Many of you reading this blog may have senior parents that are living in the same home they’ve lived in for many years and do not want to move, but for whatever reason they need money for bills, medical expenses, etc. One way that some people are getting this money is through reverse mortgages. Ideally you should look at reverse mortgages with a fair amount of caution, and be aware of what the disadvantages of reverse mortgages are and try to help your parents make the right decisions about reverse mortgages.

The following is a guest post from Brandon Laughridge of Mortgage Loan Place, who provides some great information about reverse mortgages.

Reverse Mortgage Considerations

Like any loan, reverse mortgages have their pros and cons.  Unfortunately, the decision to get a reverse mortgage isn’t simply a black and white one.  One must take a look at both the benefits and drawbacks of choosing to fund retirement expenses out of home equity via a reverse mortgage.  I always prefer the bad news first so we’ll start there.

The Bad

Fees can be high. The upfront cost of a reverse mortgage can often seem like a bear when it’s printed as one lump sum.  However, when broken down, these costs are in line with conventional financing.  Borrowers must pay an upfront mortgage insurance fee of 2% of the lending limit which is generally pretty hefty.  Add in all the normal costs of appraisals, escrow services, titling, and so on and you can begin to see how it gets pricey.

There are many snake oil reverse mortgage salesman. Unfortunately, many unscrupulous mortgage brokers are trying to make reverse mortgages the next subprime mess.  Fortunately, this has been combatted with a law that requires prospective borrowers to go through counseling with a person that is HUD/FHA approved.

The Good

Fixes monthly cash flow issues. Obviously this is the only reason borrowers would seek a reverse mortgage, but it’s an easy way for seniors with equity to cash it out slowly over time.  Living on a fixed income can be hard and reverse mortgages allow you to get a “raise” from your own pocket more or less.

It’s better than other debt. With a reverse mortgage, your debt is never going to transfer to a relative and it will never be more than your home is worth. Therefore you cannot ever owe more money than liquidating your home would provide to pay off that debt.

Do You Qualify?

In order to qualify for a reverse mortgage you must:

• Be at least 62 years of age or older.
• Own property outright or have a small mortgage balance.
• Ocucpy the property full time.
• Participate in counseling with HUD.
• Have no debt to the Federal Government.

Should You Get a Reverse Mortgage?

As you can see, reverse mortgages aren’t for everyone.  They are, however, a great opportunity if you find yourself short on cash at the end of every month and have a large amount of home equity.  Be sure to discuss this serious financial decision with family members and a nonbiased financial counselor before engaging in talks with a mortgage broker.

For some, building a new home in which to enjoy retirement is the ultimate dream. There’s not much more exciting in real estate than picking a lot, choosing or designing a floorplan, making your interior design selections, and seeing it all come together right before your very eyes.

Besides being exciting, it can also be described as overwhelming, daunting, mind boggling, and a slew of other adjectives. After reading this chapter, you should feel comfortable enough with new home construction that if you do choose to build a new home here, the words you use to describe it will hopefully lean more towards “exciting.”

Choosing a Builder

There are many factors that should go into your choice of home builder. The most important factors are those that are important to you. Of course, these are different for everyone. Some people want the very best price available, while others don’t mind paying more for higher quality. Some want a builder that will hold their hand throughout the entire process, while others prefer to have very little contact with the builder. Others still want total control over their selections, while some don’t mind if the builder even chooses the colors. It’s very important that you decide for yourself what factors are important to you before you start looking for a builder.

Once you decide on the factors that are most important to you, do some investigating. If it’s the best price you desire, visit several communities and see which builder is offering the best incentives. Builders with numerous homes in their inventory ready to move into are more likely to give incentives than a builder who has no standing inventory. Check the local paper in the area you are looking for homes, and scan the advertisements for good deals and incentives. A local real estate agent might be able to point you in the direction of the best deals in town.

If quality is the most important thing to you, spend some time in the builder’s model homes looking around on your own and examining things like the trim work, the drywall, and the paint. Look for anything that’s not quite right such as wavy walls or uneven paint applications. Chances are if the builder didn’t take the time to get his models right, he won’t take the time to get your home right. If the builder does not have a model, see if he has a list of customers that you may contact to try and go see their homes.

Working with the builder and his staff

We all know that birds of a feather flock together. The same typically holds true for builders and the people they employ.  The first person you will meet when looking at model homes will be the builder’s sales staff. Start with them. Are they presentable, eager to help answer your questions, and polite? Or are they abrasive, pushy, rude, and uncaring? Typically, if they like their jobs, and take pride in the product they are representing, odds are good that you’re looking at a pretty good builder.

Remember that the salesperson will typically be the direct line to the builder for you throughout the homebuilding process. Keep in mind that you are probably not their only customer. So if they are busy with others when you stop by to ask a question or report a complaint, be respectful of them and their time. Respect is reciprocal.

Some builders will have you meet with different members of their staff during different phases of the construction process. You may meet with a decorator, an architect, a superintendent, or all of these before and during the construction process. To save time for everyone, before meeting with each representative, have your questions ready.

A few builders allow their customers to walk the construction site whenever they want, others only allow it at specific times during the process. In either case the builder’s insurance policy usually does not cover you if you are injured, if you step on a nail, or trip and fall over some plywood. Construction sites, no matter how well they are supervised can be dangerous; so most builders require that you be escorted by someone on their staff when you visit the construction site and that you visit at times when subcontractors are not working inside. It may not always be convenient or possible for you to get to the construction site during the builder’s business hours. If that is the case, you are at your own risk when you visit the site.

How to Choose a Floor Plan

Obviously you need to choose a floor plan that fits well with the way you live your life. If you plan to use your home in Florida just as a second home or vacation home, and rarely expect to have many guests accompany you, then maybe a one or two bedroom condo, townhouse, or small home will fit your needs. If you expect more people, or plan to use the home as a primary residence and are accustomed to a much bigger home, obviously you will want to go bigger with a large condo (maybe even combine two adjacent units), a large townhouse, or a single family home.

The key to finding a floor plan that fits your needs is to spend some time in the builder’s model homes, if available, and try to envision things such as furniture layouts, traffic patterns, blending of public spaces, such as the flow from the kitchen to the living room, as well as private spaces, such as bedrooms and bathrooms. Place most of your interest in areas that meet your lifestyle needs. For example, if you love entertaining, look for an extra large great room and maybe an open kitchen. If you plan on having lots of visitors–and remember everyone wants to come to Florida–then focus on bedroom sizes. You get the idea.
You may be accustomed to the split bedroom floor plan. These are popular in Florida as well. However, in some developments where the lots are narrower (such as 40, 50, or 60, feet wide) you may find that split bedrooms are rare. Not many builders have found a way to make an efficient split bedroom floor plan for those size lots. Most people, however, find that once they are in a home with the bedrooms on the same side, that they don’t really miss the split bedrooms all that much. Split bedrooms are great for families, especially with teenagers who like to crank up their stereos or play their drums. Having the secondary bedrooms on opposite sides of the house from the master bedroom provides parents more peace and quiet. But most baby boomers retiring to Florida or using their home as a second home don’t have that problem, and find that a non-split plan works just fine for them.

Choosing a Lot

The selection of a lot to build your home on is, for some people, even more important than choosing the floor plan or who builds your house. We all know the saying, “location, location, location.”
Some people are very particular about their lot, as well they should be. The lot you choose will determine several things, such as the quality of view you will have, your level of privacy, your utility bills, the price, and your home’s future resale value. Some people could care less what lot their home is built on, but taking everything into consideration, they certainly should.

In coastal areas, water views, be it the ocean, river, lake, or pond are the most coveted, followed by views of a golf course. As such, prices and premiums you will pay to look at these vistas are higher than say, a lot with a view of the interstate. Also many people like to have their home back up to a conservation area, which assures them of privacy in that nothing can be built behind them.

Most people don’t think about it but the lot you choose can also have an effect on your heating and cooling costs. On most homes, the majority of the windows are located on the front and rear of the home. If the home is placed on a lot with an east/west exposure (home faces east or west) more sunlight will enter the home, increasing your utility bills in the summer time, and lowering your heating costs in the winter.
There are other considerations if you are going to have a swimming pool at your home. If the rear of your home faces east, your pool and patio areas will be shaded from the sun in the afternoons, but will have the morning sun. Some people prefer the afternoon shade while some prefer the afternoon sun. Others still prefer a north/south exposure, which evens out the two extremes. There is no right or wrong answer, but you’d be doing yourself a disservice if you did not at least consider what you might like before choosing a lot. My advice is try to visit the lot you are considering at different times of the day and see what exposure you think will work best for you.

What is a Zero Lot Line?

You may notice that in some communities you visit, the houses are extremely close together, sometimes a few feet or less apart. What you are probably looking at is a zero lot line community. Zero lot line means that the house is placed either on or very close to one side of the lot, allowing for a little more yard on the opposite side, and sometimes also very close to either the front or the back, which allows you to have either a bigger front yard or bigger back yard.

This method allows for more homes to be built in a smaller amount of area, and is great for someone who wants very little yard to maintain, but does not want to sacrifice home size to accomplish that goal. Another benefit is that many zero lot line communities are maintenance free, so as the owner you won’t have to worry about cutting the grass anyway.

Be Aware of these Builder Contract Clauses

As opposed to using the standard real estate contracts like in the resale side of real estate, builders often use their own contracts, and they usually err on the side of protecting the builder rather than the buyer. By making you aware of the contract clauses you might see in builder contracts, the goal is not to steer you away from them, as most will be unavoidable. The goal is to heighten your awareness of them, and the impact that they might have on your new home construction experience. As is the case with any other contract, if there is anything you are unclear about or do not understand, you should consult an attorney before signing.
Here is a selection of some clauses you should be aware of that you may see specifically in new home sales contracts.

Deposit

In most cases, the deposit that you give a builder at the time of contract will be substantially higher than if you were entering into a resale contract. Most builders here require 5-10% of the sales price as a deposit, and some even require 20% down at time of contract. Now, what happens to that deposit? In a resale transaction, the deposit would be held in an escrow account at a bank, either by an attorney, title company, or real estate broker. In the case of new construction, that money is sometimes used to build your house. If this is the case, the builder’s contract will have a deposit clause, whereby you as the buyer waive your right to have the money placed in an escrow account.

Financing

Some builder contracts do not include a financing contingency like standard real estate contracts do. This would mean that if you gave the builder a deposit on a home, but you are denied for financing, you could lose your deposit. The chance that this could happen increases the importance of getting pre-qualified by a lender before shopping for a new home to get a feel for what you can afford. In any case, when you sign a contract with a builder, make sure you know whether or not it includes a financing contingency.

Construction Delays

This is a separate clause found in most builder contracts that ties into the previous clause. It basically says that the construction completion can be delayed for reasons that are beyond the builder’s control such as acts of God, adverse weather, theft, or a shortage of labor or materials.

Closing Date

Some builders place a firm closing date in their contracts, while others leave it open ended. Builder policies vary, and you will have to ask about the policy of your builder regarding closing dates. Without a firm closing date you can be left in limbo not knowing when to schedule movers, utility hookups, change of address, delivery of new furniture, and so forth. This can understandably be a nightmare. Even if builders do not specify a closing date at the time of contract, most will at least give you a week or two notice when the house is complete to arrange for your closing and subsequent move.

Escalation Clause

Think not having the slightest idea of when your closing will be is bad? What if you didn’t know how much your new home would ultimately cost until just before the closing? In order to protect themselves from unexpected rising construction costs while your home is being built, some builders employ escalation clauses in their contracts. These can be worded and structured in various ways but basically they allow the builder to pass on any increase in costs during construction to you, the lucky homebuyer.
If you sign a contract that has an escalation clause in it, at least make sure that there is a cap on how much the price can go up, and that you are comfortable with that amount. This cap can either be a hard dollar amount or a certain percentage. Without this cap, you are essentially handing the builder a blank check.

Termination of Sale Clause

This clause allows the builder to be released from their contract with you at any time if certain conditions occur. These conditions usually include the builder being unable to get the proper permits for your home, being unable to deliver clear title, or for any other reasons beyond their control.

Making Your Selections

After finalizing your contract with the builder, you will be given a time to either meet with the builder’s decorator, or to visit their design center. This is when you pick all the colors and interior materials that will give your home its personality, including things like cabinets, carpeting, tile, countertops, paint colors, and so on. Depending on the size home you’ve chosen, this may be a short two to three hour process, or it could span several appointments over the course of a couple days or weeks.

No matter how many homes you build, this will always be one of the most stressful times because what you choose here will determine how your home is going to look and function for years to come. To minimize the time and stress that picking everything out will invariably cause, it pays to have done your homework as to what you like beforehand. This way you won’t be making any split second decisions on things that you might not be able to change later. Take pictures of ideas you see in model homes or tear out pictures in magazines of things you might like to have in your new home.

Critical Steps in the New Home Construction Process

Have you ever bought a perfect car? Wait a second–I know you’re thinking– did I pick up the wrong book?

Yes, you’ve got the right book.

For most people, the answer to this seemingly out of place question is no. No matter what make, model, or how much you pay, there seems to always be at least one problem or imperfection that you notice within the first couple weeks of owning a new vehicle.

Well, no matter where you purchase or how much you pay, don’t expect anything different with a new home. Just think, cars are built in a factory, protected from the elements like sun, heat, and rain. Machines and computers also play a big role in the production of a car.

Unfortunately, homes don’t have those advantages. They are built in the dirt out in the hot sun, being rained on and rained in, often exposed to the worst Mother Nature has to offer. And to be quite honest, a high school degree is a major accomplishment for some of the people doing the actual physical labor on your home. Sure, some may even have some college under their tool belts but remember, digging footers, laying block, and hammering nails aren’t $50 an hour jobs.

Fortunately for you, the builder supervising them in most cases is well educated and more importantly licensed to make sure your home is built up to the requirements of the city, county, or municipality where the permit was issued. You’ve also got city inspectors who are trained to discriminate between good work and bad work, looking out for you.

And finally, you have the next several pages of critical steps in the new home construction process to help ease your mind during what can be a confusing and frustrating time. While it won’t by any means tell you how to go out and build your own home, this information should give you the knowledge to feel a bit more comfortable with everything that will go on during the new home construction process.

Be aware that construction process and building codes vary from state to state. While the process below is based on new home construction in Florida, it should give you a decent understanding of the new home construction process, no matter where you are retiring.

Permitting

Once the floorplan and other structural features of the home have been selected, the builder will submit the plans to the city for approval. When submitted, the plans for the home must usually be accompanied by an architect’s or an engineer’s seal, essentially stating that they certify that the home is planned in accordance with the proper design specifications and building codes. Hard construction cannot begin until the permits have been received back from the city.

If the city feels the plans submitted comply with all current zoning and building codes, they will issue the builder permits to build the home. A copy of the plans and permits will be kept in a permit box in plain view at the construction site and checked frequently by city inspectors throughout the construction process.

Fill, Compact, and Site Prep

Most of the residential lots being built on require at least some amount of fill dirt to bring them up to the elevation required by the city or municipality which issued the building permit. Usually once the lot is filled and compacted, an engineer will come out and conduct a compaction test, to make sure the dirt added to the lot has been properly compacted. Not every lot that is filled needs to be tested for compaction. The builder usually has a set standard for lots that they test, such as lots requiring more than one foot of fill. A lot that has not been compacted properly is prone to settling, which can cause cracks in foundations and walls, and more trouble for you down the road.

Anything else that stands in the way of construction of your new home will be removed at this point. Brush will be cut back. Trees too close to the home are susceptible to damage by trucks and other machinery, and tree roots can damage the foundation, so if any trees still need to be removed it will happen at this time. The lot will be graded, generally sloping slightly towards the front, back, and sides to help with drainage. The area of the lot where the home will go will also be leveled, so that in the end, your house will be level as well.

Hub and Tack

Once the lot is filled and compacted, a survey crew will come and stake out the home, also called hub and tack. At this point, the corners of your home will be set.

Form the Slab

Pieces of lumber, typically 2 x 10s turned on their side, are used to create the perimeter of the slab. Footers are then dug out underneath the 2 x 10s. Footers, which are a couple of feet deep (depths vary area to area and builder to builder), and wider than the walls of the home, provide the support necessary to help make the house more sturdy.

Metal reinforcements rods will run around the perimeter of the home and will be positioned vertically at certain intervals to go up inside of the block that will be placed on top of the slab. These will eventually help connect the slab to the tie beam at the top level of the block.

Elevation and Setback Survey

At this point, a survey is done to make sure that the home is being built within the confines of its particular lot, and does not encroach on neighboring properties. The elevation of the lot is also checked, to be sure that it is at the height required by the city, county or municipality that issued the permit.

Rough Plumbing and Inspection

Water and sewer lines, which will be in place under the foundation of your home, are run at this time. The water lines will typically be made of copper, and drainage lines will be made of PVC piping. Any electrical outlets needing to be placed in the floor can also be installed at this time. Otherwise the slab will have to be cut later to install them. Once complete, an inspector will verify that each element of the rough plumbing has been installed properly.

Termite Treatment

Most builders in the Southeastern United States will provide some form of termite treatment for the home. The most common type is a slab pretreatment that will be done before the slab is poured. The purpose of this pretreatment is to prevent termites from getting into your home and doing serious damage in the future. If you were to visit your new home the day that it is treated for termites, you may be overcome by a very strong odor. That’s the termite treatment.

Due to environmental, scheduling, and cost concerns, some builders will not pretreat your slab but will treat the actual wood inside your home. After the framing is complete you may see that it looks like the bottom three or four feet have been stained, usually a greenish color. In this case, a termite treatment such as Boracare® has been used to treat your home for termites. The jury is still out as to which is the better treatment for the prevention of termites.

Prep the Slab

Once the rough plumbing is completed, a vapor barrier comprised of several sheets of plastic will be placed over the area in which the slab will be poured. This helps to keep moisture in the ground from penetrating the foundation and getting into your home once the slab has been poured over it.

Slab Inspection

Before the slab is poured an inspector will come and make sure that all work done up until this point is up to code, that all procedures have been properly followed, and construction is safe to proceed.
A side note here about inspections. While absolutely necessary, they can add a significant amount of time to the construction of your home, especially in areas where there is a lot of construction going on. Inspection departments are notoriously understaffed and overburdened with work. Sometimes you may see your house just sitting idle, with no work going on and your natural reaction may be to get angry with the builder.

Believe me, the builder wants to complete your home quickly, sometimes more quickly than you may even want him to. While your home is under construction he is likely carrying costs such as a mortgage on the land, insurance, and taxes, not to mention hard construction costs. Understand that when your home is sitting idle that sometimes it is the builder experiencing delays, but most often he is probably waiting on an inspection to be completed before he can proceed.

Pour the Slab

Next, the slab and the footings are poured. In the case of a monolithic slab, one long continuous pour of concrete is all it takes to create your slab. Wire mesh, or more commonly these days, high strength fibers, are usually embedded in the slab to increase its strength and help minimize cracking.

Ideal weather conditions for the pouring of your slab are that the weather should be dry, with little to no chance of rain during the pour, and temperatures should not be extremely hot or extremely cold.  If after the slab is poured, it appears rain may be in the forecast, sheets of plastic should be placed over the freshly poured slab to keep it from getting wet. Excess moisture can affect the appearance of the concrete, as well as the integrity of the slab.

While the slab won’t reach it’s ultimate strength for 20 to 30 days, it will usually be strong enough for construction to proceed in just a few days.

Slab Cracks

Eventually with almost every concrete slab, you may see some hairline cracks. They most likely won’t appear for a couple months but inevitably some will appear. These do not indicate that you have a bad slab, but are most likely just settling or expansion cracks, the result of extreme temperatures, wind, and evaporation of water in the concrete. One concrete company representative said that the only guarantee they can give is that all concrete will crack, it’s just a matter of when and to what degree.

If you are overly concerned about cracks that have appeared in your concrete slab, you might request that the builder hire an engineer to come take a look and certify that it is okay. You will likely have to pay for this service, but if it helps you sleep better at night, it may well be worth the few hundred bucks.

Foundation Survey

Once the slab is in place, another survey will be conducted, just to be extra certain that your home will not encroach on anyone else’s property. It’s better to discover this problem at this stage, when it will likely cost only several thousand dollars to fix, rather than later when it’s a much more costly problem to fix.

Block

It takes a few days for the slab to cure long enough to support block being placed on top of it.  Once the slab is cured, the block is then placed on top of the slab to form the outside walls, or shell of your home. Holes are left where the doors and windows will go, and any glass block that you have ordered is normally installed at this stage as well.

You will also see holes every so often along the bottom row of block called inspection ports where the metal reinforcement rods are sticking up from the slab into the block. These holes are included so the inspector can see that the slab, by the use of the metal in it, is effectively attached at set intervals by metal and concrete to the block walls.

Solid Pour Cells, Lintels and Tie Beam

Steel and poured concrete will be added to the block at predetermined intervals, usually every four or five feet. This process is done to add extra strength to the shell of your home and as previously mentioned, connect the shell to the slab. Lintels around all windows and doors will be poured to add strength around these openings, and then the tie beam (top layer of block poured solid) will be poured. This will have steel rods embedded in it as well, and hurricane straps that will later be attached to the trusses will also be embedded in the tie beam.

Lumber and Trusses Get Delivered

About this time in the construction process, your roof trusses and the lumber for your roofing and interior framing are usually delivered. In some cases these materials may sit unused for some time while other projects are being worked on. Just how long they sit out, exposed to the elements, rain, sunshine, and heat depends on the builder’s efficiency in scheduling as well as availability of work crews. To minimize weather exposure most builders will at least cover the materials lying out with tarpaulins or plastic sheets.

Trusses and Roof Decking

Your trusses, which will arrive at the home site already assembled and ready to install, act as a sort of skeletal system for your roof. They will be set on top of the block usually with the assistance of a crane.  Once they are secured to the block walls with the metal “hurricane” straps embedded into the tie beam, the roof decking will be placed on top.

OSB vs. Plywood

Some builders use plywood roof decking while others use oriented strand board, or OSB.  There is endless controversy about which is the better product. The fact is though that both products are excellent in their purest, undamaged forms. The problem that sometimes occurs with OSB is that its exterior “seal” may get damaged on site and lessen its integrity and ability to repel water. Don’t fret if your builder insists on using OSB; just make sure that each piece being placed on your roof is in good condition.

Framing

Framing of the interior walls of your home will also be done at this time, and rooms will really start to take shape. Don’t worry too much if the framing work looks a little rough at this point. There will be a framing “punch-out” later where everything that needs correcting will be taken care of. Feel free to point out anything that you think may not be obvious to the builder, mistakes can and do happen, but also feel secure in knowing that there will be a framing inspection to make sure everything has been done safely and correctly. Some builders will also do a framing walkthrough with you just to make sure everyone agrees nothing has been overlooked.

Window Installation

Windows will be installed and usually any sliding glass doors in your home will be installed as well. If you are coming from a cooler climate you may be shocked at first that some builders in the Southeast use single-pane windows, as you wouldn’t have even thought of using them up north.  However, single-pane windows are used quite frequently in southern states like Florida. One reason is that Florida does not experience the wide temperature swings like the north does. Another argument for them is that it takes about 5-7 years of energy savings to recoup the cost of installing the double-pane windows versus the single-pane, while most people move every 4-5 years anyway.

This doesn’t mean you should necessarily settle for single-pane windows. If you plan on being in the home more than a few years, the investment will pay off for you. With double pane windows the extra pane of glass and the air in between the two panes adds a few extra layers of insulation and therefore comfort to your home. Triple-pane windows are even available on some higher end homes.

Impact Resistant Windows

Impact resistant windows are also gaining in popularity with the increasing awareness of hurricanes and the damage they can cause. In fact, in more and more coastal areas, new homes that are in what is called the “wind-borne debris region” are required to have either impact resistant windows, or some other approved window covering or shutters. Shutters are often the prevailing choice of cost conscious builders and home buyers, as impact resistant windows can be very expensive; usually three to four times the cost of standard windows.

Roof Felt

A layer of felt-like material will be placed over the roof decking to provide an extra layer of moisture protection. If shingles get blown off in a storm, water still has the roof sheathing covered by this felt to contend with before it can enter your home.

Shingles

The shingles are now placed on the roof. The most common type of roof shingle on production homes are asphalt shingles because they are relatively inexpensive and they get the job done. Asphalt shingles will be nailed down to the roof. Asphalt shingles come in 5-year to over 50-year ratings. The higher the rating, the more substantial the shingles and thus the higher levels of winds they can withstand. The builders marketing materials will usually specify the rating of the shingles they install.
You should keep in mind that if you get, for example, a 30-year rated shingle, in all likelihood it will not last you 30 years. Severe weather fluctuations from warm to sweltering and dry to wet, can take a heavy toll on roof shingles. The factory ratings are for the shingle’s lifespan under ideal weather conditions.

Tile and Metal Roofs
Alternatives to asphalt shingles are tile, either made of clay or concrete, and metal roofs. Though each is more expensive than asphalt shingles they will both last longer and require a little less maintenance. The covenants in the neighborhood where your home being built will sometimes dictate what type of roof your home must have, but if given a choice, you might consider a tile or metal roof.
Tile roofs have a long lifespan if installed and maintained properly. Roof tiles are made in a variety of colors to blend with your home’s specific design needs. Trusses must be engineered to hold extra weight as tiles weigh considerably more than asphalt shingles. Impact such as that caused by hail can break tiles, and you should have them inspected periodically for damage to prevent problems down the road. When installed properly, roof tiles are less likely than asphalt shingles to blow off in inclement weather.

Metal roofs are also gaining in popularity because of their durability. Some roofing companies are offering lifetime warranties for metal roofs, which is a very attractive feature. Metal roofs are also available in different colors to match your home’s design. Though the metal material itself reflects the sun’s rays, it has a low r-value because it is a conductor of heat, but dead air space and attic insulation can be utilized to increase energy efficiency. As you could probably imagine, noise can sometimes be an issue with rain or hail storms on metal roofs, but sound-deadening insulation can be used to mitigate this problem. Some metal roofs can become dented when hit by falling objects like hail, but some manufacturers offer a “no-dent” guarantee.

Plumbing Top Out

At this stage toilets and bathtubs will be set and the plumbing lines will be stubbed out. Tubs will usually be made of marble, fiberglass, or acrylic and this will be spelled out in the builder’s marketing materials. Jetted or “whirlpool” type tubs are usually available, and are especially nice in master bathrooms. Tubs should be covered with either cardboard or plastic during the remainder of the construction process as they can easily be damaged by a dropped hammer or similar accident.

You usually have a choice between elongated or round toilets. Also, “comfort” commodes that are a few inches higher than standard toilets for “ease of use” are usually an option. Check to be sure that the tubs and toilets that are installed are the color and style you have selected.

HVAC Rough

HVAC, which stands for heating, ventilation and air conditioning, will be roughed in at this time. Your air ducts, air vents, and air returns, which regulate the temperature throughout your home, will now be installed. Each room should also have its own air return. This is important because air returns keep your home’s air temperature balanced. In homes where this has not been done, you can often have as much as a ten degree difference in temperature from room to room.

Air Conditioner Size

Most people when comparing air conditioning units are overly concerned with tonnage, or how big the unit is. But in reality, the tonnage is something that has a point of diminishing returns, meaning that bigger isn’t necessarily going to give you better results. The local building codes will dictate the size, or tonnage that the A/C unit used in your home should be, based on the size of your house. The size of what will be installed might also be spelled out in your builder’s marketing materials or sales contract.

SEER Rating

Here’s what is important. Your air conditioning unit will have what is called a SEER rating, or seasonal energy efficiency rating. Many older homes have A/C units with SEER ratings as low as 10. Today the federally mandated standard is 13. The higher the SEER rating, the better the performance (energy efficiency) of the unit. Most builders will let you upgrade the A/C unit so that you can get a higher SEER rating unit if you desire.

Electric Heat Pump

In all likelihood your heating system will be an electric heat pump, also not very popular up north. This system will use the same ducts as your air conditioner. Electric heat pumps are not very efficient in temperatures below freezing. At extremely low temperatures an electric heating element kicks in to help the system out. Up north that might be on constantly. But in the South, electric heat pumps are the most cost effective and efficient heaters you can have installed in your home. The temperature is rarely below freezing, allowing your heating system to run in its most efficient state most of the time.

Electrical, Phone, Cable and Security System Rough In

Now all of your electrical outlets, cable outlets, phone jacks, and the security system will all be wired in. There are certain minimum requirements for the number and spacing of electrical outlets. Most new homes far exceed these minimum requirements.

Smart Box

Located in the garage, closet or some other out of the way place in most new homes is what may be referred to as a smart box. The smart box is the central hub for all cable, phone, and high-speed Internet lines running into and throughout your home. Essential in today’s high tech world of networked computers and home electronics systems, with a little instruction you can have multiple computers networked throughout your new home, internet access in any room you choose, and high speed data flowing to your Tivo. You’d be taking a technological step backwards if you were to buy a new home today without this feature.

Outlet Locations

Well before this stage, preferably at the time of selections and before the builder submits for the permit if possible, you should let the builder know if you have any special outlet location requests. Otherwise, it will be a costly mess to have outlets moved or added later, when drywall has to be cut and removed to make any changes.

Think for a while about your living habits now. Do you currently watch television in the kitchen while cooking? If so, request a cable TV outlet in the kitchen. Like to surf the web on your laptop while laying in bed? Make sure there is a high-speed Internet connection near where your bed will go. I think you get the idea. Note that some builders will charge for this service and some will not agree to do it at all, but this is something you should ask about while shopping for a builder.

GFI Outlets

Special electrical outlets will be installed in your kitchen, bathrooms, laundry room, garage, and in any other indoor and outdoor locations where water might commonly come in contact with the outlet. These outlets, clearly marked GFI or GFCI for Ground Fault Circuit Interrupter, are safety devices designed to prevent electrocution.

At the first sign of trouble, such as water coming into contact with electricity, they are designed to shut-off or kick the breaker to that particular outlet and prevent you from being electrocuted. Make sure that whoever does your walkthrough with you, shows you how these operate and that they check to make sure that they are functioning properly.

Security Systems

One of the most popular options on new homes today is the security system. Whether for a personal residence or a part-time second home, it’s nice to have the peace of mind that a security system can offer. The security system is typically comprised of a base unit where the system is controlled from; one or more motion detectors; and sensors placed on doors and windows that alert you if one of them is opened. Other accessories include glass breakage sensors and carbon monoxide sensors. Make sure that all of your home’s smoke detectors are hard wired into the system, so that if one of them should detect smoke, you as well as the fire department, will be alerted. An intercom system can be integrated into most security systems, and video surveillance technology is also available at a much higher cost.

Just because your home has a security system, don’t sleep easy yet. You are not really protected until you have that system monitored by a security company. Probably the two most popular national security system-monitoring companies are Brinks and ADT. Ask your friends, family, and neighbors for suggestions on companies as well, as there are many other options available from lesser-known local companies. When you contact them they will send a representative out to your home to make suggestions as to the type of monitoring services that will suit you and your system the best. Once you choose the company you wish to go with, you will sign a contract for their monitoring services. When an alarm “event” occurs at your home, whether you are there or not, their monitoring center will be alerted and they will contact the proper authorities.

Alarm.com

One other monitoring service that is worth looking into is offered by Alarm.com, from their website of the same name. Alarm.com offers some advantages over traditional monitoring companies, namely wireless monitoring, and an online user interface. Most security systems communicate with the monitoring service via your phone line. Should a burglar cut your phone line, the monitoring center cannot be alerted when they break in. With Alarm.com’s wireless monitoring this problem is eliminated as the system uses, you guessed it, wireless signals (similar to how a pager works) to monitor your home.

The online user interface is a convenient feature, especially if this is a second home for you and you are away from it quite a bit. You can keep a virtual eye on your home from anywhere with an Internet connection. From the web you can set the alarm, schedule lights to come on at certain times, and, with available sensors, even monitor things like whether or not the pool guy came to clean the pool last week. You can also be notified of any system event (alarm or door opening, for example) to your Blackberry, cell phone, or by e-mail.

For more information on security system options that might be available to you, visit: http://www.adt.com, http://www.brinks.com, or http://www.alarm.com

Exterior Doors

The exterior doors, such as the front door and any side exterior doors will now be installed. They can be made of solid wood or a wood composite, metal, or more commonly these days fiberglass. Fiberglass is extremely durable, less likely to dent than steel, and easy to paint.

Framing Punchout

As mentioned earlier, any last corrections that need to be made to the framing before inspection will be done at this point.

Framing, Electrical, Plumbing, and Mechanical Inspections

Next, a whole slew of inspections happen.  Typically, you won’t even be made aware of it if some aspect of the home fails inspection. But not to worry, the house will not proceed until everything that may be wrong with it has been corrected and re-inspected. Failed inspections happen, and it shouldn’t give you the impression that you are getting a substandard home. You should be thrilled that someone has been careful and diligent enough to catch any mistakes, to prevent problems for you down the road.

Stucco

The outside of the home is now stuccoed, providing another layer of protection for your home to the elements. Stucco is basically a muddy mixture of cement, dirt, and water applied to the outside of the block walls of your home. Before the stucco can be applied to the house, a layer of sheathing and a wire lathe must be placed over any exterior wood framing, such as porch ceilings, to protect the wood and to help the stucco adhere. Blocks walls, however, can have the stucco applied directly to them.

Exterior Paint

Now the outside of the home will be painted the color you selected. Several builders, particularly in Florida, after having experienced never before seen water penetration through block walls during the tropical season of 2004, have started using elastomeric paint to help keep wind-blown rain from penetrating the outer shell of their homes.

It is highly recommend that you seek out a home builder using this type of paint, or have your home painted with it soon after you move in. The elastomeric paint is a “waterproofing” paint, not necessarily waterproof, that is applied and a factory representative will usually inspect the application to ensure that it was done properly.

Insulation

Different types of insulation will now be placed in different parts of your home. For example, very thin foil insulation will be placed inside the exterior block walls, batted insulation will be placed between the studs of some interior walls and– if possible– in parts of the ceiling. The remainder of the ceiling will have blown-in insulation, especially in those areas that are hard to reach. Thick, fire rated insulation will also be placed between the garage and the interior of the home to form a fire barrier.

R-Value

The effectiveness of the insulation to resist heat from entering the living areas of the home is measured in what is called an R-Value. In Florida, all builders and sellers of new construction homes are required to disclose to you what the R-value is of the insulation installed in the different areas of the home. This will most often be in your sales contract but it could be under a separate “insulation addendum” to the contract.

Garage Insulation

Some builders insulate the garage ceiling, and some do not. You should be able to find out from the builder’s marketing materials whether or not they do it. If not, and you plan to spend any significant amount of time working in your garage, I suggest you pay a little more to have insulation installed over the garage. It can make a big difference in the comfort of your garage, especially during the hot summer months.

Insulation Inspection

Because insulation is such an important component in your home from both a safety and comfort standpoint, there will be an inspection to make sure the right type and right amount of insulation have been installed properly in the required places.

Soffit and Fascia

The soffit and fascia are aluminum or vinyl materials that are used to cover the eaves, or where the roof overhangs the outside walls of the house. The soffit is designed to prevent water and bugs from entering the home, while still allowing air to flow into and cool the attic.

Drywall

The interior walls of your new home will most commonly be constructed of drywall, also referred to as “wall board.” The drywall will be nailed to the wood studs inside your home and the seams will be hidden by tape. The rooms of your new home are really taking shape now.

Drywall is typically less expensive and less durable than the plaster walls that you may have had or seen in older homes. Drywall is available in different thicknesses, the most commonly used thickness being ½ inch thick. Thicker drywall is generally preferred because each increasing level of thickness adds extra insulating, durability, and sound deadening properties. Also, thicker drywall, especially 5/8 of an inch or thicker, is easier to hang pictures on than ½ inch drywall. Different types of specialized drywall are also available albeit at higher costs such as fire-rated drywall or sound deadening drywall. As with anything else, having the builder install thicker drywall or any specialized drywall will usually result in an increase in costs.

Over the first year or so in your new home, drywall cracks, and nail or screw pops may appear as the house is breaking in and going through a shrinkage process. Near the end of your initial warranty period, usually one year, you should have the builder repair these minor cracks and nail or screw pops.

Windowsills

After the drywall is installed but usually before it is textured, the windowsills will be installed. Most production builders these days are using cultured marble or solid surface windowsills, but some use real wood sills. Many experts prefer cultured marble or solid surface as opposed to wood because windowsills sometimes can get wet if you leave a window cracked open accidentally, and moisture and wood don’t go well together.

Drywall Texture

Your drywall job will not be complete without a layer of texture applied to give it some depth, added durability, and also to help hide any imperfections. Two of the most common types of texture being applied in Florida today are called “knockdown” and “orange peel.”

Knockdown texture can best be described as looking like splatter, while orange peel looks like–you’ll never guess–the peel of an orange. Looking through the builder’s model homes, speaking to the sales staff, or reviewing their sales literature will give you an idea of what types of texturing they use.
I briefly mentioned plaster walls before and if you prefer the look and feel of plaster, it can be applied to certain types of drywall. Just check with your builder for the ability to upgrade, and their willingness to do that for you.

Trim carpentry

At this stage a trim carpenter will go into your new home and install the baseboards, special moldings such as crown molding if offered by the builder, chair rails, and doorframes.  Interior doors will also be delivered to the home around this time, but won’t be installed until after they are painted.

Interior Paint

Your inside painting will be completed at this time. Make sure to request that two coats of paint be applied. Don’t fret if the paint does not look perfect at this point. There is still work to be done inside, and a final paint touch up will occur before your home is complete.

Most builders will offer you a choice of colors that you can choose from when you make your initial selections. Be aware though that some production builders do not allow you to choose, and only offer white. If this is the case, you’ll either have to paint the interior of the home the colors you want yourself, or hire someone to come in and do it for you.

One tip I can give you is that if you are hiring someone to do the work for you, they will usually quote you a lower price if there is no furniture for them to move or have to cover up. So if possible, have your new home painted before moving anything into the home.

Garage Door

Your garage door will be installed about this time. The garage doors for your home can be made of wood, fiberglass, or most commonly on production homes, steel. Garage doors are rated based on their “wind load” which is the amount of positive and negative pressure they can withstand.

Most people aren’t aware that roughly 80% of hurricane damage to a home starts with wind entering through the garage. This makes the garage door the most vulnerable part of your home when it comes to hurricanes, so you’ll want to make sure that the garage door on your home is sturdy and made to withstand high winds. This is usually accomplished with the use of heavier, sturdier door materials; door insulation; and many horizontal rows of steel bracing.

Specifications for your garage door were likely submitted with your house plans to the permitting office in order to certify that it is up to local code, and an inspector will verify that the proper door was installed when inspecting your home during construction. In most cases additional bracing can be added, just contact a garage door contractor in the area to come take a look and tell you what options might be available to you.

Tile
Ceramic tile is common in most high quality homes, at least in “wet” areas such as kitchens, bathrooms and utility rooms. Lower cost homes will substitute linoleum, which can be made to look like real tile. Available in different sizes, usually 12 x 12, 16 x 16, or 18 x 18, tile can be installed pretty much wherever you want, is extremely durable, and can be fairly inexpensive. It can also be very expensive, depending on your tastes and where the tile is made. Imported porcelain tile from Italy will be more expensive than ceramic tile manufactured in the United States, but most untrained eyes won’t be able to tell the difference. Another option in higher end homes is travertine marble. In the end, the tile you choose to have put in your home will be a reflection of your personal taste and budget.

A quality tile job will have grout lines of consistent size, and there will not be any high spots or low spots in the tiles. A good tile layer will employ the use of a level to ensure an even application with no high or low spots. Once you move in to your new home it is recommended that you have your grout sealed, or do it yourself, to prevent stains. While the tile can easily be cleaned with water and a mop, grout is much tougher to get clean so it’s best to protect it from the start.

Lay out and pour driveway and sidewalks
Now your driveway, front and back patio, as well as any sidewalks, will be laid out and formed up. Once they are formed, they will be inspected to ensure they are the correct size and shape. Assuming they pass inspection, these areas will be poured with concrete.

Final Survey
With all of the components of the home, structure, driveway, sidewalks, and patios in place, a final survey will be conducted to ensure all components are within the setbacks where they are supposed to be.

Irrigation System
Your irrigation system, which can be run off your main water system, a reclaimed water system, or a deep well, will be installed at this point. Be aware that with a well, there is a chance that if the well is not dug deep enough, high levels of sulfur in the water can discolor your exterior paint job over time. Typically, the deeper the well, the less paint discoloring sulfur will be present in the water, and proper depths of deep wells will vary from area to area.

The irrigation system is usually controlled by a timer box that can be manual or electronic, allowing you to set watering times, and setting the system to water certain days, while skipping others. Several Florida cities and counties are experiencing severe water shortages because of rapid growth and development, along with other factors. Therefore, restrictions on how often and when you are allowed to water your lawn are sometimes in place. Check with your city water department for more information on what restrictions might be in place in your area.

Landscaping
Any landscaping that is included with your home will be installed, following the installation of your irrigation system. Most builders include a basic landscaping package with your home, and some will give you the option to upgrade that package. Otherwise, you may want to add some more landscaping after you move in, since most basic packages can be pretty sparse.

Measure Cabinets
In the case of custom, or even semi-custom cabinetry, the cabinet company will measure for those shortly after the drywall is in. While some minor corrections to cabinetry can be made in the field, a quality cabinet company will rely on accurate measurements at this stage to build your cabinets to exact specifications.

Cabinets
Cabinets range from entry level laminate cabinets to a step higher with thermofoil cabinets, which are essentially vinyl-covered particleboard, to faux wood cabinet doors with plastic or particle boards drawers and shelves at a step higher, to all wood cabinets at the highest end. Maple, hickory, oak, and cherry are the most popular types of wood cabinets and various stains and glazing such as cinnamon or pecan can be applied to each. Again, just like most of the other important selections going into your home, the cabinets you choose will be determined by your personal preferences and most definitely budget. Be sure to put a lot of thought into your cabinetry, because if you decide you don’t really like it that much a few years down the road, it can be expensive to replace.

One simple way to save a little money without sacrificing design is to have upgraded cabinets installed in your kitchen, and have standard cabinetry installed in your bathrooms. This way, everyone can marvel at your beautiful cabinets in the place where most people tend to congregate, the kitchen.

Counter tops
Your kitchen countertops are one of the most used components of your new home. Your choices range from inexpensive yet functional laminates, to solid surfaces like Corian®, granite, and Silestone®. Again, just like other components in your home, the product you ultimately choose will be based on factors such as personal taste as well as budget. A laminate counter will usually arrive with your cabinets, while solid surface counters must be custom measured for after your cabinets go in. Because of this there is often a couple week delay between your cabinets being installed and the countertop installation.

Laminate
Laminate countertops are made in a variety of colors, patterns, and textures. Laminate countertops are among the least expensive countertops available, yet many laminate countertops resemble the look of higher priced counters at first glance. Laminate countertops are not as durable as solid surface counters and can be cut or scorched easily, so you’ll need to always make use of a cutting board when working with knives, and hot pads when using hot pots or pans.

Corian®
Corian®, invented by DuPont, is one of the most popular countertops available today and with good reason. It is extremely durable, nonporous (this makes it stain resistant), and with over 100 colors available, it can be used in a number of creative applications. Something you might want to think about is that some people decide to transition their solid surface countertops into their bathrooms as well, something you may not typically want to do with laminates.

While Corian® is extremely durable, care should still be used when cutting or cooking. Its cost far exceeds that of laminate counters. A typical kitchen will cost a few thousand dollars as opposed to a few hundred with laminate, but with the proper care and precautions, it should last you a whole lot longer.

Granite
Granite is a natural stone, quarried in several locations around the world. Available in a vast range of colors and patterns, granite’s use as a countertop surface is very popular, especially in higher-end homes. Because it is a natural stone, no two pieces will ever look exactly the same, allowing the homeowner to express their own sense of flair and uniqueness.

Being that it is a natural stone, granite is porous, and must be sealed regularly to prevent staining. Most experts recommend that this be done twice a year. Granite is known for its hardness and durability, but again, as is the case with other solid surfaces, it is not scratch or burn proof.

Silestone®
Silestone® is a nonporous solid surface material made mainly of quartz, the fourth hardest natural mineral. Harder and more durable than granite, Silestone® is scratch, stain, and scorch resistant. However, the manufacturer recommends that as with any other solid surface countertop, proper precautions against each of those be taken. Because it is nonporous, it does not need to be sealed like granite does.

Like each of the other countertop options, Silestone® is available in a variety of colors and patterns, and can be used in a variety of ways. Also, the company that manufactures Silestone® recently introduced Microban®, an antibacterial product built-in to the Silestone®. This helps to continually fight bacteria between cleanings. It should also be noted that previously mentioned DuPont has a similar quartz based countertop product called Zodiaq®.

Appliances are ordered
If you have not picked out your appliances by now, you better get started. At least some of them, like the range, dishwasher, and any built in microwave or wall ovens will be delivered around this time. Your builder will usually have you go to visit their supplier to have you pick them out, otherwise you might be stuck picking out your appliances from a catalog which really makes it tough. Your final appliances– refrigerator, washer and dryer– will usually come a little later.

Appliances might be one of the hardest items to pick out. You should do a lot of looking around at different makes and models before you decide. Appliances are usually available in white, black, bisque, or stainless steel. You should choose a color that coordinates with the rest of your kitchen.

Plumbing Trim
This is when your faucets will be installed. Popular finishes include polished or antique brass, chrome and nickel. You will most likely have picked out the type and style of fixtures you want at your appointment with the builder’s decorator.

Mirrors and Shelving Installed
Your bathrooms mirrors get installed around this time. Mirrors range from standard flat mirrors, to more upscale beveled mirrors available in a variety of shapes. Some builders offer you a choice at your design meeting and some do not. If not, you can always have them changed out later.

Also, closet shelving, which is usually wire shelving in production homes, will now be installed. Some builders are offering the choice to upgrade to California® type closets, which provide a more useful and appealing shelving and hanging system customized to fit your needs. If your builder does not offer this but you just have to have it, once you move in just look up “closets” in the phone book and get some estimates.

Electrical and HVAC Trim
Your outlet covers and light switches will be installed, along with any light fixtures you have chosen for your home. Also, your air conditioning vents and return vents will be installed if they have not been already.

Attic Insulation
You might recall that when the insulation was installed, certain areas of your home’s ceiling may have gotten batted insulation. At this stage the rest of your home’s ceilings will get insulated with blown-in insulation. A large tube or hose runs from an insulation truck and the installer climbs into the attic and “blows-in” the rest of the insulation. They will usually apply it until there is at least a foot or more of insulation covering all areas.

Flooring
Any hardwood flooring or carpet you have requested will be installed at this time. You will have picked out your flooring choices at your meeting with the decorator, and now you get to see how it finally looks installed in your new home. If you’re not excited yet, you should be. You’re almost home!

Final Inspection
This is the last city inspection that your home will have. After it is complete, and assuming your home has passed, the city will then issue a Certificate of Occupancy (or “C.O.” in builderspeak), basically stating that the home is habitable and has been inspected to meet or exceed local building standards.

Paint Touch-Up
The painter will go back in and touch up any spots he might have missed, or areas that have been scuffed, nicked, or otherwise damaged as things have been delivered and installed and people have been working.

Meter Installed
Up until this point, your home has been running on temporary power. Now the local power company will come out, remove the temporary power pole, and install an electric meter. A power company employee will check this meter each month to see how much power has been used, and the power company will use this information to calculate your bill.

Hot Check
With the home running on permanent power, all of the electrical functions of the home will be tested to make sure there are no shorts in the system, and make sure everything functions the way it should.

Install the rest of the appliances
With 99 percent of the work on your home complete, your final appliances will usually be delivered and installed. You will have a chance very soon at your final walkthrough to verify that these are in no way damaged, and that they work like they should.

Punchout
Here the last one percent of work, which is often the most important, will be attended to. Either the superintendent or a walkthrough specialist will walk through your home examining it for quality finish and attention to detail. Anything out of order or not in tip-top shape will be taken care of.

Final Cleaning
After all construction work is done, a cleaning crew will go through the home cleaning it from top to bottom, mopping floors, vacuuming carpet, scrubbing toilets, and cleaning counters. After the cleaning it may be found that certain counters or tubs have been scratched during construction. If this is the case they will be buffed or otherwise repaired.

You may think that once you’ve moved into your brand new home in a new retirement community that your work is done. This is only partly true. There are several things you should do after you move in to keep your home looking and operating like new.

Periodic Maintenance

These include monthly maintenance like changing your air filter, cleaning your disposal blades by running ice cubes through it, and checking for leaks around toilets and under sinks. Periodically check all grout and caulking for any cracks, as this can occur due to shrinkage. Of course, you’ll want to maintain your appliances and have them repaired at the first sign of trouble.

Twice a year you should have your roof (please don’t try to do this yourself) and the exterior of your home inspected. Check the operation of all windows and shutters if you have them. You should have your heating and air conditioning system inspected and serviced twice a year as well, once at the start of summer, and again before the winter heating season.

Your home warranty information provided by your builder may have additional hints and tips for keeping your home in tip-top shape year round.

Pest Control

In some states like Florida, having a pest control service company come to your home regularly is essential in keeping your home both comfortable and free of insects and other pests. Without it you may have some unwanted roommates. Most non-natives, especially Northerners are surprised at the amount of pests in the south, but unfortunately the climate helps them thrive. The great weather might be what brought you here, and the bugs like it just as well.

The pest control company will usually start you off with an initial “kill everything in sight” type of service and maintain regular visits every 60 to 90 days. If you are still seeing bugs in your home, most companies will come out in between scheduled visits to try and get rid of the problem. Look in the phone book under “pest control” for companies providing service in your area.

If you are having a new home built, another pest control option is to have pest tubes installed in your walls. This is done after the framing stage, and before the insulation and drywall are put in. In the future, when the pest control company comes to your home, they service the tubes inside your walls from a base station outside, eliminating the need for you to be home when they come and eliminating the need for them to come inside. These tubes aren’t something normally offered by most builders, so you might have to ask. They should not be very expensive, because pest control companies that work with them will install them for next to nothing in the hopes of making up for the expense when they sign you to a service contract. Not all pest control companies service these pest tubes, but more and more are doing so as they gain popularity.

Photo credit: aresaauburn on flickr

There are costs other than the sales price that are incurred in your real estate purchase in a retirement community. As the buyer, your share of these costs will typically range from 1% to 2% of the sales price. The closing costs that you pay will be a function of a couple factors including what you have negotiated in the real estate contract and whether or not you are getting a mortgage. Costs that are customarily paid for by the buyer include:

•    Recording of the deed
•    Documentary stamps on the deed*

*This is typically paid by the seller in a resale transaction, but I included it here     because many builders require the buyer to pay this

•    Documentary stamps on the mortgage
•    Intangible tax on the mortgage Lender’s title insurance policy
•    Taxes
•    Prepaid interest
•    Prepaid HOA Dues, capital contributions, or transfer fees
•    One year of insurance in full
•    Appraisal Fee
•    Underwriting Fee
•    Flood certification fee
•    And more…

How should baby boomers take title?

How you take title to your home is an important question that should only be answered after consulting an attorney, and your accountant, due to tax and estate-planning implications. How you take title establishes proof of ownership of a property, and often determines who will inherit your home when you die.

Sole Owner

Also known as owner in severalty, sole ownership is how you might take title if you are single, divorced, or widowed. Should you happen to die while owning the property, the property will be passed on according to your will. If you do not have a will, it will be passed on by descent to your heirs.

Tenancy by the Entireties

Tenancy by the Entireties is the most common way to take title in Florida for those who are married. In this case, if one spouse dies, the remaining spouse automatically becomes the owner.

Tenancy in Common

If you are in a second (or third, or fourth) marriage and you have children from a previous marriage, you may want to consider a tenancy in common. In this case, if you should die, your share of ownership in the property can be willed to your children.

Joint Tenants with Right of Survivorship

If you and the person you live with are not married, but you want to ensure that they receive full ownership of the property when you die, then joint tenancy with right of survivorship may be for you. The surviving owner will own the property outright, and the heirs of the deceased will have no claim to the property.

Taking Title in a Trust

Another option many boomers may want to consider is to take title in a trust. Speak to an estate planning attorney or a real estate attorney as to how and why you might take title in this way

The walkthrough, or new home orientation as it is sometimes called, is one of the most important phases in the construction of your new home. It is a time for you to meet with the builder and let him or his representatives acquaint you with your new home and all of its components.  The walkthrough is also a time for you to give your new home the once over, looking for any construction issues not up to quality standards. Here is what could be considered the ideal walkthrough in detail.

Allow Enough Time

Allow ample time to go through your new home. In my experience an hour and a half to two hours is sufficient for average sized new homes. Also, leave any pets, kids, or curious friends and relatives at home. There will be plenty of time for them to experience and enjoy your new home in due time. The walkthrough is serious business and should be treated as such. Minimizing distractions is critical.

What to Bring

To ensure a successful walkthrough bring along several pens or pencils, a black permanent marker, a packet of neon green dots available at office supply stores, a pad of legal paper, some bottled water, and a ton of patience. Understand that everything might not be perfect once you start the walkthrough. It’s just the nature of home building that no matter how careful, the builder can’t catch everything. But, if you follow my advice, the builder and his employees will be in the position to get things corrected for you in a timely fashion.

The order of the walkthrough is not really important as long as everything gets covered. As you find items not up to standards, place one of the neon green stickers I suggested you bring on the item and write it down on your legal pad or a punchlist provided by the builder, or both if you feel it necessary. Green dots can mysteriously disappear but if you write it down it can’t be forgotten for long.

Breaker Box and Electrical System

You will of course be tempted to head for the front door and bask in the glow of your fresh new home. But not so fast. Let’s cover some things in the garage first. The garage houses several important components of your new home and you should become familiar with them. The first item on the list is the breaker box. This is where the electricity that comes into your home is regulated. The walkthrough representative should show you where it is and how to operate it.

Make sure that each breaker has been clearly labeled for you. This will eliminate headaches down the road. Also, there should be some GFI outlets in the garage. Now is a great time for the walkthrough representative to test those in front of you, and to show you how they work. Also, make sure they test the GFI outlets inside the home when you get in there.

Hot Water Heater

Be sure to check the hot water heater. Make sure the size, measured in gallons, is what you contracted for. The walkthrough representative should show you how to turn it off so you will know how to when necessary. There are timers available for your hot water heater that can easily be installed that will save you some money on your electric bills. If your hot water heater comes with a timer, have the walkthrough representative show you how to set it.

Water Shutoff

The main water shutoff valve to the home will usually be located inside the garage or sometimes on the outside. The walkthrough representative may advise you to turn the water off if you will be leaving the home for days at a time. This is probably good advice, at least initially until you’ve lived in the home a while and made certain there are no leaky toilets or pipes.

If you do turn off your water, make sure that you also turn off the breaker for the hot water heater. The hot water heater has coils inside that can burn up if there is no water passing through. When you return home, it is very IMPORTANT to make sure you turn the water back on before turning the hot water heater back on.

Air Handler and Air Filter

The air handler, which distributes the heated or cooled air throughout your home, will usually be in the garage as well. Make sure the walkthrough representative opens the filter door to show you how to change the air filter. Using the black permanent marker, make note of the filter size in a conspicuous place on the front of the air handler. You should change the air filter about every month for best performance.

Garage Door

While you’re still in the garage, open and close the garage door to check for proper operation and make sure the remote controls work. If your garage door opener came with an outside keypad, ensure that it too works. In the event of a power outage you may need to open the garage door manually. Have the walkthrough representative show you how to do that.

Kitchen

Once inside the home, the best place to usually start is the kitchen because there is so much to cover there. Make sure that there are no scratches on the kitchen countertops or cabinets. Open and close a random selection of cabinet doors to make sure they are working properly. Make sure the hinges are tight, and the cabinets aren’t sticking or rubbing against anything as you are opening and closing them. The representative should give you care and cleaning instructions for both your counters and your cabinets.

Turn on the kitchen faucet and set it to the hottest setting. Here we are checking to make sure that the hot water heater is working properly. As long as you’ve got hot water after what you feel is a reasonable length of time, you’re doing just fine. Have the walkthrough representative show you how the sink disposal works, and how to clear it if it gets clogged. Also have them show you where the individual shutoff valve is for the water in the kitchen as well as the locations of the GFI outlets.

Appliances

Examine the appliances that came with your home. First, examine the outside of them to make sure there are no scratches or dents. Accidents do happen during construction, but assuming you bought new appliances, and not scratch-and-dent specials, they should be in brand new condition. Turn the stovetop on, check that the burners are working, and then try heating the oven. Assuming everything is working thus far, start the dishwasher to run through a cycle. This is to mainly make sure that there are no leaks in the dishwasher, either when it fills or when it drains.

While the dishwasher is running do a quick check of the refrigerator. If there are integrated ice and or water controls in your refrigerator make sure they work. Don’t use the first batch or two of ice; just discard it in the sink. Also, most manufacturers suggest running through and pouring out the first couple of gallons of water from the refrigerator. This is to make sure that the water line becomes clear of any debris that may have gotten inside during construction and installation.

If your home came with a microwave, also check to make sure it works. In the laundry room, start both the washer and the dryer if provided and make sure they are working correctly. Make sure the dryer vent hose is connected.

All of the appliance instructions and warranty information should be kept in one easy-to-access location. Some of them may have cards for you to fill out and mail in to the manufacturer to record your warranty.

Drywall and Flooring

Before leaving the kitchen, examine the flooring for quality. Also check the walls for any drywall imperfections and check the paint for any spots the painter may have missed. As you see things that don’t meet your standards, write them down on the list and place a green dot on or near the problem area. This is so that the drywallers or painters know exactly where to look to correct the problem areas.

Continue your flooring and wall inspection throughout the remainder of the home. Don’t forget to look up every now and then and inspect the ceilings.

Systems and Components

As you are going through the home, have your representative show you how various things work, such as how to set and control the thermostat, how to use the security system and intercom if there is one, and how to operate the central vacuum if you bought one. If your home has a fireplace, whether it is wood burning, gas, or electric, have the walkthrough representative show you how it works. Make sure you are given instruction booklets on each of these items and that you place them with your appliance booklets.

Bathrooms

Visit the bathrooms and check that the plumbing works. Again turn on the hot water, then the cold water to check the functioning of each. Be sure to check the showers and baths, as well as the sink. Water lines sometimes get reversed. Hot will be cold, and cold will be hot, but this can be easily corrected. Flush the toilets and make sure they have adequate water flow and don’t remain running long after you flush. Check the tile work inside the showers to make sure that there are no holes or gaps in the grout or caulking. You don’t want water getting behind your tile in there. Examine the vanity tops for scratches and cabinets for loose hinges.

Exterior

Be sure to inspect the outside of your home as well. The walkthrough representative should familiarize you with where the hose bibs are located, the sewer cleanout, the A/C unit and anything else that is important. Make sure all of the exterior walls of the home are evenly painted, and do an inspection from ground level of the roof to make sure there are no shingles that look loose or out of place. If your home comes with a sprinkler system, you should be shown how to operate that.

Warranty

After you feel you’ve examined the home top to bottom and have made note of anything that is not satisfactory, you should have the walkthrough representative go over any warranty paperwork that is given to you, so you have an understanding of what items in the home are covered and for how long. Most warranty plans cover most everything for a short period of time, usually the first year. The systems of the home, things like plumbing, electrical, and HVAC, will be covered for a little bit longer, maybe up to two or three years.

There will also be a warranty on the structure. This is the longest lasting component of the warranty. When you hear a builder say a ten-year warranty or 15-year warranty, they are referring to the warranty on the structure. The structure is usually deemed to include the foundation and footings, beams, lintels, columns, walls, roof framing systems and flooring systems.

When things settle down a little bit and you have some time, it can never hurt to read over all of the warranty information. This will help you feel more comfortable with the warranty claim and repair process should you ever need to go through it in the future.

Emergency Information

The walkthrough representative will usually give you a list of subcontractors who worked on your home so you can call them if you have a problem with something. You should also be sure that you have a list of repair people to contact should an emergency arise on a weekend or during any non-business hours.

These people should include the heating and A/C contractor should the heat or air break; the electrical contractor if you lose power due to something other than a loss of overall power from the power company; the plumber for if your hot water heater breaks or if there is a sewer stoppage; and finally the number for the roofer if you get a roof leak. I also recommend having the number for a 24-hour water extraction company handy, just in case a pipe breaks or a water heater bursts and your home is flooded.

Write all of these numbers down on one piece of paper and tape them to the inside of a cabinet so that you can find them easily in an emergency.

Sign Here Please

To conclude the walkthrough, the walkthrough representative will typically have paperwork for you to sign stating that he walked you through and familiarized you with everything in the home, and that all the workmanship was satisfactory. Just make sure that the items you found to be unsatisfactory are either on this paperwork or will be attached to it in some form or fashion.

It is not absolutely critical that these items all be completed before your closing, so long as they are documented as needing repair. Invariably in the days and weeks after you move in, you will find more items needing the builder’s attention. Just write all these items down as you find them and bring them to the builder’s attention.

It has been a long process but now you are all set to enjoy what you have longed for, a beautiful new home.

With most purchases we make in our daily lives, negotiation is usually not part of the transaction. We don’t try to haggle with the barista at the corner coffee shop over the price of our grande white mocha, no whip, with non-fat milk. Because of this, when we go to purchase big ticket items like cars and homes, we are often times reluctant to negotiate because of our natural desire to avoid conflict. However, when purchasing a home, negotiating is, most of the time anyway, the order of the day.

But that can depend on the market. For example, if in a community you are considering, a builder has several homes completed with no buyers for them, you may be able to negotiate with them for something. (Very common these days!)

It may end up being tens of thousands of dollars, it may be a couple hundred dollars, or it may be a free appliance upgrades. It just depends. But as the saying goes, “you never know, unless you ask!” You just don’t want to end up paying full price when you could have saved thousands or more just by asking.

It’s Not Just About the Price
Better prices aren’t the only thing up for grabs. When we hear the word “negotiation” the first thing we think of is price. But real estate transactions are so complex that there are many things that can be negotiated other than just the price. You can negotiate things such as when the closing will take place, who will pay for any repairs needed after the home inspection, who will pay the transaction closing costs or attorney’s fees, and who gets the patio furniture. The most important thing for you to remember is that almost everything is negotiable.

Top Four Tips for Negotiating
While no two real estate negotiations are exactly the same, you will find yourself in a position for success nearly every time if you keep these four simple negotiating tips in mind.

1) Keep your emotions in check.

The main thing to remember in any negotiation is to remain calm. It can help if you have a real estate agent representing you to act as a buffer between you and the seller or the seller’s agent, so long as the lines of communication are clear and open on both ends. Keep in mind that this transaction is probably just as stressful for the seller as it is for you. I recently sold a personal home of mine, and even though I’m a seasoned real estate broker, I let another broker I trust handle my sale because its just too tough to be objective when your own emotions are involved. You do not want to come out of this transaction thinking you paid too much, and the seller does not want to feel like they “gave the house away.” This segues into my next tip…

2) Do your research before submitting an offer.

If you are working with an agent, ask them for a list of homes comparable in size, style, age, and location to the one you are considering (this is called a CMA or Comparative Market Analysis) and compare the sales prices of those homes to the price of the home you are considering. If you are not working with an agent and do not have access to the Multiple Listing Service, the local property appraiser’s website usually will have data such as sales prices online. Another resource for this task is the website Zillow.com which I mentioned earlier. Keep in mind that these websites sometimes take anywhere from 6 weeks to six months longer to update than the Multiple Listing Service, and therefore may not have the most current information.

3) Set your limits before you submit an offer and be realistic.

If all you can afford to pay or are willing to pay is $300,000, you are not doing anyone any favors by looking at $400,000 homes and offering $100,000 less and hoping someone will bite. By the same token if you want or need a four bedroom home but get talked into or decide to settle on a three bedroom home, you may be unhappy down the road when you realize you really did need that extra room. Have a firm understanding beforehand of what your wants, needs, and limitations are and stick to them.

4) Be the path of least resistance.

If roles were reversed and you were selling a home and were placed in the following two scenarios, which buyer would you like to have most?

Buyer “A” has been pre-qualified by a lender, has asked for no contingencies other than the right to inspect the property and have repairs made, and wants to close within 30 days.

A lender has also pre-qualified buyer “B,” but they want to make the contract contingent upon their current home selling within 45 days. Both buyer “A” and buyer “B” are offering the same amount of money.

Most likely you would choose to accept the contract from buyer “A” and reject or at least counter buyer “B” with terms more advantageous to your position. It looks like Buyer “A” is financially able to purchase your home and they don’t want to wait. Buyer “A” wins over buyer “B” every time.

The lesson here is that when you are searching for a property in a fast moving market, be buyer “A” and give the seller every reason to choose you and your offer over anyone else’s. Be the seller’s path of least resistance.

Photo credit: oooh.oooh on flickr

In addition to the obvious need to protect your investment, the ability to get homeowner’s insurance is of utmost importance when getting a mortgage on your property. No mortgage company will loan you money on a home in a retirement community without you first having insurance on the property. In some instances your mortgage lender can even foreclose on the property if you fail to carry insurance. While no one can predict what the future will bring, I have done my best to compile for you the facts and resources, as they now stand, to help you navigate the homeowner’s insurance minefield.

Getting Started
Presumably you now have homeowner’s insurance on your current residence, wherever that might be. My first piece of advice is to ask your current insurance agent if their company writes homeowner’s insurance policies in the area you are moving to. If you are with a large national insurer like State Farm, Nationwide, or Allstate, the odds are good that they do write homeowner’s policies in many other areas. (Note that State Famr no longer writes Homeowner’s Insurance policies in Florida) By doing this, you are taking the path of least resistance, and you will probably be able to get pretty decent rates through what are called “multi-line” discounts assuming you have other property such as cars, jewelry and the like already insured through them. You are welcome to shop around and price out other insurers, but from what I’ve seen, if you are comfortable with the company you have now, switching carriers to save a few bucks isn’t worth the hassle.

Ask Around
If the above scenario does not work out for whatever reason, my next step would be to ask any family or friends presently living in areas you are thinking of moving to who they have as their homeowner’s insurance carrier. If they have no useful information, ask a real estate agent or potential new neighbors for a recommendation.

Because of the ever present risk from hurricanes as well as rising re-insurance rates (yes, insurers get insurance to protect themselves against losses on the insurance they issue you), many insurers have recently dropped customers in damage prone coastal areas, stopped writing new policies in those same areas, or stopped writing new policies in coastal states altogether. You are going to have to do some serious legwork, phoning different agencies to see who is doing what at the time when you need insurance. Many have a one policy out, one policy in type of arrangement, where they will place you on a waiting list and when a policyholder does not renew for whatever reason, they can pick you up.

How to Lower your Wind Premiums
In many states there are ways in which you can save significant amounts of money on the windstorm portion of the insurance premiums you pay each year. Most of these have to do with the manner in which your home is constructed.

For instance, just owning a home that is compliant with the current building codes can save you nearly 50 percent, depending on the insurance company. All the more incentive to buy or build a new home. If that home is built of concrete block, you save another few percentage points. Also, since the roof—as you might have guessed– is an important component in standing up to a hurricane, certain roof types make your home eligible for reduced rates. Experts agree that a hip roof, or a roof that is sloped on all four sides, will perform the best under extreme winds, and having a hip roof on your home can save you almost 25 percent. Other savings are available for having certain types of protective shutters installed on the windows of your home.

In order to get these discounts, most insurance companies either ask that you get a certification from the builder or they will send some other independent party to your home to verify that the home does in fact comply with the requirements for the discounts.

Types of Coverage
When shopping for homeowner’s insurance, there are various types of coverage available for you to choose from. Perhaps the most important is guaranteed replacement cost coverage.

Guaranteed Replacement Cost Coverage
No matter which insurance company you eventually go with, you need to make sure that all rates that you are being quoted are for what is called guaranteed replacement cost coverage, as opposed to actual cash value coverage. Guaranteed replacement cost coverage means that even if you are insured for, let’s say, $200,000, if your home is destroyed and it costs $250,000 to build at today’s construction costs to be put back into use as it was before, then that’s what the insurance company will pay.

This type of coverage will cost more, as you might imagine, but it provides the policyholder with much more protection. One way to mitigate the rise in your premium is to raise your deductible. When you raise your deductible, or the amount you pay out of pocket to file a claim, your yearly premiums will go down.

Endorsements and Additional Coverage
Your homeowner’s insurance policy may not cover certain items in your home against damage or theft. Always have your agent explain anything you don’t understand and read your policy carefully.

Items like fine art, coin or gun collections, jewelry and furs, or electronic equipment beyond the standard televisions and DVD players, must usually be accounted for and covered under a separate policy or endorsement for an additional premium amount. But if you have any of these items, it might be wise to look into the coverage available to you.

Inventory
Always maintain a current inventory of the items in your home, including pictures or video of your property. This inventory should be kept in a safe place outside of the home like a safe deposit box at a bank. This way, if your home and personal belongings are destroyed, you have evidence of what was damaged to show the insurance adjuster. This step alone can save you several hours, days, or sometimes weeks of hassles and delays in getting your insurance claim processed.

Flood Insurance
There are two facts that most people do not know. First, flooding is the number one natural disaster in the United States; even properties not near water can be susceptible to flooding. Second, losses due to floods are not covered by your homeowner’s insurance policy.

The Federal Emergency Management Association (FEMA) puts out “flood maps” that show which areas tend to be most prone to flooding. I often hear people ask, “is the property in a flood zone?” and usually people describing homes in low-risk areas will say “no, it’s not in a flood zone.” Well, the correct answer is that every property is in a flood zone. It’s just a matter of whether it is in a low, moderate or high-risk flood zone.

Your real estate agent might be able to tell you which flood zone the property you are looking at is in. But it is your insurance agent who will use a Flood Insurance Rate Map or FIRM, to ultimately determine your flood risk. Be aware that federal law requires you to purchase flood insurance if you have a federally backed mortgage and reside in a high-risk area.

Flood Zones Explained

Here is a break-down of the various flood zones in which you may find a property located.

Moderate to Low Risk Areas
(Flood insurance is not required, but recommended)
Zones B, C, and X
These are flood zones with a less than 1% chance of flooding each year.

High Risk Areas
(Flood Insurance is Mandatory)
Zones A, AE, A1-A30, AH, AO
These areas have a 1% chance of annual flooding and a 26% chance of flooding over 30 years.

Zone AR
This is a flood zone with an increased temporary risk due to the construction or restoration of a levee or a dam.

Zone A99
Areas with a 1% chance of annual flooding that will be protected by a levee or dam where construction has reached specified legal requirements.

High Risk – Coastal Areas
(Flood Insurance is Mandatory)
Zone V, VE, V1-V30
Coastal Areas with a 1% or greater chance of flooding annually and subject to the additional hazard of storm waves. Also has a 26% chance of flooding over 30 years.

Undetermined Risk Areas
Zone D
Possible but undetermined flood hazards.

Better Safe than Sorry
Everyone, no matter where they choose to live should carry flood insurance available through the National Flood Insurance Program. It is relatively inexpensive, especially if your home is in a low-risk flood zone. A single-family home is limited to $250,000 coverage for structural damage and $100,000 for contents. I have those amounts of coverage on my home in a low-risk flood zone and my premium is just over $300 per year. For less than a dollar a day, I can sleep easy at night when the rain from the latest tropical system is pouring down. It’s a no-brainer.

For more information on flood zones, flood maps, and flood insurance contact your insurance agent or visit www.floodsmart.gov

Photo credit: slworking2 on flickr

You’ll surely find that the real estate taxes that you pay on a home can vary widely depending on what state, what city, and what county you are buying the home in.

Why the difference? Well, several factors are at work here, but the main thing is that the taxes will usually be higher in areas that are experiencing rapid population and housing growth. When rapid growth happens some local governments cannot provide the level of services expected of them without raising taxes. This usually happens because city governments didn’t anticipate the rapid growth and must then play catch-up.

Here are links to property tax information for each state we cover. In addition to links to each states local property appraiser’s websites, these sites do a good job of explaining the property tax situation specific to each state.

State Property Tax Websites
Arizona - http://www.azdor.gov/property/manuals.asp
California - http://www.boe.ca.gov/proptaxes/proptax.htm
Florida - http://dor.myflorida.com/dor/property/
Georgia - http://www.etax.dor.ga.gov/IndTax_PropTax.aspx
Nevada - http://tax.state.nv.us/property_tax.htm
New Mexico - http://www.tax.state.nm.us/ptd/ptd_hom1a.htm
North Carolina - http://www.dornc.com/taxes/property/index.html
South Carolina - http://www.sc.gov/Portal/Category/TAXESRESIDENTS
Tennessee – http://www.comptroller.state.tn.us/cpdivpa.htm
Texas - http://www.window.state.tx.us/taxinfo/proptax/

Property Appraisal
In most states the property appraiser’s office has the task of putting a value on your home. This will help determine the amount of tax you will be required to pay. The property appraiser is not, however, the person who determines what your taxes will be. The local government usually does that when they set the millage rate.

Some property appraisers are even taking into account the recent run-up of home prices in 2004 and 2005. Most realize it was a high percentage of investor demand that was driving the increase in values, as opposed to “real” demand, and to compensate they are now assessing some homes in the 70 to 85 percent range.

While the above information is good to know, in order to get the possible “worst-case scenario” idea of what your taxes will be, use the 100 percent value for your financial planning. Then when you get your tax bill, if it happens to be lower, you will hopefully be pleasantly surprised.

Millage Rate
An essential element to figuring out how much your taxes will be is the millage rate, commonly referred to as “mil rate.” The millage rate is expresses as “mils per thousand.” For example if the millage rate is “22.55”, then you will pay $22.55 per $1,000 of assessed value.

Each taxing district will set its own millage rate which can be determined by dividing the total proposed budget of the taxing district (city, county, school district, etc.) by the total taxable value of all real estate in the district after exemptions are deducted for.

You will likely be taxed by your city, county, school district, water management district if there is one, and others. It’s important to get a whole tax picture view before deciding on an area. The local property appraiser’s office will usually be your best resource for this.

It is also important to note that in some states real estate taxes are paid in arrears, and in many cases you will have an opportunity to get a small discount for paying them early.

Homestead Exemptions
Some states provide some much needed tax relief in the form of homestead and other exemptions. Here are some of the possible exemptions that can save you money:

• Homestead Exemption
• Additional Homestead Exemption for Persons 65 and Older
• Widow’s and Widower’s Exemption
• Disability Exemption
• Disability Exemption for Ex -Service Members
• Exemption for Blind Persons

The best resource for calculating what your taxes will be on a particular property is, again, the local Property Appraiser’s office. They are there to help you. Some even have calculators on their website that you can use to get an idea of what your taxes will be.

When considering a new home purchase, one of the first decisions you should make is whether to have a home built, or buy a resale (previously occupied) home. Your decision will depend on several factors including how quickly you need a home, your personal taste, and other factors. Here are some pros and cons of both.

Pros of Building a New Home
One of the best things about a brand new home is that it is under warranty from the builder. If (almost) anything goes wrong while the home is under warranty, you won’t be charged to have it fixed. Assuming you are building from scratch (not buying a builder spec home), you will get to choose your own décor like carpet, tile, cabinets and counters. This helps to personalize the home to your tastes and to give it some of your own soul. You also have the ability to customize to an extent, depending on what types of changes the builder allows.

Also, you will usually qualify for better insurance rates because the home will be built to current building codes.

Cons of Building a New Home
One of the cons of building a new home is that you typically have to wait for the home to be built, unless the builder has the style of home you want in his inventory (commonly referred to as “spec” homes or “quick move-in” homes). If you are on a tight schedule, or you do not want to find a temporary place to live while your home is under construction, you might want to pass on building a new home.

Also, builders are typically not negotiable on their prices, mainly because when they price their homes they use a set profit margin and hate to stray from that figure. Your best shot at getting any wiggle room on the price is with negotiating option prices. Builders usually have huge markups of 50-100% or more on options and extras not normally included in their “standard” houses.

Keep in mind that some builders are willing to negotiate on the overall price of the house, and that it also depends on the market. If they have a lot of homes in inventory (buyer’s market), they may be more likely to negotiate with you than if they don’t have very many homes available (seller’s market).

Another important factor to consider is that building a new home can be an overwhelming and nerve-wracking process. Seeing little day-to-day progress can be exasperating and many people feel the urge to micromanage the builder when there is usually no need to do that. If you are predisposed to being a micromanager, skip the headaches and buy a home that’s already built.

Pros of Resale Homes
One pro of buying a resale home is that unless you have plans to do some remodeling before you move in, the home is ready to be occupied, and you know exactly what you’re getting. You get to avoid the roller coaster of emotions involved in building a new home.

Most home sellers are open to negotiation on price. Again, this depends on the market, and in some cases why the seller is selling. Helping you negotiate is where your real estate agent comes in handy.

Cons of Resale Homes
With a resale home you are not able to choose your décor such as tile and carpet, cabinets and countertops, or make any customization or personalization until after the purchase and, even then, not without a remodeling budget. It is what it is. Someone else has chosen the colors and materials, and their tastes may differ from your own. Something else to consider is that, depending on the age and construction of the home, your insurance may cost more.

Additionally, if you want the protection of a home warranty, it must be purchased separately at your expense, unless the seller provides one. Also, don’t forget you’ll need a home inspection.

Should you Rent?
Another possibility for you to consider is renting a home for a year or two while you acclimate yourself to your new area. This can be helpful for a someone who isn’t sure they want to retire in a certain place, or live in a certain neighborhood, or type of home. You can try it out, and when your lease is up, you can decide what to do from there.

Most experts agree that in most cases buying is better than renting. Not so much because of future appreciation that can take several years to realize, but for the tax benefits of owning, like deducting mortgage interest and real estate taxes. But in a situation where you are the least bit unsure of your decision, renting may be the answer. It would do you very little good to plunk down tons of money on a new home, only to decide you hate the area, and in six months or a year later pick up and find a new home in a new area.

There are other problems with renting as opposed to buying, including the difficulty of finding something that suits your tastes and housing needs. There’s no such thing as a custom built rental. Plus, if you do find a place, since you don’t own the home you’ll be restricted in making any changes to its appearance.

Single Family Homes
The most basic and most popular type of home is the single family home. It’s what most people think of when someone says “house”. A standalone structure, a single family home sits on its own piece of land, be it the size of a credit card or several acres. Single family homes offer their owners the most sense of space. Even if your neighbor’s home is only five feet away, as will be the case in some communities, you still have a feeling of separation and distance from them. When standing in your living room, you really can’t tell if the neighbor’s house is five feet or 50 feet away.

Single family homes typically offer the most flexibility when you wish to make changes, such as adding an addition, changing the exterior color, or putting in a pool.

If you buy a single family home in a subdivision governed by a Homeowners’ Association (HOA), you will not have as much flexibility with what you can do to your home. The Architecture Review Board or ARB must typically approve most changes, especially those affecting the exterior appearance of the home. However the upside is that your neighbors will have to conform to the same standards when they wish to make changes. Be sure to read the HOA restrictions before purchasing to make sure they’re rules you are willing to follow.

As an owner of a single family home, you will be responsible for the home’s maintenance. You will be responsible for cutting the grass, trimming the shrubs and bushes, painting, pressure cleaning, and any other exterior maintenance as needed.

For someone who has better things to do than to spend Saturday on yard work, however, the new trend in some communities is for single-family homes to be maintained on the outside, just like a townhouse or condo. These are called “maintenance-free communities” or “maintenance-free lifestyle communities.” Just as in a townhouse or condo, the owner is assessed a fee to pay for certain services such as lawn care, periodic painting, and pressure washing.

Condominiums
Condominiums, or condos, are popular all over most retirement states, but even more so in coastal areas. Condominiums are buildings comprised of several separate units. Theoretically, the price of the land that the condo is built on is spread across the units, with units on higher floors typically commanding higher prices and yielding better views. For example, someone who wants to live on the ocean and may not be able to afford the several million-dollar price tags for a home may opt instead for a condo at a lower price. Even so, some condos run into the millions of dollars depending on location and features.

Condominiums are communities unto themselves. The beauty of condo living is that most of the upkeep of a regular single family home is eliminated. There is no lawn to cut, no shrubs to trim, and you won’t ever be asked to paint the building in your spare time on the weekend. Amenities range from the bare bones with a swimming pool and fitness room, to total luxury with full-time concierge, doorman and valet, room service, spas, and restaurants.

Townhouses
Townhouses can be considered sort of a happy medium between a single family home and a condo. Townhouses are two-story structures that are similar to single family homes in that they sit on their own piece of land.

They are also like a condominium in that they are attached to one or more other homes. They commonly include either a one or two-car garage and also a front or back patio for lounging outside.

The outside of the home is typically taken care of for you, you don’t have anyone living directly above you, and there is frequently a small piece of the yard for you to call your own in which you can plant annuals or a rose bush, etc. (often subject to community restrictions). These benefits account for the rise in popularity of townhouse living in Florida.

In most communities, townhouse owners are assessed for the maintenance of the common areas (parts of the community owned equally by the home owners), as well as any amenities provided such as swimming pools, tennis courts, and pavilions.

These assessments can occur monthly, bi-monthly, quarterly or yearly. Most likely these fees will not be figured into your mortgage, so you will have to make a separate payment when it is due. Again, you should review the budget and the association rules before you make a purchase.

Attached “Villas”
Available in some communities, attached villas are very similar to townhouses in that they are attached to another unit. However, they are only one story and therefore have no stairs, which some people find to be an attractive feature.

Manufactured Homes
Close your eyes and step into a modern manufactured home. Now open them. Are you sure that you’re really in a manufactured home? You see drywall, crown molding, tile, hardwood floors, a fireplace, decorative niches, and archways. Then look at the floorplan and layout, it seems that this can’t be a manufactured home!

Manufactured homes have come a long way from the long and narrow tin cans on wheels of the 50s, 60s, and 70s and have evolved into a logical, economical, and safe choice for many would-be homeowners. Affordability is one of the main factors driving the increase in manufactured home ownership. Manufactured homes cost considerably less than their site-built counterparts, sometimes 25-50 percent less, in fact.

Money is one thing you say, but are they safe? Today’s manufactured homes are built in quality and environmentally controlled factories and adhere to current federal building codes. This, combined with the fact that they are anchored to the foundation on which they sit, a process that is overseen by local building inspectors, means a safe and secure home that can withstand the elements. Manufactured home builders’ websites are often filled with testimonials of how their homes have been able to withstand hurricane force winds just as well and sometimes better than some site-built homes.

Before you jump in though, some caveats to consider: Though they may be built to withstand winds over 100 mph and are up to federal codes, manufactured homes are still feared by many insurers. It can be tough to find insurance on your manufactured home at a reasonable rate. Also, when hurricanes threaten Southeastern states, especially near the coast, manufactured home communities are almost always under mandatory evacuation orders, even if site-built home communities surrounding them are only under voluntary evacuation orders. That might be something to think about if you don’t want to have to pick up and go every time the wind blows.

Manufactured Home Communities
Most folks entertaining the purchase of a manufactured home will be considering manufactured home communities that offer a full array of amenities like golf, tennis, swimming pools, clubhouses, and restaurants and bars. It’s not just the home, it’s the lifestyle that people are after, and many developers have realized this and are offering it to the manufactured home buyer.

However, in many (though not all) manufactured home communities, you do not own the land your home sits on, the developer does. One of the main factors in a home’s ability to appreciate is its location and land value, something that in this arrangement you have almost no stake in. This is often times a thorn in the side of residents, but it is what it is. If you really want to live there, it’s simply something you’ll have to deal with.

Also, the developer will pay the taxes and provide the services outlined in the developer agreement such as grounds maintenance, lawn care, security, and the like, and in turn will charge you a fee, commonly referred to as “lot rent.” This is a source of revenue for the developer. The developer is providing you certain services, and you are paying him for providing them. Likewise, when he has an increase in costs or taxes, these increases will be passed on to the homeowners.

One of the best ways to find out more about what owning and living in a manufactured home might be like is to talk with people who live in a manufactured home. If you are curious, when visiting an area spend some time driving around a manufactured home community and talk with some residents if possible. Most will be glad to share their experiences with you, whether they are good or bad.

Photo credit: Sam Beebe / Ecotrust on flickr

If you are taking the time and initiative to read this guide, you know better than to simply trust that the first real estate agent who crosses your path will be able to adequately handle the complex details of your real estate purchase. Unfortunately, this is not the case for many people. According to the National Association of REALTORS®, 70 percent of people complete a real estate transaction with the first agent they made contact with.

In order to find the very best real estate agent for you, first ask friends or family who have moved to the area you are considering for referrals. If you don’t have anyone to contact in the area you are considering, try doing an internet search, such as “Orlando real estate agent,” and investigate the websites of several agents that come up. Also pay attention to agents you see advertising on Zilllow and Trulia. These will often be the most engaged and tech savvy agents.

Also, try contacting the chamber of commerce for the city you plan to move to and see if they have any recommendations. It is a good idea to contact at least a few agents in the early stages to get a feel for what to expect down the road. Be open and forthright with them if you have used the services of another agent before contacting them, so that there are no surprises for anyone later.

Ask the agents questions about their qualifications, years of experience in their market, and whether they have helped other people, particularly boomers like you, relocate to their area. They should be able to offer you written testimonials from satisfied clients. Also, since you will be new to the area, make sure the real estate agent has a strong network of local service providers such as attorneys, home inspectors, and lenders to recommend to you.

Buyer Brokerage
Buyer Brokerage is a type of agent-client relationship that you could engage in. The Exclusive Buyer Brokerage Agreement, if presented to you, is a document that essentially binds you to a certain agent, for a certain amount of time, to look for a certain type of property.

The thing to be careful of is that the agreement is usually written with you, the buyer, being held responsible for paying the agent’s fee if the seller does not agree to pay it, or paying for any shortfall in the amount required by the agent. It should be noted here that not all buyer’s agents operate in this fashion, but several do.

I’m all for working with a buyer’s agent, someone who has only your interests, not the sellers, at heart. However, because compensation is usually offered through the seller, you should request that they delete the clause requiring you to pay them their fee if the seller will not. The only exception should be in the case of the agent finding you a for-sale-by-owner property that does not offer the agent compensation.

If you wish to be shown for-sale-by-owner properties, be clear up front with the agent about how much you are willing to pay. Most agents will ask for a percentage of the sale price, usually two to three percent, but you’re better off paying them a flat fee to help you. For example, if you agree to pay a percentage, the agent makes out better when you pay $300k for a house than they would have if had they helped you negotiate a sales price of $270k.

Special Designations
As you search for an agent, you may find that the initials after their names are beginning to look a little like alphabet soup. John Smith, GRI, ABR, MBA. Jane Smith, CRB, CRS, e-Pro. It can be helpful to know what some of these letters (which abbreviate different designations that the agent has earned through experience or education) stand for. If you see an agent who has letters after their name that I haven’t mentioned, just ask what the initials stand for. I’m sure the agent would be more than happy to tell you about it.

Graduate Realtor Institute – GRI
GRIs have obtained their designation by attending a minimum of 90
hours of classroom instruction on topics including contract law,
professional standards, sales and marketing, finance, and risk reduction.

When working with a REALTOR® who has earned the GRI designation,
you are working with someone who has shown that they are dedicated to
their profession, knowledgeable, and adequately trained to help your
transaction go as smoothly as possible.

Council of Residential Specialists – CRS
Before obtaining the CRS designation, REALTORS® must have a considerable amount of experience, have conducted a certain volume of real estate deals, and must have completed rigorous educational requirements. Less than four percent of all REALTORS® are members of the Council of Residential Specialists, making it a very elite group of agents.

Certified New Home Salesperson – CSP
This is a designation that you might see when shopping for new construction homes. The CSP designation is offered to new home salespeople through the National Association of Home Builders (NAHB). Salespeople with the CSP designation are trained to relate to their new-home seeking customer’s wants, needs, and desires, and to guide them smoothly through the sometimes rocky road that is new construction.

Accredited Buyer Representative – ABR
ABR stands for Accredited Buyer Representative. An agent with this
designation has been specifically trained to work with different types of
buyers, such as buyers of new homes, e-buyers, and relocation buyers.
As with most of the other designations I’ve mentioned, the ABR
designation is earned by completing extensive education requirements
and possessing a proven track record of working with buyers.

Resort and Second Home Specialist
A REALTOR® with a Resort and Second Home Specialist designation can successfully guide you in your purchase of a second home or investment property in resort towns and communities. Training for this designation includes courses on creating wealth through investment real estate, managing second home and investment properties, and the essentials of international real estate. They are also trained in 1031 tax-deferred exchanges, also called “like kind” exchanges, where you can avoid paying taxes on the sale of an investment property by using the profit to purchase a property of equal or greater value. This is becoming a popular designation due to the rapid rise in second and vacation home ownership.

E-pro
If you prefer to do a large part of your home shopping online, or at least your initial research, and you would rather converse with and vet an agent through e-mail versus over the phone, than working with an e-pro may be for you. E-pros are trained to answer e-mails promptly and professionally, offer extensive property listings and other information to you electronically, all the while respecting your time and your privacy. While any REALTOR® should be able to send you pictures by e-mail of properties you may be interested in, e-pros can do that and much more. E-pros have taken the extra steps to acquire the training and expertise that will benefit the internet consumers of today.
The Rest of your Real Estate Team

In addition to your REALTOR®, you may want to have one or more of the following people on your side during your search for, and purchase of, a new home.

Attorneys
In several areas, perhaps the place you currently live, attorneys are required in all real estate transactions. Not so in some states such as Florida. However, this does not mean you should not use one, especially if it is a complex transaction, or there are clauses in the contract that you do not understand. It can certainly make you feel more comfortable having a set of trained eyes on any contract you sign. One point I would like to make, however, is that if you are buying real estate and would like the counsel of an attorney, use an attorney based in that specific local area, preferably one who specializes in real estate.

I’m sure the attorneys where you are currently living are very competent and would never purposely misguide you, but for your protection, it’s better to use an attorney who deals with real estate transactions in the local area on a daily basis. You wouldn’t use a medical malpractice attorney to defend you in a DUI case, would you? Then don’t do the same with your real estate transaction. The best way to find a real estate attorney is through a referral from your real estate agent. They should give you a list of more than one attorney to check out on your own.

Tax Advisor and Accountant
When deciding to purchase a home in a retirement community, there are a number of tax considerations you should discuss with your tax advisor or accountant. Among the many concerns is whether you should pay cash for your new home or get a mortgage so that you can get the tax deduction on the interest. This is not an easily answered question, and the answer will not be the same for everyone. But your tax advisor or accountant should be able to help you decide what’s best for you and your situation.

Financial Advisors
Buying real estate anywhere is both a financial and an emotional decision. Naturally, you will seek the guidance of as many people around you as you can. For some people, this includes seeking the guidance of their financial advisor.

Most financial advisors put their clients’ interests before their own and should be highly regarded for the contribution they can make in developing an individual’s financial strength. However, just as in any other industry, the financial advisor industry does contain some unscrupulous people who have a tendency to look out for their own interests, rather than those of the client’s. If you have done all the research you can do regarding your decision to purchase a home and feel comfortable with it financially, you should not let the advice of a financial advisor or stockbroker stand in your way.

When consulting with your advisor or broker about a real estate purchase, remember that they are usually compensated based on how much money they are directing for you. If they could stand to lose hundreds of thousands of dollars from your portfolio because you want to sell some investments to pay cash for a new home, they may not be happy about parting with your money. If you sense any personal motive in their advice to you on this matter, take your money and run, don’t walk, to find another advisor.

Photo credit: _moonpie on flickr