- Key Takeaways
- âÂ Get coverage for pets of all breeds and all ages
- â Pick your own veterinarian for care
- âÂ Use a fast and easy claims process that can be accessed on your mobile device
- â TrustedPals has excellent user reviews online
A pet can give you a shoulder to cry on or even a friend to exercise with. Research from the National Institutes of Health (NIH) found that spending time with an animal can decrease stress-related hormones in your body, or even lower your blood pressure.
Unfortunately, owning a pet can be downright expensive depending on factors that might not be in your control. For example, dog cataract surgery could cost anywhere from $2,700 to $4,000, and chemotherapy treatments for your pupâs cancer could run up to $5,000. Then there’s the typical cost of spaying or neutering, annual exams, routine vaccines, and more.
If you’re not prepared, your pet could easily cost thousands of dollars every year. TrustedPals Pet Insurance can help pet owners give their pets the best care and protection against unexpected vet bills.
The insurer makes the cost of owning a pet considerably more predictable. For a monthly pet insurance premium, you’ll get coverage for accidents and illnesses you can’t budget ahead for. It also offers a wellness plan that includes regular and routine care.
If you want to protect yourself from pricey vet bills while ensuring your pet gets the care they deserve, then a pet insurance plan can help. Keep reading to learn how TrustedPals Pet Insurance works and whether it might be for you.
About TrustedPals Pet Insurance
TrustedPals Pet Insurance is underwritten by Zurich North America, which has an A+ rating for financial strength from A.M. Best. You can feel confident about the financial security of this insurance provider.
It offers insurance for dogs and cats of any breed, or age. There are products for every budget and TrustedPals lets you customize your plan. For example, you can choose your annual coverage limit and deductible. You can also pick your own vet when seeking out care, instead of having to choose from a pre-approved veterinarian list.
TrustedPals Pet Insurance Products and Services
Although some pet insurance providers offer plans for a wide range of animals, TrustedPals focuses their business on offering helpful pet insurance plans for dogs and cats. With a pet insurance plan from TrustedPals, you can choose the coverage you want, whether you prefer insurance only for accidents or illnesses, or a comprehensive wellness plan.
TrustedPals Dog Insurance
When buying TrustedPas dog insurance, you can get coverage for accidents and illnesses first and foremost. This part of your plan pays for vet visits required to diagnose the problem. It also covers treatments, prescription medicine, and special pet food or supplements prescribed by your vet.
Meanwhile, any behavioral training and therapies prescribed by your vet might also be covered by your dog insurance plan. You also have the option to add on a pet wellness plan that covers up to $750 in routine and preventative care every year. Your wellness plan can kick in to pay for:
- Wellness exams
- Flea and tick medicine
- Heartworm prevention and testing
- Prescribed nutritional supplements
- Spay or neuter
- Dental cleanings
- Prescription pet food
When you apply for dog insurance through TrustedPals, you can tailor coverage to your needs. For example, you can pick an annual coverage limit and a reimbursement level. You can also choose a deductible between $100 and $750.
Additionally, TrustedPals lets you customize your plan with the exact features you want.
*Sample quote is for a five-year-old large, female dog thatâs mixed-breed
TrustedPals Cat Insurance
TrustedPals cat insurance plans offer the same basic coverages for accidents and illness. If your cat has major health conditions, your pet insurance plan will pay for related visits to your veterinarian, including treatments, medication, and special pet food or supplements prescribed by your vet.
Similarly, behavioral training and therapies might also be included in your plan provided your veterinarian prescribes them. A pet wellness plan for cats can also be added, if youâd like. This covers up to $750 in routine care such as wellness exams, dental cleanings, preventative medications, spay or neuter, and more.
When you apply for cat insurance through TrustedPals, you have the option to choose from one of their plans or create your own.
*Sample quote is for a five-year-old female cat, thatâs mixed-breed
Costs Not Covered by TrustedPals Pet Insurance
Although weâve included some basics on what each pet insurance plan covers, TrustedPals has a list of “not covered” expenses, like other insurers. Before you buy pet insurance, you should know about the conditions and situations this provider excludes.
TrustedPals doesnât provide coverage for:
- Pre-existing medical conditions
- Anything not prescribed by your veterinarian
- Hip dysplasia for the first year
- Cruciate ligament injuries in the first year
- Boarding and transport
- Non-veterinary costs, like pet license fees
- Preventative care (unless you add on a $750 wellness plan)
There are a few major areas where TrustedPals Pet Insurance really stands out. These include the following:
- TrustedPals lets you file claims online or through your mobile device. It also promises claim payouts in 10 days, versus the 30-day turnaround you can expect from some pet insurance providers.
- You get an annual deductible with TrustedPals plans, whereas some providers have a deductible for each condition or incident.
- TrustedPals doesnât have a maximum age limit for dogs or cats. Other providers won’t sell plans if you have a senior pet.
Who TrustedPals Pet Insurance is Best For
TrustedPals is a good option for anyone with a dog or cat, but particularly for people with older animals who canât purchase pet insurance elsewhere. This provider is also a good choice for pet owners who want to customize their coverage so they only pay for what they need.
After all, you can go with TrustedPals to get bare bonus coverage for surgeries or major illness, but also buy a robust plan with no annual coverage limit and up to $750 toward wellness and ongoing care.
TrustedPals Pet Insurance vs. Other Pet Insurance Competitors
The following table shows how TrustedPals stacks up to a few of the top competitors in the pet insurance space:
|TrustedPals Pet Insurance||Healthy Paws||Embrace Pet Insurance|
|Age limit for dogs and cats||No||Max age of 14||Max age of 14; pets ages 14 and older can qualify for an accident-only plan|
|Claims processed||Within 10 days||Up to 15 days||Up to 15 days|
|100% reimbursement option||Yes||No; up to 90%||No; up to 90%|
|Wellness plan available||Yes||No||Yes|
What to Know About the Pet Insurance Industry
Before you select a pet insurance plan, there are details you should know about this industry. The following key points are important considerations before settling on a new plan:
- Waiting periods are common. Unlike health insurance for humans that kicks in right away, pet insurance plans might have fine print that states when your plan actually starts. For example, TrustedPals Pet Insurance has a waiting period of 14 days, but other insurers have waiting periods up to 30 days.
- Reimbursement can be low. As you compare pet insurance plans, check for reimbursement rates. Even some of the top plans only have reimbursement levels as low as 50%, which doesnât prevent you from paying exorbitant vet bills.
- Pre-existing conditions canât be covered. By and large, the pet insurance industry doesn’t cover your petâs pre-existing conditions. This is important to know before investing in a plan.
The Bottom Line
We feel confident recommending TrustedPals Pet Insurance for a few reasons. The company earns excellent third-party rankings for financial strength. We also like that you can customize your policy to meet your petâs needs and your budget. The option to add on a comprehensive wellness plan is also helpful.
It’s smart to compare at least three or four pet insurance providers before purchasing a plan to protect your best friend. Our guide to the best pet insurance of 2021 can help you get started.
TrustedPals Pet Insurance FAQs
If your goal is protecting your pet and your finances, you should find out all you can about TrustedPals. The following questions and answers can help.
TrustedPals offers discounts for families who insure multiple pets, military members and veterans, veterinary industry workers, veterinary students, and first responders. You can also get a discount if your pet is a service animal.
Like other pet insurance providers, TrustedPals doesnât cover your petâs pre-existing conditions.
TrustedPals Pet Insurance covers a broad range of preventative care with a wellness plan. It covers up to $750 in wellness each year, and is available as an add-on to your regular insurance.
The post TrustedPals Pet Insurance Review: Great for Senior Pets and Custom Plans appeared first on Good Financial CentsÂ®.
If you own a car or truck, you know it can be expensive. Your loan payment, ongoing maintenance, fuel, taxes, and auto insurance can take a big chunk of your budget. According to a 2019 AAA study, the average cost to own and operate a new vehicle was $9,282 per year.
When you consider just auto insurance, the most recent data from the Insurance Information Institute shows that the average cost is $936 per year nationwide. However, where you live significantly affects your rate. New Jersey drivers pay the most, $1,309, and Iowa drivers pay the least, $628 per year.
Many personal attributes get factored into your base car insurance rates that you can't change. They include where you live, if you’re a homeowner, your age, gender, marital status, and credit rating.
Insurance savings are available, but many policyholders don’t know what discounts exist or that they need to ask for them.
However, when it comes to getting auto insurance discounts, you have more control. Insurance savings are available, but many policyholders don’t know what discounts exist or that they need to ask for them.
In this post, we’ll review 20 auto insurance discounts that can easily save you money. What’s available depends on your insurer and the state where you live.
But even if you only qualify for a few insurance discounts, they can add up. Then you can put your savings toward something more rewarding, such as taking a vacation or boosting your emergency fund.
20 Money-Saving Auto Insurance Discounts
See how many of the following discounts you qualify for.
1. Safe Driver Discount
Your driving history plays a significant role in how much you pay for car insurance. It makes sense that auto insurers love safe drivers and are willing to reward them for being claim-free.
If you have a clean record with no moving violations or at-fault accidents over the past three to five years, most insurers typically give you a nice discount.
Potential savings: 10% to 20%.
2. Educated Driver Discount
But what if you don’t have a squeaky-clean driving record? You may be able to redeem yourself by passing an in person or online defensive driving course. Insurers know that boosting your education and skills can make you a better driver.
Potential savings: 5% to 15%.
3. Affiliation Discount
Did you know that belonging to a particular group can qualify you for a car insurance discount? Depending on your insurer, it’s likely that they have hundreds of different partner organizations that allow members to get a break on the cost of car insurance.
They may include alumni associations, education organizations, certain fraternities or sororities, honor organizations, and recreational groups.
Potential savings: 5% to 10%.
4. Occupation Discount
There are also auto insurance discounts if you work in specific industries or occupations, such as being in the military, a teacher, medical professional, or government employee. Also, members of professional associations, such as unions and state bar associations, often qualify for reduced rates.
Potential savings: 5% to 15%.
5. Good Student Discount
An often-overlooked car insurance discount is for students who make good grades. You typically qualify if you’re in high school, college, or graduate school (up to age 26) and have at least a “B” average.
Insurers consider good students less of a risk when they’re behind the wheel. So, parents shouldn’t miss the opportunity to make it more affordable to insure their young drivers.
Potential savings: 10% to 25%.
6. Distant Student Discount
Another way to cut the cost of insurance for students who live away from home, no matter their grades, is to request a distant student discount. It applies if a student lives at least 100 miles away from home and doesn’t have an insured vehicle with them on campus. They’ll be covered when they come home for breaks, but at a reduced rate.
Potential savings: 5% to 25%.
7. Low Mileage Discount
Maybe you’re driving less for a new job or keeping a car in the garage more often. If your driving patterns change, be sure to let your car insurance company know. Vehicles that are on the road less have fewer claims, and that earns you a substantial insurance discount.
Potential savings: 5% to 15%.
8. Usage-Based Discount
Many insurers offer usage-based insurance or UBI, which adjusts your rate based on how you drive. Data may be collected using a device that you keep in your vehicle or that gets reported from a smartphone app.
UBI programs evaluate different driving behaviors such as the time of day you drive, your average speed, how hard you brake and corner, and your mileage. If you’re considered a safe driver, your discount gets applied at renewal.
Potential savings: 5% to 40%.
9. Loyalty Discount
Every auto insurer wants to retain existing customers and give you every reason not to switch. Being loyal to one company for at least a few years often results in substantial savings.
Potential savings: 10% to 25%.
10. Multi-Car Discount
If you have more than one vehicle in your household, insuring all of them with the same company usually gives you a multi-car discount. Insurers offer incentives to make sure they get as much of your business as possible.
Potential savings: 10% to 25%.
11. Bundling Discount
In addition to insuring more than one vehicle, getting different types of coverage with the same insurer is known as bundling or a multi-line discount. Many insurers cover more than just cars. You could get auto and homeowner, renters, or life insurance with the same company and score savings.
Potential savings: 5% to 15%.
12. Paperless Discount
Some insurers offer a discount if they don’t have to mail paper documents, such as your policy description and bills. Merely electing to be a paperless customer can qualify you for a small discount. You can get your information by email or an online account.
Potential savings: 3% to 5%.
13. Full Payment Discount
Instead of making monthly or semi-annual auto insurance payments, paying your entire annual premium upfront may qualify for savings.
Potential savings: 5% to 10%.
14. Automatic Payment Discount
Also, signing up for automatic premium payments using automatic withdrawals from your bank account can help you save a small amount.
Potential savings: 3% to 5%.
15. Online Quote Discount
Some auto insurers offer a discount if you sign up for a policy after getting an online quote. You could shop directly on a carrier’s website or an aggregator site, such as Bankrate.com.
Potential savings: 5% to 10%.
16. Switching Discount
Just like your existing auto insurer wants to keep you, others want to entice you. A switch or transfer discount is a promotional offer that cuts your rate for a time after you sign up with a new carrier.
Potential savings: 5% to 15%.
17. New Car Discount
If you purchase a new vehicle or one that’s less than three years old, many auto insurers offer a discount. Newer cars typically have modern safety features that reduce the likelihood that you’ll make a claim.
Potential savings: 5% to 10%.
18. Anti-Theft Discount
Car insurance companies want to help you prevent car theft, so most offer discounts for having any device, feature, or system that helps keep criminals away from your car. They could be factory-installed or an after-market product that you install.
Examples of systems that may lower your insurance rate include a GPS-based location system, such as OnStar, or a theft recovery system, such as LoJack. VIN etching, which is a permanent engraving of your vehicle’s identification number on the windshield and windows, may also qualify you for a discount.
Potential savings: 5% to 20%.
19. Safety Features Discount
Cars with modern safety features, such as anti-lock brakes, airbags, and rear-view cameras, are less likely to get in an accident and cost an insurer. So be sure to let them know every on-board safety device in your vehicle.
Potential savings: 5% to 30%.
20. Mature Driver Discount
If you’re at least age 55 and pass an in-person or online defensive driving course, you can qualify for a discount. Insurers know that maintaining good driving skills reduces your risk and makes you less likely to file a claim. Most insurers offer a mature driver discount in many states.
Potential savings: 5% to 30%.
Understanding Auto Insurance Discounts
The savings you get from auto insurance discounts are typically capped. For example, an insurer may only allow a total discount of 40% off your base premium, even if you qualify for multiple discounts.
You don't have to wait until your auto insurance policy is up for renewal to compare quotes.
Also, it’s important to remember that not all discounts are applied to your rate automatically. You may have to ask for discounts that an insurer wouldn’t know you qualify for, such as getting a new job or having a driver in your family who qualifies for a good student discount. And not every insurer may offer all of the discounts we’ve covered.
Auto insurance prices vary from company to company, and they can even change from month to month. You don't have to wait until your auto insurance policy is up for renewal to compare quotes. So, if you haven’t reviewed your car insurance lately or it’s been a while since you’ve shopped policies, you may be leaving money on the table.
Many health insurance shoppers will consider premium costs when purchasing health insurance. The full cost of a health planalso includes your out-of-pocket expenses, like the deductible, copays, and coinsurance.
As important as it is that your health plan is affordableand that the monthly premiums fit into your budget, itâs also important to consider the value health insurance offers. If youâre considering opting out of health insurance next year, evaluate the value of the following health plan offerings before you finalize your decision:
- Discounted rates
- Preventive care coverage
- Additional features
While everyone has a different financial situation with varying constraints, health insurance is a worthwhile investment.
1. Discounted Rates
Health insurance companies negotiate costs directly with hospitals and other medical care providers. These rates are then included with the health plans offered by the company.
Some plans only have negotiated rates for in-network providers. Others have different negotiated rates for in-network care and out-of-network care. All health plans offer coverage for emergency services when a patient is admittedâwhether or not the care was received from an in-network provider.
The amount the hospital or clinic usually charges is higher than the negotiated rate. The differences between the negotiated rate and the standard rate varies depending on how the insurance company has negotiated.
However, when you receive an Explanation of Benefits (EOB) with the breakdown of costs, youâll see:
- What the hospital or clinic usually charges
- What the negotiated cost actually was
- What portion of the bill your health insurance company paid
- The amount left for you to pay
Health insurance plans come with an annual deductible and annual out-of-pocket maximum. The deductible is the amount of money the insured must pay in cost-sharing over the course of the year before the insurance company takes on a greater responsibility for the costs. The out-of-pocket maximum is higher than the deductible. Once it is reached, the insurance company is responsible for the remainder of your covered medical expenses.
Health insurance plans often have separate deductibles for prescriptions and medical care. Health insurance plans that offer out-of-network coverage will have a different deductible and out-of-pocket expenses maximum for out-of-network care and in-network care.
Health insurance companies determine cost sharing in a few different ways depending on how your plan works. With a traditional plan, youâll have copays and coinsurance. Coinsurance means that the insured pays a certain percentage of the discounted medical bill.
Copays are a set amount that the insured pay when they receive health care services. There are usually set amounts for prescriptions, primary care visits, specialist visits, and emergency services. Payment may also be required beyond the copay after the bill is processed by the insurance company. The copay contributes to this payment.
High-Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) work differently. Instead of having copays and coinsurance, you pay for your medical expenses as you receive medical care. You can use the funds in your HSA to pay these costs.
Funds in your HSA roll over year to year and can be invested. The money you put into your HSA is tax-free. The monthly premiums for HDHPs tend to have lower premiums because a greater cost responsibility is on the policyholder. Some people take advantage of these plans while they are healthy and save funds for medical expenses later in life.
The specifics of cost-sharing differ from plan to plan, so carefully reviewing your plan before signing up will help you understand how the cost-sharing works.
3. Preventive Care Coverage
Because of the Affordable Care Act, health insurance plans cover preventive care fully. While the future of the Affordable Care Act is uncertain, coverage for preventive care is an important way that health insurance protects your finances.
Doctors can detect some health problems early on and implement treatment plans to prevent the issue from developing further. Regular visits to the doctor go a long way in avoiding expensive bills later, especially for preventable issues.
Itâs especially important for people with some diagnoses and conditions to visit a specialist regularly as needed because some health issues can be managed successfully and future complications can also be avoided.
4. Additional Features
Health insurance companies also offer the following helpful features with their plans:
- Nurse help lines
- Care management
These additional features are helpful resources for people. Telemedicine allows plan members to work with a doctor over the phone or through video chat in non-emergency situations. Some companies offer this service to plan members for free, like Oscar. Other companies also offer it as an a la carte supplement to health insurance, like GoHealth.
Others may charge a fee when you use the telemedicine service. The fee for the telemedicine service may vary based on your plan and your insurer and can be cheaper and faster than setting an appointment with your doctor or visiting an urgent care.
Nurse help lines are another common offering among health insurance companies, including Cigna. This hotline gives people quick access to a nurse without needing to leave their home. In non-emergency situations, the nurse can answer questions and give advice on scheduling appointments.
While these benefits are nice and do not require you to establish care with a doctor, you can always call your doctorâs office with questions to get similar assistance. If the doctor canât take your call, one of the assistants can take a message and get back to you with a response in a non-emergency situation. Even after hours, thereâs usually a doctor on-call.
Another benefit some health insurers offer is care management. These can be helpful to people who want support with improving their health. Companies like Kaiser Permanente offer this with many of their plans to help members with chronic conditions.
Is the Investment Worth It?
Itâs easy to see how much your health insurance plan saves you on medical care when you review the EOB.
Itâs trickier to determine if the cost of monthly premiums is worth the savings. If you have health insurance, you can keep track of how much you are spending on medical care, prescriptions, and premiums. Evaluate you EOBs over the course of the year to understand what the costs would have been without insurance.
Medical procedures, surgeries, and emergency medical treatment are more expensive than preventive care. Some of these events can be planned for in advance, but many cannot.
Because of the high financial cost of these services, not having health insurance is a risk for your financial stability.
Alice Stevens loves learning languages and traveling. She currently manages content for BestCompany.com, specializing in personal finance, health insurance, Medicare, and life insurance.
The post 4 Ways Health Insurance Can Save you Money appeared first on Credit.com.
Medicare is a federal health insurance program widely used by U.S. citizens and permanent residents age 65 and older. The program also applies to those younger than age 65 who have disabilities, end-stage renal disease (ESRD) or other diseases. But Medicare has multiple parts, and the eligibility requirements vary for each.
Who Is Eligible for Medicare?
U.S. citizens or permanent residents whoâve lived in the U.S. for more than five years qualify for Medicare if theyâre age 65 or older. Those younger than age 65 also qualify for Medicare if they disabilities or life-threatening diseases.
Medicare Eligibility for People Over 65
If youâre age 65 or older, you can get Part A coverage without paying premiums, as long as you or your spouse worked and paid Medicare taxes for at least 10 years, according to the U.S. Department of Health and Human Services. In order to skip the premium payments, though, one of the following must apply to you:
- You are receiving Social Security or Railroad Retirement Board retirement benefits
- You are eligible to receive Social Security or Railroad Retirement Board benefits but have not collected them
- You or your spouse had a Medicare-covered government job
Being eligible for Part A coverage also guarantees your eligibility for Part B Medicare coverage. The only difference is that youâll have to purchase Part B coverage. However, if youâre receiving Social Security or Railroad Retirement Board benefits at least four months prior to turning 65, youâll be automatically enrolled in Part B.
Medicare Eligibility for People Under 65
If youâre under age 65, you can enroll in Medicare if you:
- Have received Social Security Disability Insurance (SSDI) checks for at least 24 months
- Have been diagnosed with end-stage renal disease (ESRD)
- Have amyotrophic lateral sclerosis (ALS)
- Have permanent kidney failure which requires dialysis or a transplant
Youâll automatically receive Part A and Part B coverage if youâve either gotten disability benefits from Social Security for 24 months, or if youâve received certain disability benefits from the Railroad Retirement Board for 24 months, according to medicare.gov.
Medicare Eligibility for Part C and Part D
Medicare Part C is a Medicare health plan thatâs typically offered by private insurance companies. Also known as Medicare Advantage, youâre eligible for Part C if youâre enrolled in Part A and Part B, you donât have ESRD and the option is available in your area. These plans include health maintenance organizations, preferred provider organizations, special needs plans, private fee-for-service plans and Medicare medical savings account plans.
Offered by private insurance companies, Medicare Part D provides prescription drug coverage. Youâll need to be enrolled in Part A or Part B to be eligible. You wonât be eligible, however, if youâre enrolled in Part C coverage.
Eligibility requirements for Medicare vary based on a number of different factors such as age and medical history and condition. This is why itâs crucial to do your research so you can determine which parts of Medicare best align with your retirement savings goals.
Retirement Planning Tips
- Not sure youâre saving enough for retirement? Our retirement calculator can help you determine your estimated Social Security benefits, how much money you need to retire and how much annual income youâll need in retirement.
- A financial advisor can offer advice on any of your Social Security, Medicare or retirement savings needs. SmartAssetâs free financial advisor matching tool connects you with up to three local advisors.
Photo credit: Â©iStock.com/filadendron
The post The Basics of Medicare Eligibility appeared first on SmartAsset Blog.
Buying a house is a big decision, but it can feel especially overwhelming to place an offer on a home less than 24 hours after seeing it for the first time. Plus youâre under pressure to outbid several other buyers â or risk losing the house.
While these circumstances might sound extraordinary, theyâre not. With housing inventory nationwide at an all time-low â down 22% from last year according to the National Association of Realtors â itâs no wonder buyers are competing for the same few houses.
I was in this exact position last fall. Here are seven key takeaways from my experience buying in a sellerâs market.
Get a Pre-Approval Letter
In order to be competitive in a hot sellerâs market, you will need to line up your financing in advance.
Besides all the usual suspects, like saving up for a down payment and improving your credit score, youâll also want to get a pre-approval letter from your bank. It states that a bank would approve you for a mortgage of a certain amount, and acts as a guarantee to the seller that you can actually afford to buy their house.
This is where it helps to know your budget up front.
âItâs important to understand that the strength of financing is a key consideration a seller takes into account when selecting an offer,â said real estate developer Bill Samuel.
No seller wants to risk accepting an offer that might fall through. Aand since pre-approval letters can take some time to get, have one ready before you find your dream house.
Be Friendly With Neighbors
This might sound crazy, but making a good impression on your new neighbors can actually make a difference when it comes time for a seller to review offers.
Since youâll likely be visiting the home at least once before making an offer, be prepared to talk to any neighbors you might run into. In close-knit neighborhoods, or ones where people share resources (like an HOA), sellers might care a bit more about the type of person they sell the house to.
If you happen to meet a neighbor when visiting the home, introduce yourself and make a good impression. You never know how much their opinion of you might factor into any final decisions.
Submit an Offer Quickly
After youâve seen a house, and decided you love it, be prepared to submit an offer quicklyâÂ as in, ASAP.
Work with your real estate agent to determine how many other offers the seller already has (or expects to get) and then be prepared to draft something up that day. In our case, we toured our home for the very first time at 11 a.m. on a Monday â it came on the market the evening before â and made an offer by 4 p.m. that same day.
If that sounds fast, it is. But by the time we submitted our offer, the seller already had three others. This is where it helps to have a great real estate agent on your side.
âHaving a realtor who can get your offer submitted quickly is crucial,â said Erik Wright, owner of New Horizon Home Buyers. âYou want to get your offer in front of the seller first, and make it strong. Purchase price is the obvious factor and in a competitive market, houses often go for over asking price. However, a strong offer has several factors and it depends on whatâs most important to the seller.â
Work with your real estate agent to find out what matters most to the seller â is it money, closing quickly, something else entirely? Then make sure your offer addresses their needs.
Minimize Your Contingencies (Within Reason)
Another way to win over your seller (and prevail in any bidding wars) is by keeping your contingencies to a minimum.
Contingencies are the contractual stipulations buyers and sellers must meet before the deal can close. Unsurprisingly, sellers donât like to have too many of them to deal with. Contingencies can include such things as requesting a seller to make certain repairs, getting a home inspection, or even the fact that youâll need to sell your old house before being able to buy the new one.
âIn a really aggressive sellerâs market, a home buyer who has to sell a current property should do so before placing an offer on another home,â said Jason Gelios of Community Choice Realty. âDonât always assume that the seller will take the highest price. Other conveniences can play a factor in gaining the sellerâs attention, especially things like faster closing times and less restrictions.â
While my partner and I didnât make the highest offer on our house, we did have the fewest contingencies âÂ mainly, we didnât ask too much of our seller in the way of repairs, or have another house to sell in order to afford the new one.
All that said, there are certain contingencies you should never forgo, and a home inspection is one of them. Getting your home inspected is hugely important, since inspectors will often find things even the sellers werenât aware of. No matter how much you love a house, donât be afraid of exercising your right to an inspection.
According to buyer protection laws in most states, sellers are required to report any findings in home inspections to subsequent buyers. In other words, if an inspector finds something wrong with the house, the seller will have to deal with it one way or anotherâÂ either with you, or the next buyer should you choose to drop out of the deal.
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Make a Generous Earnest Money Deposit
When trying to woo your seller in a competitive market, it helps to make a generous earnest money deposit. An earnest money deposit is a good-faith deposit requested by the seller when you enter into a contract to buy the house and typically run anywhere from 1% to 3% of the sale price of the home.
When deciding how much of an earnest money deposit to include in your offer, keep in mind that whatever amount you give comes off the price of the home (and is returned to you if the deal falls through). In other words,Â thereâs no reason to be cheap. If you can, go slightly above the sellerâs requested deposit amount. Even if itâs just a little more than what theyâre asking, that gesture of good faith might just be what gets you the house.
Offer Above Asking Price
Wait. Why would anyone make an offer thatâs above asking price? Because the competition did it first, and in a hot sellerâs market, offering above asking price is often what it takes to even be considered.
Upping your offer may not break the bank as much as youâre fearing. âWith interest rates so low these days, offering more than what the seller is asking may not make a drastic difference in your overall monthly payments,â real estate agent Pavel Khaykin of Pavel Buys Houses said.
Letâs say the listing price on your dream home is $320,000 and youâre able to put down a 6% down payment. That leaves you with a mortgage of roughly $301,000. For a 30-year fixed mortgage at an interest rate of 3%, that translates into $1,269 monthly payments. Now letâs say you decide to bid a little higher on the home and offer $10,000 over asking price. This would only bump up your monthly payment (assuming you qualify for that low interest rate) by $42.
Lace Up Your Running Shoes
In a hot sellerâs market, youâve got to be ready to move fast. Often this is more of a change in mindset than anything else. When my partner and I first started looking at homes, we considered ourselves casual buyers â that is, until our dream home came on the market late one Sunday night. From there, things moved quickly. We saw the home, made an offer, were under contract by morning, and spent the next month and a half going through the process of closing on the house.
If youâre serious about finding your dream home in the next few months, the best thing you can do is know what you want from the outset, and get your ducks in a row to make a compelling offer when you find it. Maybe this means making a list of your must-haves in a house, and working to improve your credit score. It might also mean reaching out to a real estate agent before you need one, and getting that pre-approval letter in place.
Although inventory is low, new houses come on the market all the time.
Larissa Runkle is a contributor to The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.