Tips for smart guys:

On Buying Insurance:

1. Always compare “Apples” to “Apples”:  In no other industry is this concept more important.  When you buy insurance you are buying protection and you want to make sure that you are getting the protection you expect when securing a new insurance policy.  Any company can offer savings when they are giving you a quote which reduces your coverage.  Make sure that when comparing insurance quotes, all quotes are offering the same coverage limits and deductibles.  If not, don’t be afraid to ask the insurance rep or agent why their quote offers less or more and how would the premium be affected if you adjusted the limits to match their competitor’s quote. 
2. Always verify that all companies are using the same rating information: When looking at multiple insurance quotes, you want to know for sure that all quotes are based on the same underwriting information.  This is important because inaccurate rating information can make a tremendous difference in your rates.  (Ex.  You are shopping for a new auto insurance company & you have a chargeable accident 2 ½ years ago.  You are presented with three quotes, but one quote is 30% less than the others.  You decide to go with the less expensive company only to find out several weeks later that your quote did not account for your at-fault accident.  The company understandingly adjusts your rate to account for this oversight and now your new rate is 20% higher than what you were paying before.)
3. Never misrepresent the facts on an application: All insurance policies have a provision that would allow the insurance carrier to deny all coverage for any claim if it is found that the insured materially misrepresented something on an application.  Also, in addition to having your claim denied, you may also be subject to civil & criminal penalties including jail time if you are found guilty of insurance fraud.  If your insurance representative or agent suggests that you omit a material fact on an application, you are best to sever all ties with that entity because they clearly do not have you best interests at heart and are guilty of giving you criminally negligent advice.
4. Good customer service is a must:  If you are not happy with the level of service you are getting from your current insurance carrier or agent, it is time to switch.  Insurance costs enough and if you are not getting the service and attention you deserve when you have questions or a claim problem, you are being shortchanged.  Reasonable expectations of your insurance carrier or agent include:
1. The Ability to Knowledgably Answer Your Questions
2. Prompt Return of Your Phone Calls
3. Courteous Staff
4. Excellent Claims Service
5. Provides Thorough Explanation of Your Coverage
5. Never deal with an agent or company you don’t trust:  Since you are buying “protection,” you need to be able to trust those who are “protecting” you.

On Shopping for a Mortgage:

1. It’s best to only pay points on a loan if you are planning on keeping the loan for no less than four years:  A point – equaling 1% of the total loan amount- is an upfront interest fee that reduces your monthly interest rate and total interest due over the life of a loan. This means that a one point loan will always have a lower interest rate than a no point loan; paying points is in essence a trade off between paying money now versus paying money later.
   We suggest paying points up front if you plan on keeping the loan for at least four years to ensure that you recoup the costs through lower monthly payments. If you think that you might move within the next four years or might want to refinance because the market rate is declining, then you probably would be better off with a no point loan.

2. When comparing mortgage rates, base your comparisons on the APR, not the rate that’s being advertised:  The Annual Percentage Rate, or APR, is a tool used to compare different terms, offered rates, and points among different lenders and programs.  The Annual Percentage Rate factors in the up front costs and loan fees thereby giving you the actual interest costs associated with that particular loan. (Ex.  You are looking at two mortgage offers that both promise a 7.5 interest rate on a 30 year note; however, the first loan has an APR of 7.707 and the second loan has an APR of 7.802.  In this example the first offer would be preferable as the second offer contains higher up front costs as indicated by the higher APR.)
3. Never pay mortgage fees up front:  Prior to closing, the only out of pocket expense for you should be the cost of the appraisal. This fee is usually paid directly to the appraisal company at the time of the appraisal. After this, your financial concerns should be on closing costs and down payment.
4. If you are looking to get prequalified for a mortgage, you should expect your mortgage company and/or broker to get your prequalifications done within the hour:  If you’re in the process of getting prequalified, that means you are about to go out looking at prospective properties. Your mortgage representative or broker should not be impeding this process. You need someone who is on top of things, almost as though he were investing his own money in the property.
5. When shopping for a mortgage, be sure to only deal with quality brokers and or companies:  A good mortgage broker and/or representative should exemplify the following qualities:
1. Explains Terms and Jargon That is Unfamiliar to You
2. Availability
3. Demonstrates Intelligence & Knowledge of the Industry & Product
4. Never Answers Questions if He Doesn’t Know the Answer
5. Integrity
   
   

This information was contributed by Scott Snyder of Allied Home Mortgage Capital Corporation

On Buying a House:

1. You can, and should, get pre-approved for a mortgage before you go looking for a home:   Pre-approval is easy, and can give you complete peace-of-mind when shopping for your home. Your local lending institution can provide you with written pre-approval at no cost and no obligation, and be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank.  It entails a completed credit application and a certificate, which guarantees you a mortgage to the specified level when you find the home you are looking for.
2. Know what monthly dollar amount you feel comfortable committing to:  When you discuss mortgage pre-approval with your lending institution, find out what level you qualify for and also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a pre-approval amount that is higher (or lower) than the amount of money you would want to pay out each month. By working back and forth with your lending institution to determine what this monthly amount is, and what value of home this translates into at today’s rates, you won’t waste time looking at homes that are not in your price range.
3. You should be thinking about your long term goals and expected situation, to determine the type of mortgage that will best suit your needs:  There are a number of questions you should be asking yourself before you commit to a certain type of mortgage; How long do you think you will own this home? What direction are interest rates going in and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.
4. When buying existing construction, hire an independent home inspector to furnish you with a complete report on the property’s condition:  Buying a home is one of the most important decisions you will make in your life.  A home inspection report is very affordable and will give you detailed information on the property including things which may need replacement or updating as well as structural conditions.  Before you put out money to purchase a new home, it is wise to know ahead of time if you will need to spend any more money addressing any existing deficiencies.
5. Deal with a realtor who you can trust and demonstrates integrity:  You never want to deal with a realtor who is only concerned with selling you a house.  You want realtors who will honestly asses the property you are looking at and give you valuable input on whether or not the property is a good choice for you.

 This information was contributed by Matt Moxhay of Prudential Fox & Roach.

On Selling a House:

1. Know why you’re selling, and keep it to yourself:   The reasons behind your decision to sell affect everything from setting a price to deciding how much time and money to invest in getting your home ready for sale. What’s more important to you: the money you walk away with, or the length of time your property is on the market? Different goals will dictate different strategies.  However, don’t reveal your motivation to anyone else or they may use it against you at the negotiating table. When asked, simply say that your housing needs have changed.
2. Do your homework before setting a price:  Settling on an offering price shouldn’t be done lightly. Once you’ve set your price, you’ve told buyers the absolute maximum they have to pay for your home, but pricing too high is as dangerous as pricing too low. Remember that the average buyer is looking at 15-20 homes at the same time they are considering yours. This means that they have a basis of comparison, and if your home doesn’t compare favorably with others in the price range you’ve set, you won’t be taken seriously by prospects or agents. As a result, your home will sit on the market for a long time and, knowing this, new buyers on the market will think there must be something wrong with your home.
3. Do your homework:  (In fact, your agent should do this for you). Find out what homes in your own and similar neighborhoods have sold for in the past 6-12 months, and research what current homes are listed for. That’s certainly how prospective buyers will assess the worth of your home.
4. Find a good real estate agent to represent your needs:  Nearly three-quarters of homeowners claim that they wouldn’t use the same realtor who sold their last home. Dissatisfaction boils down to poor communication which results in not enough feedback, lower pricing and strained relations.
5. Maximize your home’s sales potential:    Each year, corporate North America spends billions on product and packaging design. Appearance is critical, and it would be foolish to ignore this when selling your home.
   You may not be able to change your home’s location or floor plan, but you can do a lot to improve its appearance. The look and feel of your home generates a greater emotional response than any other factor. Clean like you’ve never cleaned before. Pick up, straighten, unclutter, scrub, scour and dust. Fix everything, no matter how insignificant it may appear. Present your home to get a "wow" response from prospective buyers.
6. Make it easy for prospects to get information on your home:  You may be surprised to know that some marketing tools that most agents use to sell homes (e.g. traditional open houses) are actually not very effective. In fact only 1% of homes are sold at an open house.  Make sure the ads your agent places for your home are attached to a 24 hour prerecorded hotline with a specific ID# for your home which gives buyers access to detailed information about your property day or night 7 days a week without having to talk to anyone. It’s been proven that 3 times as many buyers call for information on your home under this system. And remember, the more buyers you have competing for your home the better, because it sets up an auction-like atmosphere that puts you in the driver’s seat.
7. Know your buyer:  In the negotiation process, your objective is to control the pace and set the duration. What is your buyer’s motivation? Do they need to move quickly? Do they have enough money to pay you your asking price? Knowing this information gives you the upper hand in the negotiation because you know how far you can push to get what you want.
   Make sure the contract is complete:  For your part as a seller, make sure you disclose everything. Smart sellers proactively go above and beyond the laws to disclose all known defects to their buyers in writing. If the buyer knows about a problem, they can’t come back with a lawsuit later on.
   Make sure all terms, costs and responsibilities are spelled out in the contract of sale, and resist the temptation to diverge from the contract. For example, if the buyer requests a move-in prior to closing, just say no. Now is not the time to take any chances of the deal falling through.
8. Don’t move out before you sell:  Studies have shown that it is more difficult to sell a home that is vacant because it looks forlorn, forgotten, simply not appealing. It could even cost you thousands. If you move, you’re also telling buyers that you have a new home and are probably highly motivated to sell fast. This, of course, will give them the advantage at the negotiating table.

This information was contributed by Matt Moxhay of Prudential Fox & Roach.

On Buying a Car:

1. Remember, You are in control:  Car salesmen are trained to take control of the situation when you enter a dealership.  You are the customer and it’s your decision on what to buy, when to buy, and how much you are willing to pay.
2. Don’t be afraid of the “come on” car:  Often dealerships will advertise one or several vehicles with an extraordinarily low sales price.  These vehicles often are base models or vehicles they are having trouble moving.  The purpose of these cars is to get you into the dealership so the salesman has an opportunity to steer you into the direction of another vehicle which is a much better profit piece for the dealership.  If the advertised vehicle will satisfy your needs and fit your budget, don’t let the salesman talk you out of it with comments like…”That’s a stripped down model, you don’t want that” or “Let me show you something similar which I think you’ll like a lot better.”  Look at the vehicle and decide for yourself if you’ll be happy with it.
3. When buying a used vehicle, always demand a Carfax report:  A Carfax report will tell you if the vehicle you are looking at has ever been involved in an accident or suffered water damage.  Vehicles with this type of history are bad news and you would be better off to stay away from these types of automobiles.
4. When trading in a vehicle, do some research on your vehicle’s value:   Websites like Kelley Blue Book can give you an idea of what your car is actually worth before you go into the dealership and hear what they are willing to offer.  Having this figure available will give you a better idea of if the dealer’s trade-in figure is a fair number.
5. When buying a new vehicle find out what the dealer actually pays for the vehicle:  You can easily find out the dealer invoice for any new vehicle by using consumer websites like www.edmunds.com.  If you know what they are paying for the vehicle, you will know how low they can go on the sales price. Some dealerships when pressed enough will sell a car for less than invoice while most dealerships will sell a vehicle at invoice if you tell them that you aren’t going to pay more than the invoice and you intend to keep looking until you find a dealership that will. 
6. When buying a new car do your research on what incentives are available in your area:  Websites like www.edmunds.com offer an up to date list of the incentives available in your area for most manufacturers including the dealer incentives which often you use to use to further negotiate down the sales price of a vehicle.  Know what money the dealer has coming back to him and what money you have coming back to you so you leave nothing on the table when negotiating a sales price.
7. Remember, a dealer always makes money and can make money from many areas of the sale including financing and volume bonuses from their manufacturer:  When a dealer says I can’t sell you the car for that price or I will lose money and you know that the sales price is at worst what they paid for the vehicle, don’t be afraid to tell them that you will keep looking and get back to them.  Usually when pressed, a dealer will drop their price to their absolute bottom line rather than letting a sale walk out the door.  If the dealer is willing to let you go without further reduction of the price than you probably will not do any better with that particular dealership.
8. If a dealer changes the terms of your deal or switches stories when confronted go somewhere else:  If the dealership does not treat you ethically when you are buying the car, imagine how they will treat you after they cashed your check.