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Scottsdale Real Estate News - August 2013

In this Issue for August 2013:

Home Prices Keep Rising

Foreclosures Down From a Year Ago

Reasons To Improve Your Credit Even If No Loan Is In Your Future

 

Home Prices Keep Rising

Home Prices Keep RisingHome prices continue to rise despite higher mortgage rates. The S&P/Case-Shiller home price index was up 12.2% compared to a year ago, slightly better than the 12.1% rise in April. It was the biggest year-over-year jump in prices since March 2006, near the peak of the housing bubble.

The national index, which measures prices in the 20 largest markets, is still 24.4% below the peak of June 2006.

Just a year ago, the index posted a 12-month decline in prices. Sellers had been struggling while their homes sat on the market for months, or even years. But prices have increased every month since June 2012, and each month the increase has been greater than the month before.

The gain in home prices has now made this a good time to sell a home. Many sellers are finding themselves in the midst of bidding wars, with buyers eager to make a purchase in a market with a tight supply of houses available for sale. House hunters are also eager to lock in a mortgage while rates are still low, at least by historic standards.

But the rapid price gains over the last year are at a level that no expert thinks can be sustained. Some have even suggested it was unhealthy for the market, raising the risk of a new housing bubble, at least in some regions. The rapid rise of home prices in the middle of the decade eventually sparked the crisis in the financial markets and the Great Recession.

With values up 5.8 percent year-over-year at mid-year and 2.4 percent from the first quarter, they are expected to rise another 5 percent over the next 12 months, according to the Zillow Home Value Forecast. "This kind of market behavior won't last," said Zillow Senior Economist Svenja Gudell.

In reality, typical home values have appreciated at roughly half this pace for the past several months, which is still very robust. Looking ahead, a combination of rising mortgage interest rates, flagging investor demand and more inventory entering the market should all help to moderate the pace of home value appreciation and stabilize the market.

 

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Foreclosures Down From a Year Ago

Foreclosures are down from a year agoLenders completed fewer foreclosures in June than they did a year ago, while the number of properties sitting in the foreclosure pipeline also decreased as the housing market continued to improve. There were 55,000 foreclosures finished last month, down from 68,000 in June of last year.

Before the housing market's downturn in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Since the financial crisis began in September 2008, there have been about 4.5 million foreclosures.

Over the past year and a half, the battered housing market has gotten back on its feet as prices rose, sales climbed and the foreclosure landscape improved.

There were approximately 1 million homes in some stage of foreclosure, down from 1.4 million a year ago. That foreclosure inventory represented 2.5 percent of all mortgaged homes, down from 3.4 percent in June last year.

Foreclosures are completed when a home is either seized by the lender or sold at auction.

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Reasons To Improve Your Credit Even If No Loan Is In Your Future

Reasons to improve your credit score even if you have no loans in your FutureWhen most people think of their credit, they think "loans." Obviously, the condition of your credit will determine whether you get a loan or not, as well as the terms of the loan, IF you qualify.

What many people don't realize is, a credit history influences a lot more than just loan approvals and interest rates. The information collected by credit agencies is used in a number of non-credit financial decisions.

Insurance Premiums

Insurance premiums are set, in part, by consumers' credit histories. Your credit score is pretty much universally used to determine premiums these days. While life insurance premiums aren't usually set with the help of credit history, most property and casualty (particularly auto) premiums use a special version of the information in consumer credit histories known as an "insurance score."

Consumers without good credit pay more for their insurance, regardless of other factors. For some companies, the discount on insurance is as much as 38% for the best credit scores.

Rental Opportunities

The Federal Trade Commission (FTC) provides guidelines for landlords who want to use consumer credit reports as they make decisions about tenants. If an applicant has poor credit, the landlord can require a co-signer on the lease, require a larger security deposit, raise the rent, or even deny the housing application altogether. Consumers with poor credit can find their rental choices limited, as well as find that it costs them more to pay for their housing.

Checking Accounts

The Consumer Financial Protection Bureau (CFPB) points out that some banks look at a credit report prior to allowing consumers to open checking accounts. One of the most commonly used reports is the ChexSystems report, which compiles information on consumer banking behaviors, particularly overdrafts and bounced checks. However, there are banks that check depositors' credit scores before allowing them to open checking accounts. If a consumer has a low score, he or she might be required to open a checking account with a monthly fee, or with restrictions.

Telecommunication Services

Internet service providers, cell phone providers and cable/satellite providers all use your credit information to make decisions. Most service providers look at credit scores when you open a new account.

When you walk into the phone store to buy a new phone, they check your score to determine if they should ask for a deposit. Your credit score will even determine the size of the deposit, if they decide they need one from you. The same rule generally applies to satellite, cable, and Internet providers. The lower a consumer's credit score, the greater the chance that he or she will be subject to a deposit when seeking telecommunication services.

Getting a Job

While potential employers aren't supposed to look at applicants' credit scores when hiring, they can — in states where it isn't prohibited by law — ask to view a credit report as part of the screening process. A survey from the Society for Human Resource Management indicates that nearly 60% of its member employers use credit reports as part of the background screening for at least some positions.

For the most part, positions that involve a fiduciary duty, or some level of access to sensitive information, are the jobs most likely to require a credit check as part of the hiring process. However, a recent survey by Demos indicates that even some entry-level applicants are subject to credit screening.

 

Summary

As you can see, even consumers who don't plan to apply for a loan need to pay attention to their credit. Credit reports, and even credit scores, are used by a variety of financial service providers, and poor credit can cost consumers hundreds of dollars, a place to live, and even a job.

Scottsdale Real Estate News - July 2013

In this Issue for July 2013:

Real Estate Values Set Record Nationally

Rising Mortgage Rates Raising Concerns

Bad At Math? You're More Likely To Lose Your Home

 

Real Estate Values Set Record Nationally

Real Estate Values Set Record NationallyU.S. home prices jumped 12.1 percent in April from a year ago, the most since March 2006. More buyers and a limited supply of available homes have lifted prices in most cities across the country, a sign of a broad-based housing recovery.

The Standard & Poor’s/Case-Shiller 20-city home price index released recently also rose 2.5 percent in April from March, the biggest month-over-month gain on records dating back to 2000. Prices rose from a year earlier in all 20 cities for the fourth straight month. Twelve cities posted double-digit gains.

The housing recovery is looking more sustainable and should continue to boost economic growth this year, offsetting some of the drag from higher taxes and federal spending cuts. Steady job gains and low mortgage rates have encouraged more people to buy homes.

David Blitzer, chairman of the index committee, said the housing recovery should continue even with mortgage rates rising. Borrowing rates have jumped after Federal Reserve Chairman Ben Bernanke said recently that the Fed could slow its bond-purchase program, which is intended to keep long-term interest rates low.

Prices are rising because demand is up and fewer homes are available for sale. That's made builders more optimistic about their prospects, leading to more construction and jobs.

The index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The April figures are the latest available.

 

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Rising Mortgage Rates Raising Concerns

Rising Mortgage Rates Raising ConcernsAlthough still low by historic standards, the recent increase in mortgage rates have put a damper on a home refinancing boom and will make buying a home noticeably more expensive for borrowers. What's more, some experts say, the rapid run-up could pose a threat to consumer confidence, delivering a blow to the recovering housing markets and even beyond.

Mortgage rates have jumped a full percentage point above their recent record lows, raising costs for borrowers and questions about the housing recovery.

A standard 30-year fixed-rate home loan hit an average of 4.63% recently before backing off just slightly. That's up from 3.49% on May 3rd and an all-time average low of 3.44% during a week in December.

Regardless of whether the jump in rates reflects a new reality or just volatility in a skittish market, refinance volume is likely to fall further. Home purchases have been on the upswing, but not enough to make up for the decline in refinancing.

Higher rates have an instant effect on family budgets. At 3.5%, a borrower who bought a home for May's median price of $368,000 would have a principal-and-interest payment of $1,322, assuming a 20% down payment. At 4.5%, that payment rises to $1,492.

At 6%, still a decent rate by historical standards, the payment goes up to $1,765.

Despite the run-up in rates, homes remain affordable in most markets across the nation with prices still about 25% off their peak during the housing bubble.

Higher mortgage rates tend to have the immediate effect of pricing certain stretched borrowers out of the market. But it will likely take rates rising to 6% over the next 12 months to depress home purchases and prices.

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Bad At Math? You're More Likely To Lose Your Home

Bad At Math? You're More Likely To Lose Your HomeAccording to a study released last week, math-challenged borrowers were five times more likely to default on their loans.

The study examined several hundred borrowers who held mortgages issued in 2006 and 2007 — right before the mortgage meltdown. Of the study subjects, 25% of the borrowers who scored in the lowest bracket for math skills had defaulted on mortgage payments within five years of getting the loans. Meanwhile, only 5% of those in the top tier for math skills defaulted.

The survey sample included homebuyers from a variety of backgrounds, from blue collar workers to corporate professionals. Their math ability covered the gamut — from those with very limited abilities to a mathematician with a six-figure salary.

The researchers controlled for differences in overall intelligence by measuring for verbal and general IQs, as well as math skills, and controlled for socioeconomic factors, such as age, sex, income, ethnicity and local labor market conditions.

Surprisingly, it did not seem to matter what kind of mortgage the borrowers had, the researchers found.

The researchers asked the survey participants a series of five basic questions. The simplest question asked them how much a $300 sofa would cost at a half-price sale. The most difficult asked how much a savings account of $200 would grow to after earning 10% interest for two years.

Determining why those with poor math skills default on mortgages more often than others will take more research, but previous studies suggest that people who struggle with simple math also struggle with handling their finances. This group tends to budget less carefully, misuse credit cards and mishandle financial emergencies, such as temporary income losses. When they hit a rough financial patch, they may not understand the math well enough to negotiate the most favorable settlements with lenders.

The report suggested that benefits could come from improved financial education. The more homeowners understand money matters, the less likely they are to mishandle them.

Scottsdale Real Estate News - June 2013

In this Issue for June 2013:

No, NOT Another Housing Bubble

Protect Yourself Against Moving Scams

Home Sales Up Despite Slim Inventories

 

No, NOT Another Housing Bubble

No Housing Bubble in SightAll the news of late has been talking about another housing bubble, including our report here last month. The double-digit home price increases and the return of bidding wars have led to a lot of "bubble" talk lately.

But today, we're going to tell you why we are NOT in another housing bubble, nor are we about to be. Read on!

First, prices, as measured by Case-Shiller, are still down 27 percent from their peak seven years ago. But Case-Shiller calculates nominal prices, not real ones. And the consumer price index (inflation) is up 15 percent since 2006. So real house prices are about 37 percent below 2006 levels and are just now returning to where they were 13 years ago.

It takes a larger percentage increase to offset a percentage decline. Take a $100,000 house at the peak. If it fell the real national average 42 percent during the bust, it would have been worth $58,000 at the bottom early last year. But to get back to $100,000, it would take a 72 percent increase from the bottom.

Even now, after the sharp bump off the bottom, prices would have to jump 60 percent to get back to their bubble-era peak.

You also have to remember that some land-constrained individual markets are prone to booms and busts and probably always will be.

One could argue that the bubble of the 2000's was so insane that we don't have to get back to those levels to have another bubble. And that's true, but there are plenty of other indicators that say we aren't in one.

For instance, is it better to rent or to buy? It's still better to buy, according to S&P Indices calculations. The essential question regarding any bubble is: Does the investment make sense? Can homebuyers actually afford their mortgages?

Homeowners are spending a historically low amount of their income on their mortgages—just 13 percent, according to Zillow. From 1985 to 1999, that number was 20 percent. In the bubble it was nearly twice what it is now. In 1979 it approached three times today's levels.

The economy can't get back on its feet until housing starts really moving again. Low interest rates make it possible for buyers to afford higher prices. As interest rates start to rise in the next year or so, that will counterbalance the surge in prices, as will an increase in inventory, as underwater homeowners are able to sell their houses without losing money.

To really have a housing bubble, you have to have lots and lots of transactions. And while sales are up (remember, that’s a good thing!) they’re still at 1999 levels, even though we have 10 percent more households since then. Transactions of new and existing homes would have to pop 55 percent to reach peak bubble levels—roughly 3 million more deals a year.

That's not happening anytime soon.

Bear markets don't last forever, and not every recovery is a bubble.

 

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Protect Yourself Against Moving Scams

Watch for Moving ScamsHiring a moving company can be complicated, and even an honest mover can disappoint a consumer unless they know their rights. And those rights can vary depending on whether you're moving between states or within one. Don't be duped by low-ball estimates and then the mover grossly inflates fees after loading your possessions onto their truck. Consumers need to protect themselves, and here's how:

Get Recommendations

Try not to rely on newspapers, phone-books, or online ads for the names of movers. Instead, get recommendations from friends, family, or reliable real estate agents. Plan to obtain estimates from at least three companies. Avoid movers that can't provide an address or licensing information. Ask if they have marked trucks, and use a mover that does. Never hire a company that relies solely on a phone or online estimate, or one that requires a large deposit.

Check for Complaints

Along with licensing information, the federal website and some state sites list complaints against movers. Also check the BBB (www.bbb.org), and search with the company's name to find reviews and complaints on online forums and complaint websites.

Verify Licensing

New Jersey officials conducted a sting operation last year that resulted in fines against 25 unlicensed moving companies with listings on Craigslist, Angie's List, and other websites. Several movers had outstanding warrants; two were wanted by U.S. Immigration and Customs Enforcement. Interstate movers are licensed by the Federal Motor Carrier Safety Administration, which offers information on how to screen them, at protectyourmove.gov. The site also has a list of state regulators who oversee in-state movers. (Click on "State/Local Resources" when you get to the site.)

Know Your Rights

The federal government and some states require movers to provide booklets explaining your rights. Although the federal "Your Rights and Responsibilities When You Move" doesn't apply to in-state movers, it's a must-read for all. Find the title under "Are You Moving?" at protectyourmove.gov. Also check the consumer information on the American Moving & Storage Association’s website ( www.moving.org ).

Making Complaints

If there's a problem after the move — you notice items are damaged or missing — contact the mover immediately. The mover should have given you a copy of its procedures for handling complaints and inquiries. If you think you've been defrauded or the mover violated the law, contact your state attorney general or consumer protection agency. If you think the mover is illegally holding your possessions and trying to rip you off, contact the police. If ultimately you need to sue in small-claims court, send your mover a demand letter with your complaint and what you're seeking.

Moving companies can leave you fighting for your possessions if you don't become pro-active in the process of finding a reputable mover.

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Home Sales Up Despite Slim Inventories

Pending Home Sales Up Again Despite Low InventoriesPending home sales — the measure used by the National Association of Realtors to indicate completed sales about two months ahead — rose only slightly from March to April, a mere 0.3 percent. But those rising prices are helping keep homes off the market as many homeowners in negative equity and banks holding foreclosed properties opt to stay on the sidelines.

Based on contract signings for the sale of existing homes, the Realtors' Pending Home Sales Index is up 10.3 percent from a year ago to the highest level since April 2010, right before the expiration of the homebuyer tax credit.

Total existing home sales are expected to rise just over 7 percent to about 5 million this year, according to NAR. The national median existing-home price should increase close to 8 percent and exceed $190,000 in 2013.

"Because of inventory shortages, higher home sales will push up home values to the highest level in five years," said Lawrence Yun, NAR chief economist.

The Pending Home Sales Index in the Northeast jumped 11.5 percent to 92.3 in April and is 17.7 percent above a year ago.

In the Midwest, the index rose 3.2 percent to 107.1 in April and is 15.1 percent higher than April 2012.

Pending home sales in the South slipped 1.1 percent to an index of 119.2 in April, but are 12.3 percent above a year ago.

With significant inventory constraints, the index in the West fell 7.6 percent in April to 94.6 and is 2.6 percent below April 2012, blamed strictly on the low number of homes for sale to satisfy rising demand.

Scottsdale Real Estate News - May 2013

In this Issue:*

How To Do a Final Walkthrough

Signs of a New Housing Bubble?

Features Buyers Say They Will Pay Extra For

 

How To Do A Final Walkthrough

Doing a final walkthrough inspectionWhen the home buying process is nearly complete, many buyers start relaxing and focusing on other details, such as purchasing new furniture and looking at paint samples.

But there is one more crucial step to take before closing on the house: a final walkthrough. This is the last chance before closing to make sure everything is in working condition.

A final walkthrough can not only help you feel more confident about your purchase and avoid buyer's remorse, it can also pinpoint any last-minute problems that should be taken care of before settlement.

When to Schedule a Walkthrough
A house walkthrough should take roughly 30 minutes to complete, enough time for you to be extremely thorough. During this assessment, you should check for new issues that may have come up since the last time you viewed the home.

This is especially important if a major event, like a severe storm, occurred during that time period. Once you close on the home, previous owners are not obligated to fix new damages that may have occurred.

Be sure to schedule a timely walkthrough, about 24 hours before closing on a home, to address any potential problems.

What to Look For
You should check all major appliances to ensure they are in working condition. For example, consider turning on the dishwasher and washing machine, checking outlets and light switches and testing other basic operations. Don't forget to turn on water faucets and flush the toilets, providing water is on in the house. You might also request warranties and owners' manuals for appliances.

Look to see whether any fixtures the seller agreed to leave behind (a chandelier, for instance) are missing. Check to make sure any previously agreed-upon repairs have been made. Then, look over the general condition of the property, inside and out: Are there damages like scratched walls or floors that occurred when the homeowner moved out? Did they leave unwanted furniture or other things behind? Is the yard and overall property in good shape (or, rather, the condition it was when you last saw the home)?

Many industry professionals recommend buyers bring a home inspector with them to look for any problems, and to confirm that repairs were made as requested and to their satisfaction. For this kind of service, home inspectors will typically charge much less than their original inspection costs.

Take Action Quickly
If you do find problems, you have a few options. First, you could choose to walk away from the deal altogether. However, most professionals encourage buyers to consider how significant the problem is before walking away. Is avoiding a $500 fix worth losing your dream home?

You may choose to postpone the closing until the sellers fix the problem. If sellers balk at having the problem fixed, and the repair was agreed upon during negotiations, you do have legal recourse — although it is recommended the buyers and sellers try to reach an amicable agreement to make the closing go more smoothly.

Take your time during a final walkthrough to ensure there are no surprises after the closing. Once this important last step is complete, take a deep breath, relax and smile: You are about to be the proud owner of a new home!

 

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Signs of a New Housing Bubble?

Are we facing another real estate bubble?In various parts of the country, people are starting to use terms to describe the real estate market such as "overheated" and "skyrocketing prices" and "buying frenzy".

The discussions are not all that isolated either. Housing has been a tricky industry to read, as economists fail to agree on where we are in the recovery process.

Home sales are up, inventory levels are tight, mortgage rates are low, housing starts and permits are up, and three in four major metros are considered improving markets. Various indicators imply that housing is improving as the crisis has come to an end and the nation is trying to catch its breath before it begins walking again.

The U.S. Census Bureau says housing starts have hit their highest level since 2008 (the year the economy crashed, by the way), and although construction of single-family homes fell slightly, total starts rose seven percent in March over February, rising 47 percent over March 2012.

Home values are rising faster than rent, and while national home values only rose 0.1 percent for the month in the most recent report, it still marks 17 consecutive months of home values increasing.

Home values took massive hits when the economy tanked, and many homeowners suddenly found themselves underwater on their mortgage.

While there are many indicators to take into consideration, this simply addresses the tip of the iceberg. The fact is that as a whole, housing is no longer plummeting into a hopeless abyss, rather is trying to climb its way out of one – but the industry is not out of the hole yet, and unless politicians interfere, the sector could see some substantial improvement (but not necessarily a full recovery) this year.

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Features Buyers Say They Will Pay Extra For

Kitchen upgrades top the list of things people are willing to pay more forSome home shoppers say they are willing to spend thousands of dollars above the price of the home in order to have certain interior features.

The most coveted home features tend to center around the kitchen, such as stainless steel appliances and a kitchen island, says Errol Samuelson, president of realtor.com.

Here are eight features that made the list and how much extra, on average, buyers say they're willing to pay for having that feature in their home:

  • Central air conditioning: $2,520
  • New kitchen appliances: $1,840
  • Walk-in closet in master bedroom: $1,350
  • Granite countertops: $1,620
  • Hardwood floors: $2,080
  • Ensuite master bath: $2,030
  • Kitchen island: $1,370
  • Stainless steel appliances: $1,850

The features described are not necessarily the most important deciding factor for potential home buyers. When looking at a house, the first things people consider are factors such as the neighborhood, the school district and the difficulty of the commute to work.

There is a difference in people's preference and what they are willing to pay for things. Many people seem to want the steak but are on a hamburger budget.

Scottsdale Real Estate News - April 2013

In this Issue:*

Housing Inventory Shortage Causing Problems

Buying a Home: Should You Take The Plunge?

5 Hidden Dangers In Your Home And How To Foil Them

 

Housing Inventory Shortage Causing Problems

Pending home sales fell in January for the third month-over-month decline in the last four months.The National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI) fell 0.4 percent to 104.8 in January, the third month-over-month decline in the last four months.

NAR chief economist Lawrence Yun attributed the drop in the PHSI to weak inventory of existing homes for sale.

If more sellers don’t start listing homes for sale soon, the real estate comeback could be in trouble due to a lack of homes to be sold to prospects looking to buy. A lack of inventory has led to bidding wars in many markets as foreclosures have waned and cheap financing has lured a host of new buyers into the market. The competitiveness has resulted in rising prices.

Yun expects the inventory shortage will be relieved by an uptick in construction of new single-family homes, though single-family home completions regularly exceed new home sales. Government reports indicate builders have shifted from construction of single-family homes to multifamily, suggesting reluctance among younger, first-time homebuyers who witnessed the impact of the housing meltdown.

The month-over-month trend in sales correlates inversely with the movement in the median price; that is, when the median price falls, sales improve, as happened four times in the last 12 months.

According to the latest existing home sales report—which tracks closings—there were 1.94 million homes for sale at the end of February, a 4.7-month supply. The number of homes for sale has averaged 2.19 million for the last 12 months, down from an average of 2.8 million in the previous 12 months.

 

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Buying A Home: Should You Take The Plunge?

Buying a Home - Taking the Plunge

Spring is typically the busiest time of the year for homebuying, and this year the housing market is already showing signs of a strong comeback. Even though home prices are starting to rise, affordability continues to improve. The National Association of Realtors (NAR) first-time homebuyer affordability index reached a record high of 127.7 in 2012 (the higher the number, the better). In 2006, at the real estate market’s peak, the index stood at 71.3.

Low mortgage rates and an improving economy are helping make buying a home more attractive today. Should you take the plunge? Consider the following:

Rent vs. Own

In many areas it is now cheaper to own a home than it is to rent. But much of that advantage still depends on the size of your down payment, the interest rate you’ll pay on a mortgage and the amount of time you plan to stay put. If you’re a renter, it may pay you to sit down with a professional to see if your situation makes it more affordable for you to buy versus continuing to pay your landlord’s mortgage.

Finding the Right Home

Even if it’s more affordable to own rather than rent, whether you can find the right home for you could be a big question to answer. The number of homes for sale has dwindled in recent years. Inventory (excluding new construction) is back to 2005 levels, according to the NAR, and it may be another year before supply improves, as homeowners hold out to sell at higher prices.

Getting the Best Mortgage

Rates on home loans are still attractive. Currently, the average rate for a 30-year fixed-rate mortgage is around 3.6 percent, compared with an average rate of 5.4 percent for the last ten years.

But to qualify you’ll need a sizable down payment (generally 10 percent to 20 percent of the home’s value), a solid FICO credit score (720 or higher) and plenty of documentation to prove your income, among other things.

If you don’t clear those hurdles, you may be a good candidate for an FHA loan, which is a mortgage backed by the Federal Housing Administration.

The rates for these loans are 3.45 percent and require a down payment of only 3.5 percent. Also, you don’t need sterling credit. You may be approved with a FICO score as low as 580, though many lenders want a minimum of 620 today.

The catch is, you may owe more in fees.

FHA borrowers who put down less than 20 percent have to pay mortgage insurance. Starting today, April 1, the premium for new loans of up to $625,500, rises by 10 percentage points (for bigger loans, the fee goes up by 0.05 percentage points).

And beginning June 3, most new borrowers will have to pay the premiums for the life of the loan. Previously, mortgage insurance was dropped once the loan balance fell to 78 percent of the home’s original value.

Conventional loans also require mortgage insurance for small down payments, but lenders may be willing to waive the charge once you’ve paid down a chunk of the loan.

To decide whether you should “take the plunge” into the waters of home ownership, talk to us today for a free, no-obligation consultation on your particular financial situation for homebuying.

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5 Hidden Dangers In Your Home And How To Foil Them

Here are what we consider to be the top five hidden home dangers, along with our solutions for staying safe.

DANGER #1: Carbon monoxide
You can’t see it, and you can’t smell it, but carbon monoxide (CO) is the leading cause of accidental poisoning in the U.S. It’s produced by improperly working appliances, fireplaces, and it can even seep into the house from a running car in the garage. (See our article recently on ventless fireplaces)

SOLUTION #1: Carbon monoxide alarms
The only way to detect carbon monoxide? With an alarm. These should be installed on every level of the home, including the basement, and outside each sleeping area. Check with your fire department to see what local and state laws require in terms of placement. And be sure to have your appliances checked regularly.

Fire is one of the dangers in your home - be sure to have a fire extinguisher on handDANGER #2: Kitchen gadgets and equipment
Cooking equipment is, and has long been, the leading cause of home fires, according to the National Fire Protection Association. The most common sources: stovetops, ovens, rotisseries, microwaves, portable cooking units, and barbecue or hibachi grills.

SOLUTION #2: Fire extinguishers
Unattended cooking is the main reason behind home fires, so start by staying in the kitchen when you’re using the stovetop, checking food frequently when it’s in the oven, and keeping the range clear of anything that can catch fire. But even for those who consider themselves Top Chef contenders, we recommend keeping a fire extinguisher or extinguishing spray on hand to prevent a small kitchen fire from growing out of control.

DANGER #3: Foundation cracks
If you’re like many homeowners, you’re probably unfamiliar with radon: the second leading cause of lung cancer (behind smoking). This odorless, radioactive gas can move up from the soil and enter the home through cracks in the foundation. Even if you don’t have a basement, radon can still enter your home through cracks around service pipes and construction joints.

SOLUTION #3: Radon test kits
You can’t see or smell radon, but you can easily test for it with an at-home kit. Rest assured, though, even if you come up with an elevated result, radon is fixable: the EPA says some radon reduction systems can reduce radon levels by up to 99 percent.

DANGER #4: Rapid fires
It’s little known how fast home fires can spread. From the time a smoke alarm sounds, your family can have as little as two minutes to escape safely before the fire spreads throughout your home, according to the National Fire Protection Association.

SOLUTION #4: Home escape plan
Your ability to escape from a home fire depends on advance warning from a smoke alarm but, also, from advance planning with an escape plan. Shockingly, though, only 29 percent of families have ever practiced their fire escape plan. It is recommended that you practice your plan regularly—at least twice a year—so everyone knows what to do in the event of a fire. You might even consider holding a drill at night.

DANGER #5: Home theft
While not exactly a “hidden” danger, home theft is something that’s frequently overlooked. You might think it’ll never happen to you, but the reality is that a home is broken into every 14 seconds in the United States, according to the FBI.

SOLUTION #5: Residential safes
There are basic ways to deter burglars from getting inside your home: install solid core entry doors with sturdy deadbolt locks; properly light entries; install metal grates over basement windows; and trim bushes so there are fewer places to hide. But you’ll enjoy extra piece of mind by storing your most valuable possessions in a safe (consider one that’s both waterproof and fireproof to keep items safe from the elements too).