Bill Primavera is a licensed Realtor® (www.PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (www.PrimaveraPR.com). For questions or comments about the housing market, or selling or buying a home, he can be reached directly at 914-522-2076.

Retrospective about Home Owning, Buying and Selling

By Bill Primavera

The Home Guru

Here is a retrospective of musings that come from my past columns in The Examiner News. For a full index of articles, visit: www.PrimaveraHomes.com and click on The Home Guru icon.

Will We All Return to Dust?

Did you know that household dust is composed mostly of our own flaking skin? If we are uncomfortable when our house is dusty, is that being uncomfortable in our own skin?

This Toilet Is for the Guys

The design of the elongated bowl surely was designed to accommodate the male anatomy. Trading up from a circular bowl to an elongated one is like a guy going from jockeys to boxers.

Did Someone Die in This House?

Some people are suspicious about buying a home next to a cemetery or one in which someone has been murdered or just quietly died.  But not all. One homebuyer, told that the house he wanted might be haunted, said, "I don't care if I have to live with the ghost of Morley, as long as I get a good price."

St. Joseph Reigns Again in Hard Times

Dedication to St. Joseph, the patron saint of selling homes, is back in the news and some entrepreneurs are doing well selling his statue for burial on properties to be sold, but it must be buried correctly. There is a report that one was buried facing the wrong direction and the home across the street sold, and it wasn't even on the market!

Where Is the Front Porch?

Hasn't everyone noticed that the front porch has all but disappeared from house plans? Seems that the advent of television, air conditioning, then social media eliminated the need for this social venue.  Those who build a front porch today just want to show where they would be and what they would be doing, if they had the time to do it.

Are Parents the Kiss of Death When Buying a Home? 

Realtors always groan when a young couple says that they must bring their parents to check out the house they've selected.  Traditionally parents are known as the kiss of death in the real estate transaction.  "We just want to protect our kids," parents say. "They just want to wield one last-ditch effort of control," say kids.

Who Does What in the Home?

Are there "guy" jobs and "gal" jobs and never the twain shall meet?  It's always great to witness a woman driving a large lawn mower or a guy washing dishes because these are not the traditional jobs society has assigned to the sexes.  And interestingly there is a carpentry service with the name Pink Ladies that has got to be a draw for the guys!

That Magic Spigot

In Disney's movie, Enchanted, the animated fairy princess finds herself in real-life New York City and one of her first discoveries of modern life is the magic of turning a spigot to create a waterfall. Where does the water come from, she asks?  From the pipes, she is told. But, where do the pipes get it, she asks? Actually, much like it came to the Romans.

Flood Insurance

The whole scenario of flooding has changed in our region and communities that have never flooded before now face the possibility. Why? Because of overdevelopment, water no longer has a place to go other than where it doesn't belong. Does it pay to get flood insurance? If it makes you feel better, but coverage is very restricted and you need a lawyer to understand a policy, but better to vet than to be wet.

Noise You Can't Control in the ‘Hood

The noise outside that annoys me most, other than lawn mowers early in the morning or late at night, is the barking of dogs that goes on and on. My town has a code that invites us to complain to the code enforcement officer if barking lasts more than 15 minutes. But lately, I notice that my neighborhood has been very quiet. Maybe every dog neighbor has been trained by Bark Busters?

Everything but the Kitchen Sink

Did you ever wonder where the expression "everything but the kitchen sink" originated? The answer has a shorter history than you might think.  The idiomatic expression developed at the onset of WWII when everything made of metal was collected, melted down and re-used for the war arsenal. The only objects left out were porcelain kitchen sinks.

Got Mold?

It can be a dark, dank business, but once identified, mold remediation is important to your health, and certainly to the sale of your home. It all but killed Ed McMahon and even Erin Brockovich, made famous by her eponymous movie and no one to be trifled with,  fought against insurers for the mold contamination in her house. If you see it or feel it, do something about it.

Mirror, Mirror on the Wall

When the wicked queen wanted verification of who was the fairest of all, she turned to her trusty mirror and, when it betrayed her, Snow White got the business.  But in today's downsize-minded economy, mirrors may be more important than ever as an illusion of greater space that otherwise we can’t afford.

Slowing Down on House Cleaning

Maid Brigade reports a lessening in house cleaning since the recession hit us. So, like many aspects of our lives in these times, while cleaning up, we're slowing down.

Bill Primavera is a licensed Realtor® (www.PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (www.PrimaveraPR.com). For questions or comments about the housing market, or selling or buying a home, he can be reached directly at 914-522-2076.

Housing Issues for Retired and Elderly Citizens

By Bill Primavera

The Home Guru

Last week I was invited to speak before a meeting of the Retired Municipal Employees Association, and as I planned my remarks, I thought about the realty that I’m at an age when some people think about retiring and living differently than they do now.  As for me, I intend never to retire from the enjoyable work I do unless I absolutely must. Nevertheless my living preferences have changed significantly in the past few years, just as if I were retiring.

When I was still in my 20s and my wife and I moved to the historic home we still occupy, I was eager and ready to restore and maintain it.  I was known as the “young guy” on the block who always answered the door with a hammer or paint brush in hand. Today, very honestly, I’d rather be doing something other than hammering and painting.

The housing issues facing retired and elderly people can be quite simple, such as finding living space on one level with no steps, and at the same time, they can be quite complex, such as facing the fact that their nest egg for retirement, their home, may have dropped 20 to 30 percent in value in the last five years.

Many older people are still in the homes in which they raised their children, married them off, and then retired as empty-nesters, and these homes may have become too big to rattle around in or maintain, and the tax bill that paid primarily for the education of their children no longer has the same payback.

But they may still want to remain in those homes, no matter how impractical. Interestingly, surveys by AARP find that about 80 percent of older persons say that they want to stay in their own homes and not move, and this phenomenon has been called the preference to “age in place.” It’s understandable.  After a long period of living in one place, our homes become an extension of who we are and how we express ourselves. Long time residence is also a connection to the community where people know their neighbors and merchants as well as their houses of worship, libraries and community service.

For a long stretch, our homes were our principal financial asset, but today, home owners may find themselves breaking even or, a worse state of affairs, they may be “underwater” when they sell if they have taken equity loans against the value of their homes. But what many are losing on the sell side, they can make up on the buy side, especially for those who are planning a move south where housing is much cheaper, as are living expenses.

Others who have paid off their mortgages and have equity can take reverse mortgages to stay put and live more comfortably through their golden years.

Those who decide to downsize still must think carefully about the percentage of income they should be paying for housing and still manage to afford other necessities of later life besides food and clothing, such as transportation and medical care.  Affordability depends on their individual situations and whether they live with a spouse, alone or with relatives.  Today, about 54 percent of older persons live with their spouses, 31 percent live alone, 13 percent live with relatives other than their spouse, and 2 percent live with non-relatives.

If the decision is to move later in life, people seem to know what they want. A survey done by the National Association of Realtors in concert with MetLife in late 2009 found that retired and older citizens want easy, comfortable homes, with single-story floor plans or homes that offer a first-floor master bedroom. They also like home maintenance and repair as part of their next home purchase, preferable with no necessary outside duties and low maintenance inside, washers and dryers, storage space, easy-to-open windows and easy to use climate controls. 

There are other quality of life considerations, such as proximity to hospitals and doctors, shopping, transportation and recreation.

For a couple of years after the bubble burst, there were still many sellers holding on to old pricing ideas, hoping to find a buyer who would pay what the owner felt the home was worth. In the past year in particular, more homeowners are resigned to pricing their homes where they will sell, and those homes are being purchased by young couples or single individuals buying their first homes at bargain prices and low mortgage interest rates. And, if the homes need work, these young people may just be answering their doors with hammers or paint brushes in hand.

Interestingly, my daughter recently informed me that she and my son-in-law have discussed the eventuality of my wife and I living with them when the time comes.  I was greatly touched, even though I’m sure we would rather remain independent as long as we can and to seek at-home care should we need it. And while the sentiment expressed by my daughter is lovely, I do wish she had waited another 15 or 20 years before discussing the matter with me! 

Bill Primavera is a licensed Realtor® (www.PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (www.PrimaveraPR.com). For questions or comments about the housing market, or selling or buying a home, he can be reached directly at 914-522-2076.