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November 2007

First time home seller's guide

Kinan Beck of One Source Realty in Austin, TX, has some Real Estate 101 to pass along to first time home sellers.

When it comes time to sell your home, you will likely have a number of questions racing through your head all at once. First, you will be concerned about what you need to do in order to increase your chances of finding someone to buy your home. Second, you will likely feel a bit overwhelmed when selecting your agent. By following a few simple steps, however, you will find that it can actually be quite easy to sell a home for the first time.

Making Your Home Into a House

One of the most important steps you will need to take in order to sell your home is to de-personalize it. When you are shopping to buy a home, you want to find a piece of property you can picture yourself living in. The same holds true for your prospective buyers. Therefore, you don't want them to see the house and you have personalized it. Rather, you want to remove personal items so your potential buyer can see himself living in the home.

In order to de-personalize your house, you should remove knick-knacks and other items of a personal nature. In addition, if you have transformed a bedroom into a music studio, a pet room or something else, you should change it back into a bedroom. Otherwise, potential buyers may have a difficult time seeing the room as something other than what you have turned it into.

Adding Curb Appeal to Your Real Estate

In order to improve your chances of selling your home in a short period of time, you need to take steps to improve the curb appeal. Curb appeal refers to the way the home looks when the person first sees it from the road. In order to improve curb appeal, you might need to invest a bit of cash. But, the investment will be well worth it. Some simple ways to improve curb appeal include:

• add flowers or other landscaping elements to the front of the house,
• apply a fresh coat of exterior paint,
• add shutters, window boxes or other decorative elements to the outside of the house and
• repair any broken windows, hanging address numbers or other noticeable problems.

Each of these improvements are simple and cost less than a few hundred dollars. Yet, taking these steps can increase your profits while also helping you sell the real estate faster.

Picking the Best Real Estate Agent

Your agent is going to play a major role when it comes to selling your home. As such, you want to take care in selecting the agent to work with you. To that end, it is best to interview a few different real estate agents. Don't be suckered into going with the agent who appraises your home at the highest value. Although this may seem as though the agent has your best interest in mind, some will use this tactic in order to win over new clients and will later talk them into lowering their price. Rather, go with the agent who seems to be the most honest and you are the most comfortable with. By taking steps to improve the appearance of your home and by selecting the right real estate agent, it shouldn't take you long at all to sell your house and move into a new place you can now call home

2:30 PM - Nov. 30, 2007 - comments {0} - post comment

Is impulse buying ruining your budget?

Marshall Loeb, former editor of Money Magazine, takes a look at how to stop buying on impulse and starting living within your budget.

Is impulse buying taking a heavy toll on your budget? Here are six ways to get a handle on your spending:

1. Identify your triggers. Many people use shopping as an emotional outlet. But letting your emotions dictate your spending is nearly always a bad idea. To break yourself of the habit, try to determine what prompts you to spend unwisely and take steps to change your behavior.

2. Avoid temptation. If you're inclined to overspend, consider a self-imposed ban on window shopping, casual browsing and unnecessary trips to the mall. Hint: If you know you're going to be in a situation where you're likely to be tempted, leave your credit card at home and only bring as much cash as you absolutely need.

3. Be a cautious consumer. You may think you're immune to advertising, but even the savviest shoppers fall prey to marketing tactics now and again. Next time you find yourself eyeing a "new and improved" product, ask yourself why you feel compelled to buy it. Will that new golf club/razor/skin cream substantially improve your life or just deplete your bank account?

4. Take a time-out. If you stumble on a "must have" item, don't get caught up in the excitement, advises MSN Money columnist Liz Pulliam Weston. Take a deep breath and walk away. Give yourself anywhere from a few days to a few weeks to figure out if this is something that you can afford and really need. After the cool-down period, if you can truthfully answer yes to both questions, go ahead and splurge.

5. Remember long-term goals. Before you buy, ask yourself if you'll get more long-term satisfaction out of owning this item, paying down your debt or putting money toward that dream vacation. You may get a temporary boost from buying that scarf, but that doesn't mean it's the best use of your money.

6. Check your balance. If you find yourself standing in the checkout line, ready to buy something you're not sure you can afford, hold off, suggests Weston. Go to your local bank or log on to your bank account online. Once you've viewed your balance, the purchase may appear far less enticing.

2:21 PM - Nov. 28, 2007 - comments {0} - post comment

Looking to buy or sell - stay on your toes

In today's market, it's not only the agents who need to be on their toes when it comes to staying ahead in the changing market, but buyers and sellers as well. Here, three agents discuss the three most important things every one involved in the real estate transaction needs to know.

Dr. Cliff Baird outlines what he has learned in his experience in the real estate market.

Erick Harpole is a team leader with Keller Williams Realty in Reno/Sparks Nevada. Having been in real estate for six years, Harpole has production in excess of $25 million a year. He has increased his market share and sales by 100% in the past 12 months even though the market has dropped over 50% in the past two years.

Diane Ivas is a member or the RE/MAX Circle of Legends, the Top 20 Teams Northern Illinois, the Chairman's Club, the Hall of Fame, and has received the Life Time Achievement award. She is no stranger to success. With annual sales in excess of 80 homes in the exclusive western suburbs of Chicago, Ivas and her team understand the current market situation.

Mark Des Jardins is a Virginia native and 20-year Florida resident. He holds a Bachelor's degree in Computer Information Systems and with over 20 years of technology business experience he is currently providing first-tier professional real estate service in unique, picturesque Ocala, Florida.

What are the three most important things every seller needs to consider in today's market?

For Harpole, he breaks it down to the basics of business, from the Law of Supply and Demand through educating the agent in market value, and ensuring the seller is really ready to sell.

The Law of Supply and Demand: "When inventory goes up and demand goes down, prices fall. It's a law…no exceptions. Sellers need to understand that the market is not what it was in 2005. Unfortunately, they will not see those two-year-old values when there is currently over 12 months of housing inventory on the market."

Market Value: "…is what a buyers is willing to pay you for your home and what you are consequently willing to sell it for. Buyers are comparison shopping. They are looking for the house that offers the most benefits and features for the best price."

Sellers, who sell, Sell! "Are you really motivated? There are a lot of motivated sellers in our market place; 1) Bank-owned Property (REO), 2) Pre-Foreclosure (short-sales), 3) Builders, 4) Divorces, 5) Bankruptcies, 6) Relocation for jobs, then everybody else. When there are a limited amount of buyers and you don't have to sell then you are better off not listing your house. Increased inventory on our market drives values down."

For Ivas, however, it's a mix between old-fashioned accurate pricing and new-age proactive thinking through staging and home inspections.

Accurate Pricing: "Historically, under any market conditions an overpriced home seldom sells. Successful agents know that they have to be "in line" or better than the competition."

Staging the Home: "Because most markets are filled with inventory, a home needs to look as presentable and immaculate as possible. There are just too many homes available for buyers to have to look past the unkempt, untidy and cluttered conditions. They will move on very quickly."

Pre-home Inspection: "Oftentimes it is a good idea to perform a pre-home inspection to show potential buyers and also as a pre-emptive strike to discover any defects that need to be corrected."

Mark Des Jardins takes a traditional approach taking it back to the basics for agents. He offers his best advice with an accurate price, timing, and good terms.

An Accurate Price: "Definitive pricing provides a true perspective on current market variables. It is most difficult for sellers in the early shifting of a market to be come willing to set a more competitive price. A successful agent is prepared with the "facts". It is so important not to be casual or cavalier but to demonstrate an abundance of market awareness while not being adversarial with the seller."

Timing: "One of the confirming factual tolls successful agents use with power is the average length of time on the market statistic. It provides fair estimate on when the property will sell. It takes the "heat" off the agent. However, it is incumbent that the agent continue to stay in touch regularly."

Terms: "Good terms are clearly significant influences for potential buyers and their selling agents to see and show the property. Terms are marketing tolls not merely facts about a listing."

What are the three most important things every buyer needs to consider in today's market?

According to Harpole, the best homes sell first. Buyers need to set their expectations by a little planning ahead, with the help of their agent.

The best homes sell first: "Regardless of the market the best always sell first. If a home is priced in the correct price range and is in outstanding condition it will sell first and for the best price."

Length of stay: "How long do they plan on staying in their new house? With buyers concerns about the market continuing to decline in value and by understanding their goals and dreams you are able to overcome this objection. Real estate markets go up and they go down, buying a home is an emotional purchase, understand what they want."

Buyers are looking for a deal: "Ask them what does a deal look like to them, price, incentives, concessions. Narrow down what they are looking for and why. Most buyers don't even know what they are looking for."

Ivas knows that in this market, buyers need to understand that it's a great time to buy, underneath much of the national hype. Her other thoughts? Thinking of a home as a home, and location.

Excellent time to buy: "Since prices and interest rates remain low this continues to be a wonderful time to buy. There are no guarantees about the future but the present is opportunistic."

A Home First not only an Investment: "Don't just look at buying a home for investment. They need to love what they have chosen to purchase. This is where their family will enjoy living."

Location: "It is important to study the home's location to accommodate buyer's needs such as schools, driving, shopping and other unique family circumstances. There are plenty of choices."

Mark Des Jardins encourages his buyers that there's no day, but today to buy a home. And while today's real estate industry has a great presence on the Web and innovative technology, he also presses the value of hiring an agent to aid the personal process, when the time is right for them to decide on a home.

Cost Associated with Waiting: "Given that we cannot predict the bottom of the market an overly cautious may miss a golden opportunity. Prices may go up, inflation, taxes, political change and on and on."

One cannot sell a property over the Internet/phone: "Properties sell themselves in person. Almost 100% of our home buyers visit properties to purchase. Dissuade them from being obsessive about making selective decisions through virtual touring. Yes, it is a phenomenal tool but we should never relinquish our responsibility to them to encourage the onsite viewing. This, of course, allows us to more adequately understand their wants and desires."

Be Ready to Decide: "The best opportunities belong to those who can decide "now". Get your buyers to have all their 'ducks in a row' …. current house on the market competitively priced, financing in order and able and willing to buy 'today' not tomorrow or three months from now."

2:10 PM - Nov. 26, 2007 - comments {0} - post comment

Sub-primes will be back

The next generation of subprime mortgages, however, will look much different than the loans issued during the height of the housing boom in the first half of the decade that are now causing so much trouble, mortgage professionals say.

"So long as we have a policy position in this country of maintaining or further increasing homeownership rates there is going to be subprime lending," said Mark Fleming, chief economist with First American CoreLogic, a provider of mortgage-risk management and fraud-protection technology.

"We have been very successful in increasing homeownership rates. One of the ways we've done that is by creating liquidity and offering credit to people who we traditionally wouldn't have 20 years ago - the subprime borrower."

Fleming was one of 4,300 mortgage professionals who recently traveled from around the country to Boston for the industry's annual convention, where participants did a lot of reflecting on the lead-up to the credit crunch this summer and the housing slump pervading many of the nation's real-estate markets.

Many are looking to the Federal Housing Administration to step into the subprime void. Several proposals in Congress would expand FHA lending authority, allowing it to come to the rescue of subprime borrowers struggling with their current mortgages.

The FHA, which provides government-backed mortgage insurance on low-down-payment loans, is in a good position to address the subprime market, Fleming said, even though the growth in private-investor-backed subprime lending "directly cannibalized the FHA business. FHA went down and subprime went up."

That said, subprime mortgages backed by nongovernment investors will also return - albeit with greatly different lending standards than in recent years, some in the industry say. Translation: It won't be the "Old Wild West" again, where mortgage money came easily for all types of borrowers, said Thomas P. Cronin, vice chairman of Clayton Fixed Income Services, a credit-risk management firm.

"But it (subprime lending) will come back in a mature and rational fashion, as markets tend to do," Cronin said.

Rebound still a ways off

Certainly, that return isn't happening just yet. According to data from Clayton, nonconforming securitizations were down 82% between December 2006 and August 2007. Nonconforming loans are those that can't be purchased by government-sponsored mortgage agencies Fannie Mae or Freddie Mac, which are limited to buying loans of $417,000 or less.

Jumbo loans, those above the limit, and most subprime loans rely on the private-securities market for liquidity.

"[Subprime] volumes are way off from where they were even a year ago," said Steve Nadon, president and chief operating office of Option One Mortgage Corp., during a MBA panel discussion. But Nadon thinks that the subprime market will indeed return. "Will we serve as many borrowers as before? Maybe not," he said.

Hard-working people with limited income or blemished credit histories deserve and need access to credit, but the terms should be fair, said David Beck, policy director for Self-Help, a community-development lender that makes fixed-rate loans to credit-blemished borrowers. Self-Help's affiliate, the Center for Responsible Lending, is a vocal policy organization with a mission to protect homeownership and eliminate abusive financial practices.

"It used to be the problem was access to credit. Now it's the terms of credit," Beck said.
"There's a line between providing fair access to credit and taking advantage of people."

To start, Beck said prepayment penalties should be prohibited on subprime loans. He also thinks that there should be more of an effort by conventional lenders to figure out which of these subprime borrowers eventually could be moved into prime products.

Subprime lending shouldn't dry up completely, it's the "abusive products" that should dry up, Beck said. Before putting a borrower into a loan with an interest rate maybe one percentage point above the prevailing conforming rate, Self-Help spends a fair amount of time with clients to make sure they can make the monthly payments, he said.

While FHA reform might help some of these borrowers, it's hard to say how much, he said.

Regaining investor confidence

For subprime products to come back to the market with any significance, it's necessary to first build up the confidence of those who invest in them, Fleming said.

Some investors have been beginning to return in the past couple of weeks, Fleming said. He expects that the prime jumbo loan market could be the first to make a return to some kind of normalcy, but there is a long way to go before the nonconforming market could be considered stable.

How will the confidence be fully regained? For one: "We have to do a better job of making sure a high percentage of the loans aren't headed for default to begin with," Cronin said. As such, subprime mortgage products need to be redefined, he said. As people got caught up in the euphoria of home-price appreciation, "we got away from balanced credit decisions," said Michael McQuiggan, CEO of Tri-Emerald Financial Group, a mortgage lender and processor, during the MBA panel discussion.

"People that probably shouldn't have had those homes in the first place had gotten away with it for years because of home-price appreciation," Cronin said. Suddenly, when they couldn't refinance those loans, problems started surfacing and foreclosures became imminent.

Now, there has been a shift back to basics across the entire mortgage lending spectrum, using more reasonable assessments of what buyers can afford, Fleming said. People now need better credit scores and a larger down payment to get a mortgage, in addition to documenting their incomes and proving where they work, he pointed out.

For those in the mortgage industry, there should be a return in focus to the writing of quality loans - not just doing a large quantity of them, Nadon said. And perhaps part of the lender's mission should also be helping subprime borrowers graduate into prime loans, he added.

Beyond that, there have been calls for more transparency in the market, and suggestions that the risks of investing in mortgages should be completely understood at the outset. "We need to sort out in the industry how we assess risk and provide signals as to how risky these things are," Fleming said.

Plus, investors and lenders also need to be more responsible in how they approach leverage, Cronin said.

It was leverage, after all, that exacerbated investor losses, Doug Duncan, chief economist of the Mortgage Bankers Association, said during a briefing with reporters earlier this week.

"Subprime was clearly the trigger, but it was the old standard that leverage works well when asset values are going up to increase return on equity; but when asset values are going down, it works adversely to exhaust equity," he said.

2:01 PM - Nov. 24, 2007 - comments {0} - post comment

Here's what to do to spruce up the house for sale

Home Is Where You Hang Your Hat...Not to Mention a Few Light Fixtures, a Screen Door, and Maybe a New Deck

When the housing market's hot, it seems like just about any remodeling project is a good investment and adds value to your home. But when the market's tight, you want to be more selective about which projects you undertake...and what you expect to gain in return.

If you've been thinking about boosting your home's value or just making your living space more comfortable, the ideas below can help your prioritize your list. So before you start knocking out walls and renovating your roofline, consider these ways to make a difference...cost-effectively!

First Things First. Buyers often decide whether to look at your house before they even get out of the car. Before you spend a lot of time and money remodeling the inside, you may want to look at the outside. Washing windows, repainting trim, planting flowers, and fixing screen doors can make a big difference. For even more impact, you may want to consider replacing your siding or even adding a patio or deck. The added value for these bigger projects won't yield as high of a return on investment, but may help your house stand out. So, weigh your options and ask your Realtor® for advice before starting a big project.

Come On In...Make Yourself at Home. Making a cozy first impression is critical. To make sure your entryway invites people to come in--not turn away--try adding a fresh coat of paint to your foyer or a wicker chair and table outside the door. For even more impact, replace those old light fixtures and update the floor in your entryway.

Sparkle Up That Old Bathroom. Remodeling an old bathroom can make a big impact. For very little money, you can add a new faucet to your sink, a new medicine cabinet on the wall, and even new paint or wallpaper. For a little more, you can update the bathtub, add a double sink, or re-tile the floor.

Even Better: Add a Second Bathroom. Perhaps no improvement makes a bigger impact on your family's comfort and your house's appeal than adding a second bathroom. The number of bathrooms is always a big sticking point for potential buyers, especially families with two or three children. Although adding a bathroom costs more than simply fixing up your old one, it also increases the value of your house more. Plus, having that second bathroom may help you sell your house faster than if it only has one bathroom...an important point to consider in today's market.

Make it Hot in the Kitchen. Renovating an outdated kitchen is practically a sure thing...as long as you don't splurge on extravagant items like hand-painted Italian tile or built-in espresso machines. Instead, focus on the basics: installing new flooring, adding a backsplash and a new coat of paint, re-facing existing cabinets, installing new countertops, and possibly installing new appliances. These go a long way to making a new buyer feel at home.

Remember, start small, work your way up, and always plan ahead. You don't want to get halfway into a renovation only to find that you have to update your entire electrical system or that you forgot to apply for a permit. So, check your local zoning codes before starting any remodeling project. But with a little planning and prioritizing, you can make your house more comfortable and valuable with very little time...and money.

7:30 PM - Nov. 22, 2007 - comments {0} - post comment

Live the dream - find that place in the country

Curtis Seltzer, land consultant, gives us some ideas on how to finally achieve the dream.

You catch yourself staring at the napkins on your kitchen table in Suburb, USA early on a Saturday morning. The week's stress is over; another begins on Monday.

You say to yourself, "I need a piece of the country."

How do you start? Here are some tips to get you started:

- Pick a target county. Decide what you want to do and where you want to be-mountains, beach, small town, farm, woods. Then drive in that direction. Purposeful wandering around orients you. It's quality time.
- Choose a county that's no more than a four-hour drive from your principal residence. Three's better than four, and two's best. Unfortunately, prices are more expensive closer in. Buyers get more for their money at $2,500 per acre four hours away than $10,000 per acre within a two-hour drive. Convenience costs.
- Find a local lawyer. This is your first step. You want a person who has been practicing for a while in that county and does real-estate work. Your lawyer's knowledge and advice at the outset will focus your search and save you money.
Start your lawyer's billable clock with your first question. These are extremely productive dollars. You are buying both information and friendship.
- Ask about the different parts of the county, prices, building and zoning regulations and pending projects that might affect you.
- Ask for recommendations-lenders, real-estate agents, surveyors, appraisers, excavators, contractors, consulting foresters and anyone else you might need.
- Drive around the areas your lawyer suggests. Do this before you contact a real-estate agent with listings.
- Subscribe to the county newspaper. It will carry ads from local brokers and For Sale By Owners (FSBOs). Get a feel for local politics and issues of current concern.
- Check online listings. See what's being offered locally at sites like these: www.landwatch.com; www.realtor.com; www.landandfarm.com; www.elandusa.com; www.landsofamerica.com; www.houses4sale-online.com; www.rliland.net; and www.unitedcountry.com. Buyers can search by state (and often by zip code or county) and property type.
- Take a Land-Wanted ad in the local paper. State what you prefer in terms of acreage, improvements and location. Don't include your price range. Have replies sent to "Land Buyer" at a local post-office box. Pay your lawyer to forward them to you with comments.
- Put the word out. As you interview individuals your lawyer has recommended, tell them what you're seeking. Property may be available through personal contacts.
- Visit listed property with a real-estate agent.

- A buyer is most protected in this process by working with an exclusive buyer agent (EBA at www.naeba.org), or, if none are available, an agent who agrees to represent you, the buyer, in your search and purchase. An EBA never works for sellers. Agents who are members of the Realtors Land Institute (www.rliland.com) have training and experience in rural land sales. Look for the designation, Accredited Land Consultant (ALC). Good agents know how to help a buyer without compromising their obligation to the seller who is paying their commission.
- Auctions. Good deals are sometimes available when property is auctioned without reserve. An absolute auction means property is sold for the highest bid, no matter how low. Buyers must thoroughly research such properties before bidding. Contingencies are not accepted on auction sales; buyers are buying property "as is."
- Patience, persistence and research. You don't need to swing at the first pitch…unless it's exactly what you want and priced right.

7:21 PM - Nov. 20, 2007 - comments {0} - post comment

You CAN sell your house in the fall

"It's impossible to time any market," said Piero Orsi, president of the Realtor® Association of NorthWest Chicagoland. "Realtors have worked with buyers and sellers in all types of markets and know what changes or improvements can generate the quickest sale at the best price."

A common mistake for sellers as the market slows is to set an unrealistic price for their home. A house that is priced appropriately for the market will be taken more seriously and will sell more quickly than one that's overpriced.

One of the easiest ways to properly price your home is to request a comparative market analysis (CMA), or a report telling you how much your house is worth comparable to other homes sold in the area in the past year. A local Realtor not only has experience with these types of reports, but access to the sales records in your area and can complete this analysis upon request. Once you have a proper price for your home, you can spend some time preparing it for sale.

The changing colors of the fall season can make for a beautiful landscape for a listing. Since most buyers tend to be more inclined to request a showing if a home's exterior is visually appealing, focus some of your time on improvements to your curb appeal and add interior touches. Even small adjustments can make or break a sale.

Here are some quick tips:

- Keep the lawn tidy. Rake up excess leaves that may distract buyers.
- Add some seasonal accents to your home. Hang a fall wreath on the door or place pumpkins on your front porch.
- Consider baking a pie before your open house. Or burn a candle to fill the home with the scent of cinnamon or apples.
- Open blinds and turn on the lights to brighten the home.
- Emphasize your fireplace if you have one. Light a fire if the weather is cool to create a sense of warmth.
- Trim any bushes or trees that might obstruct the view of your home.
- Move pets to another location before showings.

"The value of your home does not depend on the season," said Piero Orsi. "Set a competitive price, familiarize yourself with the current market and be patient. Your sale will follow."

7:18 PM - Nov. 18, 2007 - comments {0} - post comment

Energy efficiency can lead to tax credits

Marshall Loeb, former editor of Money Magazine, reminds all of us about tax credits for the energy efficient.

If you've been considering making your home more energy efficient now is the time to act. Not only will "greening" your home help you save on heating bills this winter and reduce your environmental imprint but it can also cut your tax bill.

In an effort to combat growing energy problems, Congress passed the Energy Policy Act in August 2005. The law offers a tax credit to consumers making specific energy-efficient upgrades to their homes. These upgrades include everything from installing insulation to weatherproofing your doors and windows and investing in approved energy-efficient appliances.

The catch? The tax credits are set to expire in December, so those interested in taking advantage of them will need to act fast.

The Alliance to Save Energy offers a list of home improvements that will help you save on taxes:

- Furnace and boiler: credit up to $150
Homeowners are entitled to a rebate of up to $150 of the purchase price, including the cost of installation. To qualify, the furnace must meet exacting efficiency requirements.
- Exterior windows, skylights and storm windows: credit up to $200
Homeowners are entitled to 10% of total cost, not to exceed $200. All windows must meet tithe standards of the 2001 or 2004 International Energy Conservation Code and must be expected to last for at least five years.
- Central air conditioner, heat pump or water heater: credit up to $300
Homeowners are entitled to up to $300 of purchase price. This includes the cost of installation. All products must meet stringent energy-efficiency standards.
- Insulation, exterior doors: credit up to $500
Homeowners are entitled to 10% of the cost of the product up to $500, not including installation. Qualified improvements include storm doors, seals and weather-stripping designed to limit air infiltration. Insulation and doors are required to meet the 2001 or 2004 International Energy Conservation Code standards for your region and must be expected to last for at least five years.
- Pigmented roofs: credit up to $500
Homeowners are entitled to 10% of the cost of the product up to $500, not including installation. Pigmented roofs must be expected to last at least five years and must meet Energy Star requirements.

To ensure that you receive all the money you have coming to you after you've completed the improvements, Ronnie Kweller of the Alliance to Save Energy advises printing out IRS form 5695 and bringing it with you when you visit your tax preparer.

Remember: In order to receive the credit, energy-efficient home upgrades must be done at your principal residence and must be in place by Dec. 31.

7:09 PM - Nov. 16, 2007 - comments {0} - post comment

Saving energy

"Congress must adopt and send to the president the CAFE increases in the Senate energy bill," said Alliance President Kateri Callahan. "As consumers continue to be burdened by increasing gasoline prices, and with cost-effective technology currently available that can dramatically increase vehicle fuel economy, there simply is no excuse for Congress to postpone raising fuel economy standards.

"The benefits will go beyond consumers' pocketbooks," Callahan continued. "Energy efficiency in the transportation sector is a key element in helping to curb the polluting emissions that contribute to climate change and in lowering U.S. dependence on imported oil."

Callahan noted also that consumers have the power to lower their monthly gasoline costs through easy no-cost and low-cost steps and by choosing hybrid or very fuel-efficient vehicles when purchases are made. To help consumers in the purchase of hybrid or efficient, clean diesel vehicles, the federal government currently offers tax incentives.

The Alliance challenges consumers to take measures that will not only keep dollars in their pockets, but also will help to curb greenhouse gas emissions and enhance our national energy security:

1. Keep cars in good working order with regular tune-ups and oil changes; keep tires properly inflated; stick to the speed limit and avoid aggressive driving; and think about fuel economy when purchasing a new vehicle.

2. Keep your tires properly inflated to improve gas mileage by around 3.3% and also improve safety and tire life. Under-inflated tires can lower gas mileage by 0.4% for every 1 psi (pounds per square inch) drop in pressure of all four tires.

3. Use the manufacturer's recommended grade of motor oil to improve gas mileage by 1-2%. Also, look for motor oil that says "Energy Conserving" on the API performance symbol to be sure it contains friction-reducing additives.

4. Idle minds and idling vehicles - be mindful when behind the wheel. Avoid idling, which gets 0 mpg. Cars with larger engines typically waste even more gas while idling than cars with smaller engines.

5. Obey the speed limit. It's safer and less expensive. Gas mileage usually decreases rapidly above 60 mph. As a rule of thumb, each 5 mph over 60 mph is like paying an additional 20 cents per gallon for gas.

6. Curtail "road rage"/aggressive driving. Speeding, rapid acceleration, and braking can lower gas mileage by 33% at highway speeds and 5% around town. Sensible driving is safer, too - so you may save more than gas money.

7. Are you carrying around too much excess "baggage?" Pack lightly when traveling, and avoid carrying items on your vehicle's roof. An extra 100 pounds in the trunk cuts a typical car's fuel economy by up to 2%.

8. Use cruise control to help cut fuel consumption by maintaining a steady speed during highway driving.

9. Combine errands into one trip to drive fewer miles, use less fuel, and reduce wear and tear on your vehicle. Several short trips taken from a cold start can use twice as much fuel as a longer, multipurpose trip when the engine is warmed-up and efficient.

10. Investigate other options for getting to work and other places - carpooling, ridesharing, public transportation, biking, walking.

11. Telecommute or stagger work hours if your employer permits to avoid sitting in traffic and wasting gas, especially during peak rush hours.

12. If you own more than one vehicle, drive the one that gets better gas mileage whenever possible. If you drive 15,000 miles a year, driving a car that gets 20 mpg rather than 30 mpg will cost you $1000 or more this year.

13. Buying, leasing, or renting a vehicle? Select a model that gets better fuel economy. Check out www.fueleconomy.gov, for information on fuel-efficient vehicles.

14. Take advantage of 2007 federal income tax credits that reduce what you owe to Uncle Sam or increase your tax refund by $250 to $3,400 for purchases of hybrid-electric or diesel vehicles. Amounts are based on the vehicle's efficiency and fuel savings. Details in English and Spanish on the Alliance's Web site -www.ase.org/taxcredits.

7:06 PM - Nov. 14, 2007 - comments {0} - post comment

Financial planning can help you sleep at night

"THERE WAS A TIME WHEN A FOOL AND HIS MONEY WERE SOON PARTED...BUT NOW IT HAPPENS TO EVERYBODY." Adlai E. Stevenson

The latest Retail Sales numbers showed the consumer is still out there spending...but many of our expenditures have gone up right under our noses, without us getting any extra enjoyment out of them. Rising gas prices, increased interest rates for borrowed money, higher minimum monthly credit card payments...expenses are getting higher every day, and it may be crimping our normal monthly spending style. And not knowing where your money is going each month often gives you a general sense of unease when your head hits the pillow at night...and may eventually cause you a major financial hardship.

There are many phenomenal budget programs available for your computer, such as "Quicken" or "Money", but starting with even a little simple planning can put your mind at ease and allow you to spend, knowing that you have control of your monthly income and expenses. Don't worry if the word "budget" gets you feeling uneasy and makes your palms sweat - hey, relax. Just think of a budget as you would a healthy diet. You don't have to starve, but you may just have to cut back on a few tasty expenses to accomplish your goals. And who knows...you may actually be better off than you thought, and can splurge a little. Let's take a look.

A good budget is written down and includes as much information as possible. Start by determining your current monthly income. Use the net income (amount received after taxes and any insurance benefits are deducted) and anything additional such as part time work, interest, rental, or bonus income. Next, determine your monthly expenses. Obtain and keep a receipt for every item purchased, especially if you frequently use cash for purchases. Receipts should include everything from groceries to Starbucks coffee...even minor purchases can add up quickly. Although you usually need to have some pocket cash on hand, many people choose to use debit or credit cards more often than cash, purely to have a better record of money spent. At the end of the month grab the receipts, your checkbook, and any credit card statements and start categorizing your expenses.

Expenses should be classified into the following categories:

· Household - this would include rent or mortgage, utilities (gas, electric, water, etc.), cable television, Internet, phone, and any additional items such as a housecleaning service or pool service. This category could also include the many things you frequently buy for your home such as paper towels, cleaning products, plastic baggies, lawn and garden supplies and the like.

· Food - separate food expenses by groceries and dining. Dining out would include lunch and dinner expenses for every member of the family.

· Transportation - this would include all expenses related to an auto (e.g., auto payment, insurance, fuel, and maintenance). Additionally, include public transportation, tolls, and parking expenses.

· Healthcare - include monthly health care fees such as medical, dental, prescriptions, and insurance co-pays.

· Looking good - all of the items that make you, you. Clothing, shoes, dry cleaning, toiletries, haircuts, manicures, etc.?

· Entertainment - include all of the "just for fun" items. Movies, concerts, vacations, subscriptions, sporting event tickets, and hobbies.

· Miscellaneous - include all additional monthly expenses such as banking fees, credit cards, savings, education, gifts, donations...and don't forget pet expenses.

Need a simple, free, easy to use monthly budget sheet that can be used by you or your children? Just hit this link: Sample Budget

It is important to note, some expenses will vary on a monthly basis and an average will need to be calculated. For example, utilities can change each and every month. To come up with the average, simply add the actual amount paid for twelve months and divide the total by twelve to create a monthly average - and adjust as needed over time. Additionally, any expenses such as insurance premiums that are paid annually should be divided by twelve to create a monthly average as well.

Once all items have been categorized and listed, simply total the income and subtract all of the expenses. The remaining number will clearly determine if you are coming up short, breaking even, or have money left over. If you have money left over, meet with your financial planner and discuss investment strategies that will maximize those extra dollars.

If you come up short or barely break even, it is important to determine areas that you can trim expenses. Look at trimming dining out, entertainment, or looking good expenses. Although it may sting a little in the short run, you'll know that you are on the path to a great financial future.

3:13 PM - Nov. 12, 2007 - comments {0} - post comment

Buy consumer electronics on line

Marshall Loeb, former editor of Money Magazine, has these tips for buying consumer electroncs this holiday season.

If consumer electronics are on your gift-giving list this holiday season, you may want to skip a trip to the mall and go online instead. According to a poll by Consumer Reports, many online retailers offer a wider selection and better prices on products like TV sets, digital cameras and laptop computers than their brick-and-mortar counterparts.

Here are eight steps for finding the best deals online without compromising your security:

1. Take advantage of so-called shopping bots. These are online databases that collect up-to-the-minute pricing information on a dizzying array of products and offer a quick and easy way to compare prices on a number of brands. Consumer Reports recommends starting your search at the following Web sites: Bizrate.com, Buy.com, DealTime, Froogle, MySimon, Shopping.com and Yahoo!.
2. Don't get hung up on a particular brand. Prices on consumer electronics vary dramatically depending on brand, particularly when it comes to televisions. So if you can't find the product you want at the right price, try settling for a lower-tier brand. Many lesser-known brands offer comparable quality at lower prices, says Consumer Reports.
3. Make sure to add on shipping charges. Don't forget to factor them in when comparing prices or you may end up saving far less than you think.
4. Confirm the seller's physical address. More and more identity thieves are setting up fraudulent virtual storefronts to dupe customers into handing over their financial information. To ensure that you can track down a retailer in the event of a problem, the Federal Trade Commission advises confirming the company's physical address and phone number. Warning: If you get an e-mail or pop-up requesting your personal data, don't input any information! This is a sure sign a vendor isn't on the up and up, warns the FTC.
5. Read the company's privacy policy. Make sure you know where your information is going. Before ordering anything from an online retailer, read the company's privacy policy. It should outline exactly how the data you provide is used and with whom it may be shared, says the FTC Web site. If the terms aren't clearly spelled out, consider ordering from another vendor.
6. Make purchases with a credit card. Credit cards are covered by the Fair Credit Billing Act, which gives you the right to dispute charges and even withhold payment in some instances. And if someone unscrupulous gets hold of your credit-card number and starts racking up charges, you're typically liable for only $50.
7. Learn the return policy. Before you click the submit button on your order, make sure you understand the retailer's return policy. Who is responsible for paying the shipping charges if you want to return the item? Are there any restocking fees?
8. Keep paper records of the transaction. The FTC recommends filing away a hard copy of all ordering information, including a product description, a printed transaction record and copies of any e-mails you receive related to the purchase.

3:05 PM - Nov. 10, 2007 - comments {0} - post comment

Market should improve in 2008

Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales. "Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages," he said.

Yun said it's important to place the current housing market in perspective, and that 2007 will be the fifth highest year on record for existing-home sales. "Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year - a lot of people are, in fact, buying homes," he said. "One out of 16 American households is buying a home this year. The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains."

He emphasized all real estate is local with naturally large variations within a given area.

"Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well next year," Yun said. "Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments."

Existing-home sales are expected to total 5.78 million in 2007 and then rise to 6.12 million next year, in contrast with 6.48 million in 2006. New-home sales are forecast at 804,000 this year and 752,000 in 2008, down from 1.05 million in 2006; a recovery for new homes will be delayed until next spring.

"A cutback in housing construction is a positive sign for the market because it will help lower inventory and firm up home prices," Yun said. Housing starts, including multifamily units, are likely to total 1.37 million in 2007 and 1.24 million next year, down from 1.80 million in 2006.

NAR President Pat V. Combs, from Grand Rapids, Michigan, and vice president of Coldwell Banker-AJS-Schmidt, said, "Housing is still a good long-term investment, and we'll be seeing a broad, modest improvement in home prices in 2008. With widely varying conditions, the best advice for consumers is to consult a Realtor(R) in their area to learn about local market conditions because supply and demand can change from one neighborhood to the next."

Existing-home prices will probably slip 1.3% to a median of $219,000 in 2007 before rising 1.3% next year to $221,800. The median new-home price should drop 2.1% to $241,400 this year, and then increase 1.0% in 2008 to $243,900.

The 30-year fixed-rate mortgage is expected to average 6.4% for the next two quarters and then edge up to the 6.6% range in the second half 2008. Additional cuts expected in the Fed funds rate will help to keep mortgage interest rates historically favorable.

Growth in the U.S. gross domestic product (GDP) is estimated at 2.0% this year, below the 2.9% growth rate in 2006; GDP is likely to grow 2.7% next year.

The unemployment rate is forecast to average 4.6% this year, unchanged from 2006. Inflation, as measured by the Consumer Price Index, is expected to be 2.8% in 2007, compared with 3.2% last year. Inflation-adjusted disposable personal income will probably increase 3.6% in 2007, up from 3.1% last year.

3:02 PM - Nov. 8, 2007 - comments {4} - post comment

Which mortgage rate is actually better for you?

Mortgage Market Guide, gives us the scoop on how to figure out which mortgage is ACTUALLY cheaper. It's not always the one you think...

Borrowers who shop for mortgages based on the loan's annual percentage rate (APR) often choose costlier mortgage loans without ever knowing it. Using APR as a determining factor when selecting a loan is actually a very poor and unreliable way to comparison shop for the best mortgage, and often leads borrowers into making very costly mistakes.

APR was created to provide borrowers with a way to account for the various costs associated with each mortgage. "In theory, APR is supposed to make it easy to compare a loan with a lower rate and higher fees, to a loan with a higher rate and lower fees," explains Barry Habib, CEO of the Mortgage Market Guide, and a mortgage expert who has appeared on the CNBC, NBC, CNN and FOX television networks. "The problem is that the APR calculation makes some very bad assumptions."

According to Habib, there are four main assumptions that account for the misleading information:

- APR assumes zero inflation. "It's assuming that the value of a dollar today will be the exact same value of a dollar 10, 20 or even 30 years from now," explains Habib.
- APR assumes the mortgage will never be prepaid or paid off. "The average life of a home mortgage is less than six years," states Habib. "Most people are either refinancing or selling way ahead of the 30-year marker."
- APR doesn't consider the value of the money used for fees. "If you spent thousands of dollars in points or fees to get a lower rate, the APR calculation doesn't give any value to the money if it wasn't spent on closing costs," he adds.
- APR does not take tax consequences into consideration. "This can be significant, because higher fees on the mortgage may not be deductible, while the higher interest rate typically is deductible," Habib emphasizes.

"What makes APR even more dangerous is that it can be manipulated," Habib advises. "This can make it worthless."

APR is not calculated on the mortgage amount, but rather on the "amount financed," which is derived from the Truth in Lending statement. Because the amount financed takes into account lender fees, like application fees, points and commitment fees, as well as interim and per diem interest, it gives lenders variables that they can use to raise or lower the final APR value. The amount financed is equal to the mortgage amount less any lender fees, points and interim interest, so the more fees, the lower the amount financed. Monthly payments are then calculated as a product of the amount financed to give you the APR. The lower the amount financed, the higher the APR. Therefore, lenders can easily manipulate the amount financed by assuming a closing on the last day instead of the first day of the month, which would increase the amount financed and decrease the APR.

According to Habib, the best way to comparison shop for a mortgage is to consider three variables: interest rate, mortgage amount and monthly payment. "A qualified Mortgage Planner will be able to help you to determine which loan truly costs less based on the interest rate, loan amount and monthly payment," explains Habib. "The truth is, APR tends to favor lower rate and higher fee loans, which often end up costing the borrower a lot of money in the long run. Unfortunately, a lot of high fee lenders are counting on under-educated borrowers to use APR-based decisions to put more money in their pockets."

Borrowers looking to learn more about selecting the right loan should educate themselves and consult a qualified and reputable Mortgage Planner, a mortgage originator who is educated on how to best counsel borrowers on how to invest in a mortgage wisely. "The bottom line is that borrowers should forget about APR and think twice about those low advertised rates when they're accompanied by higher fees," advises Habib. "They need to look at the big picture, and they need to look at it realistically with an eye on the future. A little homework goes a long way when choosing a mortgage. It can mean the difference of thousands of dollars every time they buy or refinance."

2:37 PM - Nov. 6, 2007 - comments {0} - post comment

Making healthy financial decisions

While we all hope that we never have to deal with a sudden medical crisis caused by the discovery of a life threatening or life altering illness the reality is that at some point, many of us will have to face this situation. As they say, life is a terminal condition. Good health is a gift that is often taken for granted, but when you are healthy is also the very best time to take a few simple steps to insure that you and your family, income and assets would be protected in case the worst would happen.

A stat that "will" surprise you:

Did you know that less than 10% of all adult Americans have a will? Amazing, because it is one of the most important documents you will ever create, especially if you have children. In addition to your will, it is advisable to create Power-of-Attorney's to allow someone you trust to be able to make financial decisions or pay bills on your behalf if you are not able to do so yourself.

Also consider creating a living will, outlining the types of treatments that you would want or not want to have performed. Typically a living will is accompanied by a health care proxy, which is a Power-of-Attorney specifically for making medical decisions.

Emergency fund:

There are dozens of reasons that it is important to build up a nest egg of cash, but one of the most important is to help protect against the loss of income that can occur during a medical crisis. Rarely considered for couples who both work, but worth mentioning, is that during a medical emergency, not only would the ill individual be out of work, but oftentimes the other would also have lowered income due to spending time and energy with the sick partner.

Throw me a line:

A Home Equity Line of Credit (HELOC) can be another great safety net to consider, as it allows you easy and immediate access to a relatively cheap source of money. It is important to remember that your ability to qualify for a new loan may be diminished if you are critically ill, so obtaining a HELOC when you do not need it is a very good idea. And since HELOC's are typically inexpensive to set up, and only require payments if there is a balance owed, this makes it an ideal safety net.

"Insure" your safe future:

Life insurance is rarely considered a popular discussion topic, but it is a very important way to protect your family. Dealing with the loss of a loved one is very difficult and there is no easy way to ease the pain. And the financial problems, although secondary, can be very serious. Loss of home, income, and savings can all be avoided with the right life insurance plan.

Other types of insurance to investigate are disability insurance - which can help provide income if you are unable to work because of an injury or illness - and also long term care, which can help you preserve your assets from being eaten up by caretakers in the future.

2:30 PM - Nov. 4, 2007 - comments {0} - post comment

Is it time to throw out the milk?

Marshall Loeb, former editor of Money Magazine, gives tips on how long to keep food in your frig.

No, it's not your imagination. Eating well really is getting more expensive. Consider: a gallon of milk and a dozen eggs can easily run you more than $7 in New York City. A McDonald's Egg McMuffin, by contrast, will cost you in the neighborhood of $2 - and save you the trouble of cooking and cleaning.

If you're on a strict budget, but determined to maintain a healthy diet, don't throw away any food before its time. Consumer Reports' Shop Smart magazine offers a brief primer on food safety and shelf life for those who want to get the most out of their food:

Staples

Milk and butter. If stored properly, in a colder section of your fridge, milk will keep up to a week after the "sell-by" date. As soon as you detect it turning sour, it's time to toss.

Meat. Roasts, steaks and deli meats are safe to eat three to five days after you purchase them. But poultry and ground meat offer less wiggle room. They should be thrown away within one or two days.

Fish. Seafood is among the more unforgiving foods. It should be used within one or two days or you risk getting sick.

Cheese. If you wrap it in wax paper and a layer of plastic wrap, cheese is safe to eat until you see mold develop. Once mold appears, cut off about an inch of the surrounding area with a clean knife and rewrap.

Eggs. If you keep them in the back of your refrigerator, eggs will last up to five weeks.

Frozen foods

Meat. When uncooked, ground meat should be used three to four months from the day it was frozen, while steaks and roasts can last as long as a year. A frozen chicken can also keep for about a year. Chops should be tossed after four to six months.

Fish. More delicate fishes, such as sole, will stay tasty for about six months in the freezer, but sturdier fishes, like salmon, should be eaten within two to three months.

Veggies. Frozen vegetables can be eaten eight to 12 months after being frozen.

Leftovers. Most frozen leftovers will keep for two to three months, according to Consumer Reports - just make sure to label them properly, so you don't lose track.

2:24 PM - Nov. 2, 2007 - comments {0} - post comment

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