Real Estate Information Archive


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Making An Earnest Money Deposit

by Jon Smith, CRB, CRS, GRI




Earnest money is a good faith deposit of funds that accompanies your offer if you are buying a home, condominium or other real estate. By depositing this money it establishes that you are serious.  Earnest money is not a legal requirement but the seller may not take your offer seriously or their real estate agent or attorney will recommend against them taking the house off the market until you come up with a deposit.

How much money should be deposited?

There is no legal set requirement as to the amount of money that should be deposited. The good faith deposit is dependent upon the agreed sale price of the real estate. Deposits vary and typically can range anywhere from 1 to 3 percent of the sales price. Typically you want your deposit to be large enough that your offer is taken seriously, but you do not want it to be so large that you put significant funds at risk.

Is the deposit refundable?

This will depend upon your real estate contract , so be sure to review this document very carefully. It is advisable that you consult a real estate attorney who can help ensure that your offer is written in a manner that protects your rights to the deposit.  Even if your money is refunded, you may not receive the entire amount. Often, third party fees are paid out of earnest money deposits. For example, if an appraisal has been completed on the property then the appraisal fee is going to have to be paid before money can be released to either of the parties. Check the laws in your state as some states have laws requiring the buyer and the seller to agree on the disbursement of these funds before they are refunded, which can lead to further problems and legal action.

Who holds the money?

The earnest money deposit should be made to a reputable third party that is agreeable to both the buyer and the seller such as a well known real estate brokerage, legal firm, escrow company or title company. As a buyer, be aware that if you allow earnest money to be held and deposited directly by a seller or by a builder or developer for use in construction, you risk that they will not be able to return it to you in the event the transaction does not close for whatever reason.  To reduce the risk that the monies will be improperly used it is best to have real estate agents or attorneys hold the earnest money deposit as  they are licensed by the state and required to deposit the money in a trust or escrow account. To avoid the loss of your deposit, follow these tips.
• Never give an earnest money deposit to the seller.
• Verify that the third party will deposit the funds into a separately maintained trust account.
• Obtain a receipt.
• Do not authorize a release of your earnest money until your transaction closes.
• Ask how the money will be returned if necessary. Do they hold the check until it clears or return it?

Where does the money go before closing?

The purchase contract will indicate where earnest money will go. It should also specify the amount(s) to be paid, when the payments are to be made, where the money will be held and who is holding it. The contract will indicate as to if they money will be credited against the purchase price at closing, and what may happen to it if the transaction does not close.

Moving And Storage What Are Your Options?

by Jon Smith, CRB, CRS, GRI

There are many reasons why people need to store their household items for a period of time, especially during the moving process. You may be in between selling one home and moving into your new home or need a temporary place to remove excess items while showing your home. There are different options to fit your need, read more below to find one that will work best for your situation.

Self Storage Facilities

These consist of mini-storage units that come in a variety of different sizes to accommodate your storage needs; if you are not sure of what size you may need, use this estimator to help determine the best size.
This option works best for items that you are likely to retrieve, but don't have available space at home. Depending on the facility, self storage is usually convenient and accessible and reasonably priced. Find a self storage facility near you.

Container Storage

This type of storage can be used for long-term, portable storage. Many people refer to this type of storage as Pods, they are delivered to your home where you pack them and then can be stored at a storage center, and once you move to your new home, delivered at your doorstep for your convenience.  This can be a time and money saving solution because you only have to pack once, you don’t have to move your items to the storage facility and then again to your final destination.

Moving Companies That Offer Storage Facilities

If you are using a moving company, check and see if they offer storage facilities as well. Many offer this service for an additional fee. This may be a convenient option to have the same company who is handling the moving, pick up, store your items and then delivery them to your final destination.  

 Important factors to consider when making your storage decision:

Location. It is important to consider the location to your residence and the time and expense associated with frequent visits to the location. 
Convenience. You will need to ask about the accessibility of your storage facility on weekends and evenings.  Some self storage facilities are 24 hours, but check first.
Special Needs. If you are storing items such as electronics or artwork, you will need a special climate controlled unit.  While most facilities offer this, the cost may be more and there may be other restrictions, be certain you know all the specifics.
Security. Be certain you understand the security in the storage facility that you choose. How will your household goods be stored within the storage unit? What kind of security does the facility have both during regular business hours and after hours?
Insurance. Ask about what would happen to your stored items in case of fire, flood or other natural disaster. Don’t assume the storage facility will cover your items if they are damaged or stolen. Check your homeowners or renters insurance policies to see if they will cover items kept in storage.

Problems With Hard Water? There Are Solutions!

by Jon Smith, CRB, CRS, GRI

Hard water is more common than most people may think; in fact, according to the U.S. Geologic Survey in the U.S. about 85 percent of the homes have hard water. You may have hard water problems and not necessarily know about it. Some ways to tell you may have hard water is if you are finding it difficult to get soap to form lather, you have to use alot of soap into the water to clean your dishes or if your dishwasher is just not getting the dishes clean. Some people also complain that they can feel like the soap leaves a film on their skin after showering.

What Is Hard Water And What Causes It?  

Water that is described as "hard" is high in dissolved minerals, specifically calcium and magnesium. When water moves through the soil small amounts of minerals are broken up and are held in the solution. The minerals that hold the most are magnesium and calcium and the how hard the water is depends on how much of these minerals is in the water.

Why Is Hard Water A Problem?

While hard water is not considered to be unhealthy for people to drink, people who have it are more prone to rashes and skin problems because it changes the skin's pH and soap remains on the skin, clogging pores.
Appliances that use water, such as dishwashers or washing machines are much less efficient when you are using hard water in the operation of them. This can translate to higher energy bills. If the hard water is heated it brings about a scale of magnesium and calcium which comes in the form of limestone deposits. These deposits can lead to less efficient water using appliances and sometimes can lead to the breakdown of them as well. If you suspect you have hard water, contact a professional in your area who will do the proper testing and recommend your best treatment options.

What Are The Advantages Of Soft Water?

• You will use less soap by using soft water, both in the shower and in the kitchen.
• You'll have less unsightly spots on dishes, and glassware and your knives and forks.
• Your heating bill will also be lowered because heating hard water in the water heater, causes hardness scale which plugs plumbing pipes and vessels and builds up on the inside of water heaters.
• Your plumbing will last longer. Hard water can cause a build up of scale from mineral deposits. Over time, pipes can clog, water flow can diminish, and water pressure can be reduced. This doesn't happen with soft water. Soft water is low in mineral content and therefore doesn't leave deposits in the pipes.
• Your skin and hair will look and feel better after bathing or showering. Scum from hard water clogs skin pores and coats hair.
• Clothes are softer, cleaner, brighter, and last longer
• Your food and beverages will taste better using soft water and ice cubes will sparkle more

Hard Water Solutions

If you suspect you have hard water, call a professional  to test your water and recommend soft water solutions.   Some solutions to correct hard water is either to filter the water by distillation or reverse osmosis to remove the calcium and magnesium, or to the most common solution is to use a water softener.
The idea behind a water softener is simple. The calcium and magnesium ions in the water are replaced with sodium ions. Since sodium does not precipitate out in pipes or react badly with soap, both of the problems of hard water are resolved.    A typical household water softener costs around $1,000 to $1,500 with a monthly operating expense of around $2 to $8 if sodium is used, and $3 to $15 if potassium is used. Look for the WQA Gold Seal to find products that have been successfully tested to industry performance standards. There are also options to rent water softeners if you do not want to purchase one.

Hard water waste can cost hundreds of dollars each year as it impacts laundry operations, your  water heater, efficiency, household cleaning, and the life expectancy of water-using appliances and plumbing. While hard water is not an emergency, the costs do adds up.  Click here to read more about hard water and how it affects you.

Being Prepared For A Power Outage

by Jon Smith, CRB, CRS, GRI

A power outage is inconvenient, whether it lasts a second or an hour. Because you never know when a power outage will strike, you can minimize the problems and safety hazards of a power outage by following these simple suggestions to protect your family and home.

Be Prepared

Don’t wait for a power outage to buy emergency supplies, be prepared and have everything you need on hand. If your power goes out, it’s likely you could find the store shelves raided and empty during a power outage. It is a good idea to purchase emergency home kits and store them in a general area in your home so you won’t be searching for needed supplies in the dark in an emergency. While most power outages are short-lived, but some may last days. Here are some things to consider for a long-term outage.

Stock up on:
•  Matches and disposable lighters.
• Flashlights and extra batteries.  It is recommended you not use candles unless necessary to avoid fire risks.
Battery operated radio and extra batteries
• Canned goods and dry food mixes. Water and juices. Don’t forget the hand-operated can opener
• Special items for infants, the elderly or family members with special needs and prescription medications
• Paper plates, cups and plastic utensils.
First-aid kit
• Fire Extinguisher

What To Do During An Outage

Turn off or disconnect any appliances, equipment (like air conditioners) or electronics you were using when the power went out. When power comes back on, it may come back with momentary "surges" or "spikes" that can damage equipment such as computers and motors in appliances like the air conditioner, refrigerator, washer, or furnace.
• Make sure the oven and stove are off; this will prevent fires if the power comes back on while you’re away. Do not set dishes, towels, or paper on the stove; these may catch on fire if a burner is on when the power comes on.
• Never touch downed power lines or attempt to remove trees from power lines. Contact with power lines may result in serious injury or death.  Report any downed lines to your power company and leave the clean up and repair work to the professionals
•Leave the doors of your refrigerator and freezer closed to keep your food as fresh as possible. If you must eat food that was refrigerated or frozen, check it carefully for signs of spoilage. See the Red Cross brochure called, "Help The Power Is Out" for more information on food safety during an outage.
•Use the phone for emergencies only. Listening to a portable radio can provide the latest information. Do not call 9-1-1 for information -- only call to report a life-threatening emergency.

Specific Information For People With Disabilities

 If you use a battery-operated wheelchair, life-support system, or other power-dependent equipment,  plan ahead and call your power company before an outage. Many utility companies keep a list and map of the locations of power-dependent customers in case of an emergency. Ask them what alternatives are available in your area. Contact the customer service department of your local utility company(ies) to learn if this service is available in your community.
• If you use a motorized wheelchair or scooter, have an extra battery. A car battery also can be used with a wheelchair but will not last as long as a wheelchair's deep-cycle battery. If available, store a lightweight manual wheelchair for backup.
• If a loved one is blind or has a visual disability, store a talking or Braille clock or large-print timepiece with extra batteries.
• If you are Deaf or have a hearing loss, consider getting a small portable battery-operated television set. Emergency broadcasts may give information in American Sign Language (ASL) or open captioning.

Additional Preparedness Tips

Protect sensitive electronic equipment, such as computers, televisions and other devices, with surge suppressors.
• Make sure you know how to safely reset your circuit breaker or change fuses. Keep extra fuses on hand.
• If a well is your source for water, plan ahead to determine how you will get drinking water. Store containers of water for cooking and washing.
• If you have an electric garage door opener, find out where the manual release lever is located and learn how to operate it. Sometimes garage doors can be heavy, so get help to lift it. If you regularly use the garage as the primary means of entering your home upon return from work, be sure to keep a key to your house with you, in case the garage door will not open.

Power outages are one of the most common emergencies that occur. They can be caused by storms, accidents in which power lines are knocked down, circuit overloads, etc. Power failures can last for an extended period of time or for a brief moment, but no matter the length of time, they cause a disruption in everyday life. Take the time to prepare for a power outage and to gain the knowledge needed to respond safely and effectively during the emergency. A few simple preparations can greatly reduce the inconveniences caused by a power outage.

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Contact Information

Photo of Jon Smith, CRB, CRS, SRES, SFR Real Estate
Jon Smith, CRB, CRS, SRES, SFR
Iowa Realty
3521 Beaver Ave.
Des Moines IA 50310
Fax: 515-453-6404



Licensed in the State of Iowa