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Advice for a first-time home buyer in Florida?
Old 03-23-2011, 08:33 PM   #1
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Advice for a first-time home buyer in Florida?

Does anyone have advice for a first-time home buyer in the panhandle of Florida? What I should look for when getting quotes on homeowner's insurance?

So far everything seems to be going real smooth. My loan officer and real estate agent have been great, but there are somethings that I would like to get your opinion on. Tomorrow is the housing inspection, and I suspect that there will be a few problems (wood frame, built in 1984, no wind mitigation, etc.).

I'm just worried things are going TOOO smooth.
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Old 03-23-2011, 08:41 PM   #2
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With wood construction make sure you have a very good termite inspection .
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Old 03-23-2011, 08:44 PM   #3
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If you let your real estate agent pick the home inspector, you might be right. I'd recommend being there and following him/her around and asking questions. Walk away or demand concessions if problems come up during the inspection...

Home Inspection Checklist - General Home Inspection Checklist Items

good luck with the Home insurance...

Compare Homeowner's Insurance Rates
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Old 03-23-2011, 08:47 PM   #4
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Watch as many Holmes on Homes episodes you can find on YouTube.
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Old 03-23-2011, 08:50 PM   #5
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With wood construction make sure you have a very good termite inspection .
Does that happen during a normal inspection? I have already told my real estate agent and loan officer that I will buy an annual termite bond.
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Old 03-23-2011, 08:54 PM   #6
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If the bones and fundamentals are good... Buying a house, a right sized house was the first, best steps to financial independence for me. Great move, and at what could be the best buyers market for the next 17 / 18 years. It is a big step and nerves are natural, but don't let cold feet get in your way to the good life.
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Old 03-23-2011, 09:15 PM   #7
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Welcome back, KN! When did you leave Japan-- hopefully not on a recent evac flight?

What's your next career move?

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Does that happen during a normal inspection? I have already told my real estate agent and loan officer that I will buy an annual termite bond.
You want to know what's there and how to prevent the termites in the first place.

Following the inspector around is essential so that you can understand the thoughts going through his mind as they're coming out of his mouth, not just summarized (perhaps in cryptic language) on his report.

As a first-time homebuyer you probably won't have any trouble getting insurance, but you might want to compare Armed Forces Insurance to USAA. We've been happy with AFI over the last 20 years, even though at times they've appeared to be less profitable than USAA.
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Old 03-23-2011, 09:20 PM   #8
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Are you still on active duty and do you expect to remain on active duty for the foreseeable future? What are you going to do when the house gets heavily damaged by a hurricane and you are thousands of miles away? I've been on active duty and a long distance landlord and I wouldn't wish it on my worst enemy.

My advice is not to buy at this time but I don't think that's the kind of advice you were looking for.
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Old 03-23-2011, 09:40 PM   #9
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Welcome back, KN! When did you leave Japan-- hopefully not on a recent evac flight?

What's your next career move?


You want to know what's there and how to prevent the termites in the first place.

Following the inspector around is essential so that you can understand the thoughts going through his mind as they're coming out of his mouth, not just summarized (perhaps in cryptic language) on his report.

As a first-time homebuyer you probably won't have any trouble getting insurance, but you might want to compare Armed Forces Insurance to USAA. We've been happy with AFI over the last 20 years, even though at times they've appeared to be less profitable than USAA.
Glad to be back! I PCS'd off the island March 2010 and was shipped off to Eglin AFB. This area reminds me of Okinawa (sun, heat, sand) and everyone speaks English! I am glad I missed the earthquake, but my friends tell me the island didn't see much action.

Next career move? There are days I wish I made the cut for OTS (since there seems to be a ton of O's here) but I am starting to understand maybe that line of work wasn't for me. Right now I am doing the best I can in the USAF and hoping something "cool" comes along. It has taught me alot about myself, and what I need to improve on. Financially I think I have saved up quite a bit for someone who hits his 5yr mark in June (time really does fly!). Was recently on an educational TDY with some former submariners out of Hawaii (they kept saying DIRSUP...whatever that means) and they had some REALLY funny (and gross) stories about life in a tuna can. I'm sure you could elaborate on some of those as well =)

According to their website AFI doesn't offer insurance in this area . I haven't called the 1-800 number to see if they recommend anyone else though.
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Old 03-23-2011, 09:44 PM   #10
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Are you still on active duty and do you expect to remain on active duty for the foreseeable future? What are you going to do when the house gets heavily damaged by a hurricane and you are thousands of miles away? I've been on active duty and a long distance landlord and I wouldn't wish it on my worst enemy.

My advice is not to buy at this time but I don't think that's the kind of advice you were looking for.
I see myself staying on AD for quite a while and will probably have a rental agency take care of the property if it doesn't sell.

Wouldn't insurance take care of the home if a hurricane blew it away?
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Old 03-23-2011, 10:18 PM   #11
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Does that happen during a normal inspection? I have already told my real estate agent and loan officer that I will buy an annual termite bond.
Not usually ! You have to have a separate inspection even if it showed nothing I would have regular bug treatment .
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Old 03-23-2011, 11:08 PM   #12
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(This story is dedicated to Porter.)

Your questions take me back to one of my favorite memories of becoming a homeowner, KN.

Advice: as noted, accompany your home inspector if you can, asking lots of questions about everything he does. Treat it like an hour-long class in home maintenance.

On termites, they depend on a water source. Typical problem spots are near a water leak or at the outside wall where flowerbed soil has been piled up too high against a slab foundation. If the house inspector doesn't find such problems or he doesn't recommend a termite inspection as a local necessity, you can probably skip a termite inspection.

Or you can call Tommy.

Our first house was bought when we were young, like you. We relied a lot on the advice of my broker. He was a smart guy, and had found me a great deal on a 50-year-old house, but he was not very experienced in the residential market.

Offer made and accepted? check
Contract form OK? check
Title insurance covered? check
Home condition inspection scheduled? check

The house inspector said he saw some evidence of past water leaks and a few wooden floor joists that might have damaged by termites. He didn't think there was a current infestation, but recommended an inspection by a specialist.

So I asked my broker for a recommendation........[crickets chirping - nothing]

Time was short, so I went to the yellow pages. AAAAAAABC Pest Control's name seemed too gimicky. Pictures of scary bugs didn't impress me. And, with no real basis, I figured that the big brand name companies would overcharge or bring a throw-down termite to ensure a treatment sale.

It didn't look good. But I turned to the second page of listings and knew I had found my hero....a picture of Tommy the termite dog. I figured a beagle's nose was at least as good as some guy in coveralls with a flashlight poking around down in a crawlspace.

And, since he was a dog and all, it was unlikely that Tommy would lie to me or be a cheat. So with blind faith in the power of science and the olfactory pre-eminence of the genus canine, I called and arranged for Tommy to make an inspection.

He arrived right on time, chauffeured rock-star style to the site in a van with his name and picture painted on the side. I remember it was one dramatic beagle picture - I think Tommy's portrait artist had a 1970's career painting bare-chested swordsmen on custom vans.

His trusty assistant left Tommy in the tour bus with the engine running and the AC on high while he came inside and set up the stage. (Actually, he performed a crawlspace inspection in the traditional style.) Tommy peered out the van's window, anxious for the curtain to go up.

Back on the front porch, the inspector said it looked like any termites were long gone, but said we'd only be sure if Tommy gave his concurrence. Almost on queue, Tommy began a fierce beagle howl, letting us know he thought it was showtime. The assistant looked me straight in the eye, (maybe even put his hand on my shoulder, I don't remember) and said "let's see what Tommy finds".

Release the hound! Tommy was all energy, pulling the poor handler all the way across the front yard. He leaped up the front steps two at a time, a dog on a mission.

Five minutes of dog toenails scratching across wood floors, furious sniffing and vigorous tail wagging ensued. I had no idea what Tommy would do if he actually found a termite, but it was clear that there would be hell to pay if he did.

Suddenly, Tommy stopped, either spent or giving us the sign that the evil termites were in our midst. Tommy looked up at me. His handler looked at Tommy, then me. Neither said anything for what seemed like an eternity. I had a lump in my throat. Finally, with all the drama of a soap opera doctor delivering a diagnosis, Tommy's spokesman said "we're good". Hurray!

I knew I had paid for a very good show, but for all these years I had thought it was just that, a show. Thanks to the internet, I now know termite-sniffing dogs are legit: http://www.bedbugdog.biz/UF%20Brooks%20papaer.pdf
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Old 03-24-2011, 09:58 AM   #13
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Excellent dog story! And I'm not surprised - dogs have amazing senses of smell - and are for the most part eminently trainable.
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Old 03-24-2011, 11:23 AM   #14
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Glad to be back! I PCS'd off the island March 2010 and was shipped off to Eglin AFB. This area reminds me of Okinawa (sun, heat, sand) and everyone speaks English! I am glad I missed the earthquake, but my friends tell me the island didn't see much action.

Next career move? There are days I wish I made the cut for OTS (since there seems to be a ton of O's here) but I am starting to understand maybe that line of work wasn't for me. Right now I am doing the best I can in the USAF and hoping something "cool" comes along. It has taught me alot about myself, and what I need to improve on. Financially I think I have saved up quite a bit for someone who hits his 5yr mark in June (time really does fly!). Was recently on an educational TDY with some former submariners out of Hawaii (they kept saying DIRSUP...whatever that means) and they had some REALLY funny (and gross) stories about life in a tuna can. I'm sure you could elaborate on some of those as well =)

According to their website AFI doesn't offer insurance in this area . I haven't called the 1-800 number to see if they recommend anyone else though.
Whew, talk about dodging a bullet.

So you're not planning to try another shot at OTS or some other commissioning program? The fact that you have doubts about your suitability may actually be an indication that you'd make a better officer than the young turks who "know" they're God's gift to the military...

Re-enlistment plans? Are you on a six-year contract or longer? Thinking about an MBA or a master's degree?

"DIRSUP" doesn't ring a bell, other than Supply Corps lingo. But after nine years of ER I'm an acronym dinosaur. And yes, the quality of submarine humor is directly related to the quality of its grossness. I have dozens of sea stories that start with "The sewage system was supposed to..."

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Wouldn't insurance take care of the home if a hurricane blew it away?
The problem with hurricane insurance is that rebuilding prices soar right after the storm. Both contractors & materials are in short supply. Insurance adjusters (also very busy and in short supply, sometimes literally flown in from out of state to help) will offer you a quick lowball while sternly reminding you that it's your job to protect the property against further weather damage or they'll canx your policy. (Not that blue tarps are so plentiful, either.) Permit agencies also take the opportunity to force the rebuild to include expensive upgrades to bring the home into compliance with the latest codes.

Insurance companies know far more about this than we do and will want you to pay a staggering sum of money to compensate for the unknowns of materials, contractors, & permits. They're hoping to rush you into a quick settlement or stonewall you by blaming you for the damage that occurred after the storm (due to your weatherproofing "negligence".) You may be unwilling to pay these premiums, especially when you're on three-year orders at least three time zones away from your investment.

At some point the insurance company will offer you a deductible for self-insuring a portion of the damage-- the first $5000, or 2% of the total, or some other oddball number. Your challenge is deciding whether you'll save enough premium (say, a savings of $250/year) to literally put the money in savings for 20 years to be ready to pay that deductible. Of course the other uncertainty is whether there'll be a catastrophic hurricane damaging your home during that 20 years before you've saved up the money to pay the deductible.

There are no easy answers to this multi-factor problem. In fact it's so gnarly that I've read many times that the first thing you should do after a major house fire or hurricane is to hire an insurance claims adjuster (and pay them out of your own pocket) just to negotiate with "your" insurance company.

If AFI won't come through then it sounds like your only remaining cost-effective alternative is USAA. The "good" news is that USAA is less likely to screw you on the settlement.

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Suddenly, Tommy stopped, either spent or giving us the sign that the evil termites were in our midst. Tommy looked up at me.
I just hope Tommy wasn't named for that "deaf, dumb, & blind kid" from The Who's rock opera...
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Old 03-24-2011, 02:06 PM   #15
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As far as I know, USAA is still not writing homeowners policies in FL but be sure to check. The state won't let them charge enough to "pay" for the risk. Makes you wonder what the other insurance companies are going to pay your claims with if they aren't charging high enough premiums to cover the true cost.
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Old 03-24-2011, 02:55 PM   #16
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Does anyone have advice for a first-time home buyer in the panhandle of Florida? What I should look for when getting quotes on homeowner's insurance?
Some may agree with me on this ..and some may not...so here goes...

After years of paying high home owner insurance premiums that had low deductibles AND since I never filed a claim (for over 18 years)...I started increasing my deductibles and now carry a $5,000 deductible on the house.
The deductibles start at around $500.00 The question to ask yourself is ...am I really going to put in an insurance claim for that window?...and risk them upping my premium??...

So..my advice is to figure out how much you are willing to pay for things in a year. (IF it happens at all).....and choose that deductible. Just recently advised my 93 year old friend to increase hers from $500 to $2500 and it saved her over $300 a year. She had never put a claim in and was paying those high premiums all this time.

It saves...hundreds...on the yearly premium. Same with car insurance.
I deleted comprehensive and collision on my daughters car. (car is worth only $6,500 at this point) .....and it brought her homeowners down $300.00 (homeowners and car in same policy).

Get several quotes...at different deductible levels.
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Old 03-24-2011, 03:38 PM   #17
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I started increasing my deductibles and now carry a $5,000 deductible on the house.
The deductibles start at around $500.00
Just be aware, that if you have mortgage on your house your lender might require a lower deductible and it might not even be spelled out in the contract.
When we had WellsFargo mortgage, we increased deductible to $2k and got a letter from their compliance department, requiring us to lower the deductible to no higher that 1% of property insured value.
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Old 03-24-2011, 03:56 PM   #18
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Just be aware, that if you have mortgage on your house your lender might require a lower deductible and it might not even be spelled out in the contract.
When we had WellsFargo mortgage, we increased deductible to $2k and got a letter from their compliance department, requiring us to lower the deductible to no higher that 1% of property insured value.
We had that little gotcha too.

A year from now I'll raise it back up to 2% or 5% or wherever we had it before.
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Old 03-24-2011, 04:39 PM   #19
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Wow ...I've never had the insurance company make a demand like ...in 18 years both with or without a mortgage. (But it could be that at that time my deductibles were low anyway...and by the time started increasing the deductibles, 1st mortgage was paid off - left with a small HELOC).

The other thing that might be of interest to the OP (and this happened with my daughters mortgage that she just on in Feb)..I advised her not to escrow her homeowners and property taxes.

All the lender wanted was a year of homeowners paid in full at closing....which on a HO6 condomimium policy was $198.00. Single family dwelling will be more.
AFter that first year...you can pay it however you like.

The lawyer said to her at closing...."That is smart ...and I have to tell you ...that you are the first closing I have done in 15 years that did not escrow those amounts". I just sat there (and smiled under my breath)..and let her take the credit. (see honey...mom still knows a few things!)

But ..if one doesn't "escrow" those amounts one has to be disciplined to set aside the money to pay those bills when they come in. Better you get the interest that money can generate than the mortgage company (i know...i know....what interest you ask...)

For me, it's the principle of the thing. I would love to know how much money is "escrowed" for these two items around the world and U.S. .....and how much interest that generates for the mortgage companies.
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Old 03-24-2011, 04:40 PM   #20
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Hey, KN, you might already be aware of this, but it's possible that your overseas duty has bought you an extension on the 2009/2010 first-time homebuyer's tax credit. Take a look at this article:
Military.com - Finance - Whats New for Military Tax Payers

Quote:
First-time Homebuyer Credit. The Homebuyer Assistance and Improvement Act of 2010 has extended the purchase date for homebuyers who entered into a binding contract before May 1, 2010, to purchase a home before July 1, 2010. Under the Act, these homebuyers may claim the credit if they purchase the home before October 1, 2010.
Also, if you (or your spouse) are on qualified extended duty outside of the U.S. for at least 90 days after 2008 and before May 1, 2010, you may have additional time.
... and this fact sheet:
First-Time Homebuyer Credit: Members of the Military and Certain Other Federal Employees

Quote:
Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
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