How To Lose Your Home in Less Than 10 Minutes

How To Lose Your Home in Less Than 10 Minutes

Don't under insureMost people think that having condo insurance is like having renter’s insurance, you need to cover your personal possessions and the rest is covered by the master policy of the HOA, right?  That’s what you pay your HOA dues every month for…well, sorta right.  Here in Utah we have Utah Condo Law that specifies ,( well , they didn’t really put it like this, being an official law and all, but this is what it means), if you took your unit and turned it upside down, everything that falls out is what you as a homeowner would be responsible for insuring. Pretty straight forward, right?  Well, the fly in the ointment is that community CC&Rs (the bible by which Condo and PUD communities live by) can override this very same provision in the law!

First, a bit of background.  This is the story (true by the way) of an older lady who lives with her daughter and grandson in a beautiful condo community in Salt Lake.  She , we’ll call her Freida (name is changed to protect the innocent) lives in a stack unit community (apartment type condo where there are 3 levels).  Frieda and her family and 2 cats live on the first level.

One day in December (well, more like a week I guess) we had sub freezing temperatures, which unbeknownst to anyone, froze a fire sprinkler pipe up in the attic of the top unit (which is technically common space since it is directly under the roof of the building).  So….

When the weather warmed up, the frozen sprinkler pipe cracked, blowing out the sprinkler head and priming the fire system, which being the dutiful and reliable fire system that it was, began pumping hundreds of gallons of water through the pipes, drowning all 3 units beneath it.  All 3 units suffered 10s of thousands of dollars worth of water damage.

The HOA (Home Owners Association) thought they had primary insurance (since the bad happened in a common area) so called their insurance company to begin the claim and start damage repair in all the condos, including Frieda’s unit.  This was on a Saturday to boot, not too many folks around toWater Soaked Carpet Pad consult with, so the idea was to get Frieda, her family and cats to a dry and warm place. She was quickly moved to a hotel where she could be comfortable during the month to 2 months she would need for the recovery of her unit.  Incidentally, this happened the week before Christmas…talk about Yule tide cheer.

On the following Tuesday, the HOA got the news that their CCR’s specifically state that the individual owner’s insurance policy is primary, and the HOA policy is actually prohibited from covering ANYTHING inside an owners unit.  Nada.., nothing,… not even a split hair on her cat’s head.

The two homeowners above her had more than enough insurance to cover the damage, but Frieda and her agent had decided on minimal coverage to only include personal property and a slight structural provision of 18,000.  The disaster clean up (removing the water, drying out the condo, and ripping out what was damaged, basically gutting the unit) alone amounted to more than 15,000, leaving her very little to replace sheet rock, insulation, baseboards, carpets, painting etc.  and living in a hotel for 2 months.

Long story short (too late you scoff), she is now digging into her limited savings to cover the cost of her disaster.

The moral? If you own a home, whether it is a condo, townhome, single family home, twin home, modular home or tree house, Check out your insurance, talk with your agent, read your CCR’s,  and make sure you are covered correctly for the cost of a disaster.

Contingencies For Buying Homes In Salt Lake, Ut

Contingencies For Buying Homes In Salt Lake, Ut

 

 

Buying a home in Salt Lake is an exciting experience, especially if it is your first home.  As you go through the process of home buying, however, there will inevitably be a point in time where you experience the “What Ifs”.

What if’s” are those doubts that creep into your mind after the rose colored glasses come off …after you have found “The” home to which you are about to give your commitment, your time, your love…and your money. Thoughts like

  • “What If”…I can’t afford the house after I buy it?
  • “What If”…I find out the air conditioner doesn’t work?
  • “What If”…I lose my job in the next month?
  • “What If”… I don’t qualify for the loan?
  • “What If”…I change my mind?

There are a thousand different “What If”s that go through buyers minds at different points in the process of homebuying, but don’t worry, in Salt Lake these “What Ifs” are handled through “Contingencies” that are written into the REPC ( Real Estate Purchase Contract).

Contingencies that are standard for homebuying in Salt Lake are those that deal with:

  • Finance Contingency– Utah Real Estate Purchase Contracts protect the buyer if  he cannot ultimately qualify for a loan or the loan terms and conditions (payment amounts or variable rate etc) are not what he wants.
  • Appraisal Contingency-If the sales price of a property comes in below the sales price, the buyer has the right to cancel the real estate contract.
  • Due Diligence Contingency– The REPC protects the buyer by allowing her time to inspect the property, find any problems with condition, and negotiate the remedy with the seller.
  • Due Diligence Contingencies also allow the buyer to cancel the contract if he cannot remedy the condition, or if he just simply changes his mind.

During the contract period, usually 30-45 days, there is ample time for you to find the answers to all the “What Ifs” especially if you use a great Buyers Agent.

Your Buyers Agent , especially if you…ahem…use Us, will know how to protect you and address any concerns you may have by:

  1. Properly preparing you to make an offer– not only getting you pre-qualified with a lender, but making sure you are in the right kind of loan for your circumstances, AND that you are comfortable with your price range and payment. They will help you make a plan for Earnest Money and whatever down payment you will need as well.
  2. Counseling with you on what terms and conditions (contingencies) should be included in your offer to address all your concerns and to protect you in the transaction.
  3. Planning the Home Inspection with you and attending the inspection to help address any problems with conditions and help you find the answers to all the questions.
  4. Communicating with both you, the lender, and the seller’s agent to make sure the transaction goes smoothly, all contingencies are met, and to head off any problems that might occur.

So, never fear, contingencies when you buy a home in Salt Lake are there to protect you, the buyer. And if you have the right people working for you (smiling slyly here), your experience will be as it should be…..Fantastic!

Start your Search for affordable homes here.

Til later, ciao