Inside Real Estate: Fixtures

If an item is a fixture, it is included with the property when it is sold & goes with the buyer. If an item is not a fixture, it is personal property of the owner & goes with the seller. No one really cares if something is a fixture or not until the property is being transferred to a new owner. If items in a house, such as curtains or a dishwasher, are not clearly mentioned as fixtures or personal property when the house is listed for sale, there might be confusion about who gets the item.

A seller and a buyer could wind up fighting over an item, or the buyer might get an unpleasant surprise. Imagine expecting certain things to stay with the house, such as the dishwasher, and then finding it gone. People get upset.

There are some legal tests about whether something is a fixture or not. And there are items listed as standard inclusions with the property. But, the best thing a seller can do is to mention that an item, such as Great-grandmother's Tiffany ceiling lamp, DOES NOT go with the house and will be removed when selling the house. If you're a buyer, on the other hand, you might want to mention a specific item in the contract offer that you expect to be included in the sale. If a seller wants to be certain that a valuable item won’t be included in the sale of the house, the best thing to do is to REMOVE the item before listing the house on the market. If it needs to be replaced by a similar, less valuable item, it should be done before any buyer falls in love with it!

Inside Real Estate: Types of Homeowner's Insurance Coverage

When you are purchasing your homeowner's insurance, you will need to decide what kind of coverage you need. There are different kinds of coverage. The original contract price of the house is not accurate because you don’t need to insure the land that can't be destroyed. The current market value of the house may not be accurate because the house may be overvalued or undervalued by sellers and buyers.

You could get the actual cash value of the property, which includes the original cost of building less the depreciation and amounts to what your old stuff is worth today. But there may be newer, better building techniques or materials. Rebuilding a house similar to yours at today’s costs could be more expensive than the coverage you would get insuring at actual cash value.

If you know you want a house similar to what you have, but you want it created at today’s building standards & costs, you will want to insure the house for the REPLACEMENT COST, or what it would cost to get you new stuff.

Generally, most people are happier with homes insured at replacement cost rather than actual cash value. If everything got destroyed, they would be able to get their lives back to a more familiar style of living. However, it does cost more to insure at replacement cost rather than actual cash value. It is good to find out what your homeowner’s insurance covers if your house was ever destroyed.

Inside Real Estate: Homeowner's Insurance

I know it's not very exciting, but it's important to talk about home insurance. Everybody who owns a home needs insurance to protect them from unexpected events. I think it seems boring because it's hard to understand and remember what is covered. If I explain even just one component, it makes it easier for me to understand.

To start, here's one of my favorite websites, "How Stuff Works," covering homeowners insurance in much greater detail. Another place for information is Home Insurance Quotes.

In a brief explanation, homeowner's insurance is insurance that helps you if something bad happens to your home. This could be anything from destruction to an accident happening to one of your guests, which you would technically be liable for as the homeowner. I want to focus on a situation where you have a home and something BIG destroys it, like a fire. When that happens, you still need a place to live. You can file an insurance claim and you will get financial help in rebuilding your home, living expenses while it is being rebuilt, and replacing your furniture, dishes, and any personal items. I'll talk a little about choosing your type of coverage in my next post.