Another Insurance Saving Tip

Hello all, here is another insurance savings tip.

Save your deductible by doing some simple home maintaince that we call could be doing on our hot water tanks. We all know the water in AZ is horrible with heavy metals – what that means is not only do the wives complain about how it fees on their skin it also means death to appliances and your hot water tank.

Prevent future problems, save energy, extend the life of your water heater. Sediment build up in your water heater may cause clogged water lines, and faucets resulting in low hot water pressure. Other problems associated with excessive sediment are slower recovery rates (increase energy bills), glass liner in tank cracking, shorter water heater life and bacteria growth.

Recommended maintenance schedule:

  • Test pressure/temperature relief valve once a year.
  • Flush water heater every 4 months.
  • Clean water heater once a year.
  • Replace anode rod every 2-5 years.
  • Gas water heater – check/clean burner every year.

Test the relief valve at least once a year to be sure it’s working properly. The first step in removing sediment from a water heater is to drain the tank. Most of the sediment in a water heater will settle in the bottom of the tank. The anode rod should be replaced before it deteriorates completely.

Remember – when you are performing maintenance, be sure to always think “safety first”!

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Kids Water Saftey – Can Save You On Homeowners Insurance

Here’s another tip that has been drilled into you by TV and radio in AZ but I bet your insurance guy never told you how this impacts your wallet.

Another insurance savings tip. Save your deductible – By Watching Kids Around Water / Pools. If you have a pool + kids + friend = potential trouble. Check to see what your liability limits are on your policy.

Even better question is why don’t you have an Umbrella to give you an extra $1 million of coverage for pennies? I know your kids’ friends’ parents would easily value their loss of a child at over a million.

Want some Facts?

On average, nearly 90 people die from drowning in Arizona each year with the majority of those deaths happening between April and August.

Although they make up only 20% of the number of total drowning deaths in Arizona according to the Arizona Department of Health Services, news reports usually center on children who have drowned in their family’s or a friend’s backyard swimming pool. Most of them, about 75%, were being supervised around water by at least one adult and were out of the sight of those adults for 5 minutes or less.

It only takes 2 inches of water and a couple of minutes for a small child to drown.

Did you know we have a National Safety counsel to tell us how to be safe?

Simple water safety procedures from the National Safety Council:

  1. Never swim alone.
  2. Never leave a child alone near water. If you must leave, take your child with you.
  3. Enroll children over age three in swimming lessons taught by qualified instructors.
  4. Always use approved personal flotation devices (life jackets).
  5. Don’t jump or dive into unknown bodies of water.
  6. Always have a first-aid kit and emergency phone contacts handy.
  7. Never consume alcohol when operating a boat or other watercraft.

Be safe around water – you might be surprised at how much it can save you on your Arizona homeowners insurance policy.

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Canadian Home Investors – Home Insurance

There has been a couple postings about Canadian purchasing homes in AZ. These investors need to be made aware of some possible difficulties in obtaining home insurance.

In the U.S. most major insurance carriers run a loss report and require homeowners to provide SS#’s for the best pricing. Many carriers have difficulty providing the best rates to foreigners, even if they are just across our boarder to the north or south.

Canada has a system very similar to our U.S. System for SS #’s but they tend to be much more protective of their information that us. The problem with the insurance systems and Insurance database that most carriers pull from is the Canadian SS# does not pull through causing our friends from Canada to have non-preferred rates.

I have found that if the Canadian client ends of re-locating down to Arizona and get a AZ drivers license etc. that then the systems do seem to offer better rates.

I do have the ability to put foreign information into our polices so that we can attempt to verify as much information as possible to provide better rates.

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House Flipping in Arizona

House Flipping in Arizona

Presently, an estimated 200 to 250 homes are sold each day at the Maricopa courthouse trustee sale (foreclosure) auctions. Many of these are homes being purchased by investors looking to make money flipping homes in Arizona.

Can You Make Money Flipping Houses in Arizona?

Recently many different local and national news outlets have published stories about house flipping in Arizona.

Interestingly enough, the stories have been positive and have promoted the fact that a savvy investor can make a lot of money flipping foreclosed homes in Arizona.

This could be a surprise to many who consider real estate investment in today’s real estate atmosphere to either be stupid, too risky or unethical.

The Wall Street Journal recently published an article detailing the process and highlighting a local team of Arizona foreclosure investment experts that provide vital services to help would-be Arizona real estate investors buy foreclosed homes in Arizona and reduce the related risks.

During the housing boom, millions of Americans tried to make money by buying and then quickly reselling new houses and condominiums. That kind of flipping stopped several years ago as home sales stalled amid a surge in foreclosures and curtailed lending.
Now, a different breed of flipper is proliferating: one who seeks bargains at foreclosure auctions. Unlike the boom–time flippers, the latest generation needs cold cash, lots of local–market knowledge and strong nerves.
Investors compete mostly with other full–time professionals who monitor foreclosure auctions at county courthouses across the country. The bidders often haven’t had a chance to inspect the property or determine whether it’s occupied by tenants, who may be hard to evict.
Sometimes “you have half an hour to make a half–million–dollar decision,” says Damon Lines, an executive at PostedProperties.com, a Phoenix firm that provides information to foreclosure investors and bids on their behalf. “That’s something most people can’t or aren’t willing to do.”

What is House Flipping?

House flipping typically involves buying a foreclosed home and selling it quickly after “fixing it up.

It is called “House Flipping” because sell the home fast is crucial in making a good profit.

The best homes to flip are those that require limited improvements that are just cosmetic problems such as bad carpeting, old paint, and poorly kept yards. These problems can easily be repaired and updated to increase the value of the home without adding major expenses.

What are the Greatest Risks of House Flipping?

1) Buying a Trashed Foreclosure.

Most people that have looked into house flipping in Arizona have heard the horror stories of buying a foreclosure that has been severely damaged by the previous disgruntled homeowner such as holes in the walls and cement in the toilets.

Jay Thompson, a local real estate broker, has provided some good examples of this type of damage at his site.

Trashed Foreclosure Video Example
New Twist on Trashed Foreclosed Homes

Not all foreclosed homes in Arizona are trashed, but you usually don’t have access to the home to inspect it before you by it at the foreclosure auction.

2) Underestimating …

It is easy to miscalculate critical items when you buy a foreclosed home in Arizona. This includes:

  • House Flipping in Arizona %spacebasenameUnderestimating the amount of cash that you’ll have to put down to buy the home.
  • Underestimating the cost of supplies, tools and labor needed to fix up the house.
  • Underestimating your own limitations. You need to have realistic expectations before getting in of the time frame for completion, budget, and what you can do yourself and what you will need to hire professionals to handle.
  • Underestimated the importance of knowing the neighborhood where you buy the house you are going to flip.
  • Underestimating the interest expense you will incur if you use private or “hard” money to buy the house.

Is House Flipping in Arizona Worth the Risk?

It could be; many people are making a lot of money doing it. However, I recommend that if you are going to invest in foreclosed homes in Arizona that you do use the services of a company like Posted Properties as it will give you the best chance of making a profit and reducing the related risk.

Why do I recommend Posted Properties?

Simple Answer: They are good at what they do and they are nationally recognized.

Damon Lines of Posted Properties is also featured in the video below

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Hayes Barnard: Paramount Equity Mortgage

Sometimes in life, I find myself being completely wrong.

It wasn’t all that long when I was driving down the road here in Phoenix and I heard a radio spot for a mortgage company where the company owner was on the radio saying something like…

“I am Hayes Barnard, owner of Paramount Equity Mortgage. The Fed has just lowered interest rates and blah, blah, blah.”

I honestly can’t remember what the ad said – but I thought to myself: Geez, this guy sounds like he might have a face for radio!

Turns out I was wrong. I recently came across this video of Hayes Barnard and he seems like a way better guy on video than I remember thinking he was when I heard him on the radio that day.

Moral of the story?

None really – I just thought it was interesting.

And I know nothing about Paramount Equity Mortgage, so I can’ t say anything good or bad about them.

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Two Monkeys In Banana Suits

Every now and then I come across something good enough to pass along.

Today is one of those days.

My favorite line?

What are you guys doing?

“…just hangin’ around seeing if we can get another loan…”

This video proves the extreme these two guys will go to win your business.

To contact these monkeys:

MyTitleGuy Stephen Garner at Security Title
480.223.8113

Ted Canto at Academy Mortgage
480.650.8602

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What Is the Greatest Agency Risk For a Real Estate Agent Using Web 2.0?

Hello all.

I’m leading a discussion here on AMT and to be used in our CE course on Agency and the Use of Social Media at the Arizona School of Real Estate & Business.

Please leave your comment(s) below.

One of the questions asked is: What is the greatest agency-specific risk to a real estate professional using social media (i.e. blogs, Q&A forums, Twitter, etc.)?

We are discussing what actions or implications of a real estate professional using social media could lead to implied agency and the resulting consequences.

Food for Thought:

Implied Agency

  • An actual agency created by acts of a principal that reasonably imply an intention to create an agency relationship.
  • It may be implied by the conduct of the parties and no formal agreement is necessary.
  • Created by mutual assent.
  • The existence of an agency relationship is the determination of a court makes after considering all of the circumstances.

Hayward v. Graham, 104 Ariz. 103, 449 p. 2d 31 (1968)

An implied agency must be based on facts such as to imply an intention to create the agency, and the implication must arise from a natural and reasonable, and not from a forced, strained, or distorted, construction of them. They must lead to the reasonable conclusion that mutual assent exists, and be such as naturally lead another to believe in and to rely on the agency.

Lastly, consider the following examples.

http://www.city-data.com/forum/real-estate-professionals/531565-buyers-agent-implied-contract-arizona.html

http://www.trulia.com/voices/Home_Buying/Implied_Agency_Do_we_have_a_buyer_s_agent_now_-13159

Thanks again for your comments.

Steve Lines

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Can the Ten Day Close be Trusted?

Can the ten day close be trusted?

Recently an agent asked a very good question about our 10 day close program for Arizona home buyers?

“Are you sure that a ten day loan can be trusted? One of the things about loans is that they have to be done right, and someone who is trying to close you in ten days might be rushing through the important parts and costing you more money.”

Here are some points to consider:

Does closing a loan in 10 days require “rushing through the important parts”?

No, it doesn’t.

With every loan that we close we

  • obtain and review supporting documentation,
  • independently verify income, employment and assets,
  • review credit for compliance with conventional or FHA guidelines,
  • obtain written statements that no new credit has been obtained that is not on the credit report,
  • obtain an independent appraisal according to HVCC or FHA standards,
  • obtain copies of tax transcripts directly from the IRS
  • and compare to documents provided, and review the purchase contract for nuances and pitfalls.

Then it is submitted to a DE underwriter who carefully reviews and recalculates the information in detail.

So, how long should it take to close a loan?

It doesn’t take more than a few days to actually perform the review as listed above. Therefore, the question is how efficient are a company’s logistics and communication related to gathering the required information to underwrite the file, move the file from processing to underwriting, and then move the file from underwriting to closing?

I can tell you that it makes it a lot easier and faster when my processor sits across the hall and my underwriter and closer are down the hall.

How we close loans in ten days?Can the Ten Day Close be Trusted? %spacebasename

  • Our bank has a clean record with its investors, so we have limited “investor overlays”. This is very important and is a result of a history of “not rushing through the important parts”.
  • My bank does not have problems obtaining the funds needed to actually close the loan.
  • We have senior management that will accept nothing less than excellence and hold each person accountable for achieving the goal of a ten day close each and every time.
  • My entire office has a sense of urgency from start to finish.
  • My processor, underwriter and closer is all located under one roof – in my office.
  • We have the best technology to speed up logistics and communication.

Will closing a loan in ten days put the borrower at risk?

If I overlook something and close a loan that should not have closed, what are the consequences?

  • The loan becomes uninsurable by FHA (if an FHA loan)
  • The loan becomes unsalable to an investor
  • I am not compensated for my work
  • My company incurs losses from the unsalable or non-performing loan.
  • I lose my job and/or my credibility.

So, we are at risk, not the borrower.

Steve Lines

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Teaching Basic Social Media to Arizona Real Estate Agents

Social Media 101 for Arizona Real Estate Agents

Tonight I led a CE class for real estate agents called “The Latest Sales and Marketing Techniques” at the Arizona School of Real Estate and Business.  It is essentially an introductory level course on social media.

Social Media Analogies

Because social media is such a new topic for many of the class participants, I end up using a lot of analogies to help them comfortably understand many social media concepts.

Here are a few that I used tonight that I can remember:

  • LinkedIn is like the suit and tie version of social media (I stole this from Kevin McClure)
  • Going on facebook and not engaging others is like going to the dance and standing by yourself in the corner.
  • Not using social media because of the potential risk (e.g. identity theft or bad exposure) is like not driving your car because you might crash or the guy next to you might drive reckless. (I’m pretty sure I stole this from Jay Thompson).
  • Having a traditional website that does not attract visitors is as useful as having your brochure stuck to your wall with a thumbtack.
  • A person who goes on Twitter and follows Ashton Kutcher, sends a few tweets and gives up saying “Twitter is stupid … I don’t get it” is like a person who takes a bow and arrow and haphazardly shoots the arrow into the forest and gives up when they can’t find it saying “archery is stupid … I don’t get it”. Like archery, if you go on Twitter with a predetermined target (market), aim for and hit that target you will like Twitter.
  • Twitter is like a social media version of a party line. You can talk with one person while others listen, you can talk to multiple people or you can just eavesdrop. (I’m pretty sure that I stole this one from Kevin McClure too.)
  • Status updates in Twitter and facebook are kind of like pickup lines in that your hoping to catch someone’s attention and strike up a conversation.
  • If you have a potential referral partner you can use Twitter to observe them and find out what they like and dislike before you introduce yourself to them. Then when you meet them you can mention all the things that you already know they like and act like you have those things in common … kinda like what I did with my wife before I asked her out.
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