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February 2008

One more reason to check that credit score

It looks like lenders, landlords, insurance companies and employers aren't the only ones interested in credit scores these days - now the health industry is getting in on the act.

Credit industry giant Fair Isaac is working with Healthcare Analytics and Tenet Healthcare to create a new "MedFICO" score. This new credit score is intended to judge a person's likelihood of paying their medical bills and could debut as early as this summer. Understandably, the new score is already raising concerns from consumer advocacy groups that fear it will be checked before patients are treated. They are afraid that people with low medical credit scores could receive lower-quality care than those with a higher MedFICO.

According to Stephen Farber, chairman and chief executive of Healthcare Analytics, that will not happen. Hospitals will check the score, which will be based on the patient's medical bill payment history, only after the patient is discharged.

And under the Fair Credit Reporting Act, hospitals and doctors may report health care debts to credit reporting agencies but cannot indicate what they were for. Hospitals generally do not report delinquent accounts, but they do turn them over to collection agencies. In such cases, only the medical provider's name and the amount owed should be listed. And even then great care must be taken so as not to reveal the type of care given, as would be the case with the Betty Ford Clinic, which is widely known for treating drug and alcohol addiction.

But can they be trusted?

Given the problems with the credit system in general - such as identity theft and inaccurate scoring data - consumer advocates question whether or not this information should be used as the basis for a new medical version. In an analysis of more than 500,000 individuals' credit scores, the Consumer Federation of America says 29 percent were 50 points lower than they should have been.

They ask, "What's going to happen if there's a mis-scoring due to clerical error or when there are two people with names like Bob Jones who have similar numbers?" Insurance companies are already using a person's credit score to determine their premiums now. What's going to stop health insurance providers from doing the same thing once the new MedFICO score is available?

If you ever doubted the importance or legitimacy of your credit score being as high as possible, this should be your wake up call!

4:56 PM - Feb. 28, 2008 - comments {0} - post comment

Consider your landscaping

In this article Peg Guinta, CRP, Projects Director for RIS Consulting Group, gives some guidelines for taking that curb appeal from average to super.

It’s no wonder home staging has gotten a lot of attention lately. Expand interior appeal to a larger buyer group and you may sell the home sooner and for more money.  Companies that track home staging results report that a staged home can potentially reduce selling time by half and improve sales prices by 5% -7%. 

In fact a national survey of 2000 real estate agents conducted by HomeGain in 2003 found that “…moderately priced home improvements, ranging from $80-$2,800 made in preparation for sale actually yield the highest returns when a house is sold.”

So, if broader interior appeal translates to increased economic value, an improved exterior should, too. Because most buyers form opinions ‘at the curb’ - before they even get out of the car - a home’s exterior is a powerful, pre-emptive stage-setter, keeping prospects’ interest intact.

Build Appeal, Build Value

Strategic home preparation is a fundamental consideration in any home marketing tool kit, whether it’s an improved landscape design or basic upkeep and maintenance. Major elements such as landscaping; structural items and architectural features should appear cohesive and well-kept. Visual appeal is sometimes subjective, but balanced and consistent features generally create a pleasing composition.

The good news is-you don’t need a landscape designer to tell you that the foundation plantings need updating. or the front walk is undefined or unwelcoming. And improving selected features will probably cost less than you’d expect. In 2002, the American Nursery & Landscape Association reported that the average amount spent on landscape installation / construction was $3,502. Several sources indicate that this investment cost recovery is high. According to Money Magazine, February, 2000, “A nicely landscaped property can allow owners to recoup 100-200% of their investment at selling time.” Larger landscaping design projects can offer more value but always keep investment cost in line with property values.

Landscaping - An Underused Strategy?

The HomeGain survey also reported that a simple improvement such as ‘landscape & trim’ with a typical cost of $432-$506 can bring an increase in sale price from $1,594 - $1,839 - a 266% average return.

Other sources concur. According to the Gallup Organization, a landscaping project could add anywhere from 7%-15% to a home’s value. A Clemson University study reports slightly more conservative results: homes with “excellent” landscaping can expect a sale price about 6%-7% higher than one with only “good” landscaping.

Buyer appreciation of patios, decks and inviting outdoor living spaces further heighten sales appeal and add real economic value when it’s time to sell. But if expectations are to recover all costs of elaborate projects - sellers beware - because many buyers will not consider a highly personalized project desirable.

At The Front Door

The front entryway is a particularly important area and offers great opportunity to make a statement. It doesn’t matter how tiny the area is - there are lots of tasteful touches that will make an impact without costing much. A simple welcome mat, a wreath on the door, a hanging flower arrangement may be enough. A brass door knocker and kick-plate, and a potted tree on the steps can class up the front door area. Benches, art or antique objects fitting in with the overall house style can add interest and a welcoming appearance.

Consider color in the front entrance, too-could door trim or the front door itself use a color upgrade? Changing front door color is a quick and inexpensive fix to improve curb appeal. Painted a complimentary color to house and trim, doors can add dimension and style instead of receding or even detracting from overall appeal. House numbers, lighting and mailboxes should also be included in design appearance.

“Hardscaping” elements leading to the front door or the front porch itself are other opportunities to improve features that may need a lift. Selection of hardscape materials themselves (i.e., slate, brick, stone, etc.) are style choices that should relate to and complement other property elements.

Driveway, front porches and walkways are items often overlooked that when updated, can make a huge impact. One of the easiest projects to do is create a defined walkway if there is none. This not only adds visual value, but is practical. A walk way should efficiently direct users to the entry and look attractive while doing it; no overgrown grass, shrubs, loose slates or out-of-place bricks on the way to the front door.

The Value of a Tree

A home’s curb appeal has the power to set the stage; it may keep prospects away or draw them in, easily affecting a property’s sale price. Appeal is highly individualistic, but a well-designed and maintained “curbscape” needn’t be cost-prohibitive to improve the home’s sale-ability. If sellers anticipate a curb appeal project for the purpose of resale, remind them that design moderation is best for investment recovery.

For those planning to sell soon, now is the time to consider curb appeal improvements. Even for those not intending to sell right away, consider the value of a tree; based on its maturity it can have an appraisal value of between $1000 to $10,000, according to the Council of Tree and Landscape Appraisers.

12:40 PM - Feb. 26, 2008 - comments {0} - post comment

What do those rate cuts really mean?

Hot on the heels of its surprise inter-session rate cut of 75 basis points, the Federal Reserve cut key interest rates again, the fifth straight cut since September 2007. In its statement, the Fed said it had decided to cut the federal funds rate "in view of a weakening of the economic outlook and increasing downside risks to growth." In other words, economic data suggests the US is on the brink of recession, and the Fed is acting accordingly.

Who benefits from this cut?
If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit (HELOCs) and variable rate charge cards are the types of loans that will have an interest rate reduction on their next statement.

What does this mean for long-term rates?
Long-term mortgage rates, the lowest we've experienced in years, could actually increase after today's cut, based on historical performance and recent trends.

So if you're waiting for long-term rates to fall further, don't count on it. Your best chance to lock in the lowest rates since 2005 is now. Getting your application in process now will allow you to capture a great rate before it's too late.

What REALLY moves mortgage rates?
Fixed-rate mortgage rates aren't directly tied to Fed interest rate moves. Instead, they tend to follow in the direction of other long-term government bond yields, such as the 10-year Treasury, which historically moves in accordance with the economic outlook and in advance of Fed actions. The performance of Mortgage Backed Securities, issued by Fannie Mae and Freddie Mac, is what really determines long-term mortgage rates.

How does the economic stimulus package fit into the picture?
The economic stimulus package from Congress and the White House could be a double-edged sword for borrowers. Combined with recent Fed actions, the package could create inflation and bring about higher long-term interest rates.

On the positive side, conforming loan limits are likely to be raised from the current $417,000 to upwards of $625,000. This means great potential savings for purchase and refinance candidates who live in 20 high-cost areas across the country.

What should you do next?
If you're unsure how the rate-cut or the proposed legislation affects your mortgage, don't worry, you're not alone. There's no one-size-fits-all answer. Call your lender right away to see how these cuts affect your mortgage and how they can help you.

12:32 PM - Feb. 24, 2008 - comments {0} - post comment

Safety Tips for 2008

With 2008 in full swing, people are planning to make this year better than the last. One resolution that everyone should make year after year is make safety top priority.

As part of its year-long safety awareness campaign, Lifetime of Safety, Oncor wants consumers to remember these “Top Ten” important safety tips in 2008:

1. Stay away from downed power lines. Treat all fallen lines as if they are energized and deadly. Call 9-1-1 to report the situation and keep other people and pets away.

2. Leave tree trimming to the professionals. Every year, people are injured or even killed when they climb or prune trees near power lines. Tree limbs in-contact with power lines can act as conductors. A person can be seriously injured if contact is made.

3. Observe all warning signs. Teach children not to play near electric equipment or to enter areas marked “Danger,” “High Voltage” or “Keep Out.”

4. Don’t run extension cords under rugs, carpets or furniture. Extension cords can cause fires if overheated.

5. Replace light bulbs with bulbs of equal or lesser wattage. Follow the manufacturer’s warnings for appropriate wattage to avoid overheating.

6. Call 1-800-DIG-TESS before digging 16 inches or deeper. State law requires the call to help prevent coming into contact with underground electric and gas lines.

7. Don’t overload outlets and extension cords. Overloading, or plugging in too many appliances, can cause fires.

8. Turn off lamps whenever a room will remain unoccupied for an extended period of time. Not only does this conserve energy, but lamps might overheat, causing a fire that no one would be present to notice.

9. Protect appliances from voltage surges or drops-plug them into surge protectors. Surge protectors should bear the seal of a nationally recognized certification agency.

10. Make sure electrical appliances are not placed where they might get wet. Water can damage electrical parts and cause them to become grounded, posing a risk for electric shock hazards or overheating

6:32 PM - Feb. 22, 2008 - comments {0} - post comment

Make that move hassle free

The closing is finally done and you're ready to move. Here's some great tips from The Move Advocate  to make sure it's hassle free:

1. Make sure that your moving quote is based upon a visual survey.
One of the biggest mistakes that people make when booking a move is assuming that a phone quote is guaranteed. The only way to obtain a binding quote is to have your household goods visually surveyed by a moving company. Make sure that you get the quote in writing.

2. Read all documents before signing.
Once you have been provided a written quote, make sure you read before signing. The quote should document weight, distance, and services to be rendered. If you have verbally discussed any special services make sure that those needs are reflected in the estimate.

3. Make sure you have adequate valuation coverage.
Standard coverage for interstate moves, which all carriers are required to provide, is 60 cents per pound. This amount will be inadequate if an expensive item, such as a plasma television, is damaged in your move. Additional insurance can be purchased through the carrier or through your home insurance policy.

4. Use a reputable mover for your move.
The number of choices available for your move is enormous. Make sure that you are using a reputable mover who is licensed, bonded, and insured. A reputable mover will not ask for a deposit up front and will have moving trucks with their own company name on them.

5. Make sure the mover can contact you.

If you are planning to have your phone disconnected the day of your move, make sure that the moving company has your cell phone number or another way to reach you. This is also applicable for your new residence.

5:59 PM - Feb. 20, 2008 - comments {0} - post comment

7 ways to make sure the price is right

“You’ve got to know more than you would have if you’d sold a year ago,” says William Poorvu, professor emeritus at Harvard Business School and author of the upcoming book “Creating and Growing Real Estate Wealth.” “If you want to protect yourself, you have to become knowledgeable.”

1. Recognize that housing markets are local.

Home prices are like the weather — very different in different areas. In many markets, home prices have actually gone up from last year, says Dick Gaylord, president of the National Association of Realtors.

In addition, demand will change depending on the price range and even the neighborhood. What you need to know: What’s the demand for a house like yours in your area?

“You have to look at what’s being sold and at what price,” says Poorvu. “That’s important.”

Look at comparables for similar houses. Study prices and sales for one year ago, six months ago, three months ago and current numbers, says Gaylord.

What are the trends? Are prices going up or down — and by how much? How many days are homes staying on the market? If they are on the market longer, how much of that could be seasonal? In many areas, spring and summer are the busy seasons.

Pay special attention to “the delta between the list price and the sales price,” says Ron Phipps, broker with Phipps Realty in Warwick, R.I. That is, look for a meaningful relationship between list price and sales price. Perhaps most homes are selling for 5% less than the list price.

“An agent who works the market will be in the best position” to find “the tipping point between nice, attractive and interesting — and being sold,” Phipps says. You want to find the point between, “Hey, that’s interesting,” and “It’s too good to pass up.”

2. Analyze who is buying and selling in your market.

What’s your competition? Who are the buyers, and why are they shopping?

Do you live in an area like Phoenix, “a growing market with people coming in,” says Poorvu. Or are you living in an area that doesn’t attract a lot of new residents, where many shoppers are “bottom fishers” who don’t have to buy but are “looking to pick up a bargain,” he says.

Are you competing against a flood of new houses from builders eager to sell, or are you selling a newer home in an area where most of the housing stock is older?

3. Ask the professionals.

When you interview real estate agents, ask about the market conditions for your area and price range.

Specifically, ask about the “absorption rate” says Phipps. What that means: In the current conditions with the current inventory, how long would it take the market to absorb or sell, all the houses on the market?

If the supply is much larger than the demand, ask potential agents how they would “price to offset that inventory,” he says.

4. Know what your house is worth.

Talk to a handful of agents. Get an appraisal from a certified professional appraiser. Look at your comparables. Taken together, that information will give you a pretty good idea of what your home is currently worth.

5. Consider strategic pricing.

Here’s how it works: If prices in your area are dropping 1% each month, and you want to sell within the next three months, you take 3% off your price right off the bat, says Phipps. So if you were going to put your home on the market for $400,000, you set the price at roughly $388,000.

The upside: You’ll have the competitive edge over the guy who’s dropping his price every month, without the air of desperation. Plus, in a market where prices are falling, you’ll make more money if you sell quickly.

The downside: Predicting the market is a tough call, even for the pros. And it’s really difficult to raise the price if your market starts to rebound, Phipps says.

6. Evaluate whether you really have to sell now.

If you want to get the best possible price for your home and the local market is tanking, “see if you can delay the sale,” says Poorvu. Otherwise, in a lot of markets, sellers have “to be willing to accept a pretty good haircut over what they thought their home was worth last year,” he says.

The downside of waiting: The market could decline or your circumstances could change to the point that you might need to sell quickly.

But for situations where the move is optional (or you might be able to rent the property until your local market improves), waiting is a solid option.

Just because you’ve already planted that “for sale” sign doesn’t mean you can’t change your mind if you’re not seeing the interest you anticipated.

“If you know there are no sales or sales are decreasing, and you have the opportunity,” taking it off the market is a decent solution, says Healy. “I think we’re seeing a lot of that.”

7. Assess the market where you plan to buy.

If you’re selling one house and buying another, look at the market where you plan to move. Says Poorvu, “It might be that, with the housing there, it’s a great time to buy.”

1:13 PM - Feb. 18, 2008 - comments {0} - post comment

17 ways to get the Buyer inside the house

Here are some easy, inexpensive fixes that will help create outside appeal and get you one, giant step further to a sale.

1. Paint or stain the front and garage doors, especially if they show any weathering. These are the first visuals where a potential buyer focuses. If garage doors are metal and dented, they may need to be replaced.

2. Any old, basically abandoned sheds or small structures, must be removed, the area graded and the grass replaced.

3. Change any dated, outside light fixtures.

4. Fix that driveway. If it is blacktop, make sure cracks and crumbling areas are dug out and filled and then the whole driveway sealed. If it is cement, have large cracks filled and repaired professionally. The buyer must at least feel they can drive the moving truck in confidently!

5. Make sure landscaping bricks are in their proper placement. Mowing, weed-whipping sometimes moves them and this is something the homeowner rarely notices, but makes the property look unsightly.

6. Fill in bare dirt under large shade trees. Plant shade-tolerant plants in defined planters or groundcover. Landscape properly for that area.

7. All landscaping beds should be cleaned out and updated for the time of year it is in your region. Place new bedding material down.

8. Have trees and bushes pruned and trimmed. If a bush or tree is looking old or about to expire, remove it and replace it with a similar size and type if you can. If there is a tree limb(s) over the roof, have them removed.

9. If the house needs painting and a full paint job is not in the cards; have it touched up professionally in the worst, most visible spots. Paint shutters and fix them if they are hanging crooked. At least this may help get your buyer in the front door, even if they negotiate a full paint job into the sale later.

10. If the house is sided, have it power-washed and have gutters and windows cleaned. Window cleaning inside and out makes the house feel updated and fresh, rather than old and dingy.

11. Make sure grass is in good shape, weeds are removed, trimming done regularly. So many sellers fall down on this job the minute the house is listed, and this is critical to selling a house quickly, especially one where the owners have already moved out. In snowy climates, removal must be done regularly too. If owners have moved out, make sure you have an HWA Home Warranty to re-assure buyers.

12. Keep garbage and recycle containers inside the garage, along with all toys and equipment. Make sure the garage is neat and organized. Painted walls and floors also go a long way in this area and are inexpensive to do.

13. Decks should be washed and repainted or re-sealed; plantings around them cleaned, weed-free and looking good. Patio furniture should be in excellent condition. Even though it is in the backyard, this is the area where the family can envision enjoying the warm days and the new yard.

14. If the roof has missing shingles and they can be replaced inexpensively, this should be done as it may save negotiation over a completely new roof. Roof repair needs and costs should be minor or the homeowner might as well replace the entire roof.

15. If you want to do a bit more, try adding solar lights lining the driveway or installing a more attractive front door with lead glass inserts and replacing plain doorknobs with something more custom.

16. If you have an evening showing, make sure lights are on outside and inside the house. This is warm and inviting.

17. If it’s a holiday season, by all means decorate the home! Just like sugar cookies or vanilla scent on the inside of the house, this really says “it’s a home” and I can see myself enjoying life here! In the least, always have some greenery or flowers for the season on the front step or porch; even a birdbath with a little garden around it says home.

Remember, most home buyers cannot visualize even these simple changes and clean ups in a house and the ones who can, will be looking for a reduced price. So to sell the house at top dollar and quickly, make it “appeal” to the many who will be seeing it rather than the few who are looking for a “fixer upper.” These people know what they want, go after it and need less assistance.

1:03 PM - Feb. 16, 2008 - comments {0} - post comment

Eat great in 2008

“Everyone’s looking for the next breakthrough item, the next mini burger appetizer, mojito or pomegranate flavor,” says Maria Caranfa, director of Mintel Menu Insights. “This year, we expect to see new twists on already popular items, giving people more flavors and options for the foods they love. Restaurants will get more creative with foods and preparation techniques as they attempt to cater to American’s evolving tastes.”

1. Superspices are the New Superfruits - 2007 created a superfruit frenzy. With such high antioxidant content, superfruits such as pomegranates, blueberries and açaí berries flourished on the restaurant menu. This year, expect to see “superspices” seasoning American menus. Research suggests that superspices like cumin, ginger, cinnamon and tumeric may boast more antioxidant power and medicinal benefits than their superfruit cousins.

2. Snack Attack - This year, plan on satisfying that snack attack. Restaurants hope that small portions, big flavors and low prices will lure in hungry snackers. Mini burgers and wraps caught on late in 2007, but look for restaurants to add more “mini” favorite foods this year. From fast food to fine dining, restaurants may soon compete to create the fastest and most filling snacks.

3. Fine Fast Food - Fast food is going gourmet. Popular celebrity chefs are branching out with convenient, fast casual restaurants that promise high quality food, fine cooking and bold flavors…all on a 30-minute lunch break. Bobby Flay, Rick Bayless and Wolfgang Puck have invested in fast casual operations, bringing their unique culinary flairs to the masses. Expect more celebrity chefs to get in the mix this year.

4. Grain Goodness - With the health benefits of whole grains becoming more widely known, certain nutritious grains will grow on the American restaurant menu. Kamut, quinoa, barley and millet pack a worldly punch along with healthy, essential nutrients. These grains are the ideal backdrop for tomorrow’s innovative ethnic flavor and health trends.

5. Ingredient Provenance - Food safety and ecological issues have made headlines recently, causing many Americans to rethink where their food comes from. As concerns over ingredient origins rise, restaurants have responded with more local ingredients, more natural and organic menu items and more sourcing information on the menu. Expect all types of restaurants to take some of the “science” out of dining out this year.

6. Bulking up the Bar - Watch closely as restaurants flex their bar muscles. Enhancing menus with more flavorful cocktails and savory appetizers than ever before, restaurants want diners to linger, lounge and just have fun in the bar. Look for beverage lists to grow longer than entrée lists, while appetizers occupy more of the menu in coming months.

7. The Return of the Classic Cocktail - Once the preferred choice of Hollywood sophisticates, classic cocktails fell behind flashy, froufy new favorites in recent years. But no more. In 2008, expect a rebirth of cocktails such as the Sidecar, Manhattan, Bellini and Tom Collins. Classic and glamorous, these old-fashioned choices are sure to shake things up.

8. Mocktails Rock - Ice-cold lemonade with strawberry puree, fresh ginger, crushed mint leaves and … no alcohol? Rising demand for better non-alcoholic drinks created the mocktail. Boasting the same premium flavors as the cocktail menu, alcohol-free mocktails are a sophisticated alternative for “non-drinkers” and “drinkers” alike.

12:46 PM - Feb. 14, 2008 - comments {0} - post comment

Put a "freeze" on identity theft

In the time it takes to count to ten, five new people will become victims of identity theft. In fact, according to the U.S. Department of Justice Statistics, identity theft is now passing drug trafficking as the number one crime in the nation--with more than 15 million victims every year.

Rather than lay awake at night worrying and wondering if your identity has been stolen, you can actually take a simple step to protect yourself... it's called a credit freeze (or, sometimes, a security freeze). Essentially, a credit freeze gives you the ability to "freeze" or lock access to your credit file--which helps prevent someone from opening a new account in your name.

Here's How It Works

When someone tries to open an account in your name, they'll be stopped in their tracks. That's because one of the first things a creditor will do before opening the account is pull a credit report.

By having a credit freeze in place, creditors aren't able to pull your credit report. And, since very few lenders will issue credit without first seeing a credit report, identity thieves can't open fraudulent accounts using your name. However, when you want to apply for credit, you can temporarily lift the freeze using a PIN... thus, allowing your legitimate application to be processed.

The Flip Side

First, it's important to remember that a credit freeze only stops someone from opening a fraudulent account. It can't stop them from using a stolen credit card. So you still need to keep the phone numbers of your credit cards handy, in case your cards are lost or stolen.

In addition, some critics argue that credit freezes have more of a downside than most people realize. That's because you won't be able to purchase a car, get a new credit card, or refinance a mortgage at a moment's notice. Instead, you'll have to plan ahead by lifting the freeze, which usually takes about three days.

For most major purchases, this won't be much of an issue--after all, how many of us buy a car or house on a whim? Typically, we make the decision to start looking and, at that point, can easily lift the credit freeze in anticipation of the purchase. However, a credit freeze can be problematic if you're at a department store and the cashier offers you 10% off your purchases if you open an instant credit card with the store.

Other Options

Opponents of credit freezes also argue that consumers can just as easily fight identity theft with fraud alerts, which require lenders to verify identity before issuing loans or credit. If you have reason to believe you've been a victim of identity theft, you can obtain a 90-day fraud alert. And if you provide reliable evidence that you are in fact a victim--using such documents as a police report--you can extend that fraud alert for up to seven years.

The problem is... fraud alerts only come into play AFTER you've been victimized. So for many consumers, credit freezes offer more protection and more peace of mind.

Here's the Shocker... You May Not Have a Choice!

Believe it or not, credit freezes aren't available in every state. Some states have yet to pass credit freeze laws. Why? Well... it all comes down to a battle between the big business of instant credit and the growing need for more secure personal information.

And, don't kid yourself, billions of dollars are at stake in this battle! Credit-reporting agencies sell credit reports to lenders, landlords, employers and other businesses. Department stores and retailers generate huge revenues by offering instant store credit cards that boost profits through interest and increased shopping. And, finally, we as consumers have simply grown accustom to receiving on-the-spot credit for our purchases.

12:37 PM - Feb. 12, 2008 - comments {0} - post comment

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