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September 2007

Granny has an active lifestyle these days

Active lifestyle in lively Las Vegas

Active Vegas: Las Vegas, Nev., You’re guaranteed an active lifestyle and beautiful weather in Las Vegas for $750 per month. Boasting multiple golf courses and luxury shopping and dining, this city is perfect for those seniors looking to relax and still have fun. The Destinations at Valley View community offers exciting social and recreational activities while the Destinations Clubhouse^TM is the perfect place to entertain friends and make new ones. The community features palm trees throughout the world-class landscaping, a fitness center and open floor plans.

Vacation every day in this resort-style setting

Everyday Comfort: Rancho Mirage, Calif., The Brookdale Mirage Inn is the standard in premier senior independent living and is a full-service apartment community. Residents can enjoy the fine dining at the elegant and restaurant-style dining room with friends and family or just prepare dinner in their own apartment. Active lifestyles are encouraged with luxurious amenities and services such as swimming pools, a recreation room, aerobics classes, theme parties, live entertainment, movies and a fitness center. Also, individual apartments have balconies, air conditioning, cable hook-ups, window covers and an emergency response system just in case.

Ranch-Style Chic: Queen Creek, Ariz., Starting at $199,990, homes in the Solera at Johnson Ranch community are affordable and stylish. Featuring a scenic 18-hole golf course, an outdoor pool and spa, a modern fitness center, a bocce ball and barbecue area, active seniors can relax and still have a good time. The billiards room and organized dances are perfect for those looking to make new friends. In addition to all these amenities, residents can leave their spacious two-bedroom and two-bathroom homes to enjoy the relaxing foothill setting and large 10,000 sq. ft. community center.

Constant Vacation: Fort Myers, Fla., Mature landscaping, lanais, five swimming pools, six spas, tennis courts, shuffleboard, billiards and a 27-hole golf course contribute to the constant feeling of being on vacation in this luscious community. Florida’s tropical weather and beautiful scenery make the illusion complete while residents enjoy the on-grounds restaurant, salon/barber, theatre, library and karaoke. Beaches and shopping are just minutes away for these active seniors.

Pleasant Living: Bloomsberg, Pa., Starting at $1,845.00/month, Loyalton of Bloomsberg is the haven for seniors who require or prefer assisted living. Independence is still respected while the peaceful setting and caring staff help you through your day. Free transportation is offered for those who want to go on shopping excursions while activities are available daily on the premises. This cozy retirement community with its comfortable and friendly atmosphere is a true find.

12:31 PM - Sep. 29, 2007 - comments {0} - post comment

Mortgage = death?

Ralph Roberts gives us a clue to how mortgages started.

The origin of the word “mortgage� is intriguing. It is a French word generally believed to be derived from two Latin words-�mort� (meaning death) and “gage� (meaning pledge or something of value that’s forfeited if the debt is not repaid). Does this mean we can blame the current mortgage meltdown on the French? No, I didn’t think so.

Although your clients might feel as though they are signing their life away when they take out a mortgage, that’s not really what the word means. The part of the word dealing with death applies to the passing away of the agreement. When the homeowner eventually pays off the loan, the lender’s claim to the property is “dead.� If the homeowner fails to make payments in accordance with the mortgage, the homeowner’s rights to the property cease to exist (or die).

A mortgage is a contract that enables people to purchase property without paying the full value upfront. In essence, a mortgage pledges the property to the lender (the mortgagee) in the event that the borrower (the mortgagor) fails to repay the debt according to the conditions stipulated in the mortgage.

Although a mortgage is the most common way to finance the purchase of a property, it is not the only way. The seller can also finance the purchase of the property by way of a Land Contract or Contract for Deed. Instead of allowing the lender to place a lien against the property, a Land Contract or Contract for Deed typically contains a forfeiture clause. The clause states that if the loan is not repaid in full, the property reverts to the possession of the seller (the person who financed the purchase).

To answer the question posed at the beginning of this article, mortgages actually have little to do with death, unless, of course, you take out a mortgage to buy a funeral parlor. Mortgages have more to do with life-being able to purchase a home you cannot afford to pay cash for, so you can enjoy your life sometime before you hit your golden years.

12:28 PM - Sep. 27, 2007 - comments {0} - post comment

Another year before recovery?

This article from Eugene L. Meyer gives us his take on the current market situation.

Call it the perfect storm: Declining sales of new and used homes, huge inventories, price reductions, a credit crunch, and foreclosures. What seemed only months ago to be a long overdue and necessary correction, a return to a normal, more balanced market following years of giddy appreciation and home sales fueled by easy money, has turned sour, according to leading real estate industry experts.

And there is no soft landing in sight. Instead, the widely held view is that things will get worse before they get better.

“We’re going to have to live through the pain,” says Mike Bradshaw, Bank of America Senior Vice President for Realtor and Builder Mortgage Services. “We will unfortunately see more fallout of lenders. It will trickle down to both the real estate and the building industry.”

During the era of relaxed credit, many consumers who could not otherwise purchase homes were able to do so by making lower monthly payments for a period of time, after which interest rates and payments would dramatically increase. Such home buyers and the investors who bought such mortgage-backed securities counted on rising incomes and appreciation to offset any increases. While interest rates remained low, refinancing was also an option.

Over time, the number and percentage of such subprime mortgages rose. They were usually bundled and sold on the secondary market to investors seeking higher returns. But the risk was also greater. As the subprime market imploded, the fallout has spread to other sectors. Lenders have tightened eligibility requirements, not just to subprime borrowers but to others with good credit ratings. Jumbo mortgages, for amounts over $417,000, have become more difficult to obtain, with significant consequences for credit-worthy, upper-income buyers as well.

“The last 30 days have been kind of extraordinary, as you watch lenders exit the business and scaling back significantly on products,” says Bill Cary, executive vice-president and chief operating officer of Florida-based HFN, a division of Fidelity National Information Services that creates and manages mortgage companies for homebuilders and real estate firms. “Right now, the mortgage market is in a state of shock.”

“The fact that credit is tighter and not as available to as many people under the same terms will make it more difficult for individuals to get loans and could lead to further declines in the real estate market,” says James R. Panepinto, president of Pinnacle Professional Consulting Services, of Red Bank, New Jersey, which advises financial institutions, real estate firms and home builders. “Entire segments of the market have dried up for certain types of home buyers

“I think there’s plenty of blame to spread around, to the investor side of the business that bought the paper, the Wall Street firms that were securitizing the paper, the lending industry that was originating the paper. It’s clearly a situation where many participants were involved in extending credit on terms that were too generous.

“When the economy is strong and values are rising, there are pressures to increase home ownership from a lot of different stakeholders. Appreciation in the market certainly covers up a lot of excesses and practices in loan underwriting and origination. Clearly also in the market were instances where individuals or employees of lenders or various purchasing instruments ignored the rules that were there.”

The long-term good news, Panepinto believes, is that the “higher quality of [loans] being written and the tightening of standards should bode well for the market in general.” Eventually, he adds, “concerns about further deterioration in the quality of loans made, reflected in rising delinquencies and foreclosures, should ease off.”

How long will this take? Bradshaw estimates the real estate and mortgage industry is in for another 12 to 18 months of hard times. Then, he said, “There will be some stabilization and a healthier housing and lending market. The market will move forward on what’s better for the consumers.”

Large lending institutions, such as Bank of America, which retain and service many of their home loans, are faring better than mortgage brokers and others who sell their loans on the secondary market to securities firms, which in turn sell them to investors. The big banks are further cushioned because, having largely stayed out of the subprime market, they are not facing the need to foreclose on delinquent homeowners.

“We decided [subprime loans] were not prudent,” said Bradshaw, recalling a comment by Kenneth D. Lewis, his company’s CEO, that his institution is in the business of making homeowners, not taking homes back from people to whom it has extended credit.

The credit crunch has also affected new homes, with many builders canceling or ratcheting down projects they believe they could not now quickly sell. This, in turn, could have a domino effect, leading to layoffs in the large construction workforce sector.

However, cautions Panepinto, “Certainly, new home sales are very, very significant, but trends in existing home market are really the key thing to watch. Let’s remember that close to 90 percent of homes sold in this country are re-sales of existing homes. That’s really what drives the market.”

Says HFN’s Cary: “I think the light at end of the tunnel for everybody is when inventory gets back in line with demand. The markets have way of correcting themselves. This is not the first time we’ve gone thru a real estate downtown, and it won’t be last.”

The current crunch has underscored the importance for brokers of offering a multitude of core services to consumers, not just selling properties but also providing title insurance, home warranties, appraisals, and even mortgages. As with any investment portfolio, diversification can soften the blow if one sector falters, said Jeff Mandel, president of Prism Professional Solutions, a Charlotte, North Carolina firm advising financial services and real estate companies.

“Broker-owners used to like to talk about how it would be nice to have these value added services–such as mortgage, title, escrow,” Mandel says, “but the real estate market has slowed so rapidly, faster than brokers are able to shed fixed assets and expenses, that it’s absolutely essential.”

For brokers already facing lower revenues from declining sales, the credit crunch has hit hard. “Their need for positive returns out of these [other] services such as mortgages has never been more important to sustain their operations,” Mandel says. “But all of a sudden the money doesn’t exist in their mortgage operations. Many have seen either their partners go out of business or profits eroded to the point where they’re not deriving the returns expected or needed. The constituents I represent are having tough times…

“Number one, on the real estate side, companies need to buckle down, focus on their core strengths, make hard decisions to eliminate fixed overhead unnecessary for current market conditions, and apply fiscal discipline in ways not done before, to position themselves not only for today but for the future. They have to change what they can control.”

As with any economic upheaval, there will be winners and losers. While more than 100 mortgage loan companies have folded, large banks that have traditionally held onto most of their loans are getting more referrals from real estate brokers who had previously relied on less substantial lenders.

At J.P. Morgan Chase Home Loan Lending, loan originations are up 41 percent since July, and up 30 percent during the first two quarters of 2007, according to Sue Barber, senior vice-president for business development.

“We are seeing a good news story out of this current environment,” she said, “There is a very serious need for a lender who can still provide a full array of mortgage products, who has ability to directly lend as well as sell to the secondary market, a partner who has financial strengths and liquidity. Certainly we are receiving lot of inbound calls from lot of the national real estate companies, and there are a lot of the large regional independents reaching out to us.

“We are certainly happy Chase has the balance sheet and liquidity to fund directly, because conditions in the secondary market are challenging today. A lot has to do with the Chase brand. It signifies stability, financial strength. I think the consumer and real estate community are recognizing now more than ever they really need that. I think consumers are realizing they really want a long-term lending relationship.”

That is not to say that Chase hasn’t tightened its lending requirements. It has. “The main focus of all the tightening of credit standards we’ve done and the focus on strategy with sales force is to educate our consumers,” Barber said. “We are working on a simplified disclosure so customers completely understand how [their loan] works, how affects their monthly payments…

“I think the overall industry impact of tightening of credit standards will take some consumers out of the market. But tightening standards certainly will result in better performing mortgages and in turn have a more positive effect on the housing market.”

The subprime mortgage meltdown has had the paradoxical effect of bolstering some intermediary companies that can provide brokers with several lending sources.

“We run a multi-lender mortgage platform, so if you do business with us you’re not tied to just one lender or source of money,” said HFN’s Cary. “We have six [lending sources], including American Home Mortgage, which went bankrupt last month. We were able to take loans placed by our customers there and within a week we had those loans placed with other investors. So we were able to provide a solution.

“We kind of look at the market right now and say there are going to be winners and losers,” Cary said, “and we’re trying to become winners.”

12:18 PM - Sep. 25, 2007 - comments {0} - post comment

Watch out for mortgage fraud

This information from Ralph Roberts is timely and thought provoking.

Turn on the news or visit your favorite news Web site, and you are likely to see a report about the foreclosure epidemic. The reports you are not likely to see, however, are about something that is closely related and equally if not more disturbing-real estate and mortgage fraud. As foreclosure rates rise, so does fraud. And as the incidence of fraud rises, foreclosure rates follow. It is as vicious a cycle as any economist has ever witnessed.

Which came first is a chicken-and-egg scenario that I do not want to get into. Sometimes rampant fraud can trigger foreclosures. I am currently involved in the investigation of such a case in Detroit. In a classic cash-back-at-closing scheme, a builder who was having trouble selling his homes managed to find someone to pay nearly $800,000 for a home with a true market value of no more than about $550,000, scamming the lender out of over $250,000 in cash.

A homeowner in the same subdivision contacted me to report her suspicions when she noticed two of the builder’s homes across the street in bad need of some TLC. They were without lawns, window dressings, and furniture. Apparently once the buyers purchased the homes and “earned” their cut of the ill-gotten proceeds, they simply neglected or even abandoned the homes. The homeowner who contacted me was concerned that housing values in her subdivision would drop as a result. And her concern is a very valid one.

Real estate and mortgage fraud can turn a beautiful neighborhood into a ghost town.
Increases in foreclosure rates also trigger rising rates of fraud. This happens for several reasons. One is that builders and homeowners who are having trouble selling their homes in a depressed market often search for ways to give buyers extra incentives-such as cash back at closing. A homeowner may agree to sell their home for tens or even hundreds of thousands of dollars more than the home is worth and then kick back the surplus to the buyer, just to unload the home. Builders have been know to do the same thing, offering cash, free upgrades, furniture, and even vacations and cars as enticements to buy… all of which are financed by lenders who are fooled into approving loans in excess of the property’s true market value.

Another reason why rising foreclosure rates trigger fraud is that con artists have more tools to work with in the form of bargain properties. They can purchase rundown REO (Real Estate Owned or repossessed homes) from banks at bargain basement prices, do some cosmetic renovations, order an inflated appraisal, and either refinance the home or sell it for significantly more than its true market value to an unsuspecting buyer (illegally flipping the home). In many cases, the illegal flipper recruits people who are financially strapped to go along with the deal. Eventually, the buyers cannot afford the monthly payments, default on the loan, and lose the home in foreclosure. That same home can then be used again in another scam.

To fix the problem with rising foreclosure rates, we need to wage a two-pronged attack that helps homeowners steer clear of the foreclosure trap while shutting down the perpetrators of real estate and mortgage fraud.

Ralph Roberts is a real estate fraud expert and activist and co-author of “Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership” (Kaplan, August 2007). Visit www.FlippingFrenzy.com or contact Ralph at: RalphRoberts@ralphroberts.com or 586.751.0000.

11:46 AM - Sep. 23, 2007 - comments {0} - post comment

Home remodeling return on investment

Our friends atLowe's have come out with the 2006 cost v value report on various home remodeling projects.

According to the Cost vs. Value Report

10:43 AM - Sep. 21, 2007 - comments {0} - post comment

A short course in radon

The following article is by Carl Brahe of Inspection Perfection.

Radon is a difficult issue for homebuyers and sellers, real estate agents and home inspectors. The Surgeon General says that radon is the second leading cause of lung cancer. The EPA sets an average level as the recommended maximum allowed in residences. HUD and FHA have regulations about warnings that must be issued to homebuyers and mortgagees. We must adhere to these guidelines. 

There is no doubt that decaying radon will damage lung cells. The exact levels and circumstances that are required to cause lung cancer are not known. Currently, scientific studies have not been performed to accurately establish danger levels. Existing studies have not had access to accurate, long-term data and are sometimes contradictory. Accurate data on health effects of radon exposure at normal household levels may not be established for many years.

The practical reality is that several of our government agencies have accepted an arbitrary maximum radon level that we must respect. These government regulations make it a liability issue. This level, 4 pCi/l (pico curies per liter) is what we have learned to fixate on, but what matters to real people is how to prevent radon from harming us.

We live with radon. It’s a fact. The EPA estimates that as many as a third of all Colorado homes have radon that exceeds their recommended maximum. Environmental radon is relatively high in the whole state. The first step is to decrease exposure as much as possible.

Sealing gas entry points always makes sense. The places that leak gases into your home are a source of energy loss. Moisture can also enter through these routes around pipes and other things that penetrate the foundation, as well as expansion joints, sumps and cracks. If leaks above ground are sealed and leaks through the floor are ignored, a chimney effect may be created and radon levels can increase.

The tighter you seal your house the more important ventilation becomes. The air inside our homes can be more “polluted” than the air outside. Besides gases, like radon, that are drawn into a house, everyday living creates indoor air pollution from activities like cooking, cleaning and using gas, or wood, burning appliances. Natural ventilation, like opening a window, is easiest but may not be feasible because of heat loss. The tighter the house is sealed, the less passive ventilation exists from leaking doors and windows, etc.

Passive ventilation for crawlspaces and/or foundation slabs can sufficiently reduce radon. This may be ventilation grating at the ends of a crawlspace relying on natural air movement. Ventilation pipes inserted under, or through, the foundation ending above roof level may also provide sufficient reduction. A wind turbine is sometimes used to draw air from under foundation or crawlspace.

The most popular method of controlling radon may not always be the best. There are inexpensive ways to control radon that we never hear about. According to Industrial Hygienist Caoimhin Connell, even burning a candle can provide airborne particles that unattached radon daughters may attach to, reducing radon risk.

One of the most effective systems for reducing the concentration of unattached radon daughters is a ceiling fan, or air circulating fan; sometimes coupled with an ion generator. Positive ion generators work best. The fan mixes the air, and the charged particles are attracted to the surfaces of walls, furniture and floors, and other airborne particles where they are deposited, thus removing them from the breathable air, insuring they are not deposited in our lungs. 

A Casablanca type ceiling fan can reduce radon by up to 95%.If a 50% reduction of radon levels is sought a ceiling fan, or circulation fan, can be used alone. If a reduction of 80% + is desired a fan with a positive ion generator can be used. This combination has been tested world wide with consistent radon reduction of up to 95%. This can be an inexpensive radon system costing far less than the most accepted remediation today – sub slab depressurization, or suction.

Radon is released from the soil. There can also be other gases, naturally occurring, or resulting from man made pollutants. The place where I grew up is a gigantic toxic waste site. The soil is very sandy. The water table is close to the surface and pollutants have traveled throughout the area in the ground water. There are dry cleaner solvents, metal cleaning solvents, insecticides, herbicides and biological warfare agents that release gases that migrate to the surface. I doubt that people who live there ever give a thought to the gases migrating into their homes, but it seems like gases besides radon could have negative health affects. This is an argument for positive pressure in our homes.

Arguments against include: systems are noisy and have the potential for extinguishing pilot lights. Expense is also mentioned as a reason for not using this method. The possibility of moisture intrusion is cited. The result of my crude, home testing makes me think these factors may not be such a deterrent.   My office is in a walk out basement. It is consistently colder than the upper level that tends to be too hot year round from passive solar. The summer time radon level with windows open is 4-5 pCi/l. It goes to 9 – 22 pCi/l with the windows closed.

I removed a ceiling vent for the furnace and taped a 4” computer-cooling fan in its place. The radon level immediately dropped to 3 pCi/l. This level has remained steady through winds and rainstorms that usually elevate levels. It is true that it is a little noisy. I will replace it with a vent with a built-in booster fan that is made to be quiet and operate at various speeds.

The computer fan was $12. The booster vents I found run from $35-50. This little computer fan has also helped equalize the temperature between the two levels. A fan designed for this purpose should increase comfort even more, allowing higher speeds to move more air. From my subjective point of view, it seems like I have more energy and tire less quickly since installing the fan.

Sub Slab Depressurization (SSD) is the most common and accepted method for radon reduction. It provides about the same percentage reduction of radon as a fan/ ion generator, but cost significantly more. EPA estimates systems cost from $800-2500. Operating costs are from $50-200/year.

This method uses a vacuum fan to suck air from beneath the concrete floor. A variation is power vents for crawlspaces. In some cases, a vapor barrier will be applied to the crawlspaces with a vacuum fan that sucks air from beneath the center of the plastic barrier. A fan may also be used to suck air from cement block foundation.

This method may not work as well where the soil has heavy clay content preventing air from flowing. Defects and expansion joints may interfere with proper function. Improperly installed systems may increase concentrations of radon gas. Pumps may become noisy. System costs, operating and maintenance costs are relatively high.

Another technique that increases comfort while decreasing radon is the fresh air heat exchanger, also called Heat Recovery Ventilation (HRV). This device pulls fresh air from outside through a heat exchanger that is warmed by inside air as it passes through the exchanger to be vented. These devices lose about 15% of the heat used to warm the fresh air. As houses are being sealed tighter for energy savings, it becomes more important to bring in a constant supply of fresh air to maintain a healthy indoor air quality.

Making the house even more airtight might make up the heat loss without the indoor air pollution that occurs when a house is sealed too tight without ventilation. The EPA estimates installation costs of $1200-2500 with an annual operating cost including heat loss of $75-500.

10:32 AM - Sep. 19, 2007 - comments {6} - post comment

Yesterday's rate discount

Ty Mann, our trusted lender of many years, just sent us this email regarding interest rates and yesterday's Fed rate reduction...

10:28 AM - Sep. 19, 2007 - comments {0} - post comment

What does the Fed Discount Rate mean to you?

10:24 AM - Sep. 17, 2007 - comments {0} - post comment

Make your house easy to show

Ki Gray is the broker for Escapesomewhere Austin Real Estate in Austin Texas.  He gives the following ideas for Sellers to make their home easier to show.

Many Sellers ask for advice on how to sell their homes. There is the standard good advice... Hire a professional stager to make the home be on the level of a model home. Paint the house. Or install granite in the kitchen to have a little more upgrades than the one down the street for sale. Hire a cleaning service. You can do all kinds of things on the level of presentation. One thing I think many people overlook is making the home accessible and making the showing experience a pleasant one. This is some advice I commonly give Sellers:

1. Try to be inviting to everyone who calls on the house.

It is definitely inconvenient for people to be romping through their daily lives, but it is unfortunately part of selling a home. When someone calls to see the home, I advise something like: "Sure, we were heading to the park, so feel free to look around." Jjust let the potential Buyers feel like they are not bothersome. This helps set the mood of the home being inviting instead of starting off the showing with a feeling of intrusion.

2. Try to leave when the home is being shown (and take any distracting animals).

This seems kind of obvious, but many Sellers still seem to stick around despite the advice. Buyers just do not feel comfortable if someone is there, and they usually rush through the home without spending some time looking at where their furniture will go or how big the closets are. In addition, if they have dogs or animals that would be distracting during the showing experience (i.e. barking or jumping), try to take them with you, or if you are at work, keep them in the backyard. Let the Buyer concentrate on the home.

3. Don't let Sellers give a personal tour of their home.

It is hard for some Sellers to resist sharing their personal experiences, but when it comes down to it, Buyers should daydream about the overall home being theirs, not concentrate on some upgraded sink faucet the Seller installed last week. You want the people to become interested in the home on a personal level, thinking of how they will go about their daily lives in it rather than notice every detail. Noticing every detail will come later.

4. List the house with the easiest showing instructions.

List with easy showing instructions so that the home is accessible without much effort. Sometimes Sellers will need to make appointments due to certain situations like the elderly or newborns. But if possible, have the Buyers phone / leave a message and head to the home. Our MLS system calls it "Call 1st - Go". This makes it possible for anyone to come by, even if they were just driving by and admiring the home. It allows these drive-by people to come in, and the more people that come through, the more chance it will sell.

5. Check on the house cleanliness.

Many Buyers will say that they can imagine beyond a mess, but most cannot. Messy homes end up being distracting from what the home is offering. It is definitely hard to keep a model home look while trying to live in it, but it helps sell the home.  A cleaning service can be a good investment.

In summary, you want as many people looking at your listing as possible and the showing experience to be as comfortable for the Buyers as possible. So, try to make the showing access as easy as possible and keep distractions (like animals, messiness, & even the Sellers presence) to a minimum.

12:18 PM - Sep. 15, 2007 - comments {0} - post comment

Make your relocation easier

Michael Del Duca of Prudential Properties New Jersey has these tips if relocation is in your future:

A new career opportunity sometimes means relocating your family to another city. Careful consideration of various factors, such as your partner’s career, the effect on the children’s educational and recreational activities, and financial constraints all impact the decision to move.

Additional responsibilities crop up when moving to a new home, including getting the house up and running, finding the right school for the kids and getting them acclimated, and getting adjusted to life in a new town. These tasks can be incredibly overwhelming, especially in a new location without the aide of family and friends.

Here are some tips to help relieve the stress of relocation and turn your move into a successful endeavor.

Take your time.  As with all moves, there are so many things you need to do once you relocate into your new home. From dealing with utility companies, to finding a new doctor, to unpacking and decorating the new residence, your to-do list may seem endless. Don’t try to accomplish everything at once. Make a list and divide it into three categories: immediate, secondary and down the road. Set your own timetable because you are the boss of this project and the only person you have to please is yourself.

Get out and meet people.  More than likely, you won’t know many people in your new community. Besides introducing yourself to neighbors, you can find a place of worship, volunteer in a community organization, join a social club or gym, or just say hello to people.

Reevaluate your career goals.  If you had to leave a job behind, check to see if your company offers any employment assistance for relocating partners. Many companies have formal and informal programs, offering as little as resume support to as much as arranging job interviews.  If you’ve desired to make a career change, this could perfect opportunity to do so.  You may even want to consider an entrepreneurial career that you can take anywhere.

Talk to your real estate professional.  Your real estate professional can be a great resource as he or she has a strong understanding of the area you just moved to.  They will have insight on the area’s job market and may be able to give you names of career counselors or just help you feel comfortable in your new surroundings. 

Most importantly, don’t push yourself by setting unrealistic goals. Moving is a process and it will take time for you to get acclimated to your new home and community.  So, make this move not only a golden opportunity for your partner, but for yourself as well.

12:11 PM - Sep. 13, 2007 - comments {0} - post comment

Will money make you happy?

Happiness? Why bring “that” up in this insane market? Why? Because some of you are like me, with a secret split personality. Sometimes happy, sometimes not — sometimes happier. We know the signals are all there: Bear and recession ahead, with national politics and world jihad just adding fuel to a market on fire. Makes it tough to stay happy. Thank God for Jay Leno, Jon Stewart and Seinfeld reruns.

Yet, amid all the market insanity came a bright light during a Jon Stewart interview of Harvard teacher Tal Ben-Shahar, author of “Happier.” The good doctor is one of Harvard’s most popular lecturers, with 1,400 students every semester, 20% of the university. Nice guy, nice book. It got me thinking about a “Crash Course for Happier Millionaires.”

Then, confirmation for such a “course” came the next day in a new Harris Poll. Turns out 94% of Americans are satisfied with their lives. And get this: 62% even say they expect things to get better over the next five years … so apparently our insane financial markets, skimpy retirement nest eggs, fears of a recession, upsetting political election polls, burgeoning government debt and all the global threats aren’t getting in the way of the “pursuit of happiness” for most Americans. Good news, huh?  Out of the dark side, into the light.

So for a few brief moments today, let’s step away from the darkness (we can’t really do much about it anyway), and into a parallel universe. Let’s imagine sitting in an audience watching a new game show: “Who Wants to Be a Happier Millionaire.”

Uncle Warren takes center stage. Here’s his take on happiness: “I may have more money than you, but money doesn’t make the difference … I would rather have a cheeseburger from Dairy Queen than a hundred-dollar meal … If there is any difference between you and me it may simply be that I get up every day and have a chance to do what I love to do, every day. If you learn anything from me, this is the best advice I can give you.”

So sit back, relax, sip your coffee and scan our “crash course” syllabus. Then, in the next few weeks read a few of the books. Pick ones that “speak to you.” Every one’s worked for me over the years, so I can vouch for them. Maybe they’ll touch you.

There’s a rather simple, common theme … You can live with the spirit of a millionaire today and every day … whether you’ve already got that million dollar nest egg … even if you don’t have the bucks yet (which most wannabe millionaires don’t) but you’re working and saving for it … and even if you don’t care about retiring a millionaire (which most people don’t) you can still live with the “happier” spirit of a millionaire.

Here’s your course synopsis, the books, the authors, the messages:

“Zen Mind, Beginner’s Mind:” Shunryu Suzuki. “Which is more important; to attain enlightenment, or to attain enlightenment before you attain enlightenment; to make a million dollars, or to enjoy your life in your effort, little by little, even though it is impossible to make a million; to be successful, or to find some meaning in your effort to be successful.”

“Stumbling on Happiness:” Daniel Gilbert. Another Harvard professor, who says in his new book: “If everybody realized constant production and consumption aren’t a source of happiness … how many of us would get up in the morning and say: I know it’s not going to make me happy, but I want to keep the economy going?”

“The Art of Happiness:” The Dalai Lama. “Everywhere, by all means imaginable, people are striving to improve their lives. Yet strangely, my impression is that those living in materially developed countries, for all their industry, are in some ways less satisfied, are less happy, and to some extent suffer more than those in the least developed countries.”

“Money & the Meaning of Life:” Jacob Needleman. “The battlefield of life is money. Instead of horses and chariots, guns and fortresses, there are banks, checkbooks, credit cards, mortgages, salaries, the IRS. But the inner enemies remain the same now as they were in ancient India or feudal Japan: fear, self-deception, vanity, egoism, wishful thinking, tension, and violence.”

“The Millionaire Mind:” Thomas Stanley. “As most millionaires report, stress is a direct result of devoting a lot of effort to a task that’s not in line with one’s abilities. It’s more difficult, more demanding mentally and physically, to work at a vocation that’s unsuitable to your aptitude.”

“Flow: The Psychology of Optimal Experience:” Mihaly Csikszentmihalyi. “Isn’t it funny? I’ve been studying happiness for at least 40 years, but I still don’t have a definition of it. The closest one would be that happiness is the state of mind in which one does not desire to be in any other state. Being deeply involved in the moment, we do not have the opportunity to think about anything but the task at hand — hence, by default, we are happy.”

“Seven Spiritual Laws of Success:” Deepak Chopra. “Everyone has a purpose in life, a unique gift of special talent to give others … Sit down and make a list of answers to these two questions: Ask yourself, if money were no concern and you had all the time and money in the world, what would you do? … Then ask yourself: How am I best suited to serve humanity? Answer that question and put it into practice.”

“The One Thing You Need to Know.” And if all else fails, take Marcus Buckingham’s incredible advice: “Discover what you don’t like doing and stop doing it.”

“The Way of the Peaceful Warrior:” Dan Millman. “The secret of happiness, you see, is not found in seeking more, but in the capacity to enjoy less … This is the final task I will ever give you, and it goes on forever. Act happy, feel happy, be happy, without a reason in the world. Then you can love and do what you will.”

“The Alchemist.” Paulo Coelho’s novel is a spellbinding must-read about everyone’s lifelong search: “When you want something, all the universe conspires in helping you achieve it … God has prepared a path for everyone to follow … The secret to happiness is to see all the marvels of the world, and never forget the drops of oil on the spoon.”

Happiness is a state of mind. So is being a millionaire. Anyone can get a million bucks. Yes, anyone. The real key is to enjoy the journey, to live like a millionaire before you are one.

As Joe Campbell, of “The Power of Myth” fame, put it: “I took a vow never to do anything for money. Now, that does not mean that when I do something I don’t ask for money. I want as much as I can get, but that’s the secondary part of the game. My life course is totally indifferent to money. As a result a lot of money has come in by doing what I feel I want to do from the inside.”

Trust me folks, it works: Anyone can be happier.

12:07 PM - Sep. 11, 2007 - comments {0} - post comment

Top 10 safe cars

According to the site, vehicles that made the list had to meet tough Car and Driver standards, which required all vehicles include stability control and a minimum of six airbags (front and side curtain). On some of the vehicles, those safety requirements are not standard and cost a little extra, but even with those extras, all of the vehicles come in under $25,000.

“Car buyers and enthusiasts know they can count on CARandDRIVER.com for expert research and analysis when considering a new car purchase, and both safety and overall value are paramount factors to most of those in the market to purchase,” said Mike Dushane, executive editor, CARandDRIVER.com. “This list will help guide car buyers to safe vehicles at a very reasonable price, and it clearly shows how safety technology has moved to the mainstream. It’s not just for the luxury car buyer anymore.”

The Top 10 Safe Vehicles for Less Than $25,000 list includes:

    2008 Saturn Astra
    2008 Scion xB
    2008 Hyundai Sonata
    2008 Volkswagen Rabbit
    2007 Mini Cooper
    2007 Toyota Camry
    2008 Volvo C30
    2008 Dodge Charger
    2008 Honda Accord
    2008 Mazda CX-7

12:02 PM - Sep. 9, 2007 - comments {0} - post comment

You can get a low ball offer accepted

That’s what Pat O’Heron did recently when buying a home in Ann Arbor, Michigan. He was able to negotiate a steep discount with a seller who relocated for a job, in a neighborhood that had two year’s worth of inventory on the market.  Before he even made an offer, the asking price had already dropped by about $80,000, he said. After O’Heron made his case why the cost should be even lower, he eventually bought the home for $270,400, with about $11,000 in other credits. The net price ended up being $115,000 below the initial asking price.

O’Heron was able to take advantage of a market in which buyers decidedly hold the upper hand, with its excessive for-sale inventory due in large part to job losses in the area. Even though housing is in a slump in many parts of the U.S., those tactics won’t work in markets that remain healthy.  And in any location in which an aggressive offer is attempted, there is always an inherent danger in going too low. There’s a real risk the offer will insult the seller to the point that they’ll refuse to counter, and the seller could easily make the assumption that the buyer isn’t committed to making a deal.

“There’s a danger of them taking it too personally,” said Jon Boyd, O’Heron’s agent and president of the National Association of Exclusive Buyer Agents. “When you’re making the offer, if you justify that offer with outside data, then it’s much less likely to be perceived as being an insult or (the buyer) not as serious,” he added.

Heed these three guidelines on how — and when — to make an aggressive bid for a home:

1. Learn how motivated the seller is to make a deal

Certain sellers are going to be more willing than others to negotiate a low offer, and there are several giveaways that might indicate more leeway on the issue of price.  For instance, if the sellers have already purchased another home and that sale has closed, they’re likely to be more willing to make a deal, said Dick Gaylord, president elect of the National Association of Realtors and a broker with Re/Max Real Estate Specialists based in Long Beach, Calif. And certainly if the property has been on the market for a long time, sellers will be interested in entertaining any offers, he added.

To get at as many seller details as possible, Gaylord gets in the ear of his or her listing agent. The nuggets of information he gets can be clues as to what kind of offers they’ll consider.  Overall local market conditions also play a role. The housing market in which O’Heron bought, for example, was sluggish, and the home he bought had been on the market for about a year. Because of the job relocation, the seller needed to move and wasn’t in the position to take the home off the market until conditions were more favorable, O’Heron said.

2. Make your case with hard facts

When putting together an aggressive offer, create a cover letter explaining exactly where that number came from.  In addition to citing comparable sales in making the offer, it also could be important to include details regarding the amount of inventory in the immediate surrounding area.

“If we just looked at the relative values of the houses that sold, we would end up paying too much for that house because we know that the values are going to fall,” he said. “If we see two years’ worth of inventory, we should be buying five percent, potentially 10 percent less than what houses have sold for in the past year in the neighborhood.”  Buyers may even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd, Gaylord said. That way, they can detail what they like about the house but express their fear of future dropping values.

That’s still not to say the seller will respond positively.  “The difficulty we’re having in my market right now… sale prices are not dropping, things are staying on the market longer,” Gaylord said. “Buyers read about how terrible the market is; sellers don’t want to budge because they’re reading that prices aren’t falling.”

3. Prepare for the possibility of rejection, or negotiation

Ultimately, a real-estate agent working on behalf of a buyer needs to honor and facilitate the offer that the buyer wishes to make — even if it seems to be too low.  Gaylord offers a word of warning to buyers making very low offers, pointing out that the seller might refuse to negotiate. On a “super aggressive offer,” Boyd might tell a client “there’s a one in five chance there will be a positive response.”

Still, there’s that potential for a seller to counter-offer, especially if there hasn’t been many other bids. Danielle Kennedy, a real-estate sales coach and author based in Pacific Palisades, Calif., advises sellers not to think of a low offer as an insult but as “a sign of interest.”  “And it begins the dialogue regarding the purchase of your house,” she said in an e-mail interview. “They should make every effort to be grateful that an offer has come in.”  Also, not all hope is lost even if a seller doesn’t bite immediately.

Sometimes after time elapses, the seller comes around and decides to negotiate, Boyd said. Or new information — such as the sale of a comparable home at a lower price — can nudge a seller to give an aggressive offer a second look and open the negotiation process.

11:56 AM - Sep. 7, 2007 - comments {0} - post comment

What the credit crisis means to you

Tim Ray at Apollo Mortgage outlines what the current credit crisis means and what you can do about it.

Barry Bonds may have broken the all-time home-run record recently, but you wouldn’t know it by looking at the headlines. The only "Bonds" the media seems interested in are mortgage bonds – specifically mortgage-backed securities.

To date, subprime mortgages have been credited for bankrupting well over 110 lenders and seriously damaging operations at many major mortgage firms. They've reportedly wiped out 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren't enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in the US. And it's this volatility that is now spreading like a virus into other major financial sectors around the globe. Some say losses in the mortgage securities market alone could reach hundreds of billions of dollars this year.

This means that, for any American looking to buy, sell, or refinance their home, they are confronting a very different market from the one that existed just 6-12 months ago. The US Federal Reserve has already begun pumping billions of dollars into the US banking system in order to address what is clearly a credit crisis that will change how we borrow money for years to come!

How did this happen?
The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming or "exotic" mortgages.

These ideal lending conditions persisted for several years, supported by high demand, historical real estate data, home prices, and massive trading volume/profits on mortgage-backed securities and other financial instruments on Wall Street.

Then, in 2006, a slowdown in real estate led to a deterioration of home values, an increase in inventories, and ultimately to today's tightening of credit guidelines, leaving many investors unable to sell or refinance out of their existing positions. Many Americans who had tapped into their equity were suddenly tapped-out and overextended as home values fell. Foreclosures followed in record numbers and a re-valuation of mortgage bonds and other financial instruments created the credit/liquidity domino effect we're now experiencing.

Unfortunately, it's going to get a lot worse before it gets better. According to the latest estimates, over 2 million subprime and Alt-A adjustable rate mortgage (ARM) holders will face payment increases of up to 30%-100% when their loans reset in the next 2 to 18 months. These loans make up less than 40% of the total mortgage market, but the negative effects, as we have seen, of increased foreclosure activity can have a ripple effect throughout the industry and around the globe.

What does this mean to you and your mortgage?

Sellers: If you're planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers. Now is not the time to sit and wait for the best possible price. Have a serious talk with your Real Estate Agent. Having experienced buying/selling transactions in your area, he or she can help you price your home accordingly. He or she can also help ensure that your buyers are pre-approved and stay pre-approved throughout the entire transaction.

Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it's taking longer and longer to complete a transaction. Remember, what you qualify for today could change tomorrow in a volatile market. For those looking to refinance, keep this in mind. There is no time to delay! Communicate with your lender. Don't do anything that could negatively affect your credit, and make sure you get all your documentation in on time.

ARMs Borrowers: If your ARM is scheduled to reset in the next 2-18 months, you need to schedule an appointment with a mortgage professional right away. Whether your ARM is subprime, Alt-A, or even if you have a pre-payment penalty, don't let a default or foreclosure situation sneak up on you. Did you know that your monthly payments can increase anywhere from 30% to 100% once your loan resets? At the very least, give yourself the peace of mind of knowing what your adjusted payment will be. A good loan officer can help calculate the numbers.

Borrowers with less-than-perfect credit: Each week it seems lenders are shedding more and more mortgage products. Many lenders have stopped offering No-Doc loans and are reducing all forms of Stated-Income loans. While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals.

Finally, don't let the headlines get to you. While all looks bleak and scary now, there's an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we're experiencing now – while it seems harsh and could get much worse – is, in a sense, "natural" and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle.

12:11 PM - Sep. 5, 2007 - comments {0} - post comment

Consider solar

Jennifer Openshaw is the author of ” The Millionaire Zone” and founder of TheMillionaireZone.com  She has the following ideas for using solar power in our everyday lives.

Day in and day out through the summer I watch the temperature creep up and the sun beat down on my yard and I wonder: what can I use the sun for? A great source of cheap, green power, but without a roof full of solar panels, how can I put it to use?

Turns out, you don’t have to spend five figures to retrofit your house. I found a few good ways to harness the sun, reduce my carbon footprints, stick to my Millionaire Zone principles and have a little fun besides.

Stay cool, cook solar

I’d heard about solar cooking for years and always wondered if it would work, so this summer my friend and associate, also named Jennifer, gave it a shot. Solar Cookers International sells a basic kit made from cardboard and tinfoil and is designed for Third World folks who need a way to cook without fuel or water. Perfect for the suburbs, then, don’t you think?

For $25, you can get the basic CooKit and an inexpensive black stew pot from Target for $9.95. The new pot is necessary unless you already have a dark colored pot and dark lid. Black surfaces are very important in the world of solar.

Jennifer has since used her solar cooker twice, once to make an apple and berry compote to serve over ice cream and once to cook a pot roast.

First, she browned the pot roast on the stove just to save a little time. Then she heated the broth and placed it in the supplied plastic bag, sealed it with a rubber band, and put it on her CooKit. She’d already positioned the solar cooker to catch the sun for a few hours.

The result? “Darned good,” she said. “And had I put it out at noon or earlier and let it roast for a good six hours, it would have been ideal.” Essentially, it’s a no-voltage crock pot.

And her kitchen stayed cool during the hottest part of the day — and during the part of the day my local utility charges the most for its product. Granted, solar cooking works best in warm, dry climates.

Hang it up and dry your clothes outside

A throwback to the “good old days” before today’s overabundance of modern conveniences, you really can dry your clothes outside.

I have a friend who does this pretty regularly. She puts the heavier things like bath and beach towels and maybe a few cotton shirts out when the wash is done. The rest goes back into the dryer but is done much faster sans towels. When the air-dried items are done, she tosses them into the dryer for just a few short minutes to fluff them up.
Only one problem — where do you get a clothesline these days?

Turns out clotheslines are back… and coming on strong, according to Paul Gay, the third-generation of his family to be in the clothesline business.

“I sell a lot of clotheslines to younger couples just starting out,” he says, “and I think it is because of the green aspect. And high fuel costs, of course.”

Solar for everyday living

Want to keep the hot tub hot, the house cool (in summer) or warm (in winter)? A company called ClearDome Solar offers an assortment of solar blankets, pads and other simple, inexpensive devices to harness the sun.

Take a small sip of the sun

You might be ready to go the distance to get off the grid. If so, more power (sorry!) to you. But maybe you’re not. You’re still in “sun tea” stage with the glass pitcher and tea bags on your windowsill.

Spend a few bucks to go solar? It’s worth it. You’ll save money. Those dryer loads might cost $1.50 in electricity, maybe $20 or $30 a month depending on use and your electric rates.

Moreover, you’ll keep the house cooler (or warmer, as you choose) and feel good about those lighter carbon footprints. And 15 minutes of research every now and then will keep you familiar with what’s coming down the solar pike.

12:07 PM - Sep. 3, 2007 - comments {0} - post comment

I CAN get satisfaction

While this overall satisfaction with life is across all age groups, there is a generational difference with the level of satisfaction. Echo Boomers (those aged 18-30) are evenly split with 48% saying they are very satisfied and 47% who are somewhat satisfied. Matures (those aged 62 and older), on the other hand, are clearly of a different mind as over two-thirds (69%) are very satisfied while just one-quarter (24%) are somewhat satisfied with the life they are leading.

This Harris Poll was conducted by telephone by Harris Interactive® among a nationwide cross section of 1,010 U.S. adults between July 10 and 16, 2007.

Looking Back Five Years

When comparing their present situation with five years ago, over half (54%) of adults say their situation has improved while one-quarter (28%) say it has stayed about the same and 17% say it has gotten worse. The number of those who say their lives have improved is about the same as in 2005 (56%) and still up from 2003’s 49%.

Where one lives is a definite indicator of how the past five years has treated them. Southerners and Westerners are more likely to say that their lives have improved (60% and 62% respectively) while half of Midwesterners (49%) and only 42% of Easterners say their lives have improved in the past five years. While Echo Boomers and Generation Xers (those aged 31-42) are more likely to say their lives have improved (66% and 71% respectively), Matures are not of the same mind. Just one-quarter (27%) of this generation say their lives improved in the past five years while over half (52%) say it has stayed about the same.

Looking Ahead Five Years

If things have gotten better in the past five years, Americans expect things to be even better in the next five years. Three in five (62%) say expect their personal situation to improve in the next five years while three in ten (30%) say they expect it will stay the same and just 7% expect it to get worse. The number of those who expect things to stay the same is the highest it has been – in 2003, 26% said things would stay the same while in 2005, just 22% felt this way.

There are again strong regional and generational differences in life expectations. Westerners are by far the most optimistic as over two-thirds (68%) say things will improve while just 56%t of Easterners feel this way. Also, the younger you are, the better you feel about the future. Well over four in five of Echo Boomers (85%) and 82% of Gen Xers feel their personal situation will improve compared to just 58% of Baby Boomers (those aged 43-61). Matures are of a completely different mind in looking ahead as just under one-quarter (23%) expect their personal situation to improve while over half (58%) say things will stay about the same and 18% feel it will get worse.

So What?

When asked about the country, people do not feel things in the United States are going well as just 19% say things in the country are moving in the right direction1. But, when asked about their personal lives, not only are they satisfied, they’ve become more so in the past five years and expect to be things to be even better five years from now. People not only can, but are separating out the negativity they feel in the country as a whole, and are still content with where they personally are with their lives.

12:03 PM - Sep. 1, 2007 - comments {0} - post comment

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