3 Types of Insurance

Friday, September 15, 2023

Buying a home is one of the most significant financial investments you’ll make in your lifetime. It’s not just about finding the perfect property; it’s also about safeguarding that investment against unforeseen risks and challenges. This is where various types of insurance come into play.

For many years, we did not buy mortgage insurance; we found it expensive, and we didn’t need it as we had enough of a passive income buffer if an unexpected health issue arose. We have recently begun giving it a second look as some advantages now fit our situation.

Here are three types of insurance we recommend all homeowners look into when purchasing a home: title, property, and mortgage. After clarifying your options, your wisdom will flow because you’ll make an informed choice.

I. Title Insurance: Securing Your Ownership Rights

Imagine buying your dream home, moving in, and receiving notice that someone else claims to own part of your property. This is where title insurance proves its worth. The insurance company protects you against title defects and disputes.

Here are a few things it gives you peace of mind against:

☞ Hidden Liens and Encumbrances: Title insurance covers you in case there are hidden liens, unpaid debts, or encumbrances on your property’s title. Liens are legal claims or rights that other parties may have on your property.

For example, if the property’s previous owner had outstanding debts or loans secured by the property, those debts can become your responsibility as the new owner. Title insurance can protect you from having to pay these unpaid debts.

Another example is a case of easement. This legal right allows someone else (individuals, utilities, or companies) to use a specific portion of your property for a particular purpose. This could include utility easements, which grant utility companies access to install and maintain infrastructure on your land, or a neighbor’s right of way across your property to access their land.

A third situation could be encroachment. This happens when a part of one property, such as a building or fence, extends onto someone else’s property. They can affect the use and boundaries of the properties involved. If you later find out your house is on the border of someone else’s property, the insurance company will try to resolve the situation financially with the neighbour, or even move your house if necessary. If you later learn someone else’s home is built on your property, title insurance will protect your right to your land.

☞ Forgery and Fraud: It safeguards you against fraud, including forged documents or impersonation attempts by fraudulent individuals. An example of this could be someone fraudulently transferring your property to another party without your consent or through deception. If such a fraudulent transfer is discovered, the title insurance policy can protect the rightful owner financially. If a property owner faces a legal challenge or dispute related to the title, the title insurance company will provide legal defense and cover the associated legal costs. This can be crucial in cases where fraudsters attempt to claim ownership of the property through fraudulent means.

☞ Boundary Disputes: If a boundary dispute arises after you’ve purchased the property, your title insurance policy can cover legal expenses and the costs of resolving the dispute. This coverage may include hiring surveyors, attorneys, or other experts to establish the property boundaries and resolve the dispute through negotiation, mediation, or, if necessary, litigation. If a third party, such as a neighbour claims your property’s boundaries, your title insurance policy can provide legal defense coverage.

In some cases, a boundary dispute can lead to financial losses, such as the loss of land or decreased property value. The insurance may offer monetary compensation to mitigate these losses, providing you with financial support if the dispute results in adverse effects on your property.

2. Homeowners Insurance: Protecting Your Home and Belongings

Picture your home being damaged by a natural disaster, a fire, or a burglary. Property insurance steps for covered events to help you recoup. This type of insurance is also known as homeowners insurance and protects you in a few different ways:

☞ Liability Coverage: Property insurance includes liability coverage, which protects you if someone is injured on your property or if you accidentally cause damage to someone else’s property. It can help cover medical expenses, legal fees, and settlement costs if you’re found responsible for the injury or damage.

☞ Coverage for Theft and Vandalism: Property insurance protects your belongings from theft and vandalism, providing compensation for stolen items or damage caused by burglaries or acts of vandalism.

☞ Coverage for Other Physical Damage: It covers damage to your home and its contents caused by covered disasters, such as fire, lightning, windstorms, hail, and more. If your home is damaged or destroyed due to a covered event, the insurance company will provide funds to repair or rebuild it.

☞ Protection from Natural Disasters: Depending on your location and policy, property insurance can offer protection against natural disasters such as earthquakes, floods, hurricanes, or tornadoes. However, coverage for these events may require additional endorsements or separate policies.

☞ Personal Property Protection: In addition to the structure of your home, property insurance also covers your personal belongings, such as furniture, electronics, clothing, and appliances. If these items are damaged, destroyed, or stolen, the insurance will help you replace or repair them.

☞ Additional Living Expenses: If your home becomes uninhabitable due to a covered peril, property insurance typically covers additional living expenses. This means it can help pay for temporary housing, meals, and other costs while your home is being repaired or rebuilt.

☞ Loss of Use: In the event your home is damaged or destroyed and you cannot live there during repairs, property insurance can provide compensation for the loss of use of your home.

☞ Debris Removal: Property insurance often covers removing debris from your property after a covered loss. This can be especially important after a significant fire or natural disaster.

3. Mortgage Insurance: An Emergency Life Preserver

Mortgage insurance can save you in several situations where you face financial difficulties or unexpected challenges trying to pay your monthly mortgage. Here are some scenarios where mortgage insurance can be a lifesaver:

☞ Job Loss: If you lose your job and struggle to make mortgage payments, mortgage insurance can step in to cover your payments temporarily, helping you avoid foreclosure.

☞ Disability or Illness: If you become disabled or suffer a severe illness that prevents you from working, mortgage insurance can provide financial relief by covering your mortgage payments during your recovery period.

☞ Death of a Co-Borrower: In the unfortunate event of the death of a co-borrower on a mortgage loan, mortgage insurance can help the surviving borrower by paying off or covering the mortgage balance.

☞ Divorce or Separation: Financial matters can become complex during divorce or separation. Mortgage insurance can provide stability by covering the mortgage while property issues are resolved.

☞ Temporary Financial Hardship: If you face a temporary financial setback, such as unexpected medical expenses or significant home repairs, and struggle to make mortgage payments, mortgage insurance can provide breathing room.

☞ Reduced Home Value: In situations where the value of your home decreases significantly, making it difficult to sell or refinance, mortgage insurance can offer protection to the lender if you default on the loan.

☞ Sudden Expenses: When faced with unexpected expenses like emergency repairs or legal fees, mortgage insurance can help ensure your mortgage payments are still made on time.

☞ Underwater Mortgage: If you owe more on your mortgage than your home is worth, mortgage insurance can be a safety net, allowing you to sell your home or refinance without a substantial loss. This can be critical if you signed a purchase agreement for a new build and the value of the home drops before moving in.

When you buy a home, it’s crucial to consider available insurance options to protect your investment. While we aren’t saying everyone should buy them, it is always worth looking into so that you are entering home ownership with your eyes wide open. With clarity, our wisdom flows.

Are you looking for further guidance? Reach out to us at together@dekkerteam.com or 613-860-4663. We can look at your particular situation and help you clarify your options. 

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Golden Years, Golden Choices

Friday, September 1, 2023

It’s not easy watching your parents or senior loved ones age. It can be difficult to reconcile a lifetime of seeing  them as youthful then watching them slowly deteriorate. Helping them navigate the selling process of their home can be particularly painful as your emotions may come into play along with their heightened ones. Our feelings can range from nostalgia to uncertainty as we see them face a significant shift in lifestyle and identity. 

It can be challenging when the need to sell comes unexpectedly, such as quickly declining health or the death of a spouse. I experienced how quickly one’s health can deteriorate when my organs began failing after a trip to Kenya. My body was riddled with meningitis and cerebral malaria. With the amount of swelling in my brain, my husband and children didn’t know what I would be like when I came out of the coma. 

As caring family members, friends, or caregivers, we play a pivotal role in helping seniors navigate this intricate process while providing emotional support. As a REALTOR®, I’ve experienced firsthand how to assist seniors in maintaining their sense of control through the house-selling process.

  1. Allow Them Their Vital, Central Role 

This seems like a no-brainer, yet when we think about it, how likely are we to jump in and try to steer them towards what we feel is best? We need to remember to take a step back and allow our loved ones to make the decisions. Their input can provide valuable insight based on their experiences, preferences, and needs. We need to know this to help them get their desired outcome.  

A senior needs to play a central role in the decision-making process of when, where, and how their house is sold. Work together to establish a realistic timeline for the home-selling process. This can help alleviate the feeling of being rushed and allow them to adjust to the idea over time. Ultimately, giving seniors a central role in the decision-making process empowers them to shape their future and navigate this life transition with dignity and agency. After all, they still want to dream and plan their future!

  1. Enlist a Compassionate REATOR® for the Journey

If you bring in a pushy REALTOR® who just wants to get a listing, make some money, and get out of there, it’s going to be a recipe for disaster. While this is never the personality you want to work with, in a case like this, it’s particularly damaging. It’s crucial to work with your senior to vet someone who is compassionate and has experience working with older adults. 

A compassionate REALTOR® will approach the process with sensitivity and patience. They’ll guide you both through the practical aspects of listing, marketing, and negotiating and also take the time to listen to their concerns, preferences, and anxieties. This is key to alleviating stress and fostering a sense of trust between them and their agent.

 At one point, we were working with a senior and her two adult kids when the woman began slurring her speech. Ken and I realized something was wrong with our client. The kids were a bit paralyzed in shock and didn’t know what to do. Ken and I had enough emotional wherewithal to urge them to call an ambulance; after rushing her to the hospital, doctors discovered she had had a minor stroke. We were grateful to have been there to support the family when it happened, and a week later, we were at her 92nd birthday party!

  1. Go Slowly and Patiently

When sitting down over paperwork or other important decisions, go slowly. Ensure comprehension at each stage. While there is no stigma attached to reading glasses, many seniors are embarrassed to use hearing aids or to admit they cannot hear well. They might often keep nodding and agreeing, and we can easily assume they understand or hear us well enough. 

A good practice is to pause and ask questions like, “What is your understanding of the situation?”, “What did you hear me say?”, “What do you think is the best choice?”, “What steps would you like to take?” and “What would you prefer to happen here?” This ensures you have the full picture of what the person really wants to happen. 

Another thing we find helpful is to avoid using electronic signatures. While we love the convenience these provide, in this case, we don’t. We want to make 100% sure they know what they are signing. In person, I’ll verify with questions like, “What will this document do when you sign it?” “What price are you selling the house at?” 

Supporting seniors through the process of selling their homes is a meaningful way to honor their journey and preserve their dignity. By combining patience, empathy, and open communication with great professional support, you can help your senior set the stage for new adventures and treasured memories in the chapters to come.

 

If you’re seeing the writing on the wall for yourself or someone you love, it’s time to have a conversation with your family. Then, invite a professional into the conversation, such as someone from the Dekker Team, who can help you decide what changes can be made moving forward. Reach out, we’d love to support you 613-860-4663, together@dekkerteam.com



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Should I Trust You?: Is Your Real Estate Guide Truly Qualified?

 

Friday, Aug 25, 2023

Imagine yourself at a picturesque marina, ready to embark on a thrilling sailing adventure across the vast ocean. As you meet your appointed sailing guide, you engage in conversation over coffee on the deck of a sailboat. Curious about his sailing experience, you inquire about his past voyages. You are stunned to learn his confession that he has never sailed across such challenging waters before, having only taken short day trips on calmer seas. Despite his limited experience navigating the unpredictable tides and fierce winds, he is now set to lead you on a 40-day journey across the open ocean. 

Would you still entrust him to captain the ship and lead you safely to your destination and back? Likely not. Why? You need someone who has gone before you: who knows what to expect and what to do when things go sideways. 

It’s incredible how many people choose captains like the one described above when handling their largest financial asset: real estate. How many people get a referral from someone they know without finding out if the REALTOR® has purchased their own home? Or, when buying rental properties, take advice from someone who has never successfully rented properties of their own. 

My question for you today is: Who are you getting your advice from? 

At one time, I felt inspired to design a piece of jewelry that had special meaning to Ken and me. We wanted to market it, feeling the message of the pendant would encourage others in times of hardship. I wanted to go to the people I love most, who care about my success and will be on the journey emotionally with me. So I did what was comfortable: I went to a close friend I knew was in my corner. I was devastated by the result. Her response was, “Why bother?” She didn’t think the jewelry seemed nice or would have any impact. 

Ken empathized with me when I shared my disappointment with him. He asked me an interesting question. “Yetta, does this person like jewelry? Does she wear jewelry?” 

I realized that outside of a wedding ring, this person didn’t. Jewelry isn’t something that resonates with her. Suddenly it made sense why she wasn’t excited or becoming emotionally invested for me. It wasn’t in her passion zone or line of experience. 

When investing in real estate, we must ensure that we look to both people who have our back AND have the experience and passion. If you expect your parents to be excited for you when you buy your first investment property – and your parents have tried to invest and been burned in the process, don’t be surprised if they aren’t excited for you. We all come with unique experiences and backgrounds that impact how we view concepts and situations.

Similarly, if you go to your financial planner, they will recommend you invest in what they know and have done themselves. Their schooling taught them about stocks, bonds, and RRSPs. If they have gotten 6% return on investment in stocks and bonds, and stocks and bonds are what they know, they aren’t going to recommend real estate investing. It’s just outside their zone. 

What if I want an 8% rate of return? Or 15%? Or even 50%? Who should I go to when I want to invest in the lucrative option of a rental property? Find someone you can trust who has done it many times and has been successful. 

You need someone who understands what you’re up to and shares similar values and goals. To invest in real estate beyond your residence, you’ll need the help of different experts in several fields. You need a REALTOR® who has invested themselves, hopefully, multiple times. They must be well versed in how it’s different from investing in a primary residence. They need to know each stage of the game, obstacles you might come up against, and how to run the numbers on whether a property can make what you want it to. 

You’ll also want a particular type of lawyer: a real estate lawyer. Someone who specializes in helping people do exactly what they are trying to do. You want to select a building inspector who understands the style of investment property you’re looking at. Why? Maintenance is a different conversation if you are going to be living there vs. if you are renting the property out. So is safety and fire separation if you’re dealing with a multifamily residential. Aesthetics is also a different conversation. If they’ve never invested themselves, they won’t intrinsically know what you need to know to serve you best. 

It is the same thing if you are making a commercial purchase. You’ll want a real estate lawyer who specializes in commercial real estate. They’ll understand the HST implications, just like the real estate insurance broker who can insure you if you plan to get 8 properties vs. 1. 

How do I find these people? 

Find someone else who is successfully doing what you want to do and ask who you need to know. Please only look into highly recommended referrals. Not like, “Yeah, you can call Pete, my broker. He did an okay job.” No, you need a, “You’re nuts if you don’t use my broker,” kind of referral. 

After that, you need to interview the professional with questions like: 

  • What have you personally invested in?
  • What is the variety of investments you’ve had?
  • How many properties have you owned?
  • What happened as a result?
  • How have your investments worked out? 
  • What successes have you had? 
  • What failures have you had to overcome? 
  • What went wrong? How did you handle it? 

Why ask all this? Because experience leads to expertise. 

It’s important to note that we are not looking for a perfect track record here because failure is part of the learning process. We’ve had some unsuccessful experiences, and we share these openly because we know learning comes from hardships and success. If you find someone who has never had any bumps or bruises along the way, they may have missed out on some of the experiences you need to reach your goal. They need to have a level of personal engagement with it. 

If you want a guide to help you on your real estate investment journey, email us at together@dekkerteam.com. You can join our community, and we’ll start the conversation together. If you’re looking for an expert in a particular area, call us. We know many excellent professionals across Canada who we can vet for you, so you have a larger pool of people to interview.

Similarly, if you’d like a copy of our personal interview questions that we ask the professionals we work with, we’d love to share them with you! We’d love to help you start down your path. After all, who you know is more important than what you know!

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Which Wolf Will You Feed? Choosing Gratitude in the Midst of Challenge

Friday, July 14, 2023

There is a story about a First Nations elder who gave his son a lesson in gratitude. He described how two wolves live inside each of us. The good wolf and the bad wolf. The bad wolf will destroy you, cause you to do wrong things, and make you feel bad about yourself and others.

The good wolf is the one that speaks life. It reminds you of the good things in your life, the blessings, and how you can impact others for good.

The little boy exclaimed, “Yes! These two wolves live inside me, and they are always fighting!”

The grandfather said, “Yes, they always fight inside your head and body.”

The little boy said, “Which wolf wins?

The grandfather smiled at him and said, “Whichever one you feed.”

We all have dual inner voices, one that points out all the hardships we go through and that pulls us down. The other lifts us up by focusing on the good around us.

A friend of mine, Julie Caldwell from Country Jewel Retreats & Conferences, found both wolves battling in her heart several years after her divorce. She and her kids knew it was time to find their next home. Unfortunately, this happened during COVID, when homebuyers had no time to make informed decisions about the properties they wanted to buy.

In the beginning, Julie says she and her kids were so excited. After they failed to get the first and second houses they wanted, they knew the right one would come up. The fourth and the fifth were harder. Losing the offer on the sixth was even worse. But, the 7th! Julie figured it was worth losing out on the others to get this house because it was the best.

As almost every property back then had multiple offers, Julie waited in suspense for the call. She lost that house too.

She and the kids had had enough. She felt vulnerable enough being a single mom and felt even more awful bringing them on this roller coaster ride. She says the negative wolf in her head whispered, “Enough. I’m tired. I can’t do this anymore. I’ll stay stuck where I am.”

At first, Julie gave in to the discouragement and chose to stop looking. Then, she turned it into a pause, resolving that it would show itself when the right house was ready for her. So the family took a break from house hunting and focused on enjoying where they were.

Two months later, Julie browsed a real estate site and noticed a house in an area of town that was different from where she had been looking. Intrigued, she set up an appointment. Literally, on the way out the door, Julie got a call with the unfortunate news that an offer had already been put on the house. She decided it was still worth a look.

Julie’s first thought was, “Oh, here we go again.” But, a little voice in her said, “You know what? I’m already out the door. Let’s just go have a look.”

Appointments back then were limited to 15 to 20 minutes. It was not nearly enough time for Julie, and she went with her gut. She knew it was the perfect house for them in that season.

She and the kids got the house : )

If you are battling to keep your head up in a difficult situation, know that there is natural discomfort in taking a leap into the unknown of a challenge. It is an opportunity to pause, recalibrate, and choose to sit in gratitude at that moment.

Looking back, Julie is grateful for the dropped offers because she would never have found the place that she and her kids now see as perfect for them. She also knows that had she not seen the other 7, she would have had more trouble making the decision for the 8th under such a short timeline.

I’d love to ask, what situation, dream, or aspect of your life do you need to simply press pause on rather than a complete stop?

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Buyer’s Remorse Is Real

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