Author: Igor Nastaskin
The Riviera Homeowners Association: Serving Our Community for 75 Years
Ninety-two years ago, developer Clifford Reid established our special community, the Hollywood Riviera. Inspired by the beauty of its seaside location and surrounding hills, he coined the name due to its resemblance to the French Riviera and to attract celebrities from the movie industry. Sales initially boomed but soon diminished, first due to the Great Depression in 1929 and later as a result of World War II. By 1941, only 42 Mediterranean style, red-tile roof homes, and one apartment house had been built. Ultimately, it was the aerospace industry rather than Hollywood that contributed to the neighborhood’s growth. The postwar housing boom in 1945 spurred new construction and the Hollywood Riviera’s borders expanded over time, eventually including approximately 3,100 homes. During the 1945 boom, a group of local residents intent on preserving and enhancing the many attributes of our special community created the Riviera Homeowners Association (RHA). Through the past 75 years, the RHA has diligently served the Riviera by communicating important developments to residents, advocating local issues to our city’s governing bodies, presenting landscape awards, providing scholarships to local graduating high schoolers, and donating funds to area schools for special projects. One of the key ways the RHA communicates with its members is through its Riviera Reporter newsletter, and looking back at some of those newsletters (go to https://hollywoodriviera.org/reporter) is truly a blast to the past for those who have lived here for many years. The January 1969 issue, for example, mentions donations to the annual community Christmas Party made by Riviera establishments long gone but not forgotten, including Howard’s Market (where Trader Joe’s in the Village is now located), Toy Circus (where Yogurtland sits), and Morgan Moore’s Stationers (now Rolling Hills Flower Mart). A subsequent 1969 newsletter updates residents on work planned to connect Anza Boulevard with Vista Montana: “Anza will cross Pacific Coast Highway just west of Sambo’s Restaurant, run west of Walteria Post Office, through Kissel Field and connect with Montana at Newton Street.” That same edition had a small article about a celebrity sighting: “John Wayne, the ‘True Grit’ western movie star, visited the Riviera Village recently. The star of some of the greatest cowboy films ever made stopped off, not because he wanted to, but because of circumstances. Driving, with a companion from Palos Verdes, one of the tires on his car went flat and while the gas station attendant fixed the flat, Wayne walked down Catalina Boulevard to the Velvet Turtle and had lunch. Many people on the street did not recognize him. Reason…he wore yachting clothes, not western.” (Note: The Velvet Turtle was a popular steak and seafood restaurant on the south/west corner of Avenue I, where H.T. Grill now sits). Recent editions of the Riviera Reporter have covered such timely matters as the Butcher-Solana project, traffic issues, airport noise, and COVID resource updates. Special topics are also covered at the RHA’s general meetings, which are now held via zoom. You can support the RHA and its important work on behalf of our community by becoming a member. Membership dues are $25 per year or $45 for 2 years. Visit https://hollywoodriviera.org/about/rha-membership/ for more information.
Potential Problems in a Bedroom Virtual Tour
If you’re using a video tour to get a closer look at the house you are interested in purchasing, you’ll want to be sure and give the bedrooms more than a passing glance. After all, a bedroom isn’t just a place to sleep, it also tends to function as a retreat, quiet workspace, and for kids, a room to play, do homework and host sleepovers. So, while a bedroom’s size and closet space are important, those aren’t the only things you should ask to see during a video tour. Here are some potential issues you might find hiding in the boudoir. 1. It might not actually be a bedroom Some listings will refer to a bonus room as a bedroom even if it does not have a closet and a window. So, while taking the video tour, you should verify that bedrooms have a door and a window as two means of escape in an emergency. The ceiling also should be high enough for a person to comfortably stand, and the square footage ample enough to accommodate a bed. Be sure to ask your agent if the room is legally considered a bedroom. 2. There’s no privacy Have your agent scan the windows and sills to check their condition. Take note of features, such as triple-pane or tilt-and-turn windows. Finally, check the view. You’ll want to know if a large, beautiful window in the master bedroom lacks privacy and looks right into a neighbor’s yard. 3. The fixtures and outlets are dated or in bad shape When it comes to the bedroom, buyers’ eyes tend to veer toward a beautifully made bed with lots of accent pillows and art on the walls. But it’s important to remember to look at the more permanent features of the room that you’ll have to live with daily. Ask your agent to zoom in on things like the flooring, ceiling fan, light fixtures, smoke and carbon monoxide detectors, and heating and cooling vents. Also note if there’s a radiator hiding behind the headboard, an air conditioner in the window and how many outlets are in the room. Older homes often have fewer outlets, and they might be the outdated, two-prong variety that isn’t grounded. 4. The early morning sun will wake you up An abundance of natural light is a coveted feature, unless the morning sunlight wakes you up hours before your alarm goes off. Many real estate agents and home buyers who visit a property at varying times throughout the day unintentionally fail to consider what the exposure is like at 5:30 a.m. with the sunrise. While curtains and blinds are obvious solutions, you might not want to cover windows that showcase a beautiful view or are placed high in a vaulted ceiling. 5. Your furniture won’t fit Always pay attention to how much furniture is in the bedroom and how it’s arranged. Staging can declutter and depersonalize a space, so buyers should consider how their belongings will fit or whether they’ll have to purchase brand-new furnishings. Ask your agent for the dimensions of the bed and dresser for comparison. If the dresser is missing, it could mean the bedroom has a large closet with organizational options. Ask to see inside all of the closets, and note the size, shelves and other organizational components. 6. The bedrooms are in an inconvenient spot When taking a live video tour, don’t forget to pay attention to where bedrooms are situated in the house. Then, ask yourself how the locations of the bedroom will suit your lifestyle. Will you be more comfortable with the kid’s bedrooms on the same floor? Is the master suite adjacent to a busy living room or kitchen? Where are the baths in reference to the bedrooms? 7. The master bath doesn’t offer separation A spacious master retreat not only is where you’ll want to rest your weary head at night, but it’s also the place where you can relax in a soothing bath or luxuriate in a rainfall shower. If you want a bit of privacy, however, be mindful of the layout of the master. For instance, many people overlook the fact that there is not a door between the bedroom and the bath. Many floor plans now have a water closet—a small toilet room with a door—but don’t have a door separating the bedroom from the rest of the bath. 8. There might be potential safety hazards If you’re looking at a multilevel home or a house with a bedroom in the basement, be sure and verify the fire escape routes. Consider potential safety hazards, such as how difficult it might be to drop a fire escape ladder out of an upstairs bedroom window or a ladder up from a basement bedroom. Basement bedrooms should have an egress window, and upper-floor windows should be clear of obstructions like trees or sections of the house that would hamper an emergency exit.
How To Build a Good Relationship with Your Real Estate Agent
When you purchase a home, your agent will essentially serve as a business partner because you’re both working toward the same goal: closing a real estate deal. That’s why it’s in your best interest not only to know how to hire a real estate agent, but also how to build a good relationship with them. The better ally you are, the better an ally your agent will be. Here’s how to choose a real estate agent and work well with them. 1. Know what you want Many buyers enter into the house-hunting process with no idea what they want. So, the first and best way to be a good client is to know exactly what you’re seeking in a house. Ask yourself a couple of basic questions, like what your budget is and what type of house you want. For example, single-family or townhome. Also, are you looking for a certain design style or a specific neighborhood? Knowing these specifics—and telling them to your agent—will be important when it comes to finding local homes that match your criteria. After all, neither you or your agent wants to spend time looking at dozens of houses that aren’t even close to what you have in mind. In fact, it’s a good idea to even over-communicate your intentions and goals. Knowing exactly what you want also can help you choose the right agent, as some specialize in certain neighborhoods, as well as old houses and particular architectural styles. 2. Meet agents in person It’s OK to begin your relationship with an agent via email, text or phone, but before you hire an agent to work with you, set up a meeting and conduct a face-to-face interview. Some things you’ll want to know include how long they’ve they been an agent; the neighborhoods they specialize in; how many clients they’re currently working with; and how many homes they’ve helped people buy in the past year. Meeting in person can help both sides determine compatibility and establish trust. To the agent, meeting them in person also shows them you’re serious about buying. 3. Set up expectations for communication Let your agent how you’d like to stay in touch during the buying process. For instance, do you do prefer texts, Facebook messenger or phone calls? You’ll also want to let them how often you expect to hear from them (daily or weekly) and the best times of day to reach you. 4. Be Respectful Always be courteous of your agent’s time by being at showings on time. If you disagree with your agent, respectfully tell them why. And don’t get upset if your agent doesn’t immediately respond to a text or phone call. 5. Get organized Communicate your wants by writing them down. Then provide your agent with a copy. That will help your agent find homes that match your criteria. You also should have your financial records in order, which includes getting pre-approved for a loan. Pre-approval for a mortgage says you’re serious about buying a house and not just window shopping. 6. Admit what you don’t know Real estate transactions are complicated. So, don’t be embarrassed if you don’t understand all of the terms or know what to expect from each step of the process. If you don’t know what escrow means, ask. If you’re confused about the terms of an offer, say so. It’s totally normal to ask an agent for a little hand-holding; that’s their job. Part of knowing how to hire a real estate agent is finding one you trust enough to tell you things you don’t know. 7. Don’t play the field with other agents If you’re working with an agent who is doing their best for you, don’t engage with another agent. That’s an unacceptable practice, and it can backfire by damaging your relationship with your agent. If your agent finds out you have other agents showing you houses, they may prioritize other clients. So, a big part of knowing how to pick a real estate agent is knowing that you need to stand by your agent once you hire them. In fact, it’s in your and the agent’s interest to sign a buyer’s broker agreement for a set time. The agreements spell out the rights and duties of both parties, including exclusivity.
Riviera Resident Mariana Ito Brings Flower Power to the South Bay
They are lovely to look at, delightful to smell, and serve as expressions of love, friendship, and sympathy. But for Hollywood Riviera resident Mariana Ito and her many clients, flowers are also essential aides for holistic wellbeing. Mariana was introduced to flower essences as a young woman in her native country of Chile, where essences are easily found in corner pharmacies and in many homes. Mariana found that flower essences helped her maintain an emotional balance with a clear perspective on life. Flower therapy is based on the works of Dr. Edward Bach of London, a pathologist and bacteriologist who in the 1930s noted that a patient’s mental health and attitude towards life were linked to their symptoms. He concluded that to get the root cause of a patient’s illness, they needed to be viewed holistically, including the physical, mental and spiritual. Dr Bach believed that the energies from certain flowers could aide with holistic healing. In the hopes of bringing balance and peace into the lives of her friends and family, Mariana founded Flower Power Essences 23 years ago. It began as a small, independent business in Torrance and has now grown into the wellness center, Somos Life, which Mariana opened in 2018. Located in the shopping center on the south-east corner of Anza and Pacific Coast Highway, Somos Life offers flower essences as well as a variety of alternative and holistic therapies to heal the whole person. “Somos Life is a place where people can learn the science of self-healing,” said Mariana, who moved to the Hollywood Riviera with her husband, Rex, 25 years ago and raised 4 children here. “We are committed to helping the individual, neighborhood, and global community grow collectively to a higher state of health and consciousness.” In addition to being a certified practitioner in flower essence therapies, Mariana is a certified Pair Biomagnetic therapist, a practice which uses electromagnetic fields with the goal of balancing one’s pH to relieve chronic pain, both physical and physiological. Together with flower essences, Mariana uses the combined application of these two therapies to provide results. Somos Life also offers reflexology, Korean Yoga, Restorative Zen and Spanish Iyengar classes, as well as Ayurvedic consultations. To learn more about Somos Life, visit them at 24038 Vista Montana, Torrance or call 424-262-2192 and visit www.somoslife.com. And don’t forget to enter this month’s raffle for a $25 Somos Life gift certificate.
What to Ask a Home Inspector Before, During and After a Home Inspection
When you buy a house, you know that your home inspector will check it out and make sure it’s in decent shape. But if you want to get to know your home beyond its pretty facade, you also should be sure and ask your inspector plenty of questions. But take note: When you ask the home inspector questions is as important as what you ask. To ensure you get the most out of your home inspection, here’s a timeline of questions to address before the inspection even begins, during the actual home inspection and once it’s been completed. What do you check? Many people don’t know exactly what a home inspector is going to do. The answer is the home inspector will look for 1,600 features on a home, to be exact, from the roof to the foundation and everything in-between. Going into the inspection with a clear understanding of what the inspector can and can’t do will ensure that you walk away from the inspection happy. What don’t you check? There are limits. For instance, home inspectors are restricted to a visual inspection. That means they can’t cut a hole in somebody’s wall. As a result, an inspector often will flag potential problems in the report, and you will have to get another expert (such as a roofer, HVAC person, builder, electrician or plumber) to come back and do a more detailed examination. What do you charge for a home inspection? A home inspection ranges from $300 to $600, although it will depend on the market, size of the house, and actual inspector. You usually will pay the inspector the day of the inspection, so you’ll want to know in advance how much and what forms of payment are accepted. Be wary of going with an inspector who quotes a very low price, as that can be a sign that they’re having trouble getting customers. Spending money on a good inspector will more than pay for itself in the long run. How long have you been doing this? Or perhaps more importantly, how many inspections have you done? A newer inspector doesn’t necessarily mean lower quality, but the experience can mean a lot—especially if you’re considering an older home or something with unusual features. Can I come along during the inspection? The answer to this definitely should be yes. Any good inspector will want prospective owners to be present at the inspection. Seeing somebody explain your house’s systems and how they work always will be more valuable than reading a report, and it gives you the opportunity to ask questions and get clarifications in the moment. If an inspector requests that you not join him or her, walk away. How long will the inspection take? Inspections often take place during the workweek, when the seller is less likely to be around. Knowing how much time you’ll need to block out will keep you from having to rush through the inspection. You’ll get only a ballpark figure, because much will depend on the condition of the house. But if you are quoted something that seems way off—such as a half-day for a two-bedroom condo, or just an hour for a large, historic house—that could be a red flag that the inspector doesn’t know what they’re doing. Is it possible to see a sample report? If you’re buying your first home, it can be helpful to see someone else’s report before you see your own. Every house has problems, usually lots of them, but most generally aren’t that big of a deal. A sample report will keep you from panicking when you see your own report, and it will give you a sense of how your inspector communicates. It’s another chance to ensure that you and your inspector are on the same page. What should I ask a home inspector during a home inspection? • What does that mean? During the inspection, your home inspector will go slowly through the entire house, checking everything to ensure there are no signs of a problem. He’ll point out things to you that aren’t as they should be, or may need repairs. Don’t be afraid to ask any questions about what the home inspector is telling you, and make sure you understand the issue and why it matters. For example, if the inspector says something like, “Looks like you have some rotten boards here,” it’s smart to ask him to explain what that means for the overall house, including how difficult it is to repair and how much it will cost. • Is this a big deal or a minor issue? It’s normal to panic if an inspector tells you the house you’re considering buying has a foundation problem, a roof or water heater in need of repair, or electrical, heating systems or an HVAC system that isn’t up to code. Don’t freak out—just ask the inspector whether they think the issue is a big deal. You’ll be surprised to hear that most houses have similar issues and that they’re not deal breakers, even if the fixes or repairs sound major. And if it is major? Well, that’s why you’re having the home inspection done. You can address it with the seller or just walk away. • What’s that water spot on the ceiling, and does it need a repair? Don’t be shy about asking questions and pointing out things that look off to you during the home inspection and checking if they’re OK, real estate–wise. Odds are, if there’s something strange, your inspector has noted it and is going to check it out thoroughly. For example, if there’s a water spot on the ceiling, maybe he needs to check it from the floor above to know if it’s an issue. Ideally, your inspector will ask you if there’s anything you’re specifically concerned about before beginning the inspection. Make sure to tell him if this is your first real estate purchase, or if you’re worried about the house’s age or anything at all that strikes you, the buyer, as a possible negative. • I’ve never owned a house with an HVAC/boiler/basement; how do I maintain this thing? Flaws aside, a home inspection is your golden opportunity to have an expert show you how to take care of your house. Inspectors are used to explaining basic things to people. If you have an inspection question, ask it. • What are your biggest concerns about the property? At the end of the inspection, the inspector should provide you with a summary of what he found. You’ll get a written report later, but this is the ideal time to get clarity on what the inspector thinks are the house’s biggest issues, and whether or not they require further investigation. It often is a good idea to call in another home inspection expert—a plumber, electrician, roofer or HVAC professional—to take a look at anything the inspector flagged. You should walk away from inspection day with a mental punch list of things that need to be addressed by either the seller or another expert. In some states, there’s a limited amount of time for these negotiations to happen, so you and your agent may want to hit the ground running. Questions to ask a home inspector after the inspection is done • I don’t understand [such and such], can you clarify? A day or two after the inspection, you should receive the inspector’s report. It will be a detailed list of every flaw in the house, often along with pictures of some of the problem areas and more elaboration. Hopefully, you also attended the actual inspection and could ask questions then; if so, the report should contain no surprises. It should include what you talked about at the inspection, with pictures and perhaps a bit more detail. If there’s anything major you don’t remember from the inspection in the report, don’t be afraid to ask about it. • Is there any problem in this house that concerns you, and about how much would it cost to fix? Keep in mind that most problems in likely will be minor rather than deal breakers. Still, you’ll want your home inspector to point out any doozies. So, ask if there are any problems serious enough to keep you from moving forward with the house. • Should I call in another expert for a follow-up inspection? Expect to have to call in other experts at this point to look over major issues and assign a dollar figure to fix them. If your inspector flags your electrical box as suspect, for example, you may need to have an electrician come to take a look and tell you what exactly is wrong and what the cost would be to repair it. The same goes for any apparent problems with the heating or air-conditioning, roof or foundation. An HVAC repair person, roofer, or engineer will need to examine your house and provide a bid to repair the problem. Why is this so important? This bid is what your real estate agent will take to the seller if you decide to ask for a concession instead of having the seller do the fix for you.
Terranea Goes Pink For National Breast Cancer Awareness Month
L.A.’s premier oceanfront luxury resort along the Palos Verdes Peninsula is bringing back its annual “Terranea Turns Pink” initiative during the month of October, complete with a portion of the proceeds from spa treatments, golf rounds, adventure activities, pink cocktails and desserts, and more going to the Cancer Support Community Redondo Beach and Breast Cancer Research Foundation. Since launching the program, Terranea has raised almost $100,000 for breast cancer support and research. Among the specialty offerings guests can expect at Terranea in support of National Breast Cancer Awareness Month include: STAY – In addition to welcoming guests for a safe and comfortable stay along the California coast, Terranea will encourage people who stay at the resort to support fundraising efforts with an option to make a donation upon booking. DINE – The culinary team has created a wealth of special “Terranea Turns Pink” food and beverage offerings, each of which includes donating a portion of proceeds to the campaign. Among the available offerings: blush-hued and freshly baked treats like pink macarons, sugar cookies, and cake and meringue pops at Terranea’s snack and coffee shop, Sea Beans, as well as decadent specialty desserts at Catalina Kitchen, Bashi, The Lobby Bar & Terrace, Nelson’s and in-room dining, including strawberry rhubarb and ricotta brioche, and the strawberry cremimex olive oil torte. The Lobby Bar & Terrace will be offering light bites, such as its roasted beets bruschetta crostini, while hand-crafted cocktails will be served up at Nelson’s (think spicy fig and hibiscus pomegranate margaritas), plus Catalina Kitchen, Bashi, and The Lobby Bar & Terrace (including the pink flamingo and One Hope’s Wine Rosé). RELAX – Rejuvenation is front and center at The Spa at Terranea, which currently provides limited outdoor treatments to resort guests. Experience the ultimate in tranquility with a 60-minute CBD Massage, and be sure to pick up an informative breast exam card at The Spa, which promotes awareness for preventative measures and early screenings. Also, find balance with an invigorating 60-minute “Terranea Turns Pink” Yoga practice throughout the month of October. Guests are encouraged to wear pink attire and to make a $20 donation. Advance reservation required. PLAY – Celebrate “Birdies for Breast Cancer” during the month of October at The Links, where proceeds from each round will go to support breast cancer support and research. Guests have the option of matching the resort’s donation with an optional add-on when booking a tee time. SHOP – During the month of October, shop for a good cause at Marea. A percentage of all My Saint My Hero Bracelets and Voyage et Cie purchases will be donated to breast cancer support and research. ADVENTURE – For every archery activity booked in October, a portion of proceeds will benefit breast cancer support and research. Advanced reservations are required.
Buying a Second Home in the Hollywood Riviera? Here are 5 Things You Should Know
Purchasing a vacation getaway in the Hollywood Riviera can be a smart financial choice, especially if you plan on using it several times a year and renting it out for extra income the rest of the time. But if you need to obtain a second mortgage to buy an additional home, be prepared. You will encounter more stringent underwriting requirements, and you also will have to provide a larger minimum down payment than on your first mortgage. Here are five things to know about buying a vacation property including the requirements, costs and process for getting another mortgage. 1. Your first home could help fund your second Have a large amount of equity in your first home? You could get enough money to pay for most—if not all—of the cost of a second home. Two options include: • A cash-out refinance This is when you replace your current mortgage with a new, larger mortgage so you can access cash via your home equity. A cash-out refinance is taken out on a primary home mortgage, so you could borrow more money and at a lower rate than if you took out a secondary mortgage loan—such as a home-equity loan or home equity line of credit (HELOC). A cash-out refinance could allow you to get a loan of up to 80 percent to 85 percent of your first home’s value. Note: Watch for closing costs, which can lower the amount of cash you receive by several thousands of dollars. • A home-equity loan (or HELOC) With these loans, the equity in your primary home is used as collateral to obtain money as a lump sum loan or credit line that can be used over time. A home-equity loan enables you to receive the money all at once and pay a fixed interest rate, while HELOCs have variable rates and are more often used for various expenses over time. Both options might allow you to take out a higher loan-to-value (maybe 85 percent to 90 percent) than you would for a cash out refinance. Want to pay for the second home in cash? A combination of refinancing funds—plus savings, a personal loan or a 401(k) loan—could provide all you need. If that’s not enough, however, a second home mortgage probably will be the best option. 2. Be ready to define how you will use the home If your current home will continue to serve as your primary residence, you will need to tell the mortgage lender how you plan to use the additional home. Lending underwriters must follow the guidelines of Fannie Mae and Freddie Mac, the government-sponsored enterprises that back about 70 percent of single-family home mortgages. Lenders consider properties that are used as second homes—rather than as investment properties—to be less risky, which means you may be able to qualify for a lower interest rate. Before you can classify a vacation home as a second home for mortgage purposes, you have to meet certain lender requirements: You must live in the home at least part of the year and keep it for your personal use and enjoyment at least half the year; the home can function as a second home and is only one unit; you can provide short-term rentals, but the home cannot be under the control of a property management company; and it can’t be located too close to your primary residence, which might disqualify it from being reasonably considered a vacation home. 3. Underwriting is more difficult Since you already have one mortgage, you can expect the underwriting process to be even tougher when you’re trying to obtain a second mortgage. For example, lenders may ask for larger down payments and charge higher interest rates. Here’s a rundown of how underwriting is different for a second mortgage: • Credit score – Lenders will examine your credit score to make sure it meets their standards, which vary. Fannie Mae set the minimum credit score of 640 for a second home as long as there is a down payment of 25 percent or more, which is higher than the 620 minimum for a primary home. • Debt-to-income ratio – Borrowers seeking a mortgage typically are required to have a maximum debt-to-income level of about 43 percent. But it’s much more difficult to meet that standard if you already have a primary home mortgage and other debts. If you want to rent out the second home, you can see if the lender will include that income in the mortgage underwriting. • Higher down payment – While the down payment on a conventional loan for a primary residence can be as low as 3 percent, some lenders require 20 percent or more for second homes. A National Association of Realtors survey found that buyers who finance a second home typically put down 20 percent. Borrowing equity from your primary residence could be the perfect way to fund a down payment large enough to avoid mortgage insurance (or PMI) costs. 4. There are lots of added costs Although you might be picturing warm sunsets on the beach when you’re ready to purchase a vacation home, you should factor in these costs before your dreams materialize: • Insurance – You likely will have to pay more for home insurance due to the location of your house—think flood zones and areas with high wildfire risk. The cost also could be higher if you’re only there part-time or have renters. You may be able to combine some of your policy with the one on your primary residence, such as for liability coverage. However, you might not get as much coverage on the second home’s policy since you’re at the second home only part-time. The insurance company also might ask you to specify which situations—known as “known perils”—would be covered. • Furnishings – If the home doesn’t come with essential furniture and appliances, you’ll have to spring for these yourself. You also might need to invest in decorations, bedroom and bath fixtures, and kitchen items. • Maintenance – All homes require some type of maintenance, whether it be including lawn care, or roof, driveway and patio/deck repair and replacement. Consider these items when evaluating your expected start-up costs, the monthly budget and long-term expense planning. • Utilities – Electricity, water and other utilities are a regular monthly cost. • Taxes – Remember that taxes also will increase your costs. 5. You’ll need to conduct research and get advice Many factors come into play when it comes to vacation home being a solid investment or a financial disaster. That’s why you’ll want to be sure and ask yourself, your family and advisers (like financial and tax experts) these questions: • Will you use the home enough to make it worth the purchase? • Is it less expensive to stay at a nearby hotel or rental home rather than buying a home for your vacations? • If your employer is going to allow remote working, do you really need a second home for business purposes? • Is your income level enough to support two mortgages for another five, 10, 20 years or more? • Can you handle the second home mortgage payments, along with other major expenses or debts—such as college education, auto purchases or major home repairs—that may arise? • What are the start-up costs for the new home—such as furnishings and upgrades—as well as the ongoing costs, including maintenance, major repairs and travel to and from the house? • Are there any tax breaks you can get from owning a second home?
Why Title Insurance Can Give You Peace of Mind
When buying a home, you’ll also have to purchase various types of insurance to protect your property, and one of the most important types you might need is title insurance. Exactly what is title insurance? When you buy a home, you “take title” to it and establish legal ownership. A title insurance policy protects you against the possibility that someone else might have a claim on your home. If you need a mortgage to buy real estate, your lender likely will require you to buy a policy from a title insurance company. Although it’s a cost home buyers incur, getting a title policy is critical to establishing peace of mind. Here, some details about how a title company works, why a title search is required for a mortgage and more that home buyers should know. Why is a title search required with a mortgage? When getting a mortgage to buy real estate, most lenders will typically require you to get a title search before you close the deal with your escrow company. This basically means that you’ll have to hire a title company to search local records on your property. Some of the issues they’re on the lookout for include: • Disputes between previous owners over wills. If your property was inherited and then sold by the heirs, other heirs could be contesting the will and claiming ownership of your property. • Liens. For unpaid property taxes, or for contractors who worked on the home but were never paid. • Clerical problems in courthouse documents. Believe it or not, a simple typo can lead to title claim problems. • Fraudulent claims against the property or forged signatures. For example, if a group of heirs can’t get a holdout to agree to sell the home, it’s possible that someone will forge a signature on a quit claim deed. While most homeowners will never need to use their title insurance, it offers protection against a potentially aggravating—and very expensive—financial loss. ] What’s the difference between the lender’s title insurance and owner’s title insurance? When getting a mortgage, the home buyer pays their lender’s title insurance premium. Keep in mind, however, that this policy only insures the lender in case of a claim against the title. The lender’s title insurance policy pays for the expense of the insurer researching a claim and any court costs incurred due to the dispute. In addition to offering a policy to the mortgage lender, a title company will offer the home buyer owner’s title insurance. In many states, the owner’s insurance is optional. In most areas, it’s common for buyers to purchase owner’s title insurance, but in some areas, it’s more common for the seller to buy the policy. Owner’s title insurance is recommended because the lender’s insurance won’t protect you personally if the insurance company loses a battle over the legal title. You’d be required to pay for the continued fight over the title and could lose your investment in the property. You can purchase basic or enhanced owner’s title insurance, with the enhanced insurance policy offering more coverage for things like mechanic’s liens or boundary disputes. Although your title insurance covers you for things such as mistakes in the legal description of your property or human error, be aware that it will have some exclusions—particularly in cases where violations of building codes occur after you bought your home. How much does title insurance cost? The average cost of title insurance is about $1,000 per policy. However, that amount varies widely based on the price of your home, where you live and any potential issues that crop up during your title search. Unlike other types of insurance, a title insurance policy is paid with a single premium during escrow while closing for your mortgage. If you’re buying a real estate resale or refinancing, you might be eligible for a “reissue” rate, which could offer a substantial discount off of the regular premium (because the title policy already is in effect, and the title research already has been completed). In some states, title insurance premiums are the same no matter who you work with, but in the majority of states, you can save money by shopping around. Get recommendations on title companies from real estate agents, lenders, and friends, and be sure to check out the license and reputation of different title companies online. Always compare the features of each policy and get adequately covered for the real estate you’re purchasing.