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September 2008

Understanding FDIC insurance

After the recent failure of California-based IndyMac Bank, many people have wondered how safe their accounts really are. While the Federal Deposit Insurance Corp. (FDIC) guarantees most bank deposits, here are some important details to remember.

What types of accounts are covered?

The FDIC protects checking and savings accounts, certificates of deposits (CDs), Christmas club accounts, and money-market savings accounts. However, Stocks, Bonds, and mutual fund shares...even those purchased through an FDIC bank...are not protected.

What are the limits of FDIC insurance?

Bank accounts that have less than $100,000 in them and certain retirement accounts (IRAs held in CDs and money market accounts) that have less than $250,000 are fully protected by the FDIC even if the bank fails. If you want to exceed these account limits, you can keep your deposits fully protected by:

1. Dividing your money among several different bank companies. Note that dividing your money among several different branches of the same bank does not guarantee full protection.
   
    
2. If you prefer to keep your money in the same bank company, you can still be fully protected if you divide your money among various "ownership categories". Ownership categories include a personal account in your name, a personal account in your spouse's name, a joint account co-owned by you and someone else, and a trust account that names someone other than you as a beneficiary.

What are some common ways customers end up with uncovered deposits?

If you purchase a CD through an investment broker, this CD will often be placed with a bank at which you already have an account. If the CD and your other accounts exceed the $100,000 limit, you may not be full protected. Before purchasing CD's through a broker, ask where they will be placed.

In addition, keep track of the interest your accounts earn so you don't exceed the limits this way.

What will happen if your bank fails?

In most cases, depositors can fully access their funds by the next business day. Typically, failed banks are closed on Fridays, and funds are available by the following Monday. People can also usually use their ATM cards and write checks over that weekend as well. And for customers whose accounts exceeded the FDIC limit, all hope is not lost. Though this amount has varied, they can generally expect to recover 70 cents on the dollar of their uncovered funds after the bank's assets are sold.

The good news is that the vast majority of US banks are secure, but the above information will help you stay fully protected.

For more information, visit www.fdic.gov.

6:06 PM - Sep. 29, 2008 - comments {0} - post comment

Understanding Short Sales

Here is part 1 of a 5 part series on short sales and foreclosures by Darryl Davis.  One of the most sough-after speakers in real estate, Darryl Davis has been a Master Trainer and Advisor for the past 15 years. He has been named one of the Highest Rated Speakers at the National Association Of Realtors® Convention for the past 9 years. Darryl has directly impacted hundreds of thousands of real estate professionals with his live events, best-selling books, learning systems and coaching program.

According to the Mortgage Bankers Association, every three months, 250,000 new families enter into foreclosure. One child in every classroom in America is at risk of losing his or her home because their parents are unable to pay the mortgage. One out of every 200 homes will be foreclosed upon. These statistics may be alarming, but they are the reality in today’s market. Fortunately, there is a win-win solution for all parties involved: the homeowner, the bank and the real estate agent.

The recent decline in property values has created many challenges for real estate agents and homeowners alike, but a “Short Sale” could be the key to a happy ending. One of the biggest misconceptions about short sales is that they are difficult and not profitable In fact, while a short sale does indeed help a homeowner tremendously, it is also highly beneficial for the market

So, what is a short sale? A short sale is a loss mitigation solution. The easiest way to explain a short sale is this: when you go into a seller’s house and ask the magic question, “how much do you owe on your home?” the answer is more than what the current value of that home is. Very simply put, a short sale is when the value of the mortgage is greater than the value of the property.

It is said that 90% of homeowners do not understand the difference between a foreclosure and a short sale, and many agents wonder the same thing. A foreclosure is the process of the bank taking back ownership of a house due to the homeowner’s inability to pay their mortgage. The home is now an REO or bank-owned property, and the lender will sell it for the listed price. A short sale, on the other hand, is sold by the homeowner before a foreclosure takes place. The listing price is determined by broker price opinions, recent comps in the area and the condition of the home. And ultimately, in a short sale, the lender agrees to accept less payment than what is actually owed to them.

By definition, any homeowner that is two months late on their mortgage payment and can also demonstrate the inability to pay their mortgage would be considered a short sale candidate. The homeowner is considered pre-foreclosure when the bank officially sends a notice of default or a notice that they’re taking legal action against the homeowner to collect the debt. Contrary to what most agents believe, a short sale can still take place during the foreclosure process. There are only two reasons that a homeowner is not eligible for a short sale:

The foreclosure has already taken place and the home is up for auction
The homeowner files for bankruptcy

According to a recent Freddie Mac/Roper poll, more than six in 10 homeowners who are delinquent in their mortgage payments are not aware of services available to them that would help their situation. Much of the population are unaware of short sales and their process. A short sale is a win-win. It’s a win for the bank because an agent is helping them along their sales process and helping them recapture as much of this non-performing loan as possible. It’s a win for the seller because they’re going to be forgiven for a large portion of the money they owe and are saving their credit. It’s a win for buyers because they can obtain a property that is priced right.

What’s more, stopping a foreclosure before it happens is in fact helping the economy and the real estate market. According to “Collateral Damage: The Municipal Impact of Today’s Mortgage Foreclosure Boom,” written by William C. Apgar and Mark Duda, just one foreclosure can result in as much as an additional $220,000 in reduced property value and home equity for nearby homes. In an already down market, any loss in home value is detrimental to everyone involved.

Another reason a short sale is a better option than foreclosure is because it saves the seller’s credit from being damaged. A foreclosure can drop a homeowner’s credit score by 300 points or more. A short sale will affect a homeowner’s credit score by 80 to 100 points on the average. It reads on your credit report as a paid lien or paid judgment, and is much easier and quicker to repair than a bankruptcy or foreclosure.

According to RealtyTrac Inc., home foreclosure filings more than doubled in the second quarter of 2008 from a year ago. They also stated that nationwide, 739,714 households - one in every 171 - received at least one foreclosure-related notice from April to June, as soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy left many homeowners with few options.

5:45 PM - Sep. 27, 2008 - comments {0} - post comment

Plan ahead for that computer failure

 Think for a minute about all the information you store on your computer. If you're like most people, you probably have years worth of office work, research, addresses and phone numbers, school work, and thousands of irreplaceable family photos. Not to mention important financial information and the expensive software that runs the entire system!

But what happens when your computer goes on strike - when it just stops working? Do you have a plan to recover the data you need to run your life? Better yet, do you have an up-to-date backup waiting in the wings for just such an emergency? If it's been a while since you backed up your information, the steps below can help you quickly and conveniently protect your information before it's too late.

AN OUNCE OF PREVENTION

First and foremost, make sure you can easily reinstall your operating system and any software that you've purchased if your computer ever does crash. How do you do that? Simple.

You know those disks that come with your computer - the ones with all the software on them, the ones you throw in a drawer and forget about? Well don't. Even though software often comes preloaded and ready to use, those disks and serial numbers are priceless. Keep them in a safe, memorable place and you'll be able to easily reload your software after a crash.

For the rest of your data, put the following tips to work and you could save yourself a major headache!

Thumbs Up

Those little USB flash (or thumb) drives that you see everyone carrying around now are an ideal, inexpensive way to backup small files for short periods of time. Whether you're moving information from one computer to another or you want to make sure a critical company report doesn't get lost before the big presentation, these handy devices are well worth the $25 you'll spend for 4 GB of peace of mind.

Burn, Baby, Burn

Most computers come standard with CD/DVD burners. Contrary to television commercials, you can burn more than just song compilations. Make the most of this device by using it to back up your important data regularly. Most DVDs can hold 4.7 GB worth of data. To back up larger files and even more data, you can double the capacity with double-layer DVDs (known as DVD DL) that can hold up to 8.5 GB!

Step Outside

While CDs and DVDs work fine for hand-selected files, they simply don't provide enough memory for most people to backup their entire hard drive. To safeguard every last byte of data, you'll want to add an external hard drive that can be connected to your computer, but that ultimately operates independently.

External hard drives are much larger - often as large if not larger than the amount of memory on your computer's built-in hard drive. Plus, because they're external, your data will still be safe and easy to access even if your computer crashes. Simply connect the external drive to a new computer and you're up and running without a hitch. You can purchase a basic external hard drive with 300 to 500 GB of storage for as little as $100. Better still, products like Seagate's FreeAgent storage devices offer you a variety of options as well as the ability to access your information even when you're not at home, so you can open a document or view your family photos from out-of-town.

Movin' Out

For the best level of protection, move data out of the house altogether. Storing your data off-site protects it from fire, theft, and flooding. And it's not as expensive as you might think. In fact, you can get a ton of free space from services like Yahoo!® and AOL. At that price, the only thing you have to lose is your data if you don't back it up!

ONCE THE DAMAGE IS DONE

If you find yourself in the unfortunate position of having a computer crash, you may actually be able to recover some of your files. The cost, however, can run anywhere from the hundreds to the thousands. The best place to start is with inexpensive data recovery software, such as SpinRite for Windows PCs or Alsoft's DiskWarrior for Macs - both of which retail for around $100 or less. These programs may be able to help you locate and recover your missing files without the need to take your computer to an expensive technician. But, remember, the best way to recover data is to make sure you don't lose it in the first place by backing it up regularly.

All of the suggestions above are relatively inexpensive and are extremely easy to implement. So take a few minutes out of your day to make sure that your important information and priceless family photos are safe and secure.

1:14 PM - Sep. 25, 2008 - comments {2} - post comment

What happens if my mortgage lender fails?

Last month, the fallout from the mortgage crisis took a rather unusual turn. For the first time in 20 years, several US banks went belly-up, most notably IndyMac Bank, the second largest financial institution to fail in US history, and one of the largest mortgage lenders in the country. Suddenly, IndyMac's bank account and mortgage holders found themselves in uncharted territory – what did this mean to their money and, more importantly, what did it mean to their homes?

Over the next few days and weeks, the Federal Reserve, which seized IndyMac's assets, did its best to assure IndyMac's customers that their bank accounts were protected by the Federal Deposit Insurance Corp (FDIC). This meant that typical checking and savings accounts were protected up to $100,000 per individual and up to $250,000 for retirement accounts, such as an IRA.

Mortgages, however, are not protected by the FDIC. What's more, the bank or entity that just went out of business, in this case IndyMac, may not be the actual "owner" of your mortgage. Many of these investors hire a mortgage servicing company to collect and process each payment of your mortgage, and never actually receive any payments directly from consumers. This is why nearly half of all outstanding mortgage debt in the U.S. today is "purchased" or "owned" by either Fannie Mae or Freddie Mac.

Keep Paying Your Mortgage
Combined with a slowing economy and falling real estate values, additional banks will feel pressure if mortgage delinquencies continue to increase in the coming months. In fact, one banking analyst, Gerard Cassidy, of RBC Capital Markets, predicted last month that as many as 300 banks could fail in the next three years!

If you happen to hold a mortgage with a bank that goes down, the first thing you need to know is that your mortgage does not go away, so keep paying your mortgage payments on time every month. Remember, the entity that funded your mortgage may or may not be servicing it. So, keep detailed records of what you've paid and when, including any billing statements, canceled checks, or bank account statements. According to the FTC, there is a 60-day grace period after the transfer during which you cannot be charged a late fee if you mistakenly send your mortgage payment to the old servicer – but don't count on this!

Unfortunately, mistakes are made, so continue to make your mortgage payments, and keep copies of any and all letters and/or documents for your records. You have the right to dispute errors on your credit report that may result from a transfer of service, but you will not successfully challenge the credit bureaus without accurate documentation, even if you're telling the truth.

It's important to note that the company responsible for servicing your mortgage is required to send you a letter 15 days in advance of any transfer. In addition, the new company responsible for servicing your loan must advise you that your mortgage has been transferred 15 days after the transfer has occurred.

According to the Federal Trade Commission (FTC), the notices must also include:

• The name and address of the new servicer;
• The date the current servicer will stop accepting your mortgage payments;
• The date the new servicer will begin accepting your mortgage payments;
• Toll-free and collect-call telephone numbers (for the current and new mortgage servicer);
• Information about whether you can continue any optional insurance; what action, if any, you must take to maintain coverage; and whether the insurance terms will change; and
• A statement that the transfer will not affect any terms or conditions of your mortgage, except those directly related to the servicing of the loan.

Be aware: there are plenty of scammers out there that try to take advantage of people during this confusing transition. If you receive notification that your mortgage has been sold, make sure all of the above information is given and use it confirm that the transfer is legitimate before you send a payment to the new company. Don't be afraid to pick up the phone and call your existing mortgage company to find out the truth.

In the past, scammers have sent very convincing, professional-looking letters to homeowners stating that their mortgage or mortgage servicing has been sold. Before the fraud can be discovered, the homeowner's credit may have already been damaged and, even worse, they're unable to recover any of their money they lost to the scammers.

Don't let this happen to you or someone you know. If your mortgage company goes out of business, remember that the terms of your mortgage, and your mortgage itself, will not go away. Keep paying, but be on the lookout for any information regarding the servicing of your mortgage and take the time investigate, confirm, and document the transfer of service. Remember, this is your hard-earned money and credit on the line, and it's up to you to protect it.

1:08 PM - Sep. 23, 2008 - comments {2} - post comment

It's time to think about spring bulbs

There is nothing quite as beautiful as seeing your spring flowering bulbs burst into color after the long cold winter. This fall start planning for next spring by adding some color to your drab landscape. Below are some planting tips for a beautiful bulb garden sure to impress in the spring!

www.myidealgarden.com/

1:00 PM - Sep. 21, 2008 - comments {0} - post comment

Maybe it's time to rent out your second home

This article by Christine Karpinski may give you some ideas about what to do with that no-longer-wanted retirement home.

It seemed like a great idea twenty years ago-you’d buy that condo in Florida, vacation there as often as possible, then someday sell your primary residence and spend your Golden Years basking in the sun. Now, “someday” is here and-lo and behold-you’ve changed your mind. You now have grandkids you don’t want to leave, all your friends are nearby, and frankly, the idea of nonstop sunshine with no autumn leaves or snowfalls has lost its luster. You’d hate to sell your vacation getaway, but keeping up two homes has gotten too pricey for comfort. Is there a solution?”Absolutely yes,” says Christine Karpinski, director of Owner Community for HomeAway.com (HomeAway.com) and author of “How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment” (Kinney Pollack Press, 2007, ISBN: 0-9748249-9-2, $26.00). “Renting out your vacation home allows you to have your cake and eat it, too. And the good news is, it’s easy to do it yourself-not to mention surprisingly lucrative.”

Many seniors find themselves in this position, she adds. A good percentage of second homeowners fall into the “retirement age” demographic, and quite a few of them have-at one time or another-kicked around the idea of selling their primary residence and moving into that beachfront condo or mountain chalet full-time. Yet, changing lifestyle trends, combined with a rising cost of living, have led many of them to reconsider the fate of their vacation villa.

If you’re a second homeowner, Karpinski offers five reasons why you might consider renting out your vacation home:

1. Circumstances have changed since you made your retirement plans. Maybe grandchildren have arrived on the scene and you can’t bear the thought of moving hundreds of miles away from them. Or your parents are in poor health and need you nearby. Or your spouse has passed away and retiring in the Great Smoky Mountains was his idea, not yours. Regardless of specifics, your life bears no resemblance to what you thought it would look like back when you made your retirement plans.

“Life rarely turns out to look like we thought it was going to look,” notes Karpinski. “That’s okay. Some of the happiest, most successful people I’ve met during my years working in this field never dreamed they would rent out their vacation home, and yet once they tried it they love doing it. It pays to be flexible and keep your options open.”

2. You’ve suddenly realized there’s no place like home. Maybe there are no dramatic life circumstances keeping you from moving to your “dream destination.” Maybe you’ve simply changed your mind. You’ve decided you like being near your friends, you don’t want to leave your church or synagogue, and your Tuesday lunch with “the girls” or Thursday Bridge night with “the guys” is a tradition you just don’t want to give up. Or perhaps you’d like to stay in your hometown most of the year (you kind of like the change of seasons) and spend the bitterest winter months in your beachfront condo. Renting your second home out during the time you are not staying there makes it financially feasible to keep both homes.

“Traditionally, many retirees would sell the home they lived in for forty years, downsize to a smaller house or apartment, and split their time between that home and their vacation place in, say, Florida,” explains Karpinski. “But there are drawbacks to doing that: you lose your neighbors, you’re no longer close to your familiar grocery store, and so forth. And you don’t get to pass the ‘homestead’ down to your kids. Rent out your vacation home and you can have the best of both worlds. You can afford both places. It’s the perfect balanced solution.”

3. You’ve decided to “retire” from retirement. It is not unusual for people to test-drive retirement and find that it’s just not for them. Work can provide many rich rewards-structure, social interaction, mental stimulation, a sense of purpose, and so forth-that people keenly miss when they retire. And when they discover that quitting “the rat race” isn’t quite what they thought it would be, more and more people are opting to return to the workplace. And (let’s be honest), sometimes people simply can’t afford to retire.

“When people decide to postpone retirement, they may also postpone moving to their retirement home,” says Karpinski. “Even if they do retire and then rejoin the workforce either full-time or part-time, they may not want to live in the city they associate with retirement. It’s a psychological thing. And so, in these cases, it’s better to keep the vacation home a vacation home. Renting it out allows them to do that.”

4. Your fixed income hasn’t kept up with your lifestyle. Admit it. Even when you’re happy to give up the daily grind of your job, losing the paycheck that comes with it can be pretty painful. Factor in inflation, rising taxes, and unexpected “new” expenses, and you may find that what seemed like a manageable cost of living five years ago doesn’t seem that way anymore. Your second home, even if it’s paid for, may start looking like a liability due to property taxes, homeowner’s association dues, and maintenance costs. Not if you rent it out, says Karpinski. Then it becomes a (sizeable) source of new income.

“If you have a mortgage on your second home, renting it out only seventeen weeks will cover your mortgage payments for an entire year,” she says. “If it’s paid for free and clear, only five off-week rentals will cover costs like bills for your phone, power, cable, and association dues. All the rest is profit! When you consider that in some markets you can earn as much as $30K-40K in rental revenue per year from your vacation home, you’re looking at a nice ‘raise’ for yourself.”

5. You’re currently renting your vacation home through a property management company, but you’d like to make more money. Ditching the middleman may be the way to go. Property managers simply charge a hefty fee for their services. In fact, as Karpinski’s books point out, you have to rent ten more weeks with a management company to end up with the same amount of money you’d make renting by owner. And with the growing popularity of vacation home rental websites like HomeAway.com, finding renters is surprisingly easy.

“Here’s another good reason for seniors to rent by owner: they typically have time to handle the details,” says Karpinski. “Not that there’s a huge amount of work involved, but it is easier to respond to renter inquiries, do bookkeeping, orchestrate routine maintenance details, and so forth when you aren’t tied down to small children and/or a demanding career. Plus, vacation rental homeowners often meet interesting people and form friendships with them, and retirees tend to have more time to nurture these relationships.”

And here’s a surprise: people who try renting by owner often end up liking it so much that they pour their earnings into another vacation home. In fact, a recent survey by the National Association of Realtors® found that some 55% of vacation home buyers said they were likely to purchase another property within two years.

“Who knows-becoming a vacation rental property owner may become your encore career,” says Karpinski. “Buying and renting out vacation homes is addictive. I’ve done this for years and I can’t imagine ever not doing it. It’s more than a way to make money. It’s a richly rewarding way of life-at any age.”

12:56 PM - Sep. 19, 2008 - comments {0} - post comment

Consider a Green Mortgage

Tired of heat and energy prices skyrocketing out of your budget? Now you can do something about it...and your mortgage can help!

Energy-efficient improvements, such as installing double-paned windows and additional ceiling insulation, can save you money every month, not to mention pay for themselves in the long run. But how do you come up with the cash to pay for those projects up front or to buy a slightly more expensive house that already has them? One way is with a "green mortgage."

What is a Green Mortgage?

Green mortgages actually come in a couple of different formats. Officially these loans are classified as either Energy Efficient Mortgages (EEMs) or Energy Improvement Mortgages (EIMs).

An Energy Efficient Mortgage essentially allows you to purchase a home that is already energy efficient - even if the price of that home is larger than you would normally qualify for under your debt-to-income ratio. Energy Improvement Mortgages, on the other hand, allow you to take out a larger loan to make energy efficient repairs and improvements to a house that is not currently rated as energy efficient.

The main benefit of both of these mortgages is that they help you to qualify for a larger loan amount and help make it possible for you to live in a better, more energy-efficient home. The basic principle behind this type of financing is that the money you save from the more efficient home will offset the larger mortgage payments.

Qualifying for a Green Mortgage

To qualify for a green mortgage, you typically need to have a Home Energy Rating conducted. This rating provides the lender with an Energy Savings Value, which is the estimated monthly energy savings and the value of the energy efficiency measures.

Depending on your unique circumstances, you may qualify for a conventional, FHA, or even a VA green mortgage. Each type of loan is designed to fit specific situations and, therefore, each loan has specific requirements that must be met.

You can learn more about the differences between conventional, FHA, and VA green mortgages at the Energy Star website. And for more details about green mortgages in general, visit the HUD website.

12:47 PM - Sep. 17, 2008 - comments {0} - post comment

Moving tips

These suggestions from The Move Advocate will help you have a safer, saner move.

Moving may seem like an overwhelming experience for some home buyers, so we’ve compiled a list of “don’ts” to help consumers gear up for a smooth move.

1. Getting a quote over the phone or Internet: A big mistake that consumers make, when planning their moves, is obtaining a quote over the phone or the Internet. Any quote obtained in this manner is a non-binding quote. The only way to obtain a guaranteed or binding quote is to have a visual survey of your household goods by a reputable mover. If you choose to accept a quote over the phone or Internet you are setting yourself up for a nasty scenario when the mover shows up at your new home and demands more money.

2. Waiting too long to line up a mover: Allowing time for a visual survey, receiving a written and binding quote, and reserving a truck for your move takes a lead time of 4-6 weeks. Although moves can be arranged in a shorter period of time, many consumers find that their choices are limited by availability, especially in the busy summer months. In our current real estate market many homes are taking longer to sell, but once sold are closing very quickly. The time to obtain estimates for your move is before your home sells so that you are prepared when it does.

3. Misrepresenting what you are moving: It is very important to show the surveyor or estimator everything you are planning to move. If you forget to show items in a basement, garage, attic, or off-site storage unit and then add those items at time of pick-up, your estimate will no longer be binding. In the same vein, if you commit to packing your own items but don’t have time to finish, the van line will pack your items and charge you for the service. If you are uncertain of whether you will be taking something, or are not sure if you will have time to pack everything, ask the surveyor to put the items or service in the estimate. If you decide not to take something, or do not require the packing, the cost will be adjusted downward.

4. Paying a deposit up front: Reputable movers do not ask for payment up front to reserve trucks or dates. This is a classic red flag in moving. A reputable mover will expect payment upon delivery.

5. Finding a mover based upon price rather than reputation and service: If a mover gives you a price that is significantly lower than other movers it is likely that you are being low-balled. If a surveyor has underestimated your weight in order to give you a lower price you may find, on moving day, that the moving truck does not have enough room for your shipment. This is called an overflow. An overflow means that your items will not all travel together, will not all arrive at the same time, and will generally just cause you a big hassle. Another way to lower cost is to compromise service. Look for a competitive bid from a professional mover who is certified and reputable. Although price is an important factor, don’t base your decision on price alone.

12:40 PM - Sep. 15, 2008 - comments {1} - post comment

Putting that commute time to good use

You already know that your daily drive can make you aggravated, exasperated, and even potty-mouthed. But did you know it could make you smarter, too?

A USC study found that drivers who cover an average of 12,000 miles a year will, over the course of three years, spend enough time in their cars to complete two full years of college. That could make commuting the single most important educational tool we have. Think of it as the U of YC: the University of Your Car.

You can find new and used audio books online for cheap, and your local library branch has shelves of audio books of all kinds that you can borrow for free. Here are a few course offerings to consider:

Required courses. Been wanting to refresh your memory on the causes of World War I? Or maybe you want to listen to Harold Bloom read The Best Poems of the English Language. Whatever class you've been thinking of taking, there's an audio book covering the topic, from actual college lectures to best-seller non-fiction.

Get a degree in business. All the best business titles come out instantly in audio books. Learn to make friends and influence people, give yourself a total money makeover, or start thinking like a billionaire - all before you get to the office in the morning.

Stay informed. Check out www.audible.com. You'll find your favorite radio shows like CarTalk and Fresh Air available for purchase, so you can listen whenever you want. You can also find audio versions of the New York Times and the Wall Street Journal available for daily download.

A prende un nuevo idioma. What better place to work on that accent of yours than alone in the car? Go get one of those CDs that can teach you a new language. And the people in the next car watching you talk to yourself, they can think what they want.

Enroll in comedy school. Since you're the dean of admissions and you make the reading (or, rather "listening") list for this degree, you can study what you want. Why not check out the CDs of some top comedians? Dane Cook, Bill Cosby, Richard Pryor - maybe they'll inspire you to work on your own routine.

Your commute isn't getting any shorter, but at least now you can get smarter while you're getting where you need to go. And the next time traffic is stopped dead on the freeway, look on the bright side: you can take notes.

10:52 AM - Sep. 13, 2008 - comments {0} - post comment

Travel like a pro

Here are some great travel tips from the folks at Avis to help you plan the best trip possible.

When you’re visiting a new place, finding the most memorable ways to spend your free time can be a challenge. So, we’ve put together some tips that can enhance your trip and make you feel like a local.

1. Use a GPS system to easily navigate your trip and to find the city’s hidden gems.

2. Check out the city’s official website. There may be guided tours available or a special event that coincides with your visit.

3. Read a local blogger’s page to find insider info on free cultural events, reviews and all sorts of local knowledge.

4. Make a stop at the local coffee shop. “Regulars” can answer your questions and might be willing to share some ideas. And while you’re in there, grab a paper and see if there are any shows or art exhibits scheduled when you’re in town.

5. Take a look at a photo or video sharing website and search the name of the city you’re traveling to. It’s a nice way to visually locate places you’re planning on going to and know where the best picture spots are.

6. Stop by the city’s Chamber of Commerce. They’ll be able to give you operating hours for museums and other attractions, as well as maps, brochures and other useful information to help you plan your day.Whether you’ve got about a minute, an hour or a full day to spend in a new city, there’s always something exciting to do.

Here are some local ideas for a few major cities across the country:

Boston: Boston Public Garden

Bask in Boston’s historic charm with a stroll through the oldest botanical garden in the U.S. Relax beside the pond or check out the famous swan boats, which offer cruises in warmer months.St. Louis: The Meeting of the Waters Fountain at Aloe ParkVoted one of the city’s “favorite works of public art,” the fountain symbolizes the marriage of the Missouri and Mississippi Rivers. Seventeen water spirits, mermaids and fish surround a man and a woman, representing the rivers and smaller waters flowing in.

San Francisco: Tru

In one of San Francisco’s premier spa destinations, treatments include a deep-cleansing oxygen facial, an unforgettable one hour and forty-five minute massage and a skin-rejuvenating “Pair Package” for couples in an intimate Tropical Rainforest Room.

New York: Sotheby’s

This American institution offers ten floors of art, antiques, jewelry and even automobiles to peruse. There’s a diamond collection on the 6th floor and a 10th floor gallery where you can examine items more closely and discuss them with curators.

Miami: Key Biscayne

Pristine beaches and tropical surroundings make it a relaxing scene. There’s Bill Baggs Cape Florida State Park to swim, bike and kayak, the 1825 lighthouse, rustic outdoor cafes and dolphin watching at the Miami Seaquarium.San Diego: La JollaJust 15 minutes from San Diego, La Jolla (”jewel” in Spanish) boasts some of California’s finest coastal scenery, and offers beaches, dining, art galleries, golf and more. Take in the view with a stroll along Coast Boulevard or a drive to Mount Soledad.

10:42 AM - Sep. 11, 2008 - comments {0} - post comment

Does the furniture come with it?

With a glut of distress sales having flooded the market, even in the luxury sector, making selling even non-distress real estate a highly competitive and often disheartening endeavor, any competitive edge a seller can garner can mean the difference between closing escrow on a property or it languishing on the MLS in perpetuity.

“One such competitive edge not commonly considered as part of a home’s marketing strategy is to sell a property either fully or partially furnished,” says Robert Jenson, CEO of luxury Las Vegas realty The Jenson Group. “This strategy has been particularly effective in selling million-dollar real estate in the Las Vegas market where many interiors have been professionally designed, but the method could certainly be extrapolated for homes in other pricing categories and regions.”

Consider these findings on sold furnished Las Vegas-area residences: for 2008 YTD 16% of homes $1 million-plus and 20% of homes $2 million-plus were successfully sold fully or partially furnished. When compared to YTD sales data for unfurnished residences, these numbers represent a 10% increase in the incidence of homes sold with contents over those without. In 2007 15.5% of homes $1 million-plus and a whopping 37.5% of homes $2 million-plus were successfully sold fully or partially furnished.

“While bundling furnishings with a home sell is a viable strategy, sellers should not force a home’s contents onto prospective buyers, which can work against them,” says Jenson. “Instead, give buyers the option to procure the property with or without furnishings, and have a pre-established sale price set for either scenario. Also be prepared to put together a bill of sale for the furniture, separate from the home’s sale price.”

“In a marketplace where lenders have tightened their proverbial belts, forcing many home buyers to come to the closing table with more cash, a partially furnished or fully turn-key home can be a very attractive proposition…and the all important deciding factor in choosing one property over another.”

10:35 AM - Sep. 9, 2008 - comments {0} - post comment

Fannie Mae Freddie Mac Takeover

One of our lenders sent the following analysis just now about yesterday's Fannie Mae and Freddie Mac take over.  Based on the reaction of the stock market today, it seems people are relieved.

1:42 PM - Sep. 8, 2008 - comments {0} - post comment

The Sky is NOT falling!

This editorial by Phillip Cantrell, broker with Allison James Estates and Homes expresses our thoughts on the current real estate fiasco exactly!  Since we couldn't put it any better, we're letting him tell you.

So, what do I think? I think there should be more positive news in the papers than we have today. I think the press has focused so heavily on the negatives of the current housing/mortgage/credit recession that we are just beaten down psychologically.

I think I remember the paintings of the buffalo herds on the great plain of the western U.S. in the 1870s. You know, the ones where the dense herd moves as a single, wriggling, gigantic, black mass being driven by yelping hunters on horseback, firing arrows into the herd-the hunters skillfully driving the herd toward the rapidly approaching cliff, over which most fall to instant death. The buffalo follow one right behind the other with never a thought that blindly following the animal ahead might lead to a disastrous outcome. Instead, they run together, surging on and on until finally their simple lives end at the bottom of the cliff, becoming winter’s sustenance for the hunter tribe.

There are distinct similarities between the buffalo herd and the mentality of today’s consumer. I think we are being driven toward the cliff by the hunters and we are mindlessly following the buffalo in front of us, with never a thought of the possible outcome.

Just as the buffalo, we look to the left to see the yelping hunter and we panic. Not because the hunter is a genuine threat, but just because others in the herd are panicking. So we run toward the cliff, even though we have seen the cliff before and intuitively know that running in that direction will surely lead to disastrous results. I think we do so because we have no leadership to warn us that doing so will end our existence and we have no spine to realize the view can be so much more than the hind quarters of the animal in front. I think buffalo butt is not where I want to focus my attention.

I think I am sick and tired of hearing the endless armchair-quarterback analysis of the talking heads on TV. I think I want to scream at them to shut up and go back to work. I think those that can, do, and those that can’t go on TV and try to teach the rest of us what to think about the situation. Yet we refuse to remember where the cliff is located and persist in running blindly toward it.

I think the facts are that of the 120 million homes in the U.S., over 33% of them are completely paid for and have no mortgage. I think that 40 million of the remaining 80 million homes in the U.S. were bought before the year 2000, meaning that even in a “fire sale” the equity in those homes is at least 30%.
I think I know that 94% of all the mortgages in existence today are not behind at all. Of the 120 million homes in the entire U.S. today, only 4 million are “at risk” with less than 2% of all homes actually in foreclosure. I think Congress is about to spend $300 billion (yes, that’s billion, with a capital “B”) of your tax dollars to bail out those 2% of home buyers who made bad decisions. Yet the talking heads would have us believe that, like Chicken Little, the sky is falling and we all have to run for cover or risk getting smacked by falling houses.

But we keep looking to the right and looking to the left and looking in front and deciding that…well…everyone else is headed in this direction so it must be the right way to go. And the cliff draws nearer and nearer.

10:29 AM - Sep. 7, 2008 - comments {0} - post comment

National Economic Woes maybe? - Part II

This interview is between Marylyn B. Schwartz, CSP, an expert in real estate and corporate sales training/management and team development and  Robert Pardes’ (Robert@pardesconsultants.com) . She is president of Teamweavers and a trainer for Leader’s Choice.  He is a certified public accountant, attorney, banking management, real estate finance and related capital markets expert.   He is a certified public accountant, attorney, banking management, real estate finance and related capital markets expert. His company, Recourse Recovery Management Services, provides strategic and tactical services relating to impaired mortgage backed securities investments

MBS: “As you know, effective March 6, the FHA increased its loan limits on jumbo mortgages to a maximum of $729,750. As it became more difficult to get a mortgage loan, this revision infused some well-needed capital into the mix. What effect is this having on the mortgage industry to date?”

RP: “It is very important for the real estate professional to make his/herself familiar with FHA lending guidelines. As mentioned, there are many thrifts and banks that are sound and well capitalized. When you combine that with the advantages of FHA funding, the banking industry is well positioned to meet the needs of a broad-base of demand. That is not to say that the loss of what amounts of 10-15% of the sub-prime market is not a big deal. Realtors® need to use a talented mortgage broker who knows all aspects of the market and is able to explore options with the applicant as well as help educate the agent. In these challenging times I would advocate that purchase agreements would benefit from the inclusion of statement of income, FICO score, the entity funding the loan and other pertinent information.”

MBS: “While there are those who still refuse to acknowledge the existence of an actual recession, those of us feeling the crunch say that who cares what you call it, it is causing great pain regardless. Talk about your view of the present market conditions.”

RP: “The government has reported accelerated inflation rates due to energy and food costs. Even those reported rates grossly underestimate the inflation rate experienced by average American families. Despite the decreases in the cost of flat-screen TVs, we’re up against the double-digit increases in milk, gasoline, healthcare, petroleum-based products, education and household necessities. The real household inflation rate is more like 20% and is combined with flat and in some cases declining income levels. The combined effect produces an outcome that is far more damaging than even that of a recession by its definition of two consecutive declining quarters of growth.

There is an old saying, ‘It’s a recession if you’re reading about it. It’s a depression if you’re living under the twin evils of unemployment or reduced income and double digit inflation.’ There is empirical evidence that unemployment rates are increasing. The government reported rates do not include those who have abandoned the job search or are underemployed at reduced income and therefore reduced spending power. We’re not a nation of whiners as has been claimed. We are a nation experiencing real pain. “

MBS: “Do you have some concrete recommendations to improve the housing market?”

RP: “Political stalemates, confused monetary policy and the absence of participation of real estate sales and finance industry professionals with hands-on experience in the process of creating solutions for residential real estate woes has proven to be an impediment in taking action to remediate the problems as quickly as possible.

My prescription for addressing the severe conditions impacting the housing market are three fold:

- Focus on liquidity, not interest rates. Rates are higher now than they were last year, and it has not helped to cure the ills.
- Support the demographics that comprised the core housing demands prior to the bubble.
- Allow the unavoidable pain to run its course. Clean up the foreclosures as quickly as possible so that we can begin to move back to more normal housing demands.

In addition, and as a direct result of this current crisis, lending regulations have swung to the right. It is incumbent upon all real estate professionals to understand that they are under tremendous scrutiny, deserved or otherwise. They are being vilified as part of the cause of this crisis and should think about their exposure. Their professional conduct needs to be above the appearance of any impropriety. Simple vigilance is not enough. We need the highest levels of integrity and caution. One transaction could result in a regulatory investigation that could sink a career or even a company. Everything should be put in writing and all RESPA rules should be known inside and out and followed to the letter of the law. Ignorance is no excuse of the law. It is up to the individual to monitor his/her conduct and be outside of the influence of, or acquaintance with less than, ethical individuals.”

MBS: “These are complicated and challenging times for us all. The real estate industry has suffered a few black eyes over the past couple of years. The mortgage crisis is still shaking itself out, and the trouble is that we are not sure exactly where the bottom lies. However, one thing is certain. The housing market will eventually recover and move back to a new normalcy. Mortgage lending will continue and homes will be bought and sold. The American dream of homeownership, although looking more like a nightmare of late, will continue. Your viewpoints are greatly appreciated, and we look forward to speaking with you again as we will continue to need clarity as we traverse this unfamiliar territory.”

2:20 PM - Sep. 5, 2008 - comments {1} - post comment

Shape up that curb appeal

This article is by David Sobel who is vice president of sales for Home Warranty of America.

- 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.

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

- Change any dated, outside light fixture(s).

- 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.

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

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

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

- 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 are tree limbs over the roof, have them removed.

- 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 crookedly.

- 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.

- Make sure grass is in good shape, weeds are removed and trimming is 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. In snowy climates, removal must be done regularly, too. If owners have moved out, make sure you have a home warranty to reassure buyers.

- Decks should be washed and repainted or resealed, 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 warm days in the new yard.

- If the roof has missing shingles and they can be replaced inexpensively, suggest this be done as it may save negotiation over a completely new roof.

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.

Finally, have neighbors or friends look at the finished results to see if you or the homeowners have missed anything key that would be quick and easy to do. Use this article in your listing presentations so they can get started right away on these easy, inexpensive fixes and adapt the ideas to their home. When that home looks great, update its picture on the Internet.

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

2:16 PM - Sep. 3, 2008 - comments {0} - post comment

Comparing loan programs

This article is by Jason Kotar who is president of Kotar & Associates. Contact him at (954) 734-3504 or e-mail JKotar@DiversityLG.com.

Recently, while teaching a class on VA loans to Realtors, I asked a question. “How many of you have ever asked your client if they were eligible for a Veteran’s loan?” Of the 35 attendees, not one person raised their hand.

Similarly, while doing research on USDA Rural Development Loan programs, I was told by A USDA employee that Realtors were not generally aware of Rural Development loan programs. Obviously, there are exceptions to these two cases dependent upon the part of the country that you live.

As we have written previously, your best bet for loan programs are VA, USDA Rural Development, FHA or loans that lenders will portfolio. Conventional loan programs in most parts of the country generally require 620 credit score and a 5-10% down payment and mortgage insurance. Below is a quick reference guide comparing the following loan programs:

	USDA	FHA	VA	Fannie Mae
Front Ratio*	29%	29%	none	28%
Back Ratio*	41%	41-43%	41%	36%
Down Payment	0%	3.5%	0%	5-10%
Loan terms	30 years	15-30	15-30	15-30
Interest Rates	Market	Market	Market	Market
Mtg Insurance	None	Yes	None	Yes
Funding Fee/Mtg Ins. Premium	2% of loan	1.5%	2.15-3.3%	N/A
Reserves	None	None	None	Yes
Source of closing costs	No limit	6% seller	4% seller	3-6% seller

The only true 100% financing programs available are USDA and VA. Credit scoring is another issue with USDA, FHA and VA starting to use 580 as their base while Fannie Mae uses risk based pricing starting at 620.

Changes to FHA and Fannie Mae programs will continue to occur. Fannie Mae programs will tighten up with more restrictions as it continues risk mitigation efforts. FHA, on the other hand, will have its hands full trying to handle the unprecedented loan volumes of (pre-foreclosed) loans being forced on it by Congress.

* Front and back ratios are used in determining debt to income ratios used by lenders to determine the maximum mortgage allowed. The front ratio looks at how much of your monthly gross income will be used to support housing costs. The back end ratio adds monthly consumer debt to the housing costs.

2:12 PM - Sep. 1, 2008 - comments {0} - post comment

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