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May 2009

Take advantage of energy efficiency tax credits

This year, the federal government extended and expanded home energy efficiency tax credits through 2010 as part of the broader economic recovery package, and millions of U.S. homeowners appear poised to pursue them, according to a survey released by Johns Manville. More than two-thirds of survey respondents, or 68%, said they were aware of the newly created federal energy efficiency tax credits. Of those homeowners, 46% said they intend to make a home improvement-related purchase that qualifies for an energy efficiency tax credit, including nine percent of homeowners who said they had already done so during the first three months of 2009.

The energy efficiency tax credits were created earlier this year by President Obama’s economic recovery package, which sought to encourage consumer spending amid the recession, as well as persuade homeowners to become more energy efficient. The tax credits allow homeowners to claim 30% of the cost of qualified energy efficiency products, up to $1,500, including insulation, windows and doors, roofs, HVAC equipment, and water heaters.

According to the survey, saving money was a primary motivator spurring homeowners to pursue an energy efficiency upgrade. The survey found that 40% of the respondents who were aware of the tax credits cited monthly savings on their utility bills as the key reason for the planned home upgrades, followed by improving the comfort of their home (30%), reducing their carbon footprint (13%), and earning the energy efficiency tax credit (8%).

Despite the interest among many homeowners, 72% of survey respondents said they did not know exactly how to apply for any energy efficiency tax credits or rebates, including those offered by state governments or local utilities. And some respondents indicated the existing tax credits might not be big enough to spur action. A total of 41% of respondents said the tax credit would need to exceed 40% of the product’s purchase price to motivate them to pursue a home energy efficiency upgrade if they weren’t planning one for any other reason. Roughly 32% of respondents said a tax credit of 30% or less was sufficient motivation.

To earn an energy efficiency tax credit, homeowners must save their receipt for a qualified purchase, print a form provided by the product’s manufacturer and then claim the deduction on their federal income tax return.

“This recent survey clearly demonstrates that millions of U.S. homeowners are interested in making purchases that qualify for the newly created energy efficiency tax credits,” said Kateri Callahan, president of the Alliance to Save Energy, a Washington, D.C.-based nonprofit that promotes energy efficiency. “The new tax credits can help homeowners defray the cost of several types of energy efficiency upgrades, making them more affordable at this time of economic strain for many.” “By tightening up their homes with added insulation and caulking and sealing of doors and windows, homeowners will enjoy lower heating and cooling costs, too,” Callahan added.

The U.S. Department of Energy (DOE) estimates that homeowners can save up to 30% on their heating and cooling bills by adding insulation to adequate levels and air sealing their homes. In addition, an estimated 65% of U.S. homes, about 45 million, are under insulated, according to the Harvard School of Public Health.

The survey found that the most popular projects for respondents intending to pursue the tax credit included: energy-efficient windows and doors (19%); a water heater (14%); roofing (14%); insulation (13%); heating, ventilation, or air conditioning (12%); and a solar energy system (8%). A total of 53% of respondents said they did not intend to make a purchase that qualified for the credit.

The survey’s other key findings:

- Roughly six out of 10, or 63% of respondents knew that in addition to the federal energy efficiency tax credit, many states and local utilities offer energy efficiency rebates for certain home improvement-related purchases.
- More than half of responding homeowners (58%) underestimated how much a homeowner can potentially save on monthly heating and cooling costs by adequately caulking, sealing and insulating their home. About 21% of respondents answered correctly, pegging the savings at up to 20% to 30%.
- Homeowners making between $50,000 and $75,000 who were aware of the tax credit were the most likely to pursue an energy efficiency upgrade, with 59% of respondents saying they intend to do so during 2009.

“This is a perfect time for homeowners to make their homes more energy efficient,” said Mark Ziegert, a senior brand manager for Insulation Systems with Johns Manville. “With local and federal tax credits and rebates, the potential savings of lower heating and cooling costs, and product promotions offered by retailers, homeowners should have ample motivation to move ahead in 2009 with energy efficiency projects. If and when energy prices move higher, homeowners will be glad they added insulation and made other improvements. ”

3:42 PM - May. 30, 2009 - comments {0} - post comment

Vacation Planning 101

Does planning your vacation cause you stress? If planned in advance and with a little organization, your next vacation could be your best one yet. Here are some tips to help you with your next vacation whether it is staying in state, relaxing on a beach or going on a safari:

3:40 PM - May. 28, 2009 - comments {0} - post comment

Moving service vs. container shipment

This article is by Mickey Matteson, Account Executive at moveadvocate.com

Many consumers are turning to portable moving containers as an alternative to full service moving providers, but is it the best option? Usually a container is dropped off in the driveway and you have a period of time to pack and load your own belongings. When the items are loaded, drivers pick up the container and transport it to your new home where you unload and unpack. This might be a good option for you if you are storing items while the home is for sale, but is it the best option for the actual move? Below is a comparison of various moves ranging in size, weight, and distance.

What was once thought of as a cheaper solution is now very comparable. In fact, 3 out of the 4 moves were less expensive using a full service moving provider over a container shipment solution. The move to Meadville was not comparable at all as the container option was not available in the market area. In fact, many container companies are limited to major metro areas and a few locations within those metro areas resulting in additional fees and even no services in some cities.

3:16 PM - May. 26, 2009 - comments {0} - post comment

Where are people relocating?

This article is by Lauren Sherman for forbes.com

Unemployment is on the rise, credit is tight, and consumers aren't spending--which means they aren't picking up and moving much either. Very few places in America saw significant population growth in 2008.

But the buzzing metropolitan area of Denver bucked that trend. Its population increased by 2.17% in 2008. In 2007, it increased by 2.09%. In 2008, Denver was the 10th-fastest growing metro area in the U.S.

What's Denver got that other places don't?

In Depth: 10 Cities Where Americans Are Relocating

For one, according to an October 2008 survey conducted by Pew Research Center, Denver is the most popular city in America. People like it for its skiing, culture and vibrant nightlife, as well as its business opportunities. As of January 2009, the metro area's unemployment rate was 6.5%. That's high, but still two percentage points below the national average of 8.5% for the same month.

Despite the overall economic slowdown, some parts of the country keep on moving ahead, attracting more and more newcomers--even if it's at a slower pace than in more sound economic times. These places still offer a semblance of stability, as well as great weather, cultural life and, in many cases, affordability.

Behind the Numbers
To determine the fastest-growing metro areas in the country, we used 2008 population estimates for metropolitan statistical areas with a population over 1 million, released March 19, 2009, by the U.S. Census Bureau. MSAs are geographic entities defined by the U.S. Office of Management and Budget for use by federal agencies in collecting, tabulating and publishing federal statistics.

We then compared the 2008 population estimates to the previous year's data to see which areas had grown the most, percentage-wise.

Nine places fared even better than Denver, though they share similar qualities: more business opportunities, better weather and more affordable housing. The top three areas according to the data are Raleigh, N.C., ranking first, which jumped 4.29% to nearly 1.9 million; Austin, Texas, which came in second, with a 3.77% increase to almost 1.7 million; and Charlotte, N.C., which moved up 3.36% to 1.7 million.

All these areas' increases were smaller in 2008 than they were in 2007, (Raleigh increased by 4.7% in 2007, Austin by 4.29% and Charlotte by 4.2%), but a slight slowdown is not necessarily a bad thing, according to William Frey, Ph.D., a demographer at the Brookings Institute, an independent research and policy group based in Washington, D.C. "Part of the story here is the rapid rise in growth in the middle of decade," says Frey. "That growth was unnatural."

The in-migration that happened in the middle of this decade certainly had a lot to do with the housing boom. When that went bust, so did those crazy population balloons. But these particular places are still growing because instead of building an economy that relies heavily on one industry (in Las Vegas, it's hospitality; in New York, it's finance), most of the metro areas on our list serve as headquarters for a diverse range of companies.

For example, Austin's biggest employers include University of Texas, Advanced Micro Devices (nyse: AMD - news - people ) and Dell (nasdaq: DELL - news - people ). That wide range might have something to do with the area's relatively low January 2009 unemployment rate of 6.4%.

This is the opposite of what happened in true housing boom-and-bust towns like Las Vegas. In 2004, Vegas--a foreclosure mecca--saw a population increase of 4.6%, followed by 3.66% in 2005, 3.98% in 2006 and 3.22% in 2007. In 2008, that number fell to 2%.

The Power of Business
When it comes down to it, a buzzing business community is a metro area's most important characteristic, says Sean C. Safford, a professor at the University of Chicago and author of Why the Garden Club Couldn't Save Youngstown: The Transformation of the Rust Belt. He studies the social economics of U.S. cities and metro areas.

"Perception is driven by the vibrancy of the companies in an area," he says.

However, that doesn't mean that these metros won't suffer from a slowdown in population when 2009's numbers are released next year. Charlotte, for example, reported a 10.5% unemployment rate for January 2009, likely related to the fact that Bank of America (nyse: BAC - news - people ) is headquartered there. That high unemployment rate almost guarantees stunted growth in 2009.

"We don't quite yet know what the impact [of the ongoing recession] will be for 2009 populations," says Frey. "But we do know it's not going to get any better."

Indeed, where Americans are relocating today has little to do with where they'll be moving tomorrow.

3:27 PM - May. 24, 2009 - comments {0} - post comment

Buying time against foreclosure

This article is by Mildred Wilkins, founder and president of Home Ownership Matters, LLC. She is the trainer for the (FIS) Foreclosure Intervention Specialist certification program. Visit her blog: HomeOwnershipMatters.blogspot.com or call toll free (866) 507-5105.

Never before has the expression “If I could just buy some time” meant so much to people. When you are facing foreclosure you need time to discover your options, analyze your situation and implement an action plan. Your most precious commodity is time…And it’s running out. 

When your money is running out…

You don’t have time to wait for the trickle down effect of the stimulus package to make a difference in your personal situation. While the package will make a significant difference over the long haul for thousands of Americans, anyone who thinks it is going to quickly make a difference for EVERY American is kidding themselves. Facing reality is hard, but necessary. As a country, we have ignored hard truths with disastrous consequences for too long. Nothing will be gained by continuing to point fingers. However, we must immediately recognize that each of us has a role to play in correcting the serious housing problem we face as a country. (Even if your home is paid off, FREE and CLEAR). The housing market holds the key to stabilizing our country, so anything we can do to keep people in their homes is a step in the right direction.

First thing’s first...

DO NOT ABANDON YOUR HOME. Even when you are behind on your mortgage, no matter how far behind you are, DO NOT abandon your home until the entire legal process has been played out. You can stay in YOUR house until your right to possession has ended. Exactly when that time is will be determined by three (3) factors:

1.  Type of foreclosure in your state: judicial or non-judicial
2.  Whether you have a mortgage or a deed of trust
3.  State statutes regarding sheriff or trustee sale and possession timeframes

Find out the answers to items 1, 2 and 3, and then abide by them. Make sure your lender abides by them as well. Things could improve while you are holding out. Hold on.

Things are changing radically and very quickly because of the magnitude of the housing problem. Your local courts could dramatically change the way they process pending foreclosures so that you have a chance to work things out with the lender. Stay in our home and fight for the chance to work things out. More banks are willing to work with borrowers today simply because they really can’t manage the huge backlog of homes which have already been lost to foreclosure. If you can present a viable plan, your chances of retaining home ownership are pretty good.

Second thing’s second…

I know you know that, but I needed to get your attention. Probably the second most valuable thing anyone will ever tell you to do to save your home from foreclosure is to:

1.  Demand the lender or servicer who is threatening to sue you for foreclosure produce the original note/deed of trust which says you owe them. In legal terms you are asking them to demonstrate that they are the “real party of interest.” In common language that means, prove I owe you. Prove you have the right to demand payments from me. (This has been discussed on our blog, which can be found at homeownershipmatters.blogspot.com).

2.  The most effective way to demand this documentation is with a “qualified written request”. You are entitled to request that and any other information you want which is related to servicing on your loan (any mortgage loan in the United States) under federal RESPA regulations.

What Choices do I have?

Let’s consider the answer to that question.   It is critical that you start with an honest inventory of your situation. How far behind are you? Do you have the resources to resume payments? If not now, when will you be able to do so? What do you want to do? What are you ABLE to do? Why should the bank consider your proposal? You’ll need to able to defend it as being reasonable, based on your current circumstances.

Space in this article will not allow me to go into detail but I will provide you with the options you can consider. Do further research on each of them, online, in the library, on websites such as HomeOwnershipMatters.com Or at the blog: HomeOwnershipMatters.blogspot.com.

a.  Options to keep the house—special forbearance, loan modification or a partial claim. You need to learn what each of these means and how it works

b.  Options to let the house go—short sale, assumption or deed-in-lieu. All of these options are better than foreclosure but you need to know exactly how they work to avoid creating yet another problem for yourself down the road.

c.  Reverse mortgage could be considered, it could be your solution. Be sure to use a government backed reverse mortgage if you decide to use this option.

d.  Receiving disability payments (if you have a claim pending) could make the difference. Hold on until you know what you will be receiving

e.  Acquiring a roommate could change your finances—get started working on it (I mean a roommate who will PAY—not one who will add to your expenses)

f.  Selling unnecessary items in order to cover the gap until you get a permanent solution. Ebay or Craigslist could bring in some immediate cash. (Stop crying—we are trying to save your home and Buy “T I M E”).

g.  Some other solution which has not even occurred to me

“Answer” the summons

The summons is your official notification that the lender has moved to legal action. The court notifies you via the “summons”. Your response should be to the clerk of the courts, the lender/servicer and their attorney. It is critical that your answer be received within the legally stipulated timeframe in your state. It is strongly recommended that the answer be sent by certified mail, with a signature required. This is a task which you can handle on your own, with a little coaching.

Basically, an answer should acknowledge that you are aware of your situation and that you are working with the lender on a plan. Specify what that plan entails. If you are challenging whether or not the lender has the legal right to foreclose (due to failure to produce the original note or demonstrate that they are the “real party of interest”) this is your time to say so. The foreclosure is likely to be stalled based on the quality of a timely, well prepared “answer”.

3:21 PM - May. 22, 2009 - comments {0} - post comment

What to look for in a real estate agent

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

If you are a recent seller of real estate, you may have had some difficulty dealing with the gap between your selling price and your actual net proceeds, as reflected in your final check. Hopefully, you knew what to expect and factored that into your decision to sell. But, all too often, in the blizzard of activities involved in transferring real property, the costs of selling are often overlooked or underestimated.

Once all loans and liens are satisfied, the next largest cost is often real estate brokerage fees. Despite recent declines, property values having did rise rapidly in many markets and that fractional six or seven percent can equate to some serious coinage. It does cause one to ponder, where does all the money go?

As is often the case, the best value isn’t always the lowest price. Those looking for real value are more than willing to pay top dollar for top quality. But, the question arises, how does one determine the elements of full value in real estate services? What should one expect from a professional real estate practitioner?

A competent, knowledgeable real estate practitioner gets paid for their time and their knowledge.

Everyone’s time is limited. At some point, in the development of a personal service business, a practitioner can work no more hours. And, as they build their business, enhance their skills, and improve their knowledge, they can only increase their compensation by increasing their fees or adding additional revenue streams. Remember, the very best in every profession are always the highest paid.

Given the flood of inexperienced newbies who enter the field each year, a strong argument can be made that they should be paid what they’re worth.

Understanding the value of a real estate practitioner is made more difficult by what the consumer sees and doesn’t see.

From what I gather, a common perception of a real estate practitioner is someone who drives around in an expensive car, holds open houses, has a list of “for sale” properties and a special key, puts up sold signs, talks incessantly, demonstrates few social graces, scans the room over your shoulder looking for someone better to go get pushy with, and gets paid millions for doing the above.

Essentially, the work of a real estate practitioner can be broken down into three main categories: functionary duties, compliance duties, fiduciary duties.

Functionary duties

Most of what the public sees the practitioner doing could be described as functionary activity. Measuring a house, hanging a lock-box, canvassing a neighborhood, and designing flyers are examples of things that could be done by an agent of any level and, arguably, do not rise to the value of several thousand dollars.

Compliance duties

Behind the scenes, the trends toward consumerism and government regulation have placed burdensome responsibilities on sellers of real property to such an extent that most sellers have no idea what disclosures are required of them or what the consequences are for failing to provide them.

Many sellers incorrectly believe that their agent is responsible for providing these disclosures, but the legal onus is upon the seller. Among the practitioner’s compliance duties, would be a risk reduction strategy that directs the seller to be in compliance with all legally mandated requirements.

Over the course of my nearly 30 years in real estate, I have watched a standard real estate contract swell from a couple of pages to a three-pound bundle of disclosures, addenda, inspections, affidavits, disclaimers, waivers, reports, indemnifications, acknowledgements and amendments, all woven together in a labyrinth of time frames, receipts, authorizations, approvals, all with their unique ramifications and consequences for buyers and sellers of real estate.

The fact that consumers do not see all this doesn’t make it any less binding upon them.

For a real estate broker, these increasing compliance issues increase the cost of training, processing, filing, paper, toner, equipment, and long term storage. It either gets paid for by the consumer or it doesn’t get done. The consumer not in compliance is the one at risk, not the agent who cut corners.

Fiduciary duties

This brings us to what the public often doesn’t see; the top professionals in any field exhibit qualities that come at a price. Often, they are very selective regarding the clients they accept. Experience and longevity create an existing clientele.

The fiduciary relationship is based on trust. There is an absolute duty of fairness and honesty. And, in my view, there is a duty of competence as well.

That means education, training, and a commitment to mastering all of the technical and legal nuances of the business.

Here is what to expect from a top professional:

1. Courtesy

With privileged athletes and rock stars as our role models, boorish behavior has become mainstream. I’m old school. I still believe in something called “professional conduct.” I don’t need a code of ethics or Dr. Phil to tell me how to conduct myself in my myriad of daily encounters with people.

You should expect, at minimum, that a true professional will always be well-mannered, polite, relaxed, patient, and empathetic. These are more than niceties; they are valuable assets that benefit the client. These attributes foster effective communication, which is the heart of better negotiation.

Don’t think twice, just be nice. Years ago, I heard a very popular real estate sales trainer say that the worst thing that people could think of you was that you were nice. I don’t agree, but then I’m a country boy and I was reared to be polite and considerate.

Courtesy extends to being on time, returning phone calls promptly, and fulfilling commitments.

2. Thorough needs analysis

Any professional will want to meet you in their offices for the purpose of an initial consultation. Among the reasons are to determine if your situation fits their expertise, to conduct a thorough analysis of your circumstances and options, and to make sure you fully understand the process.

3. Strategy

Once you understand what your options are, you can begin to form a plan for achieving the one best option for you and your circumstances. Your best option could be doing something entirely different than your original plan, or even nothing at all. The strategy is the step-by-step process of achieving your best option.

4. Advice and Counsel

It can be hard to appreciate the value here but, in my view, it’s probably of greatest value to the client. I once asked the agent representing the buyer of my listing, “What did you advise your client to do?”

His response was, “I don’t give my clients advice.”

In my view, he is worth less than full value.

5. Prior inspections

Most real estate professionals hate surprises. They understand that it is far better for the seller if all property defects are determined prior to bringing the property to market. Those defects will be discovered by the buyer’s inspection which is likely to trigger protracted and needlessly acrimonious renegotiation and often cancellation.

6. Comparable Market Analysis

The key to selling quickly for the highest possible price is to place the property in the marketplace at exactly the right price. If the price is too high, the best qualified buyers won’t get to see it because they’ll be looking at homes priced in their spending range. This is where your home should have been listed, in the first place.

Two sets of data help to determine what is known as current market value: what others have recently paid for nearby properties which posses similar attributes such as square footage and amenities, and what is currently available to compete for buyers.

7. Mortgage Review

Is there a prepayment penalty or are there other fees associated with paying off the mortgage at this time? A prepayment penalty is deductible but should also be reflected in the plan.

8. Title Review

You could have a lien on your property and never know about it until you go to sell. Considering that even a mistake will take time to unravel, this should be learned early in the listing period.

9. Estimate of Net Proceeds

When you list your home for sale, the only thing that matters to you is your net proceeds, not the selling price or the agent’s commission. You should expect that any professional real estate practitioner would provide you with a breakdown of all the known and anticipated costs associated with selling real estate.

10. Review Escrow Instructions

You should expect that your escrow instructions have been fully reviewed to make sure there are no surprises, and the instructions to the escrow company reflect the meeting of the minds of the parties. Usually, more than one party is contributing information to escrow and they don’t always get it right.

If those 10 elements are missing then, in my view, you didn’t get full value. On the other hand, if your real estate professional behaved as I have described; upbeat, on the ball, honest, caring and laser-efficient, you can be confident that, in my judgment, you received high quality, professional service. If you feel that you got a trusted advisor instead of a salesperson, you got your money’s worth.

I’ve never advocated against those business models whose value proposition is discounted fees. Discounting brokers are hardly new to the marketplace, as much as they’d like you to believe otherwise. They often serve as valuable training grounds for new licensees who are willing to work for less to offset their inexperience. In a few years, if properly tutored, they will have built enough value in themselves to justify top tier compensation. My bet is that they won’t continue discounting once they’ve achieved mastery.

The real estate business has become so complex and legal that a meaningful apprenticeship ought to be required. But, the failure rate is so high and the turnover so rapid that it can be difficult to build much of a foundation of knowledge of real estate fundamentals while driving the salesperson to be a good closer. At least the argument can be made that, “I don’t know much about real estate, but I can save you thousands in fees.”

I know it can sound trite to say “you get what you pay for.” And, we all know from our own first hand experiences, with all manner of things, including real estate professionals, it isn’t always true. But, one thing is obvious, the best and the brightest will go where they are rewarded commensurate with their talent.

The skills required to master the real estate profession are easily transferable to other arenas. If the dumb-down factor becomes so great that masters cannot earn a living in real estate, they’ll just switch to another business.

The consumer may save money but the service level will fall as well. And, a handful of the very best will increase their fees in recognition of their higher level of service.

3:13 PM - May. 20, 2009 - comments {0} - post comment

Take charge of your debt

This article is by Clarky Davis, The Debt Diva.

The news headlines paint a grim picture. Record job losses. Stagnant incomes. Rising debt. Stalled savings. One in four consumers say they are worried about making their monthly payments over the next six months, a four percent increase from last year, according to a recent Gallup poll. To help consumers climb out of the debt trap, Clarky Davis, The Debt Diva, offers tips for living life for less with a self-help approach to debt management. “Our relationship with money has become fractured,” says Davis. ”Since April is Financial Literacy Month, now is a great time to reconsider how you’re managing your finances. Every consumer can and should know how to manage their money and live within their means.”

As a certified personal finance and debt expert, Davis uses her hard-won personal experience with debt to help consumers regain their financial footing.

Take Charge of Your Money and Start Saving
On average, Americans spend $1.22 for every dollar earned according to a recent Federal Reserve study. “Budgets provide the financial boundary for us to live within our means,” Davis says. “Establishing a household budget to track your monthly spending is the first step in taking charge of your money. It’s empowering to be in charge of your spending instead of sliding further into debt.”

Find a system that works for you. There are many tools and techniques to track expenses. A simple worksheet with sections to track monthly income and expenses is all you need to take charge of your money.

Track it. Write down everything you spend, so you know where your money is going. Then, you can make smart decisions about what you really need to spend money on and where you can save.

Start a savings cushion. Start small with a goal of saving five percent of your paycheck in a traditional savings account and another 10% of your paycheck in an emergency fund for unexpected expenses. If you’re getting a federal tax return this tax season, consider using the money to start an emergency fund.

Get the Most Out of Your Money
“Creating a lifestyle that fits your budget is easier once you know where your hard-earned dollars are going every month,” Davis says. “Find ways to cut back where you can by reducing everyday expenses and get the most out of your money.”

Slash your electric bill by running major appliances like the dishwasher and washing machine during off peak hours.

Save on groceries by planning meals and making a shopping list before you hit the store. Purchase foods that are in season to take advantage of lower prices. Visit discount grocers and try store brands to save even more.

Dine and divide. Seek out less expensive eateries that are more in line with your budget. Split over-sized portions, and the cost of the meal, with a friend. Cut back on dining out and prepare more meals at home.

Downsize Debt
A recent Gallup poll reports that 50% of consumers intend to reduce their total debt over the next six months. Last year, Americans reached a record of $951 billion in credit card debt with the average household carrying $9,000 in debt.

Eliminating a substantial amount of debt takes time and discipline, but it can be done with the right strategy in place.

Create a debt domino. Focus on the credit card with the highest interest rate and pay as much as you can on that card first, while making at least the minimum payment on your other debts. When one card is paid off, add that amount to the next highest credit card and so on and so on. You’ll pay off your debts faster because you’re applying larger and larger payments. You’ll save on interest, too. Always make more than the minimum monthly payment and make your payments on time to avoid late payment penalties.

Recognize when you need help. Many people ignore the signs of financial distress, not wanting to admit when they need help. Look out for red flags that signal you may have a problem. Paying bills late; transferring balances from one credit card account to another to obtain lower interest rates; depending on overtime at work to cover minimum monthly bills; borrowing from friends and relatives to cover basic living expenses; writing checks and hoping they don’t clear the bank before payday are all signs that you may need to evaluate your financial situation.

“There are many options for consumers dealing with debt,” Davis says. “The most important thing is to do something about it. If you don’t feel you can tackle the process yourself, there are professional services available to get you back on track.”

Seeking Professional Help
More and more consumers are reaching out to credit counseling professionals to help with their financial woes. Consumers have several options when considering professional credit counseling services, but they should check their providers against certain criteria before seeking their help.

Reputation - Check with the Better Business Bureau to verify that the provider you plan to work with is accredited by the bureau. Also make sure your provider is licensed or authorized to do business in your state.
Open book - Your provider should clearly state the services you will receive.
Informative - Provides free budget analysis, as well as financial and money education.
At your service - Offers one-on-one customer service available with multiple contact methods to meet your needs (online, phone, email).
Affordable - Charges limited fees for debt management services, no more than $50 per month, with a minimal upfront fee of no more than $50.

“We’re learning from our financial missteps,” Davis says. “We’ve lived beyond our means for too long, content to charge a life we couldn’t otherwise afford. While frugality may be this season’s hot color, it’s important that consumers adopt it as an everyday addition to our financial wardrobe.”

6:06 PM - May. 18, 2009 - comments {0} - post comment

The sky is NOT falling!

This article is by James A. Crumbaugh III is CEO of Allison James Estates & Homes.

April is now here and we’re all starting to hear positive news, almost daily, about the real estate industry. Don’t get me wrong - the “Chicken Littles” of the world are still out there, telling everyone who will listen that the sky is still falling.

Here at Allison James Estates and Homes, we go strictly by the numbers and the numbers aren’t lying. Our number of sales is up over 25% and our income was up in March over our best month ever by 31%. If the sky is falling, I sure hope it continues to fall at this rate every month.

However, the pundits are still claiming the bottom is still out there, but their case is leaking water. There are areas in the country that are already seeing small price increases, along with much stronger number of sales, and there are a lot of short sale realtors who still claim that the inventory is going to get much worse. If that’s so, I need an explanation as to why the inventory is decreasing in most areas. Sure, sellers are taking their properties off the market, but so what? Sellers have always taken their properties off the market unless they could get what they wanted. There is nothing new or revolutionary in this strategy.

The bottom line is there was an overreaction to the inflationary increases in real estate over the period between 2000 to 2006. As a result, real estate in most areas is now undervalued and the consumer has taken notice. One of the things I’ve noticed over the last month, is the number of end-use buyers is now as strong as the investors. This is a very good sign, as it shows that the pent up demand that we have all talked about for the past couple of years is starting to kick in.

On another note, the real estate brokerage business has been stood on its head due to the last three years. Everyone knew the old brick and mortar model was unsustainable with today’s realtors demanding and getting 80% plus. Then you have the 100% companies struggling because they made the mistake of trying to combine the brick and mortar concept with the 100% concept.

What surprises me is that Allison James Estates and Homes is still the only business model of its kind. We have eliminated the brick and mortar and allow our Realtors to work virtually from their home offices while keeping 100% of their commission. This is a simple business model, and I have nothing to hide with it.

It’s not rocket science, I’m just surprised no one has copied us. We all know that a lot of brokers are challenged in this area, and at Allison James Estates and Homes, we work as a team to keep our brokers at the top of the industry.

All in all, we are 14 months old, we are profitable, we’re having fun and we’re growing at a steady clip of 20% + per month. Chicken Littles take notice.

5:56 PM - May. 16, 2009 - comments {0} - post comment

Can the market rebound in 2009?

This article is by Cabot L. Jaffee is president and CEO of AlignMark, Inc. For more information visit www.alignmark.com.

If “rebound” means getting back to the sales levels and home values experienced just a few years ago, then the answer to the question: What will it take for the market to rebound in 2009? is “nothing,” which is not necessarily bad. If the definition of rebound implies simply returning to sales volumes and prices more in line with historical norms and growth patterns (normalcy), the situation is not nearly as bleak as daily headlines lead many to believe. For a rebound to occur, growth in existing home sales will need to occur. The National Association of Realtors (NAR) projected a 1.4% growth in existing home sales in 2008 (5.18 million). In addition, NAR has previously estimated 2009 existing home sales at 5.91, which will represent a sizeable growth over 2008.

And if Florida, California and a few other culprits that contributed to the speculation frenzy were deleted from current statistics, the picture of the overall market changes dramatically. A rebound is coming, but who will rebound quicker, stronger and more profitably depends on one major attribute-people.

Therefore, the better question is not “What will it take?” but rather “for whom” will a rebound occur? The rebound will not be an all-or-none phenomenon-not every brokerage will rebound. This challenging real estate market will continue to lead to consolidation, where only the stronger brokers and agents will survive.

Therefore, it is ever-increasingly important to make sure you have the right people-those who can produce, sell and perform. And it will be similarly important to have the right tools and technologies to support and differentiate your brokerage. But I caution you-it is not better to have “anybody vs. nobody.”

Those firms that identify the agents that have an aptitude to sell will be positioned for growth. And don’t ignore the Gen Y folks-you don’t only need experienced agents-you just need the right agents.

Brokers should target career-minded prospects rather than simply hire as many as possible; differentiate your value proposition to prospects; and use professional hiring tools to better assess prospects. Brokers should provide training and mentoring to enhance effectiveness versus simply acquiring meaningless designations. Brokers should also focus attention on performers; non-producers can’t be allowed to remain because “they don’t cost anything.”

If you want to rebound, you’ll have to make it happen; you can’t just wait for it to happen on its own. The time is right; the market is poised to rebound with first-time buyers and previous renters as home prices settle at more affordable levels and historically low interest rates. Remember, people are the lever that will allow you to rebound.

5:49 PM - May. 14, 2009 - comments {0} - post comment

Getting ready to sell

As the all-important spring selling season approaches in an historically slow housing market, sellers need to do all they can to market their home - and that includes staging it to attract and “wow” potential buyers. Home stagers know just the right moves to take a house from bland to grand and bring home the biggest return on investment. “Attention to detail throughout the home can make the difference between a house that sells and one that sits on the market,” explains Kate Hart, one of America’s top home stagers and owner ofHart & Associates Staging & Design. 

“In particular, improvements to the kitchen and bath - the two rooms that sell a home - will always help bring in the buyers.”

Kate Hart shares some easy, effective home improvements and tricks of the trade that can make a big change without breaking the bank, and all the difference in selling and enjoying a home.

Curb appeal: First impressions are everything, and this has never been truer than in today’s market. To leave a positive impression on buyers, take care of any exterior maintenance issues before buyers arrive, such as power washing walkways and patios, cleaning your gutters, touching up peeling paint, replacing broken light bulbs, edging and mulching beds, and adding fresh annuals. Some free things you can do include polishing your front door hardware and sweeping away pesky cobwebs.

Kitchen: Give your kitchen a mini facelift on a budget by repainting your cabinets instead of replacing them. For a more contemporary look, consider a semi-gloss espresso brown. For a more traditional look, opt for a semi-gloss creamy white. Complete the makeover by adding new hardware. Considering professional help? Ask your local painter if they can spray a lacquer finish on your cabinets. This treatment is more expensive than painting the cabinets yourself but the result looks like a factory finish.

Bathroom: Give an outdated bath a pick-me-up by replacing your existing lighting, faucets and hardware with updated styles.

Bedrooms: Take your bedroom from lived-in to luxurious by creating a headboard that gives your room a more complete look. Measure the width of your bed and determine the height you prefer. Purchase a ¼ inch piece of plywood fitting these dimensions (ask the store to cut if for you) and cover it with 2 inch foam that fits the dimensions you selected. Wrap the foam and plywood with batting that can be purchased from a craft store. Finally staple gun a fabric of your choice around the headboard you’ve created. You can then hang the headboard behind the bed on the wall as if you were hanging a piece of art using “D” rings and hooks or attach it to your bed frame using bolts and washers.

Family room: Make your fireplace or great view the selling feature, not your entertainment center. Chances are your family room is currently centered around the things you do everyday, such as watch TV. Before showing, rearrange your room to showcase the architectural focal point of your family room.

Dining room: Keep the dining room de-cluttered and streamlined so buyers can imagine how they can enjoy this space with their families. Before showing, make sure to remove any knick-knacks and extraneous items from your china cabinet or sideboard. A rule to follow: pack up any items that are smaller than a softball such as salt and pepper shakers, wedding cake toppers, and small figurines.

Living room: Make sure you are selling your space, not your stuff. Before showing, remove any family photos from the mantle, end tables and bookcases. Give this space a less cluttered look by keeping no more than three items per surface. For example, go with a piece of art and a pair of candle sticks on the mantle instead of your favorite collection.

“It’s important to complete all your improvements before your home goes on the market because as the saying goes…you never have a second chance to make a first impression,” continues Hart. “And once the sign goes up, you need to keep up the clean, de-cluttered look because you never know when you’ll have a showing. It just takes one buyer to sell your home.”

5:42 PM - May. 12, 2009 - comments {0} - post comment

Spring clean your finances

Spring’s arrival is obvious. The weather’s warmer, the days longer and you seem to have a little more energy. Chances are some of that energy will be used for spring cleaning - washing the windows, cleaning the closets or planting a garden. According to the Illinois CPA Society, it may also be smart to put a little of that energy into getting your financial house in order too.

Here are five ways to spruce up your finances:

1. Shake the dust out of your financial plan. Take a look at what your goals are and whether you are meeting them or not. If the past few months have your financial plan on shaky ground, it may be time to rethink your goals and set new ones. Make sure everything is in order and the plan reflects any changes in your life over the past year.

2. Make your credit report shine. It’s important to get your credit clean and keep it that way, especially in today’s economy. Check your credit score (it’s free from each of the three main bureaus once a year or go to www.annualcreditreport.com) and clear up any discrepancies. Develop a strategy to pay off your debt. Don’t cancel zero balance credit cards if you will be applying for a loan; keeping them open but inactive enhances your credit score.

3. Simplify. Assess all of your open accounts - checking, money market and savings - and consolidate what you can. Have an account in another state? Close it. A 401(k) from a previous job? Roll it over to your current plan or IRA if it makes good sense under market conditions. Having as few accounts as possible will reduce confusion and help keep your finances healthy.

4. Be ready for a rainy day. Although it’s not easy these days to find any extra money in your budget, do what you can to put even a small amount away on a regular basis to build a rainy day fund. Now more than ever, having some cash on hand in case of a layoff, major home repair or other emergency is a good idea.

5. Get rid of the clutter. Determine what paperwork needs to be saved and what can be discarded. It’s recommended that you keep your past IRS tax records for at least seven years and try to keep copies of the returns as long as you can as they may contain valuable information and may not be available from the IRS.

5:35 PM - May. 10, 2009 - comments {0} - post comment

Spring cleaning tips

 This article is by Angie Hicks who is the founder of Angie's List , a website where thousands of consumers share their ratings and reviews on local contractors and companies in more than 425 different categories.

Fresh rains in the early spring are symbolic of the season itself, offering a revitalizing cleansing of the outdoors. The warming weather also offers a reminder to homeowners that now is the ideal time to do a bit of spring cleaning. 

After all, a bit of due diligence by homeowners not only freshens their living quarters, it also helps them save money and avoid more costly repairs down the road.

"Making a list of items to check around the home this season – and then actually following through with the tasks – can help reduce home maintenance and utility costs," says Angie Hicks, founder of Angie's List, the nation's leading provider of consumer ratings on local service providers.

It's important that homeowners schedule needed services as quickly as possible to avoid a backlog of busy service providers.

Angie's List went to its highly rated service providers to come up with a list sure to help those homeowners who don't know what to check and when, as well as those devoted annually to giving their homes a good once-over.

General Spring Cleaning

• Experts recommend a professional carpet cleaning every 12 to 18 months – but this can vary depending on how many people live in your home, and if you have children or pets. A dirty carpet contains soil and other debris that will wear your carpet's fibers. Schedule an appointment with carpet cleaners now to cut down on your wait time.
• Check your gutters. Professionals recommend gutter cleaning in the spring and the fall. Clogged gutters can lead to water damage in your home.
• Use a garden hose on your siding and deck to remove the film left by dirty snow and rain. Attach a soft-bristled, long-handled car brush to the hose for some extra help. Use a mild cleanser to get those tough-to-clean spots.
• Remove wet leaves and debris from your deck, front porch and around your house. Allowing the debris to accumulate can trap water, lead to staining or mold build-up, as well as create an ideal environment for termites.

Home Maintenance

• Snow, ice and wind can wreak havoc on your home, so be sure to go over the structures in early spring. Finding damage early will increase your chances of getting an early repair, as many home improvement companies begin their busy season this time of year.
• Scrutinize your crawl space for water accumulation or excessive moisture, and keep an eye out for water damage on the sub-floor and joists beneath the kitchen, bathroom and laundry areas.
• Give your roof a "once-over" for damage inflicted during the winter. Depending on the style and pitch of your roof, you may want to use a ladder and a pair of binoculars to look for missing or broken shingles and other damage. If you don't feel comfortable on a ladder, call a professional before the busy season begins.
• Check the weather stripping around doors and windows. The winter season may have caused some damage. Also, remove any storm windows and replace with screens.
• Check the valve where water enters your house, outdoor faucets and valves to toilets, bathroom and kitchen sinks. Turn each off and on several times to identify any leaks.

Outdoor Maintenance

• Talk with your landscaper or local garden center about the best way to enrich your soil for the types of plants in your yard. Proper fertilization can keep your soil and your plants in great shape throughout the year.
• Bring in your mower for service in early spring. This will help avoid breakdowns and extend the life cycle. It also helps you beat the rush so your mower is in tip-top shape when you need it. Warning signs that your mower needs maintenance can include difficulty in starting, a smoking engine, and reduced horsepower. A service appointment should include a check of the oil, blade, spark plugs, filter, battery and belts. Always ask for an estimate and guarantee on the work. Be sure to sharpen the blade at least once a year. Cutting grass with a sharpened blade is important for lawn health, promoting better grass health.
• If you've postponed tool care, now is a good time to get in the garage and take a closer look at your garden equipment. Garden service companies will get busy in the next couple of months, so make an appointment now to have those tools cleaned and sharpened.
• Spring is a good time to examine your asphalt driveway's surface for damage. Water that seeps into your driveway can freeze, causing cracks and other damage. Regular resealing is the best way to protect the surface and keep it in good shape. If you're planning to hire a professional to seal the driveway, summer is peak time of year, so call now to get on their schedule.

Appliance Maintenance

• Regular maintenance on major home appliances can help to ensure their efficiency and lifespan.
• Get your air conditioner serviced. Technicians can test your air conditioner as long as the temperature is above 60 degrees. Call now to get on their schedule before the first warm days of spring.
• Clean and lubricate hinges, rollers and tracks on garage doors with a greaseless lubricant. Avoid using petroleum-based lubricants. Lack of lubrication puts additional strain on the garage door. Don't attempt to service the opener mechanism yourself. Your garage door opener can be one of the most dangerous appliances around your house. Contact a professional for assistance.
• Get your water heater serviced. Maintained properly, water heaters will last for years and deliver gallon after gallon of hot water. Left alone, they'll quickly lose efficiency, sucking dollars out of your wallet with every degree of heat.
• Spring rains can be heavy, so if you have a sump pump be sure it works properly. To test, fill the sump pit with water and go outside to make sure the pump is actually discharging water. You can also eliminate any build-up in the system by pouring white vinegar through the unit.

4:11 PM - May. 8, 2009 - comments {0} - post comment

Navigating today's mortgage markets

”There are five distinct strategies that can help home owners, buyers, and sellers successfully navigate today’s turbulent mortgage and housing markets,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

1. Understand and Utilize the New Tax Credits. Many home owners are not aware that the latest government stimulus package gives them a special tax credit of up to $1,500 for making certain home improvements. Also, if you are buying a primary home and you have not owned a primary residence in the last 3 years, you may qualify for the new $8,000 first-time-homebuyer tax credit. “Although you can’t use the credit to help with your down payment, the credit can be claimed on your 2008 tax returns if you buy the home in 2009,” Nicholas said. “This means that even if you buy the home after you file your taxes on April 15, you can simply file an amended 2008 tax return and the IRS will send you a refund check for $8,000.”

2. Consider Paying Points for Your Mortgage Transaction. Mortgage “points” are upfront fees that you pay in order to lower your mortgage interest rate. One point is equal to 1% of the loan amount. “In the past, it almost never made sense to pay points in most situations where you were refinancing your mortgage,” Nicholas said. “However, enormous changes have taken place in the mortgage securitization process. Wall Street investors are demanding higher upfront fees for borrowers with credit scores below 740, and mortgage lenders don’t have as much flexibility when pricing loans. This means that the interest rate savings can be very significant when you pay upfront points.”

“If you are buying a home, negotiate into your purchase contract for the seller to pay points on your behalf,” Nicholas said. “In addition to the significant interest and payment savings you will enjoy, you will also receive a tax deduction this year for points paid by the seller on your behalf. If you are selling a home, offer to pay points for potential buyers as part of your marketing efforts. This will make your home more affordable for potential buyers and help your listing stand out from the glut of available inventory in today’s market.”

3. Carefully Structure Your Real Estate Short Sale Transaction. A real estate short sale is when a home owner sells their property for less than what they owe on the mortgage, and the lender gives their permission to do this by forgiving the difference and/or releasing the mortgage lien on the property. “Short sales are very common in many markets because of negative home owner equity due to the steep decline in house values,” Nicholas said.

“If you are selling your home as part of a short sale transaction, make sure to negotiate for a release and full satisfaction of the mortgage from your lender. Depending on the laws of your state and your individual circumstances, lenders may be able to wait a year or two for you to improve your financial situation, and then file a deficiency judgment against you to try and recover the money that you still owe them. The only way for you to avoid this risk is to have the lender not only release the mortgage lien, but also agree in writing to a full satisfaction of the mortgage.”

If you are a buying a home as part of a short sale, Nicholas advises you to take steps to make sure the deal is closeable. “It is estimated that approximately 30% of short sale listings are not closeable deals because the lender simply won’t approve it. In most of these cases that aren’t closeable, the first or second mortgage lender is expecting home sellers that have money to contribute something to the deal. One way to avoid getting caught up in the middle of this is to have your Realtor verify the status of the seller’s hardship package with their lender.”

4. Utilize the Special Options Available for Seniors Age 62 or Older. “If you are 62 or older, you could use a reverse mortgage to buy a new home without making any monthly mortgage payments,” Nicholas said. “This is a fantastic opportunity if you are contemplating a move but are worried about trying to sell your current home into a down market. Additionally, reverse mortgages can be used to supplement your retirement income that may be declining due to unfavorable economic or financial market conditions.”

5. Carefully Interview Your Mortgage Professional. With all the noise, confusion, fear and misinformation in today’s market, it is more important than ever for you to work with a Certified Mortgage Planning Specialist who has the training and experience to guide you through the home buying or refinancing process. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way

2:53 PM - May. 6, 2009 - comments {0} - post comment

Protect your home while you travel

Is spring fever prompting you to head for the beaches or some other vacation getaway? If you’re planning to travel during the spring holidays this year, you can help protect your home while you’re away by following these tips from the Florida Association of Realtors(R) (FAR):

1. Make it look like you’re home. Install timers on interior lights so they turn on and off periodically. Consider leaving your radio on and tuned to an all-news or talk show station.
2. Disconnect and remove all exterior electrical decorations before you leave to reduce the chance of fire and theft. Install exterior lights controlled by motion sensors to make your home a more difficult target for prowlers.
3. Discontinue your newspaper delivery temporarily. Be sure to give several days notice so your order can be processed in time.
4. Ask someone to collect any free papers or sales materials left near your house. When fliers and papers are left on a driveway day after day, it’s a sure sign that no one is home.
5. Have the post office hold your mail. This can be initiated by calling the U.S. Postal Service at 1-800-275-8777 and listening to the option for putting a vacation hold on your mail. You can make arrangements up to 30 days in advance of your vacation; at minimum, two days will be needed to process your request. Or you can go to the Postal Service website at https://dunsapp.usps.gov/HoldMail.jsp and follow the instructions.
6. Ask a friend or neighbor to park a car in your driveway occasionally and keep an eye on your place. If police regularly patrol your neighborhood, give law enforcement authorities your schedule so they can watch for suspicious activity. If there’s a crime-watch program, notify the person in charge.
7. If you have an alarm that is monitored, tell the alarm company you will be away. If possible, provide a phone number where you can be reached.
8. If you’re going to be away for two weeks or more, ask a friend to mow the grass or hire a lawn service.

2:41 PM - May. 4, 2009 - comments {0} - post comment

Should you go FSBO?

This article is by George W. Mantor, contributor to RISMedia.

Pronounced “fizzbo,” an FSBO (for sale by owner) is a Realtor acronym for a property that an individual is looking to sell on their own.

To a certain extent, the notion may be driven by tough economic times. With equity evaporating in many markets, it might be a necessity for some sellers to go the DIY route. It is a question brought about by the perception of high cost for very little real work and a nagging sense that, hey, maybe I could do that.

Maybe you can. Maybe you shouldn’t.

The market, motivation, familiarity with the process, knowledge of real estate law, disposition, time, and resources should all be considered before you begin the process of selling your own home.

The Market

They don’t call them buyers and sellers markets for nothing, and, to a large extent, market conditions are often mostly local. A gripping nationwide recession, industry-wide job losses, and lenders’ unwillingness to lend, tend to have nationwide implications. But, even at the darkest of times, there are pockets of prosperity where demand for housing is high. In most cases, even if you over or under estimate the price, the market will eventually catch up to you.

Not so in a declining market. If you don’t get the price right, you will be chasing the market down. Before listing your own home, you need access to good current data about sales prices, market times, and activity. Assuming a modest sixty day market time, you still need to analyze past sales to determine what the value will be in 60 days or more, before a buyer commits.

If you are unrealistic about price, you have no chance. The notion that a prospective home buyer is going to stroll down your street and fall in love with your house is a fantasy. The objective is to price the home for a quick sale but not leave money on the table. It’s a fine line that only an experienced professional, armed with facts, can determine.

Motivation

If at all possible, you should avoid selling into a buyer’s market. If you do not have to sell, don’t, unless you are doing so to buy something else. You also have to be willing to take the hit on your opinion of value and make it up on the bargain you are buying. If you must sell, be realistic about your situation and take your markdown sooner rather than later.

Familiarity with the process

There are two types of FSBOs; the ones who know it all and the ones who don’t know anything, and it isn’t uncommon for FSBOs to be engaged in the industry because they aren’t intimidated by the process.

The process appears daunting because it is, but it isn’t unmanageable. The basic issues are either contractual or regulatory, and there seems to be a tendency among novices to assume that selling real estate to someone is just like selling a used dishwasher.

As the seller, you will need to fulfill numerous legal and regulatory conditions applicable to the state in which the property is located. The consequences for failing to be in compliance are rather harsh. Before listing your home on your own, be familiar with the process and know the requirements for your state.

Knowledge of real estate law

Some sellers believe that because they are not licensed, laws and regulations do not apply to them. Ignorance of the law is a major hurdle. Unless they specialize, most attorneys don’t know much about real estate law. On the other hand, responsible real estate brokerages make a practice of avoiding litigation by knowing and complying with the law. Today’s real estate transaction files are an inch and a half thick and weigh three pounds, and it is all driven by caution. Know the law, or hire someone who does.

Disposition

Most people, even practitioners, haven’t the proper disposition for selling real estate, let alone their own property. The job of real estate requires a lot of patience while you deal with prospective homebuyers, until one transforms into a paying client. People who are buying or selling real estate are under a lot of stress. There is the stress of uncertainty and the underlying events driving their decisions.

There is also a lot of raw emotion throughout the home buying and selling process. Well trained professionals do not surrender control of their emotions to events or the actions of others.

Time

Time is of the essence. It isn’t just a legal phrase, you will need to invest time to market the property and be available to show your home and respond to any inquiries. Your time does have value which can be earned through the investment of the time in something profitable or the value of time for leisure and enjoyment. If the home doesn’t sell quickly, you aren’t likely to recoup the value of your time in savings.

Being on the market longer won’t get you a higher offer either; it will just eat away at your equity.

Resources

How will potential buyers know about your property? A homemade sign in the front yard is effective only if the potential buyer happens to drive down your street.

The best kept secret in real estate is that if the property is priced to reflect true market value and it is placed in the multiple listing service, nothing will stop it from selling. Sooner or later, every buyer turns to the MLS, if for no other reason than to prove to themselves that there is no better home out there. The challenge for a FSBO is to find a method as cost effective as the MLS.

Looking at the bigger picture, it is hard to imagine that someone would want to take the risks and the responsibility of selling for sale by owner unless they were certain they would net significantly more money upon closing. But, that rarely happens. Most, ultimately wind up engaging the services of a professional after wasting time and money. In a declining market, every month you don’t sell means a lower market value. And, if you are making mortgage payments, each payment is lowering your net equity. A fast sale is the most profitable sale.

One thing you are likely to discover is that real estate practitioners produce more potential buyers then you will. In fact, those FSBOs who do succeed often wind up paying at least half of the brokerage fee to the broker who produces a buyer. So, at best, you won’t be able to influence a higher than market value, you will likely pay a partial fee and, if that isn’t bad enough, the buyer of a FSBO also intends to pocket the brokerage fee. Like so many things, it really is harder than it looks.

Before selling your own home, interview a few brokers and get their opinions of value and overview of the market. If one is particularly helpful, you might want to consider listing with them if the home doesn’t sell quickly. And, remember what lawyers say, “Any attorney who would represent himself has a fool for a client.”

2:29 PM - May. 2, 2009 - comments {0} - post comment

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