Navy Fellas Realty Group

Real Estate, Residential sales and purchase

Understanding the Risks of Buying a Home With a History of Termite Infestation

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Buying a home is one of the biggest investments you’ll ever make, and discovering that a property has a history of termite infestation can be a major red flag. However, this doesn’t always mean you should walk away. Understanding the risks, potential costs, and ways to protect yourself can help you make an informed decision.

What Are the Risks?

  1. Structural Damage: Termites feed on wood, and if an infestation went undetected for a long time, it could lead to significant structural issues. Damage to load-bearing beams, flooring, and walls can compromise the integrity of the home.
  2. Recurring Infestations: Even if a previous infestation has been treated, there’s always a risk of termites returning, especially if the root cause (such as moisture or untreated wood) hasn’t been addressed.
  3. Costly Repairs: Depending on the extent of the damage, repairs can be expensive. Replacing structural elements, flooring, and even drywall can add thousands of dollars to your budget.
  4. Insurance Challenges: Homeowners insurance typically does not cover termite damage, considering it a maintenance issue rather than a sudden event. This means any future damage would likely be an out-of-pocket expense.
  5. Resale Concerns: A history of termite infestation can make a home more difficult to sell in the future, as buyers may hesitate or demand additional inspections and repairs before closing.

How to Protect Yourself as a Buyer

  • Get a Termite Inspection: A standard home inspection may not be enough to detect past or present termite damage. Hiring a licensed pest control specialist for a termite-specific inspection is crucial.
  • Review Past Treatment Records: If the home has been treated for termites, ask for documentation of the treatment, including when it was done, what methods were used, and if there’s an active termite bond (warranty or service agreement).
  • Assess the Damage and Repairs: If termites caused structural damage, request repair records or hire a contractor to evaluate the extent of the repairs. If necessary, negotiate with the seller to cover some or all of the costs.
  • Consider a Termite Bond: Some pest control companies offer termite bonds, which act as a service agreement to provide ongoing inspections and treatment if needed. This can offer peace of mind and financial protection.
  • Negotiate the Price: If you’re still interested in the home but concerned about past infestations, you may be able to negotiate a lower purchase price to account for potential risks or upcoming maintenance.

Buying a home with a history of termite infestation comes with risks, but it doesn’t have to be a dealbreaker. By conducting thorough inspections, reviewing past treatments, and negotiating smartly, you can make an informed decision. If you’re unsure, working with a knowledgeable real estate agent can help guide you through the process and ensure you protect your investment.

Understanding the Process of Selling a Home Through a Lease-Purchase Agreement

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Selling a home through a lease-purchase agreement can be a great option for both buyers and sellers, offering flexibility and potential financial benefits. Whether you’re a homeowner looking for alternative selling strategies or a buyer who needs time to secure financing, understanding how this process works is key.

What Is a Lease-Purchase Agreement?

A lease-purchase agreement, also known as a rent-to-own contract, allows a tenant to lease a home with the option to purchase it at a later date. Unlike a standard rental agreement, a portion of the tenant’s monthly rent may go toward the future purchase of the home, helping them build equity while they rent.

How Does It Work?

  1. Agreement Terms: The buyer and seller agree on the purchase price and the length of the lease period, typically ranging from one to three years.
  2. Option Fee: The tenant-buyer usually pays an upfront option fee (often 1% to 5% of the purchase price), which secures their right to purchase the home. This fee may be credited toward the down payment.
  3. Monthly Payments: The tenant pays rent, and a portion of that payment may be set aside as a credit toward the purchase.
  4. Final Purchase: At the end of the lease term, the tenant can exercise their option to buy. If they qualify for financing, the sale moves forward just like a traditional real estate transaction. If they decide not to buy, they may forfeit the option fee and any rent credits.

Benefits for Sellers

  • Larger Buyer Pool: Lease-purchase agreements attract buyers who may not currently qualify for a mortgage but are working toward homeownership.
  • Steady Income: Sellers continue to receive rental payments while securing a potential sale.
  • Higher Sale Price: Because the sale price is often set in advance, sellers may benefit if the home’s value appreciates during the lease period.
  • Lower Vacancy and Maintenance Risks: Tenants in lease-purchase agreements often treat the home as their own, reducing property maintenance concerns.

Benefits for Buyers

  • Time to Improve Credit or Finances: Buyers who need time to boost their credit score or save for a down payment can work toward homeownership without losing their preferred property.
  • Equity Building: Monthly rent credits contribute to the down payment, helping tenants build equity while they lease.
  • Locked-In Price: The purchase price is agreed upon at the beginning, which can be beneficial if home values rise.

Things to Consider

While lease-purchase agreements can be beneficial, they also come with risks. Sellers should work with a real estate professional to ensure the contract is structured properly and legally binding. Buyers should fully understand the terms and be confident in their ability to secure financing when the lease ends.

A lease-purchase agreement can be a win-win solution, allowing sellers to secure a future sale while giving buyers the opportunity to work toward homeownership. However, like any real estate transaction, it’s important to have clear terms and legal protections in place. Consulting with a real estate agent and an attorney can help both parties navigate the process successfully.

What’s Ahead For Mortgage Rates This Week – February 24th, 2025

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The most impactful report released last week was the regular Consumer Sentiment reports, which have indicated the more recent concerns rising food costs have soured the view on the current state of the economy for the U.S. The talks between the Federal Reserve members have also slanted in a negative direction as they feel they still do not have a strong grip on inflation. With the Trump administration also shaking things up in the office with their views on Tariffs, the land lending and broader markets have seen a lot of turmoil and uncertainty about the future. There should be dampened expectations going forward across all markets.

Consumer Sentiment

Consumer sentiment sours as worries grow over the outlook for the U.S. economy. Confidence drops 10% from January to the lowest level since late 2023. The second of two readings of consumer sentiment in February slipped to 64.7 from 67.8 earlier in the month, the University of Michigan said Friday. It’s the lowest level since November 2023. Sentiment has fallen nearly 10% from January.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.05% with the current rate at 6.04%
• 30-Yr FRM rates saw a decrease of -0.02% with the current rate at 6.85%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.08% for this week. Current rates at 6.25%
• 30-Yr VA rates saw a decrease of -0.07% for this week. Current rates at 6.28%

Jobless Claims

Initial Claims were reported to be 219,000 compared to the expected claims of 215,000. The prior week landed at 214,000.

What’s Ahead

The PCE Index inflation report, the Federal Reserve’s preferred measure for assessing inflation, will be released the following week. The overall outlook remains largely hawkish and pessimistic.

Do I Need Flood Insurance Coverage For My Home?

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One of the most important overlooked form of insurance for homeowners is Flood Insurance. Flood damage is not covered on a typical homeowners insurance policy. Although sometimes FEMA (the Federal Emergency Management Agency) provides help for victims of flood damage, it does not provide coverage for personal property, and is often defined as a loan and must be repaid.

Flood Insurance for Homeowners: What Does it Cover?

Depending on the type of flood insurance you carry, it covers various things. The basic coverage on a flood insurance policy covers the structure of the home, which would  also  include permanently installed fixtures, finishes, and systems.  This would typically include your electrical system, plumbing, heater, water heater, built-in appliances,  flooring, and permanently installed cabinets, bookcases, and fixtures.

You can also add additional flood insurance to cover the contents of your home, that would include your clothes, electronics, furnishings, and other personal belongings.

Is Flood Insurance for Homeowners Included in Standard Homeowners Policy?

Some types of water damage may be covered by your home insurance policy, but generally speaking, damage caused by rainfall, rising water, or runoff will not be covered. For example, if your bathroom pipes burst and flood your bathroom and bedroom, your home insurance would typically cover the repair or replacement of your damaged floors, walls, and your personal property. However, a standard homeowner’s policy does not cover actual flooding from rising water caused by a source outside of the home. This is where flood insurance would take effect.

Do I Have to Obtain Flood Insurance?

Depending on who holds your mortgage and whether FEMA’s flood map indicates you’re in a flood zone, you may be required to carry a certain amount of flood insurance for the property.  Other times, flood insurance is considered an optional coverage. Keep in mind that being told by your lender that it isn’t necessary to buy flood insurance isn’t a guarantee a flood will not happen and t is important to remember that regular home insurance won’t replace your personal property or repair your home if your property is damaged by a flood.

What Does Flood Insurance Cost to Protect Your Personal Property?

Flood insurance costs are determined by several factors, including whether your home is in a high-risk flood zone (or in any flood zone at all), the type of flood insurance you want to purchase, the deductible you choose, the amount of coverage you choose, where your home is is located, the age or design of your home, and the location of it. The elevation of the property may also be a factor for properties located in or near flood zones. To get a better idea of the coverage needed as well as deductible that is right for you, speak to a trusted professional agent.

How to Make a Winning Counter-offer Without Losing the Buyer

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Crafting a counter-offer that doesn’t scare away a potential home buyer can be tricky. You want to maximize your sale price while still keeping the deal attractive enough for the buyer to stay engaged. A well-crafted counter-offer strikes a balance between protecting your interests and meeting the buyer’s needs. The key is to approach negotiations strategically, ensuring that your counter doesn’t feel like a rejection but rather a step toward a mutually beneficial agreement. Here are five tips to help you through the process while keeping the buyer interested:

1. Keep Emotions in Check

Avoid letting your emotions drive the conversation and try to remain objective throughout the negotiation process. Keep in mind that the buyer is also looking for a fair deal, and it’s important to approach negotiations with a collaborative attitude.

2. Understand the Buyer’s Needs

Understanding the buyer’s needs and motivations can help you craft a counter-offer that meets their expectations. For example, if the buyer is seeking a quick closing, you may want to consider offering to close sooner than anticipated in exchange for a higher price.

3. Be Clear and Concise

Your counter-offer should be clear and concise, outlining specific terms and conditions. Avoid using ambiguous language and ensure that the offer is easy to understand.

4. Be Reasonable

While you want to get the most out of your home sale, it’s important to be reasonable with your counter-offer. Consider the current market conditions and the buyer’s position and aim for a fair deal that benefits both parties.

5. Keep Communication Open

Effective communication is key to successful negotiations. Keep communication channels open throughout the process and be willing to listen to the buyer’s concerns and feedback. This will help you build trust and rapport with the buyer, making it more likely that they will accept your counter-offer.

To avoid frustrating an interested homebuyer, it’s important to be responsive and timely in your communication regarding their offer. Don’t let their offer sit for too long without acknowledging it and make it clear that you’re actively considering it and will provide a response promptly.

Successfully negotiating a home sale can be challenging, but being open and flexible in your approach can increase your chances of receiving the desired offer.

Thinking about buying or selling a home? Give me a call! I’d love to help you navigate the process and secure the best deal possible. 

Ways to Lower Your Homeowners Insurance Costs

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With the cost of everything rising, homeowners are looking for ways to save wherever they can. One expense that often gets overlooked is homeowners insurance. While it is essential to protect your investment, there are ways to lower your premiums without sacrificing coverage. Here are some strategies to help you secure quality insurance at a fair price.

Shop Around for the Best Rates
Insurance rates can vary significantly between providers, so it pays to shop around. Compare quotes from multiple companies and check with your state’s insurance department for additional resources. When comparing policies, don’t just look at price—make sure the coverage meets your needs.

Increase Your Deductible
Your deductible is the amount you pay out-of-pocket before your insurance kicks in. Increasing it can lower your monthly premiums. However, be sure you have enough savings set aside to cover a higher deductible if you ever need to file a claim.

Bundle Policies for Discounts
Many insurance companies offer discounts when you bundle multiple policies, such as homeowners and auto insurance. If you already have coverage with a provider, check to see if you can combine policies to save money.

Improve Home Security
Installing a monitored alarm system, fire sprinklers, and deadbolt locks can make your home safer and qualify you for discounts on your policy. Some insurance companies offer significant savings—up to 20 percent—on homes with enhanced security features. Before investing in upgrades, confirm with your insurer which systems qualify for a discount.

Maintain a Good Credit Score
Some insurers use credit scores to determine premium rates. A higher credit score can lead to lower insurance costs. Paying bills on time, reducing debt, and monitoring your credit report for errors can help improve your score and lower your insurance expenses.

Review Your Policy Annually
Your insurance needs may change over time, so it is important to review your policy annually. If you have paid off your mortgage, made home improvements, or your home value has changed, you may be eligible for new discounts or better coverage options.

Saving money on homeowners insurance does not mean sacrificing protection. By taking a few proactive steps, you can reduce your costs while ensuring your home is covered.

If you are in the market for a new home, I can help you find the perfect property and guide you through the homeownership process. Reach out today to get started.