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January 2009

Keep that exercise resolution

OK, it's about time for you to abandon that "more exercise" resolution you made on January 1st.  Here is an article by Smooth FItness that might help you stick to it.

For many Americans, the New Year means a clean slate and a chance to right the wrongs of the previous year. Unfortunately, each year millions of us make some type of fitness-related New Year’s resolution, but only about 20% of those resolutions are actually kept. Smooth Fitness, an online retailer of home fitness equipment, provides some advice to help everyone reach their fitness goals for 2009.

“We see it every year, everyone sticks to their resolution for a few weeks, maybe a month, but eventually they slip back into their bad habits,” said Chad Tackett, Certified Personal Trainer and Fitness Expert, Smooth Fitness. “The key thing for people to understand is that in order to be successful it is really about a lifestyle change, not crash diets or workout fads.”

A few tips for the start of a healthy year and ways to stick to your New Years resolution:

1. Set a realistic goal - Resolving to look like a supermodel is not realistic for the majority of people but eating healthier and increasing daily physical activity certainly is possible.
2. Develop a plan of attack - Determine your goals and specify how you will achieve them. Be specific. “Exercise” isn’t a specific plan, but running for 20 minutes each morning is a plan. It is also helpful to set milestones you plan to reach throughout the year rather than just one overall goal. It is much less intimidating to attempt to achieve a series of small goals throughout the year than one lofty goal that seems far out of reach.
3. Adjust your diet accordingly - Drink more water. Eat more fruits and vegetables. Take a daily vitamin. Substitute sugar and flour with Splenda and whole grains. A well-balanced diet will be crucial to reaching your fitness goals.
4. Do the little things - Take the stairs instead of using the elevator. Park further away from the office building. Do a few jumping-jacks during television commercial breaks. You’ll be amazed with how quickly all the little things begin to add up.
5. Don’t go it alone - Everyone needs a little help from time to time. Ask friends and family to participate in your resolution. You can also enlist the help of a professional fitness trainer.
6. Celebrate your successes - When you reach a milestone, reward yourself with something special. This doesn’t mean having a big piece of cake because you lost 5 pounds. Try something non-food related like a professional massage or round of golf.

3:54 PM - Jan. 30, 2009 - comments {0} - post comment

Frugal is In - 7 ways to save

This article is by George Mantor known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts.

For the last two decades, our freeways have been getting increasingly clogged with a steady stream of trucks loaded with imported goods. They were advertised to us and we bought them. I like my stuff. Sometimes it’s a little overwhelming and, in an odd sort of way, I don’t own it, it owns me.

It would be easy to blame crooked politicians and their global capitalization for our declining prosperity, collapsing infrastructure, looming debt, lack of health care, and the other problems that don’t bode well for our future; but hey, we elected them.

We were willing participants in a headlong scramble for the “good life.” We rushed from the farms to the assembly lines, and from the factories to steel and glass towers, and now they don’t need us any more. If you worked in the rust belt a couple of decades ago, the words of a Bruce Springsteen song might mean something to you, “…these jobs are going boys and they ain’t coming back.”

We have been marketed to, and we were encouraged to consume. Twenty years ago I got by just fine with what I had. But, who doesn’t want a big screen plasma, a faster computer and an iPod? However, it all comes with a price tag and we don’t quite have enough.

The American savings rate is far below historic lows, but I think saving might just come back into vogue. There could be a time coming when you wish you had a little stash of cash. But, with prices rising and the American workers earnings not keeping pace, what is there to save?

From the crash of 1929 to the end of World War Two in 1945, Americans became more resourceful than at any time in our history. They saved or recycled everything, and got by on what they needed.

The fact is that we have simply forgotten how to save. We have been encouraged to consume, not to save. We are wasteful in ways we do not even realize; hence, we do not see opportunities to save.

Don’t think of savings as not spending money, rather see it as a way of getting what you really want, a house full of imported crap on it’s way to the junkyard or a little less anxiety about the future. It’s a choice.

1. Be proactive

Make a game out of it. Pennies are points, so scoring is easy. Everyone in the family can play because pennies are easy to come by. I guarantee if you see it that way, you’ll never pass up a penny in the street again. The idea is to make the goal of savings more fun than the goal of temporary distraction. If the act of saving isn’t fun, you probably won’t do it.

2. Create a budget

Simply make a list of the bills you pay every month. What can be reduced to create regular savings? Can you eliminate a phone line and do you really need the premium cable package when everything winds up on DVD? Many categories, including utility bills, clothing, groceries and sundries are ripe for savings. Take the electric bills for the last six months, add up what you paid, divide by six and you have your monthly average. By simply being conscious of opportunities to conserve energy, you should be able to save a few more dollars every month.

3. Establish a Kitty

Put the pennies, nickels, dimes, quarters and even folding money in the Kitty. Keep it handy. My grandmother raised six children during the Depression; her Kitty was a sugar bowl in the pantry. She never spent change, saying that these were the seeds of more dollars and we wanted to grow more dollars. If she saved money with a coupon or a bargain, she put that money in the sugar bowl and, when the bowl was full, she was off to the bank to deposit in her savings account.

Clip coupons, take surveys, get cash back, join shopping clubs and when savings are realized, put the equivalent amount in the Kitty. Often, register receipts will show your savings total. Put that in the Kitty. Tax refund-in the Kitty. Any found money goes in the Kitty.

When the Kitty gets full, take it to your bank or credit union and deposit it in your savings account. Here’s a great idea; Coinstar, the coin counting machines, are now participating with some credit unions and banks so that you can direct deposit your change right from Coinstar into your savings account.

Savings accounts don’t pay much interest, but don’t worry too much about that.

Once you start accumulating money, you’ll want to have it working as hard as you do and generating as high a rate of return as possible. But first, your goal is to have six months of budgeted living expense saved.

Distribute them between a savings account to collect the money and a Money Market Account to generate a higher return with no risk and easy liquidity.

Depending on your institution’s minimum money market balance, say $2500, you might want to collect $5,000 in your savings account and then move half to the money market account to get started.

After you have saved six months living expense, it’s time to start saving for the long term; start investing the overage in the S & P 500 and forget about it.

If you haven’t been saving, you probably haven’t been interested in investing. Start with what’s easy and works. Over time, the S & P has produced a solid rate of return.

Now that you are taking your money seriously, you may be tempted to seek the highest returns possible. Starting out, settle for security and performance history.

4. Plan your purchases

One key to savings is simply to eliminate all impulse buying. If you really want something, take your time, research it, and see when and where you might get the best price. Any kid who grew up during the depression will tell you that one of the greatest aspects of getting something they really wanted was anticipation. The waiting, the thinking, the dreaming often deliver greater satisfaction than the thing itself.

My uncle broke my new Pogo Stick on my tenth birthday before I ever even got to try it, and, despite promises, it was never replaced. I spent a lot of time anticipating my birthday and the joy of my Pogo Stick, and then I got to anticipate its replacement until winter came. Knowing me as I do, I probably would have gotten bored with jumping up and down after about four days, but many a happy hour was spent thinking about it.

Everything goes on sale at some point. And, if you plan your purchases, you’ll get a discount of 30-50 percent.

5. Buy things that last

…..like a better Pogo Stick. Often, the best value isn’t the cheapest but rather, the highest quality. Not having to replace something is an easy way to save money.

6. Ask, do I really need it?

I’ve made it through life without a Pogo Stick and still had a pretty good time, and plenty of ups and downs. Sorry, I couldn’t resist. The point is that it is okay not to have everything you want. The thing probably won’t deliver the satisfaction you imagined and it won’t fill the void of wanting. In a short time, you will be wanting something else, and your former heart’s desire will collect dust somewhere.

7. Can you do it yourself?

Gardening is a pleasant hobby to some but, during the Depression, it was a necessity. Canning and preserving food is a chore but families then had no other choice. The added benefit of gardening is that you can have the most flavorful organic food without worrying about where it came from or how it was grown.

We do not know what we are capable of until we are really challenged. We can all do more for ourselves, get by on less, do without some things and, with the right mindset, become a nation of savers.

Depression era thinking is coming back. Throwing things away is so yesterday. Besides, there is no more “away” in which to “throw” things. The landfills are all full. Just when it seemed everything was headed for disposability, durability will make a comeback out of necessity.

The mantra of the Depression was, “Use it up, wear it out, make do, do without!” Now, that appears to be solid advice for the future. Being frugal could be the new fashion. And it could be fun.

2:04 PM - Jan. 28, 2009 - comments {0} - post comment

Vacation travel tips

If you're already planning that summer vacation, here are some tips to help you have the best vacation ever!

http://away.com/ideas/index.html, http://www.concierge.com/ideas, http://www.vacationidea.com/

12:08 PM - Jan. 26, 2009 - comments {0} - post comment

Consider a "refresher" course

This article is by Melissa Birdsong who is vice president for Trend, Design & Brand, Lowe’s Companies, Inc.

Staging has been the buzzword in real estate for the past several years. But taking the next step to refreshing can really set one home apart from the rest.

Buyers look at a lot of homes. So how do you make sure a home is memorable to a buyer? Having a well-staged home is now the rule rather than the exception for a faster sell and a better price. Try to think beyond the obvious for ways to make the entire home feel updated and inspired.

A fresh coat of paint on worn walls provides a “wow” factor without excessive cost or effort. While this isn’t new news, something that tends to get overlooked (and can have just as much impact) is painting the trim and other accents that may have gotten scuffed or dingy over the years. Freshly painted trim work is cleaner and a healthy home environment is very appealing to buyers.

Hardware is a quick fix as well. Switching out knobs and pulls in the kitchen or bath will catch the eye and revive an entire room. Taking it a step further to update faucets, light fixtures and even switch plates can take a space from ordinary to inspiring. Area rugs, lamps and plants are also quick ways to add life and warmth to a room with the convenience of portability. Because they are easily changeable, updating “unattached” items can instantly modernize a space with a fresh style.

And don’t forget first impressions-exactly how fast are prospective buyers driving past the home? No brake lights? A quick tap and then accelerate? Or do they come to a full stop to get a better look? That fresh, new interior will never be revealed if the curb appeal of the exterior is blasé. Everything from container gardening and clean welcome mats to new storm doors and shutters can pull that buyer into your drive.

Artistic staging can showcase the best features in a home. But in today’s market, take a refreshing approach-go that extra mile and look for ways to make the home memorable to a potential buyer.

11:58 AM - Jan. 24, 2009 - comments {0} - post comment

Mark to Market explained

This is the best explanation of Mark to Market that we've seen.

Mark to Market
Barry Habib

The 'Mark to Market' Accounting Rule:
What it is and why it is important to you now!

The financial crisis we are in today was not caused by mortgages or housing, although they were both catalysts. The real reason was an accounting rule called "Mark to Market" (also known as FASB 157).

Few people have a strong grasp of this rule, and even those who do have a tough time explaining it on air due to time restrictions. So let's take a few minutes to break it down, so you can have the inside track on this very important concept and understand why it represents some great opportunities.

Why does 'Mark to Market' exist?

Let's go back to the stock market crash, which occurred between 2000 and 2002. With the S&P down 49% and the NASDAQ down 71%, many people lost much of their life savings and they were very angry.

Companies like Enron and Arthur Andersen were able to find ways to make their books look more attractive, which was reflected in an artificially inflated stock price.

Both the public and Congress had a call for more transparency in business and hastened the passage of "Mark to Market" accounting.

This is the notion that all assets should be valued as if they were sold on a daily basis. Under the letter of the law, failure to do this conservatively can now result in jail time.

So what's the problem?

Before we get into what this means for banks, let me make a quick analogy using a scenario that should make perfect sense to you and your clients.

Let's imagine that you own a house in a neighborhood where all of the houses are priced at around $300,000. Unfortunately, your neighbor, who owns his home free and clear, falls ill and needs emergency cash quickly. Because he is under duress, he must sell the home for $200,000 in order to get the cash he needs right away, even though the home is worth considerably more.

Now would this mean that your home is now worth the same $200,000 that your neighbor sold his for? Of course not, because you are not forced to sell under duress. It just means that your new neighbor got a great deal.

However, if you were a publicly traded company and had to abide by Mark to Market account rules, you and the rest of your neighbors would now have to say, by law, that your home was worth only $200,000 ­not the $300,000 you would get for it if you actually sold. So what's the big deal? Read on.

So how does this principle apply to banks?

Let's say we decide to start a bank . . . call it XYZ Bank. We raise $2 Million to

open our doors. Remember that our capital account is $2 Million. Banks make money by taking in deposits and paying low rates of interest to those depositors (maybe throw in a toaster too). We then take that money and make loans with it at higher rates. We keep the difference.

So, we turn the $2 Million worth of deposits into $30 Million worth of loans. This puts our ratio of loans to capital (our Capital Ratio) at 15:1 ($15 Million in Loans to $1 Million in Capital). This level is acceptable, as long as we can shoulder some losses and recover.

Because we are very conservative here at XYZ Bank, the loans we make require a minimum down payment of 30%, a credit score of 800 or better (that's nearly an 850 which is perfect), proof of income and assets, a reserve of at least two years of mortgage payments (normal is two months) and income requirements that only allow 10% of monthly income to cover all expenses (normal is 40%).

We do this and our loans perform perfectly. We make lots of money. Nobody is paying late and our clients are sending us holiday cards. They love us . . . it's a party. You and I are celebrating as we see our stock price soar.

But real estate values decline and, even though all of our loans are paying perfectly, we must re­assess the loan portfolio to account for the decline in real estate values, which leaves us with less of an equity cushion. We had a minimum 30% down payment, which means the loans were 70% of the value of our assets ­until we account for the decline in the market. Now, our position goes from 70% to 90%. That's riskier and, therefore, worth less than when our loans had a 70% safety position.

Our accountants tell us that we must "Mark to Market" or risk jail. They say our value is now reduced by $1 Million. Whoa!

We must take or write down this loss against our capital account. It is a paper loss ­we don't write a check, we have no late payers, no defaults, no bad business decisions. Still, we must reflect this $1 Million paper loss in our Capital Account, which drops from a $2 Million to $1 Million in value.

Here's where things get problematic.

At this level, with $30 Million in loans outstanding, we now have a capital ratio of

30:1. At this level of leverage, alarms begin to sound.

Our ratios are out of the safe zone; we could go under with just a few losses, deposits are in jeopardy. Hello FDIC examiner, we are on the watch list, the Securities and Exchange Commission (SEC) is asking questions and our stock starts to tumble. The business networks are showing negative coverage of our now troubled bank. We are in big trouble.

The problem, we are "over leveraged". The solution? We have to "de­lever" . . . and do so quickly. But there are only two ways to do that, and one of them isn't really an option.

The first way is to raise capital, but that's not going to happen when our ratios are out of whack and we are in serious trouble as well as on the FDIC watch list. It is unlikely that anyone will be willing to invest cash in XYZ Bank.

The other option is that we can sell assets, like the outstanding loans, which are increasing our capital ratio. Like your neighbor, who owned his home outright but needed cash for medical bills, we are now under duress. The paper we are holding has a lot of value, but we have to sell it quickly and, because of that, cheaply. So, we offload the loans at a loss, which exacerbates the problem because those losses further reduce our capital account.

Very quickly, like a flushing toilet, things start to spiral ­we are going down.

The problem multiplies

The problem doesn't stop there. The fire sale we just had on our loans makes things worse ­even for the banks that bought them up and thought they were getting a great deal.

Under Mark to Market, the loans we just sold must be included in the comparables that other financial institutions use to value their assets. This is how the problem spread and got so bad so fast. Other good institutions, with good loans, have to mark down. Just like us, they become over­leveraged. It's a chain reaction, all triggered by a well intentioned, but over­reaching accounting rule.

Financial institutions fold, sell, or freeze. Credit ­the life blood of our economy ­is cut off at the source. Because of a lack of available credit, home sales and refinances crawl, auto sales drop and jobs are lost. Additionally, the economy enters a recession.

During the last recession in 2001, the economy recovered relatively quickly thanks to $3 Trillion worth of home equity withdrawals. But, more restrictive programs, a lack of available credit, and lower home values will make it difficult for us to use home equity to help pull us out of a recession this time around.

Fixing the Problem

The Federal Reserve has passed a rescue plan, which, over time, will provide some level of help. Some banks will get money to infuse into their capital accounts. Others can sell some assets to the government in an effort to "de­lever".

But, the big thing that is not talked about, not well understood, is the part of the rescue plan that traces this financial crisis back to the source.

The US Congress has given the SEC its blessing to modify "Mark to Market" accounting. And by January 2, SEC Chairman, Chris Cox has to get back to Congress with ideas, if any, on how to fix Mark to Market accounting.

It won't be eliminated, as we will not want to go back to the Enron days. But he is likely to adjust the Mark to Market provisions.

Here's one potential solution ­even rental or commercial real estate properties can be valued two ways:

1                    The comparable sales method, which determines the value based on what other assets have sold for, which is the way Mark to Market work currently.

2                    A cash flow method, which values the property based upon cash coming in.

If we see Mark to Market modified to use cash flow to value assets, without requiring a large percentage discounting mechanism ­wow! What a shot in the arm that would be. We'd likely see the stock market rally, with financial stocks leading the uphill charge.

Consider that, in today's market, fund managers are holding 27% of their assets in cash, compared with just 3% they held in cash when the stock market peaked in October of 2007. That means there is a lot of money on the sidelines that can push stock prices higher. Additionally, think about the redemptions from hedge funds that eventually need to be put back to work. That's another reason to be optimistic about stocks in the first quarter of 2009 ­provided that Chairman Cox modifies Mark to Market accounting in a meaningful way. And a good stock market helps individuals feel better about purchasing homes. Additionally, stronger balance sheets for financial institutions will allow them to lend more money.

The bottom line

With some potentially very good news around the corner, there might be reason for optimism as we head into 2009.

11:05 AM - Jan. 22, 2009 - comments {0} - post comment

Are the number of dependents you claim correct?

This time of year, millions of Americans find themselves wondering how they're going to pay for all of the items on their holiday shopping lists. Perhaps you considered charging your purchases on a credit card and then paying that card off with your tax return. But wouldn't it be nice if you had that money already? Sure, you could go to a service that gives you money now for the refund check you're expecting... but the fees involved can take a hefty chunk out of your refund.IRS Bean Counter calculator for free, which lets you see how a change in withholding will affect your paycheck.

So how can you plan ahead next time?

When you think about it, getting a refund check means that you let the IRS use your money throughout the year without paying you any interest. Wouldn't you rather have the money during the year yourself?

Here's how you do it. The IRS allows you to increase the number of dependants on your W-4 withholding form, meaning that less will be withheld for taxes from each paycheck. In the past, if you claimed greater than nine dependants, an explanation and approval may have been required. But the IRS has lifted this restriction, allowing you to voluntarily increase your dependents claimed.

This lets you have more money in each paycheck instead of "loaning" the money to the IRS and having to wait for a refund.

But don't go overboard. You should only lessen the periodic tax withholding to match the expected refund. This way you are taking your refund as you go; instead of letting the IRS hold on to it.

Believe it or not, the IRS actually makes it easy to calculate!

The IRS offers a nifty

Take advantage of this calculator today to see how changes can impact your take-home pay.

10:55 AM - Jan. 20, 2009 - comments {0} - post comment

Medical collection accounts may be effecting you

This article is by Rodney Anderson and more information on the Credit 911 Medical Relief Bill is available at http://www.rodneyanderson.com/credit/medical_collections.php

When the Federal Reserve announced its plan to invest up to $600 billion in mortgage backed securities owned by Fannie Mae, Freddie Mac and Ginnie Mae, mortgage interest rates dropped to their lowest point since February 2008. However, few borrowers may actually qualify for these savings. In addition to tighter lending standards and declining home values, borrowers are also being plagued by the nation’s credit reporting system.

According to Rodney Anderson, the country’s top producer of FHA/VA loans and the fourth highest producing loan originator, 45 percent of the 1,701 loan applications he received between June and September 2008 had borrowers with at least one medical collection account. “In evaluating these loans, we uncovered a huge injustice against the American public,” says Anderson. “The tragedy is that the collection accounts, even those that have been paid in full, are lowering these individuals’ credit scores, often to the point that they either can’t qualify for a loan, or will have to pay higher interest rates if they do.”

A nationally acclaimed mortgage and credit expert, Anderson regularly appears on WFAA Channel 8 Good Morning Texas, and the Evening News of CBS 11 and TXA 21. He also has a weekly radio show to discuss the mortgage industry and provide consumer advice.

He explains that medical collections are particularly problematic because of four main issues:

- Medical billing is a notoriously error-prone arena
- Many individuals with medical collection accounts never received the bill in question
- Medical collection accounts customarily remain on a credit report for seven years after the individual has settled or paid the account in full
- Medical collection accounts can reduce a credit score by as much as 100 points, sometimes more.

“The issue of medical debt plagues the patient-physician relationship, to the detriment of the health of the patient,” says Texas-based cardiologist Fred Maese, MD, FACC. “The way the system is set up, there’s no incentive for patients to settle their accounts quickly. Once the collection account hits the patient’s credit report, that consumer is held hostage for up to seven years, whether they settle the account or not.”

“Based on our extensive research, we can surmise that nearly half of Americans have at least one medical collection debt that’s lowering their credit score,” says Anderson, who uses analytical software to evaluate credit reports and determine how borrowers can best improve their own credit scores. In doing so, he found that medical collection accounts are routinely reducing borrowers’ credit scores by 60 to 100 points or more. “This is disastrous news for loan applicants, especially since earlier this year Fannie Mae and Freddie Mac started requiring higher credit scores to qualify for loans, and loan servicers of FHA and VA loans have implemented additional credit score-based premiums,” he adds.

Anderson, a vocal advocate and educator in the credit arena, has initiated a petition to create a federal law mandating the permanent removal of a paid or settled medical collection account from the consumer’s credit report within 30 days of settlement.

“I’ve seen many hard working, conscientious individuals who diligently address their monthly obligations, but because they unwittingly incurred a medical collection account, are forced to settle for a mortgage rate that’s half a percent higher than if they’d never had that collection account,” adds Anderson. “That half point can translate into thousands of dollars in wasted money, and that’s only for a home loan. They can also expect higher rates for auto financing, credit cards and insurance. That’s a hard pill to swallow for the many individuals who were never notified of the initial billing and who have since paid the collection account in full. In this market, where interest rates and low home prices present the ideal time for buying, we need to make sure that individuals who deserve credit, get it.”

1:31 PM - Jan. 18, 2009 - comments {0} - post comment

IRS releases new mileage rates

If you drive a car, truck or van for work, the Internal Revenue Service (IRS) has announced news that impacts you. That's because the IRS has released the new standard mileage rates for 2009. The rates will be used to calculate deductible costs for driving an automobile for business, charitable, medical and moving purposes. The new mileage rates for business, medical and moving purposes will be slightly lower than the rates for the second half of 2008, which were raised in the middle of last year due to spiking gas prices. The rate for charitable driving, however, is set by law and will remain unchanged from 2008.

Beginning January 1, 2009, the standard mileage rates for 2009 are as follows:

• Businesses = 55 cents per mile driven
• Medical or moving = 24 cents per mile driven
• Charitable organizations = 14 cents per mile driven

Overall, these rates reflect the higher transportation costs compared to a year ago. However, the rates are slightly lower than the second half of 2008 to factor in the recent drop in gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, also enter the calculation.

But before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Remember, you don't have to use the standard rate! Although the IRS provides the standard mileage rate for ease and convenience, you're not required to use it. If you choose, you have the option of calculating the actual costs of using your vehicle instead of using the standard mileage rates. So keep that in mind as you calculate your automobile usage for business, medical, moving, or charity driving in 2009!

1:03 PM - Jan. 16, 2009 - comments {0} - post comment

Consider a pre-listing inspection

This article is by Dan Steward, president of Pillar to Post

With the residential real estate market clearly at a low, real estate agents are turning to new strategies to help home sellers protect their investments and to sell homes quickly at the highest valuations. The biggest development in this area is Realtors advising sellers to schedule a home inspection prior to putting their homes on the market.

Realtors who require prelisting inspections-a home inspection that is paid for by the seller before a house is put on the market-not only reduce the possibility of last-minute surprises during negotiations, but also give their clients’ homes a marketing edge. They give the more-educated buyer upfront information on the condition of the home, along with identifying hidden problem spots that could potentially push the home’s sale price downward during the sale transaction.

Knowing the home’s potential problem areas before sellers put the house on the market creates a trusting environment between the sellers and the buyers. The prelisting inspection reduces the stress that might be involved in a transaction if surprises (i.e., damages, hazards) were to be discovered during the time the house is in escrow.

For example, imagine that three weeks before a house was to close, the water heater broke down. The seller would need to rush to repair the problem, potentially costing far more than if the repair had been scheduled. If the faulty water heater had been discovered before the home went up for sale, the seller would have avoided the last-minute stress-and unforeseen expenditure-of replacing the water heater.

It’s less expensive for home sellers to replace a faulty system or fix a problem than to negotiate the price down. It’s been suggested that for every $1 of identified repairs, the buyer seeks double to triple that in a price reduction. Savvy home sellers who, for example, learn through home inspection that portions of the roof need repair may opt to repair that section immediately, rather than having the problem become a price negotiating tool. Paying $5,000 for the repair is far more enticing than losing $15,000 in the sale price.

Even a newer home with marble countertops and hardwood floors may have problem spots. Buyers who are looking to make a big investment may very much appreciate the added touch of a prelisting inspection, showing repair cost estimates and receipts for actual work done.

Furthermore, much of the increase in prelisting inspections has been driven by real estate practitioners. They have seen a definite effect on how quickly and easily they can sell a home with home inspection reports readily available for buyers to view. Having the reports re-emphasizes the fact that the seller has nothing to hide.

To ensure selling success, a prelisting inspection is a simple way to create a win-win scenario.

1:27 PM - Jan. 14, 2009 - comments {0} - post comment

Save on Child Care Costs

According to the National Association of Child Care Resource and Referral Agencies, full–time child care can reach up to $14,000 a year for a single infant. And while child care is the last thing you want to be cheap about, there are a few proven and practical ways to limit your costs, which can really help in today's tough economy.

Let Uncle Sam Chip In – Working parents can claim up to $3,000 for one child and up to $6,000 for two or more children on their 2008 income taxes for qualified child care expenses. Ask your tax professional about the Child and Dependent Care Credit to see if you qualify for this valuable credit.

It's important to note that this credit can be reduced if you have a dependent–care flexible spending account (FSA) through your employer. These special accounts allow employees to set aside pretax dollars up to $5,000 for qualified expenses. Find out if your employer offers this program and discuss the benefits of each option with your tax preparer. If you need a referral to a qualified tax professional you can trust, don't hesitate to give us a call.

Don't Discount Your Employer – Be sure to ask your employer about any other child care programs it might offer. It's not uncommon for companies to negotiate discounts in your area that can offset expenses and travel time. Also, find out if your employer offers flex time or telecommuting, even on a short–term or part–time basis

Schedule for Success and Savings – For many couples, a simple change in schedule can cut down on the amount of child care you need each week. While having one spouse work the day shift and the other work the night shift might eliminate child care altogether, this could be very stressful on your relationship. But what if you just altered your schedules slightly? For example, if one spouse works from 7 am to 3 pm and the other works 10 am to 6 pm, this would cut down on child care and might not affect your time together as much. For couples who work together or even close together, working the same schedule could be more beneficial to child care costs and your marriage.

The right school program combined with the right work schedule can significantly reduce your child care needs. Some public schools offer pre–kindergarten programs, often for free, and many schools also offer before– and after–school care for older children at much lower rates than child care professionals.

Share with Friends And Family – While finding a relative to help out would be ideal, hiring a nanny with a few relatives or a few good friends is also a great option. This will allow you to share the cost of child care and pay less individually for each child.

7:00 PM - Jan. 12, 2009 - comments {0} - post comment

Renovating in a buyer's market

With home prices on the decline, some homeowners may be tempted to renovate their home to make it more desirable or valuable to potential buyers. But there are certain renovations that can actually decrease the value of your home – even in an up market.

If you're trying to sell your home in the next 6 to 18 months, be extremely discerning about your choices, get advice from an expert real estate agent and appraiser before you begin any major renovations, and avoid these costly projects in today's buyers' market:

An in–ground swimming pool or hot tub – In certain parts of the country, yes, a pool or hot tub can increase your home's value. But, for many potential buyers with young children, these items are a true liability and will only decrease your home's value – not to mention the built–in maintenance and energy expenses that come along with them. If you're looking to sell your home in today's tougher market, you simply can't afford to isolate a large number of potential buyers.

New additions – Of course, home additions add valuable square footage, but one false move and your addition can be an eyesore that could hurt your home's value, even when the market turns. A well–designed new addition is time–consuming and expensive and needs to be properly planned and executed. If you're looking to sell your home anytime soon, save yourself the hassle. With just a portion of what it would cost to add a new wing, you could upgrade your kitchen cabinets, appliances, and counter tops and get far more bang for your buck.

Conversions – Yes, with so much competition, it's important that your home stands out from the crowd, but following today's trends could cost you big tomorrow. Right now, space for a home office or a recreation room might be trendy, but converting a den or your garage into one can be a costly mistake. A good real estate agent can achieve the same effect by defining a space through staging. If you want to upgrade your garage, a new door is much cheaper and adds valuable curb appeal.

6:53 PM - Jan. 10, 2009 - comments {0} - post comment

Money saving tips

The following ideas are courtesy of americasaves.org

6:34 PM - Jan. 8, 2009 - comments {0} - post comment

Common real estate myths dispelled

Buying and selling residential real estate can be complex and confusing, particularly amid a process rife with misconception. To dispel common real estate myths, Robert Jenson, CEO of The Jenson Group at RE/MAX CENTRAL, offers some “truths” to help real estate consumers better navigate the home buying and selling process:

MYTH: All Realtors are created equal
TRUTH: Real estate agents vary widely in terms of experience, skill, ingenuity, accessibility and ability to produce results quickly and smoothly, among other key factors. Interview at least 3 agents, and come prepared with a list of questions you plan to ask. What is their track record? How do they market listings? Do they have a team to help show your home or does the responsibility fall on one particular agent? Due diligence is key to finding a representative prepared to work hard and who will be available to answer your questions along the way.

MYTH: Home inspections should wait until an offer has been presented
TRUTH: Even before listing a home, sellers should hire professionals to inspect the property including the roof, pool, and other structural elements, as well as for termites and other important buyer considerations. Make all repairs before you list the house on the market. Today’s buyer is discriminating and has many choices - don’t give them a reason to have concerns. A complete list of the completed inspections and repairs should be made available to serious buyers, which will go a long way in expediting the process at large.

MYTH: All negotiations start with a buyer submitting an offer
TRUTH: Sellers do have ways to kick start a negotiation, such as a “Reverse Offer.” Consider that one buyer who has been back for a second or possible third look, but hasn’t pulled the trigger. Make them an offer! Yes you, as the seller, should put something in writing and submit it to the buyer’s agent. This will create an opportunity for the buyer’s agent to sit down with his or her client and potentially help close the deal.

MYTH: Only home sellers - not buyers - need a real estate agent
TRUTH: Purchasing a home could be the most important and complex financial transaction you engage in, and going it alone is risky. Indeed, a buyer’s agent can save you time, hassle and thousands of dollars. Take time and care when selecting a real estate buyer’s agent - find someone you can trust, and that you have a good rapport with.

MYTH: Buyers should wait to secure loan approval until they’ve found a home they want to buy
TRUTH: Many buyers want to find the “perfect” home before having their credit pulled, which can backfire when an offer is on the table and time is of the essence. It’s wise to get pre-approved for a loan even before you view your first home. Your credit report may contain inaccurate information that you were not aware of, which can be a time consuming process to rectify. Or, you might not like what loan program you qualify for, or you might qualify for a higher loan value than you thought. Ultimately, you will need a pre-approval letter with your offer, so do yourself a favor and do this in advance. It’s free, after all.

MYTH: There is no real benefit to “shopping” for a mortgage among multiple lenders
TRUTH: A difference of even half a percentage point can mean a considerable savings over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8% vs. 7.5% is about $35 per month. Over 30 years, that’s $12,600. Be a smart consumer and comparison shop for the most favorable mortgage rates and terms.

MYTH: All real estate agents charge the same commission percentage
TRUTH: Not all agents - and agent packages - are created equal. From full-service agents to discount agencies, make sure you know the type of professional you are hiring and what EXACTLY they are going to do to sell your home. An agent that can professionally market your home above and beyond the MLS listing will increase your exposure within the marketplace, which will lead to a higher selling price and less days on the market. Will your agent incur costs to give your home that visibility? Find out, so that you may take everything into consideration when establishing the commission percent. Despite what an agent might say otherwise, commissions are always 100% negotiable.

12:23 PM - Jan. 6, 2009 - comments {0} - post comment

New Year's Revolutions

this article is by Michael Guld who is an author, speaker, entrepreneur and radio commentator whose business development expertise lies in the “soft skills”; increasing sales performance, marketing exposure, employee productivity and creating a world-class service experience. He is the president of The Guld Resource Group and creator of “Talking Business with Michael Guld,” airing on Central Virginia’s Public Radio and heard at www.talkingbiz.net.

While the origin of New Year’s resolutions goes back as far as 153 B.C., in modern day times, they usually evoke feelings of guilt. Most verbs associated with resolutions are restrictive in nature, including “to quit, stop, loose, reduce or eliminate.” The implication is that you need to improve, fix or repair something that’s broke or not complete. By its very nature, people see New Year’s resolutions as a difficult exercise at best, requiring discipline, determination and willpower…which are not exactly energizing words. As a result, most people “make” the resolutions January 1, and usually begin to “break” them by February 1 as their commitment fades and enthusiasm for attainment wanes. Case in point: The extreme increase in traffic at a health club the beginning of the year, which quickly subsides as the weeks and months progress.

Well here’s an idea: This year, consider creating New Year’s “reVolutions,” transformational actions that will lead to breakthrough results. New Year’s reVolutions can energize and invigorate by the thought of “what’s possible.” By definition, which one of the below would inspire you to get out of bed January 1?

- A resolution - a solution, accommodation or settling of a problem
- A reVolution - a drastic and far reaching change in ways of thinking and behaving

New Year’s revolutions are personal and broader in scope than the traditional resolutions. The framing of your revolutions requires stepping back and deciding what do you want to be as opposed to what you need to do. If someone were to introduce you to a large crowd recognizing you for your accomplishments, what would you want your bio to say? Are you on track to be that person? If not, what actionable steps can you take today that will help you get there tomorrow?

To help increase the chances of keeping inspired (vs. disciplined) with your New Year’s revolutions, follow these 10 tips:

Goals are dreams with a deadline - Dreams are all about “wants and desires” with no commitment, where goals are “concrete and defined” with commitment. Where do you ultimately want to be and what do you want to do? Imagine limitless opportunities and be willing to take a chance to lay yourself on the line to achieve them. Write down three actionable goals that you can visualize and that you WILL achieve by the end of 2009. Keep them in front of you at all times so your daily actions will lead you to the attainment of these goals.

Positive attitude plus positive actions equal positive results - While having a positive mental attitude is a good start, it is the positive actions that follow that will lead to success (vs. wanting, hoping and waiting for them to happen). Make a plan on how you will achieve each goal with mini-plans, mini-goals and corresponding dates for each.

Follow your passion - Commit to doing more of what you enjoy doing that invigorates, provides pleasure and satisfaction and less of what you do not enjoy that leads to procrastination and stress (delegate, hire out, etc.). Your chores are other people’s challenges.

Soar with your strengths - Spend more time on those projects, tasks or activities that accentuate your talents and natural gifts and less time on the improvement of your weaknesses or shortcomings (delegate to others). By focusing on your strengths - what you are naturally good at - you will have a higher self-esteem, be more professionally fulfilled and you will ultimately be far more successful.

Be the organized executive - Being overwhelmed with clutter can make you feel busier than you actually are. Start the year fresh by doing a total catharsis or cleansing. Go through every piece of paper in every file with a goal to trash it, box it (future needs) or re-file it (near term needs). Your files will be reduced by 66 to 75 percent. You will start out the year with a refreshed attitude. Begin or end each day with 20 minutes worth of organizing, even if it means hiding piles until you can get to them.

Re-analyze your “to-do list.” Does it look more like an annual plan? Are you working 10, 12 and 14-hour days and you still don’t feel like you get it all done? Go back through your “to-do list” and prioritize it to “do it,” “delegate it” or “scratch it.” Prioritize your list so you can do more of what brings you personal, professional and monetary rewards and less of what steals your time. Make sure you add in your “want to-do list” items, as opposed to only those tasks that others ask you to do.

Compartmentalize your priorities - Once you have decided on your priorities of the day, week, month, and year, focus on the tasks at hand…setting up firewalls to keep any distractions from diluting your focus. While we have two arms, two eyes and two ears, we only have one brain, so it is extremely difficult to concentrate on two or more projects and do them well at the very same time.

Change the way you see everything - By reprogramming your brain to see opportunities vs. obstacles, challenges vs. chores and celebrate what you’ve accomplished vs. feeling bad about what you have not, you will increase your energy, improve your attitude and raise your level of professional satisfaction.

Surround yourself with positive people - Good attitudes are contagious, elevating organizations to heights previously thought unreachable, but bad attitudes are more contagious, draining energy, accelerating discontent, and destroying morale. Choose to spend your precious time with people that will support you, encourage you and celebrate in your success.

Reinvent yourself - Even performers like Madonna realize that change is cathartic, energizing and can be very good for a career. It is easy to become stale and accept the way things are if we don’t shake it up every once and a while, even in our dress and our surroundings.

While we now have new technologies like cell phones, e-mail, PDAs, wireless cards - all designed to save us time, make us more efficient and more effective - the reality is they can be pulls and distractions as well - taking us off tasks to what is truly important. Do not become a slave to technology, but instead use technology as a tool to help you achieve your goals.

Finally, we all have a goal to “get it all done,” when in reality we have to accept that we will never “get it all done.” There is no way to accomplish all that we want to do plus all that is asked from us by our work, family, friends and organizations.

The reality is wherever we spend our precious resources - time, money and energy - is where we will get the greatest results. Decide first on what results you want to accomplish in 2009, and spend your time, energy and focus to achieve your New Year’s reVolutions. .

1:54 PM - Jan. 5, 2009 - comments {0} - post comment

Finding a job in a tough market

Finding a job during tough economic times doesn't have to be tough...if you know which strategies work. Here are some tips for beating the odds:

Take Networking to the Next Level: Networking is always a great job strategy, but in the current economic climate, you need to go a step beyond letting your contacts know you are looking for a job, since many other people may be doing the same thing. Instead, develop a compelling business idea for your field or the field you would like to enter. Then, when you call or email your contacts, let them know you are researching your idea and would like to meet with industry insiders to discuss its viability. With this strategy, people will see you as someone with something to offer them, rather than as someone who needs something. And if the people you meet with like your idea, your meetings could lead to a job offer even though you never asked for a job.

Focus on Sectors That Are Hiring: No matter what industry your background is in, the skills or experience you possess may qualify you for a position in a new field. For instance, sales and customer relations are skills needed in a variety of industries. To begin, make a list of your experiences and skills that could help you find a job in a sector that is currently hiring. Then, gear your resume and cover letter to focus on these particular skills and experiences.

Aim for Your Dream Job: Many job seekers begin to panic and apply for any job that's available. This is a mistake for several reasons. First, passion and enthusiasm are your best weapons for succeeding in your job search. Employers can tell the difference between someone who really wants to work for them...and someone who will take any job. Second, when you are focused on finding a specific job versus any job, you make it easier for friends and colleagues to help you because they will have a clearer idea of who they could contact for you. Third, if you're in the middle of a job transition, why not use the opportunity to enter the profession you have always wanted to try?

Be Creative About How You Start: During tough markets, many businesses are hesitant to add new employees and increase their level of fixed costs. You can offer to begin as an independent contractor for a period of time before receiving a review and possibly a future permanent job. This would give you a chance to earn an income while demonstrating your skills and value to the company. In turn, it lets the company evaluate your performance in a less costly way, because you would not receive benefits during this time; and with less risk for the company than having to make the decision to hire a permanent employee. You could also volunteer your way to a paid job. Many nonprofit organizations have powerful executives on their boards. By demonstrating your skills and work ethic as a volunteer, you could meet important connections that could lead to your next position.

12:17 PM - Jan. 4, 2009 - comments {0} - post comment

Geting a mortgage doesn't have to be difficult

The credit crunch, the credit squeeze, the credit crisis... You've seen the headlines. You've heard about the government's $700 billion rescue plan to deal with it. But what does it mean to those looking to secure financing and take advantage of lower home prices? Can someone still get a mortgage in today's volatile market?

The answer is yes, absolutely! While the credit markets have certainly tightened compared to two years ago, nearly $2 trillion of residential mortgages will have been funded in the US by the end of this year, according to the Mortgage Bankers Association. This means there is plenty of money available to potential borrowers who know how to properly position themselves for success.

Get Back to the Basics

It's true. Just a couple of years ago, the mortgage process was incredibly simple, and it seemed mortgage funding was available to everyone. All you had to do was pick up the phone, put in an application, and wait until closing. That was it. And unless your credit rating was horrible, you didn't even need any documentation to get your loan approved.

While a lot has changed in the last two years, getting a mortgage today can still be a simple process, if you plan ahead. This means understanding documentation requirements, your credit history, minimum down payment requirements, and how to structure your mortgage with smaller down payments. It also means working with an experienced mortgage professional who knows what lenders are looking for.

In others words, the mortgage market of today looks a lot like it did ten years ago, long before the proliferation of the exotic and unconventional mortgage products that flooded the market from 2000 to 2006 – risky products that are now being blamed for some of the financial woes we're facing today. Fortunately, these products are no longer available. Unfortunately, this means you'll need to do a bit more work to get a mortgage than you might have had to a few years ago.

This means being prepared to supply income and asset documentation to support what is on your application. This could include your most recent pay stubs and bank statements, W-2s for the previous two years, and tax returns if you are self-employed or have non-salaried income.

If you want the best interest rates and the lowest costs, you'll need an excellent credit score as well – 720 or higher. You can, however, even with FICO scores in the low 600s, get a lower interest rate on a home loan guaranteed by the Federal Housing Administration (FHA) - but you'll need a minimum investment of approximately 3% (please consult your mortgage professional for your required minimum investment.) This is a great option for you if you don't have the 10% or even 20% you might otherwise need to qualify for a low-interest fixed-rate mortgage.

Two years ago, yes, you probably wouldn't have needed a down payment at all, as 100% financing was commonplace. But this is no longer the case. To qualify for 100% financing today, you'll have to qualify for either VA or USDA loans from the government. The Veteran's Administration (VA) and the US Department of Agriculture (USDA) have special programs that allow 100% financing for those who qualify. What is particularly attractive about both of these loans is that monthly mortgage insurance is not required and interest rates are very competitive.

Other than being a Veteran, there are few restrictions involved in securing a VA loan. To qualify for a USDA loan, however, there are some income limitations and the property you're purchasing needs to be located in a designated "non-metro" area. Ask your mortgage or real estate professional if your area qualifies. You'd be surprised how many areas actually do qualify for this valuable government program, so it's definitely worth investigating.

If you're not a Veteran and you can't qualify for a USDA loan, FHA is the way to go. The down payment requirement is minimal. One other benefit is that FHA financing is available, through some lenders, with FICO scores in the 500s, so you don't need perfect credit. There are, of course, loan limit restrictions, but for many parts of the country, these limits have increased recently, making FHA loans comparable to conforming loan limits in many cases. For first-time home buyers (that's anyone who hasn't owned a home in the last 3 years), the government has also created a special tax credit of up to $7,500 for those who qualify. And while you can't use the money as a down payment, this temporary credit can help lower your overall costs. Be sure to ask your lender about this special tax credit.

In the end, no matter which mortgage you choose, the best path for anyone buying a home today is to get yourself pre-approved – not pre-qualified. With a pre-approval in hand, you won't have to worry about the credit crisis. You will know exactly what you qualify for, and by getting pre-approved, your real estate agent will typically have the ability to negotiate either better terms or a lower price for you. And that puts you in the driver seat to take advantage of some great real estate opportunities in a buyers' market.

3:28 PM - Jan. 2, 2009 - comments {0} - post comment

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