Category: Buying

Difference Between Home Warranty and Homeowner’s Insurance

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You’re on the hunt for a new home. Know the difference between a home warranty and homeowner’s insurance and the steps you can take to ensure you’re covered when finalizing your purchase.

It’s important to note that a home warranty and home insurance are not interchangeable. A home warranty, typically a 12-month contract purchased from an accredited company, acts as a safety net against malfunctions due to normal wear and tear of the appliances and maintenance systems in the home. This includes major systems like HVAC, water heater, plumbing, electrical and major appliances. Our recommended local company, TMI Warranty, L.L.C., offers homebuyers a reassuring peace of mind that these systems will remain in working order after the homebuyer takes possession.

A homeowner’s insurance policy is a 12-month policy purchased from a reputable insurance company, like Mel Foster Insurance, that protects the home’s value and covers losses or damages caused by unexpected events like fire, flood, theft or storm damage. Most lenders require home insurance when you take out a mortgage. While you’re not legally required to purchase a homeowner’s policy when buying a home, you will likely still have to buy some policy to safeguard your belongings.

According to Consumer Affairs, home warranties are paid monthly at between $40 and $60, while the average cost of an annual home warranty is $450 to $600 per year, depending on the provider and level of coverage. This financial aspect is crucial to consider when planning your home purchase. If you’re purchasing a new construction home or one built recently, a home warranty may not be necessary since your major systems should be in good shape.

Shifts in the housing market have given homebuyers more power. Today, there is a better balance and opportunities for mutual concessions during home-buying. Buyers knowledgeable about home warranties may ask that a home warranty be included in the final sale. This can serve as powerful leverage during negotiations, empowering the buyer.

Find more buying tips for homeowners.

2023 Fall Parade of Homes

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Discover the latest trends in new home construction at the 2023 Fall Quad Cities Parade of Homes.
Free admission. Join us to explore the Parade of Homes hosted by Mel Foster Co agents:

SCHEDULE:
Saturday, September 16 and Sunday, September 17 from 1 PM – 4 PM
Wednesday, September 20 from 5 PM – 7 PM
Saturday, September 23 and Sunday, September 24 from 1 PM – 4 PM

Fall Parade of Homes located at 355 E. Donahue Street in Eldridge, Iowa
355 E. Donahue Street, Eldridge, IA
  • Ranch Villa
  • 2 Bedrooms and 2 Baths
  • Zero Entry from the Attached 2-Car Garage
  • Quartz Countertops
Fall Parade of Home located at 437 E. Donahure St, Eldridge, IA
437 E. Donahue St. Eldridge, IA
  • 3 Bedrooms and 2.5 Baths
  • 9′ Ceilings
  • 2-Story Townhome
  • Quartz Countertops
2023 Fall Parade of Home located at 4520 Lakeside Drive, Bettendorf, IA
4520 Lakeside Drive, Bettendorf, IA
  • 4 Bedrooms and 3.5 Baths
  • Floor to Ceiling Windows
  • 2,000 Square Feet of Living Space
  • Upgraded Appliance Package
2023 Parade of Home located at 3976 Orchard Drive, Bettendorf, IA
3976 Orchard Drive, Bettendorf, IA
  • 4 Bedrooms and 3.5 Baths
  • 9′ Ceilings
  • Eat-In Kitchen with Island Pantry and Breakfast Bar
  • Finished Lower Level
2023 Parade of Home located at 5660 Red Fox Road, Bettendorf, IA
5660 Red Fox Road, Bettendorf, IA
  • 3 Bedrooms and 3 Baths
  • Zero Entry Ranch Style Villa
  • 9′ Ceililngs
  • 4-Season Room or Covered Patios/Decks

To see all the homes in the parade, click here.

Standing Out As A Buyer in Today’s Market

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It’s a seller’s market, and you’re the buyer. Sales offers often go higher than the list price and homes can sell faster than usual. So, what can you do to get ahead of the others doing the home search like you? Try taking these practical steps early to stand out as a buyer early in the buying process.

Get An Agent Now

There’s never been a better time to work with a Mel Foster Co. agent than now. Agents have access to home inventory at their fingertips and can keep you in the loop in real-time. Plus, their local contacts keep the flow of information current, so you’re always aware as things change. Your agent can help you present your best offer.

Get Your Finances In Order

One of the best things you can do before you begin your home search is to get preapproved for a loan. Then have the approval letter ready if you do make an offer. Put your best offer forward from the start and understand that it may mean offering over the asking price.

Get Ready To Act Quickly

Be organized so you can act quickly when it’s time to make an offer. Do your homework. Learn which neighborhoods you want to be in by visiting them day and night. This visit will help you get a feel for the area dynamic to see if it matches your expectations. Be flexible with closing dates when possible. Being open to a fast turnaround for your purchase may be the difference the seller needs to choose you over another buyer.

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How Much House Can I Afford?

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How do you know how much house you can afford and how much cash you may need at closing and soon after moving? Mel Foster has a mortgage calculator to help you determine your monthly costs. This information is helpful when you apply for pre-qualification for your mortgage with a lender.

Mortgage Calculators

The mathematical formula for calculating monthly payments for a given mortgage loan amount is complicated. This is where a mortgage calculator comes in handy. It does the work for you by quickly calculating the monthly payment based on the amount of the loan, mortgage length and interest rate. Use these calculators.

Other Factors To Consider

The mortgage is not the only expense you’ll have when buying your home. Be sure to include these other costs as you prepare your budget:

  • Property taxes
  • Homeowner’s insurance
  • Mortgage insurance (if applicable)
  • Down payment
  • Homeowner’s Association fees (if applicable)
  • Attorney, title, inspections and closing fees
  • Moving expenses   
  • Utility service initial fees

Market Conditions

Interest rates are still at historically low numbers, which has been great for locking in affordable mortgage rates. Recent decisions within the Federal Reserve Bank will affect borrowing power for homeowners, with indications that interest rates are likely to start climbing again in 2022. Ultimately, this means consumers will pay more to borrow. It’s time to act quickly and secure your mortgage before interest rates rise.

Find a Mel Foster Co. agent to help begin your home search.

The Shift From Open Concept

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Are you open to a home that is not open concept? Some buyers have reevaluated and now search for homes that reflect how differently we’re using our interior space, specifically when choosing an open or closed concept layout. Consider a few reasons why some are seeking homes with a more closed concept.

More Privacy

More rooms with distinct separation by walls and doors give you more options to find a spot for privacy. And the reality that we’re spending more time at home now than ever before just reiterates the value of having a choice in finding space to tuck away from others and regroup.

More Volume Control

While the sightlines of an open concept home are appealing to many, the acoustics and noise level can often be troublesome. Moms find little reprieve from the wild shrieks of spirited youngsters in an open-concept space where the kitchen flows to the family living area. A home with a separate kitchen allows for more volume control while preparing family meals.

More Rooms To Decorate

If you’re a fan of interior design but have trouble choosing just one theme, finding a home with multiple rooms means you have that many more chances to vary the décor. Instead of worrying that the open design plan flows from one room to another, you can arrange each room with creative flair.

More Energy Efficient

You have more control over the heating and cooling of your space with a closed-concept home. Managing the house temperature by closing off rooms used less often results in lower heating and cooling costs and makes the closed concept arrangement more energy efficient.

Now’s the time to give an older home a chance. Find more tips for buyers at melfostercoblog.com

Home Buyers Change Their Wish Lists

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The ability to work from home has motivated buyers to reevaluate the function and location of their home. The result is buyers are willing to search for properties outside their current neighborhood and even outside metropolitan areas to find homes offering items new to their wish list.

Working From A Home Office

Buyers are seeking additional space for a dedicated office. Working from home has become a common corporate policy and this trend may continue indefinitely. Workers who temporarily used a makeshift workspace at the dining room table now prefer their own area separate from the busy part of the house. If they don’t have the extra bedroom to convert, they are likely shopping the market for a new home with an office.

Families Want Room To Gather

When it’s time to celebrate an event or just unwind after a long week, many families are choosing to gather safely at home. They also desire a kitchen and recreation room with open concept so guests can congregate in one unified space. A home that used to feel big enough can suddenly feel small when everybody is together.

No Commuting Opens New Location Options

Not having a commute to work allows buyers to consider homes further from their corporate office. This opens up new search areas for buyers, and homes typically become more affordable outside of metropolitan areas.

Expand your search into Mel Foster Co.’s subdivisions to see how your budget can stretch to meet your new space demands. Some of the most popular neighborhoods include:

Bettendorf, IA – Century Heights

Davenport, IA – Georgetown Square

Eldridge, IA – Townsend Farms

Park View, IA – Dexter Acres

Geneseo, IL – Maple Leaf

Find a Mel Foster Co. agent if you’re ready to begin your search.

Buying a Vacation Home

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