Friday, December 10, 2010
RISMEDIA, December 9, 2010—While the holiday season puts many in the spirit to give, it’s also important to do some research before opening your wallet to support charitable causes.
"There are many worthy charitable causes and residents should feel free to contribute to causes with personal meaning, whether a local homeless shelter, food bank, soup kitchen, animal rescue, or an international organization with global outreach," said Pennsylvania Secretary of the Commonwealth Basil L. Merenda. "However, I urge everyone to take the time to understand where their dollars will be going so they can have confidence that their donation will have the biggest benefit and get to the people who need it most."
Before giving to any charitable organization, research how your money will be used. Most charities are legitimate and strive to ensure the majority of dollars go directly into worthwhile projects, but some may misrepresent their cause or spend a high percentage of donations on administrative costs. Be sure that the charity's spending practices match your expectations.
Here are some tips and warnings to help ensure your donation goes to the right place:
1. Never give to a charity you know nothing about.
2. Request written information from the charity about its programs and finances.
3. Do not feel pressured into giving on the spot or allow someone to come to your home to pick up the contribution.
4. Never commit to donate over the phone unless you are familiar with the organization.
5. Never give cash, credit card numbers or bank account numbers. Always write a check payable to the charity so you have a record of your donations.
6. All charities have expenses, so check carefully and understand how your donation will be spent.
7. Consult with a tax advisor to determine whether your contribution is tax deductible. If giving before Dec. 31, charitable donations may be tax deductible for the upcoming tax filing.
What's your favorite charity or worthy cause? Please share...
Thursday, December 9, 2010
By Claudia Buck Print Article
RISMEDIA, December 8, 2010—(MCT)—Whether you’re trekking to the mall or shopping online, the holiday season is a time when many consumers get caught up in the hustle and bustle of the season and fall prey to holiday scams and financial missteps. Here are some tips to keep your holiday spending in control.
Shop from a list: To avoid impulse buys, write down the people you’re buying for and how much you can spend for each person.
Make it: Baking, crafting, sewing, woodworking. A homemade gift from the heart might not break your bank.
Skip the plastic: To stay within budget, ditch the credit card and use cash. Withdraw what you can comfortably spend, and when it’s gone, head home.
Credit vs. debit: A credit card can be safer than a debit card as most credit cards offer better protection if a card is lost or stolen, or if an online purchase doesn’t arrive. But if using credit cards, think ahead to avoid piling up holiday debt.
Watch your wallet: Keep your ID and credit cards inside a secure purse or pocket. Don’t get distracted or let credit cards out of your sight at the counter. Keep receipts in one place for easy returns.
At the ATM: When withdrawing cash, be aware of your surroundings and passers-by. If something looks odd on the ATM itself, notify the bank or business.
Give wisely: There are many worthwhile, needy causes seeking donations this time of year. Whether you’re asked by phone, mail, online or at a shopping center, be sure the donor is legitimate. Check charities with the Better Business Bureau (http://www.bbb.org).
Don’t get scammed: Some scams are holiday-related, others tried and true. A Sacramento, Calif., woman recently fell for a classic scam in which a Canadian caller persuaded her to wire $6,500 by posing as a grandson in financial distress. If you get such a call or e-mail, verify the situation with family, friends or your bank.
Be online-savvy: Look for deals at sites like Dealnews.com and Pricegrabber.com, as well as your favorite retailers. Confirm the site is legitimate: Look for a padlock symbol and be sure there’s an “https” in the browser when making a payment. Check if the store name is spelled correctly. The more safety indicators, the better.
Use your cell: Cell phones can help you compare prices and access coupons while shopping. Download apps from sites like RedLaser and ShopSavvy.mobi that let you scan bar codes, and get product reviews, in-store discounts and competing prices from other retailers.
Be Wi-Fi wary: Browse but don’t buy when using public Wi-Fi connections to avoid hackers who could steal your financial information.
Don’t get suckered: If you’re buying $50 worth of merchandise but need to spend $75 to get free shipping, be sure you really want that extra $25 purchase. Check out http://www.freeshippingday.com for retailers offering free shipping with guaranteed Christmas Eve delivery.
(c) 2010, The Sacramento Bee (Sacramento, Calif.).
Distributed by McClatchy-Tribune Information Services.
Any tips you would like to share?
By Mary Ellen Podmolik Print Article
RISMEDIA, December 8, 2010—(MCT)—This holiday season will be a happy one in the Bellwood, Ill., home that Rogelio Huerta and Maria Soto share with their two young sons. That’s because the couple recently made the first mortgage payment on a permanent loan modification that will keep the family in the home they expected to lose to foreclosure just two months ago.
The Chicago Tribune profiled the family and the predicament they faced in late October as an example of how homeowners who follow the rules and try to regain their financial footing were nevertheless being thwarted.
Huerta and Soto applied for and received a trial modification from PNC Mortgage early in the fall of 2009. But two months ago, the family was rejected for a permanent modification because during more than a year that their application was in limbo, the family managed to save $2,500—too much, in PNC’s view.
Had PNC responded in a more timely manner, or if the family had spent some savings, they would have met the criteria for a permanent loan modification. Huerta and Soto said they were following the advice of housing counselors to build up savings.
Two days after the story ran, the Northwest Side Housing Center, the housing counseling agency that worked with the family, received a phone call from a PNC representative, offering the family an in-house permanent modification.
But there has been no phone call or letter to the family apologizing for the drawn-out process or explaining the lender’s change of heart. Huerta doesn’t expect one.
“Maybe the mail guy sent an apology to a different house,” joked Huerta, who just a few weeks ago had trouble keeping his composure while talking about his situation.
Another set of numbers, on loan modifications made through the federal government’s Home Affordable Modification Program, shows a program struggling to gain traction. As of October 2010, while almost 1.4 million trial modifications were begun since the program’s start, only 483,342 of them, or 34.6%, had been converted to permanent mortgage modifications. Meanwhile, 41% of consumers in canceled HAMP trials received alternative modification programs from lenders themselves.
Counselors at the Northwest Side Housing Center are heartened by Huerta and Soto’s success. But like others who spend their day advocating for homeowners, they worry about the people whose good-intentioned efforts still come up short.
“Servicers were never set up to make modifications,” said Liz Caton, director of counseling services at the Northwest Side Housing Center. “They were set up to make loans and collect payments, but that’s not an excuse, not for the billions of dollars that taxpayers gave them two years ago,” said Caton. “There is a canyon that a bunch of people are falling through, not even a crack, and I don’t see good faith efforts by some of these lenders to fix that chasm.”
Huerta’s final package took time to negotiate; the final agreement will keep the monthly mortgage payment at a level similar to the trial payment for the next 40 years, at a slowly escalating interest rate.
Their family’s story struck a chord with many readers. Some asked how they could assist the family, financially and in other ways, and several contributed funds to a bank account set up for them by the counseling agency. Meanwhile, a local window installer contacted the family and, free of charge, replaced a broken window at their home that Huerta was afraid to spend the funds to fix. Huerta had also held back on car repairs to build up savings.
Huerta had sought the loan modification because a job relocation meant higher commuting expenses and his hours were cut.
Huerta, who said he was stunned by the level of support he received, plans to continue attending homeowner meetings at the housing counseling agency, where people offer each other support and advice in dealing with their mortgage issues.
“There’s a lot less stress now that I know I can keep a home for my family,” Huerta said. “There’s homeowners who have nothing yet. I want to share what happened to me, and for them to keep the faith.”
(c) 2010, Chicago Tribune.
Have you had a challenging experience with your lender that you would like to share?
Wednesday, December 8, 2010
Presents, decorations and party supplies can make for a not-so-Earth-friendly holiday season. But Ben Champion, Kansas State University director of sustainability, says it's possible to celebrate and still be mindful of the environment.
"If you're going to consume, then do so conscientiously," Champion said. "Know what you are buying."
Champion offers several tips for an eco-friendly, yet still merry, holiday season:
• While many companies are trying to go green by reducing packaging—a good thing to be sure—what a gift is made of matters just as much. Paying attention to recyclability, energy use and materials that didn't cause environmental damage in their production is important. Look for trusted environmental certifications, and be sure to check your local recycler to see what materials they do recycle.
• Paper products are the easiest to recycle, as long as they don't have chemical coatings. Glossy paper decorations and wrapping paper are often not easily recycled because their coloring and designs are made of complicated chemicals. Some decorations or wrapping papers do use soy inks or other natural dyes, making them more recyclable. Buy wrapping paper and packaging that can be recycled, and then make sure to recycle them when finished.
• Plain, corrugated cardboard is best for containing presents because it's also easy to recycle. Plastic materials—especially No. 1 and No. 2 plastics—are the easiest plastics to recycle.
• Some alternatives to presents include a gift certificate or a donation to an organization in the name of the receiver. "The best way to save waste is to not buy presents that make waste," Champion said. "You can always just buy something that is going to last a long time so that it won't have to be thrown away."
• Products such as fair-trade, organic or locally made products can make one-of-a kind presents that may not require as much packaging for shipping.
• If mailing presents, try using biodegradable packing peanuts or newspapers, instead of non-recyclable packing materials.
• Disposable plates, cups and utensils can easily accumulate at holiday parties. Instead of using foam or plastic dishware, try either reusable or biodegradable, disposable dishware and utensils. While biodegradable dishes can't be recycled when they have food particles or food stains, many biodegradable dishes can be composted along with a lot of food scraps. Exploring how to compost is another way to green your living.
• Buying local food products—although they can be more expensive—provides a more eco-friendly option because smaller local farms tend to offer more customized products and can be less chemical intensive. "If it's a special occasion, you may be willing to pay that extra amount," Champion said. "You'll have something that everyone can appreciate together. It's often better quality, and I like the taste of organic and heritage foods better."
• But perhaps most important is to focus more on the season and less on material goods. "I would recommend spending our time and money not necessarily on buying stuff, but on enjoying each other's company," Champion said.
The taxpayer bailouts of housing finance giants Fannie Mae and Freddie Mac could cost as much as $363 billion through 2013, according to government projections. The Federal Housing Finance Agency, which has regulated the former government-sponsored enterprises since they were seized during the financial crisis in 2008, said the figure was based on the worst of three scenarios for the economy and housing market that assumes a "deeper second recession."
Under the best-case scenario, which would be a "stronger near-term recovery" in housing prices, the bailouts of Fannie and Freddie would reach $221 billion. The third scenario, in which housing prices continue on their current projections, would result in the combined bailouts reaching $238 billion.
So far, Fannie and Freddie have received about $148 billion in taxpayer money since they were seized by Bush administration officials and placed in government conservatorship. Taxpayers now own 79.9% of the two companies.
"These projections are intended to give policymakers and the public useful snapshots of potential outcomes for the taxpayer support of Fannie Mae and Freddie Mac," said Edward J. DeMarco, FHFA's acting director. "These are not predictions; the results reflect the potential effects of a limited set of hypothetical changes in house prices, a key variable driving credit losses for the enterprises."
DeMarco told a House subcommittee last month that taxpayer losses from Fannie and Freddie likely wouldn't top $400 billion, as some have feared, but did not provide specific data. In December, concerns mounted about the potential cost of the bailouts after the Obama administration lifted a $400 billion cap through 2012.
Officials said they did so to provide certainty to the real estate market that the government would stand behind the agencies as lawmakers and the White House began wrestling with their future. Many Republicans have blamed Fannie and Freddie for triggering the subprime mortgage problems and complained that the recently enacted financial reform law did not deal with the future of the two entities.
But the law did call for the administration to produce a plan by January, and Congress has been conducting hearings on the fate of Fannie and Freddie and the broader question of government involvement in the housing finance market.
Fannie Mae and Freddie Mac are almost singlehandedly keeping the housing finance market going as investors have fled because of the financial crisis and deep recession. Together, they hold about $1.6 trillion worth of mortgage loans.
The additional projected losses would come from further eroding of the value of loans, particularly subprime mortgages that Fannie and Freddie bought before the government seizures, the FHFA said.
(c) 2010, Los Angeles Times. Distributed by McClatchy-Tribune Information Services. Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Now who will they lend all of this money to if more than half of americans don't qualify because of default???
Tuesday, December 7, 2010
RISMEDIA, December 2, 2010—According to a recent study by the American Psychological Association, 75% of Americans are stressed out to the max going into this holiday season.
Stress relief expert Lauren E. Miller gives people real tips on how to have more joy and less stress in the midst of the holiday craze.
"Stress is simply a signal within your body giving you an amazing opportunity to identify and adjust your perception of a situation, along with your behavior. We forget that whatever we focus on grows bigger quickly...positive or negative," said Miller, who is the author of Release the Stress ... 5 Minutes to Stress Relief around the Craze of Life at Work and at Home.
Miller suggests three quick tips to help you stay sane in the midst of the insanity:
• Know what you value most in life. When your priorities are clear, decisions are easy. Stress creeps in when you forget what you value most in life. When you spend most of your energy on the "nonessentials" in life you begin to feel depleted very quickly and the stress hormone begins to double. Create moments every day that nurture what you value most in this life and notice how quickly clarity of thinking and inner peace return within your being.
• Let go of this belief: "In order to be loved and accepted I need to be perfect, have the perfect house, tree, job, car, person, family, job, credentials." What is your inner list of requirements in order to feel loved and accepted in life? Let go of your need for certain outcomes around the holidays in order for you to feel good about yourself. Happiness returns when you release the attachments you have in life in order to feel good about you. Remember, joy flows from the inside out, not the outside in. Start loving yourself completely just as you are, right where you are at.
• Breathe, Breathe, Breathe and be present to the "Silent, Holy, Night" that dwells within every moment of life. Give yourself the gap of empowerment that comes when you become the observer of your life verses the reactor. Be a curious and fascinated human being who looks at everything before them as an opportunity for learning and growth. When one door closes, don't waste one moment looking at that closed door, start seeking the open window. Don't miss life; when you worry, doubt and fear, you miss the life standing right in front of your face. When you are present, you will laugh more in life, which has profound physiological benefits, another wonderful gift to give yourself and those around you this season.
Do you have any tips you would like to share?
According to Deloitte's survey, 11 percent of bank customers surveyed have been hit with a negative credit experience for the first time in their lives during the past two years. Overall, 22 percent of consumers have experienced a serious negative credit situation since the peak of the crisis in September 2008, including events such as delinquency, foreclosure, bankruptcy and charge-offs.
"This is a significant new customer segment that banks should be aware of," said Andrew Freeman, executive director of the Deloitte Center for Financial Services, Deloitte LLP. "Our research shows just how sizeable the first-time defaulter group has become."
More than half of FTDs (58 percent) have been contacted by a collection agency, and 43 percent have been delinquent in their medical bills.
According to the survey, these events could be costly for financial institutions, as poor interactions and unmet customer expectations may cause the first-time defaulters to look elsewhere: 63 percent of respondents say they are not at all likely to borrow from their current institution in the future based on the lender's efforts to help resolve their issues.
"Today, retail banks are rethinking their broader lending strategies and practices," said Freeman. "As part of this reassessment, lenders are likely to be paying careful attention to how they serve this new segment. When implementing strategies to re-engage with these customers, financial institutions may want to recognize that once many of these individuals are able to regain their economic footing, they may become profitable again."
Other findings of the survey, from the full base of respondents, include:
• Almost two-thirds of consumers (65 percent) say they have the same level of satisfaction relative to two years ago with their bank.
• At the same time, most respondents have seen little change in the lending process overall, although 16 percent said they have seen higher fees associated with loans and credit.
• Only 28 percent believe the Dodd-Frank Act and other new regulations will have immediate benefits for consumers. Furthermore, a significant proportion of consumers expect higher fees, higher rates, more paperwork and fewer offers from lenders in the next 12 months.
• More than half of those surveyed (52 percent) would prefer to use a single bank for all their financial services needs. But, with consumers' interest in obtaining loan products from their primary bank surprisingly low, the survey findings indicate that banks' cross-selling efforts will likely require some fresh, creative efforts.
What are your thoughts?
It is a bit to early to announce a definitive trend. Although less than last year, unit sales still showed a reasonable pace (close to 2006 levels), with sales values holding steady since the spring, down about 40% from 05' peak values. It is still a Buyers Market at over 5 months supply, however the number of homes available for sale continues to shrink, helping move us towards stability and signaling the end of the imbalance in our market. Buyers should take action before they encounter an increase in interest rates.
Nationally, both NAR and the Mortgage Bankers project an increase in the number of homes sold in 2011 over 2010 based on continued low interest rates, affordable home prices as well as an improving economy. They also say values will continue to settle downward and bottom out next year. With that said, remember that real estate is local, not national. The various markets across the country will recover at different rates. In general, the Midwest, including Michigan, seems to be faring better than the South and West. Our data indicates most markets have shown a stable and even slightly rising value trend however, even in markets that continue to settle downward, it will not be significant enough for Buyers to delay purchasing, since any rise in interest rates will off set any savings from a potential price decline.
Also on the positive side, the latest Comerica economic activity report continues to move in the right direction since bottoming out in January of last year. Economic activity and hiring is slow, but it is still moving in the right direction.
One indicator that the market still has some work to do is our percentage of lease transactions, currently still running at about 20%. A good recovery indicator will be when the percentage of leases falls to under 10% which will go hand in hand with available home inventories falling to a three month or less supply.
With generally better news about the direction of the market in the past nine months, should Sellers be expecting the same in terms of rising values and offers? We are not quite there yet, however there is a growing pent up demand from buyers. In many cases aggressively price homes in good, updated condition are getting multiple offers and selling quickly. These homes represent less than 30% of the market and for the most part are priced below their competition. The rest are typically priced or "conditioned" out of the current Buyer demand.
On a bragging point, Hitwise once again ranked our web site as the most viewed broker site in the state and our new First to Know voice and text programs generated 1,150 client registrations in the past two months.
We are using a new format for the Market Summary this month. With the tax credits influence, comparing to last year can be misleading. A better current trend comparison is to the most recent months using a seasonal index so we can compare “apples to apples” months. These charts follow the current market trend over the past 90 days ( up, down or neutral).
Data Source: MIRealSource, Realcomp, Ann Arbor MLS, TAAR
Months Supply Inventory represents the rate (months) to sell the current listing inventory
*Includes Eastpointe and Harper Woods ** Includes Grand Traverse, Kalkaska, Antrim, Leelanau and Benzie Counties,
Friday, November 12, 2010
1.) There are fewer sellers in the winter months, hence less competition.
2.) The banks have been holding their inventory which has depleted buyer’s choices.
3.) The lower inventory levels have created a frenzy of activity resulting in multiple offers on the properties that are priced fairly. This often leads to a purchase price greater than the asking price.
4.) Your house is at its most beautiful during the holidays!
5.) Buyers that shop in the winter are serious about buying, they are not window shoppers & they are on a deadline!
Thursday, November 4, 2010
Investopedia November 3, 2010 04:00 AM Copyright Investopedia. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Wednesday, November 3, 2010
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/11/03/investopedia48246.DTL#ixzz14K5wGyReMany people who would like to own homes have fears that prevent them from buying. If you're one of these people, take heart - there are simple steps you can take to overcome your fears and become confident that you will make a sound purchase. Here are some of the top reasons you may be holding off on purchasing a home and how to overcome these hurdles. (For related reading, also check out 5 Mistakes Real Estate Investors Should Avoid.)
IN PICTURES: Financing For First-Time Home buyers
1.A Loss in Property Value
Homes can decline in value, even without a disaster. Neighborhoods can gradually decline, newly-built homes can make older neighborhoods less attractive, or an unpleasant development (prison, landfill, highway, etc.) could be built nearby. A poor or mediocre economy can also keep home values down.
Even savvy home buyers can't always predict what will happen to home prices. But you can take precautions, like buying in a low-crime area where the homes are well-kept, primarily owner-occupied and with high-quality schools nearby. You can buy in an area where there are multiple sources of employment, so if one business shuts down or leaves, the entire town doesn't have to move to find work. And you can contact the city government to ask about future development plans in the area you want to buy.
2.Overwhelming Maintenance Costs
All homes have upkeep costs, and many homes have very large maintenance bills. If you become a homeowner, you won't be able to avoid these costs. However, there are numerous things you can do to mitigate and prepare for them:
◦Buy a home that has been well-maintained.
◦Buy a home that has recently had major components upgraded or replaced (e.g., new roof, new water heater, new plumbing, new electrical)
◦Buy a new home (though new homes sometimes have undiscovered defects).
◦Regularly maintain your home to prevent small problems from becoming major repairs.
Go into the purchase with a generous emergency fund set aside for home maintenance and add to that fund every month.
To avoid buying a money pit, you should also have a home inspection before you buy. (For more on home maintenance, take a look at Do You Need A Home Inspection?)
Are you concerned about buying the wrong house? Maybe it's because you don't know what you want. Fortunately, you can solve that problem.
Make a wish list that includes features your home must have, as well as features that you'd like it to have but aren't necessary. Look at many houses to see what's available in your price range. If you find a home you think you want to buy, sleep on your decision before making an offer. And don't exceed your budget, as you will quickly regret buying any house that strains your finances. Also, don't be afraid to walk away from a house - new homes are always coming on the market.
IN PICTURES: Home Renovations That Don't Pay
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/11/03/investopedia48246.DTL#ixzz14K5cN7lN
Wednesday, October 13, 2010
Homeowners unable to sell turn to renting.
DETROIT — A growing number of homeowners are finding out what it means to be a landlord after failing to sell their homes in one of the worst housing slumps in history.
TIPS FOR A NEW LANDLORD
Call a private investigator.
For less than $50, you will find out whether the prospective tenant is a deadbeat right there and then instead of finding out after he or she owes you three months’ rent and you have to evict. — Tom Youngblood Jr., landlord
Don’t be scared by bad credit. Renters who lost their homes come to the landlord having gotten rid of their biggest expense — their mortgage. If they have a job, they are pretty good tenants. References are as important as the credit report. — Dan Elsea, Real Estate One
If you use a standard lease contract, have a lawyer review it to avoid surprises. — Mike Balduf, landlord PHave the tenant provide acopy of his or her credit report, references and proof of employment. Contact the employer to ensure the potential tenant is working there. — Katie Hill, Realtor with Real Estate One in Troy, Mich.
Find out whether your city or township requires you to have a permit to rent out the house and pay the fee. Do everything by the book. — Mark LaVelle, landlord
Request wire transfers and automatic deposits for monthly rental payments to avoid being scammed by people who don’t want to pay. Fraudulent checks and cashier’s checks are easy to create on a personal computer. — Steve Cole, Realtor with Coldwell Banker Weir Manuel in Birmingham, Mich.
With home prices down nationwide, many don’t want to take a huge loss when they decide to move. They want to wait to see whether they can rebuild their equity. So they rent.
“People just really don’t want to be landlords, and they really have no choice,” said Dennis Dickstein, a Realtor at Real Estate One in Farmington Hills, Mich., who estimates 20 percent of his deals are leases.
Mark and Rhonda LaVelle decided to buy a bigger home while the market was down. The couple had a 1,100-square-foot house in Royal Oak, Mich., to sell but decided to move when they found a 2,300-square-foot home about two miles away. They started renting their house in January after it had been on the market nine months.
“After paying two mortgages and the house wasn’t moving, we were at a point where we would have to sell it at a substantial loss or get someone else in who could pay the mortgage,” said Mark LaVelle, 38, a freelance cameraman.
He and Rhonda LaVelle, 37, a television-news producer, turned the leasing over to his real estate agent.
“It’s been a great experience. We’re getting the full mortgage payment from the tenants,” Mark LaVelle said. “My wife just wanted to wash her hands of the whole thing. She looks at it like a liability. I look at it as an investment.”
But it’s not always moving up that sparks a home rental.
Sometimes it’s a life change, such as marriage, college graduation, divorce or death in the family.
Many homeowners who decide to lease their homes use their real estate agents to handle the transaction, including background and credit checks.
The service generally will cost a landlord one month’s rent, and property management could cost 10 percent to 20 percent of the monthly rent. But with rent often set just high enough to cover the mortgage payment, some landlords do it themselves.
Dan Elsea, president of brokerage services for Real Estate One in Southfield, Mich., advises landlords not to be too turned off by potential tenants with bad credit.
“The people coming to them have gotten rid of their biggest expense, their mortgage, when they arrive at the door. They arrive with a reasonably clean income statement if they have a job,” he said. “You should look at the credit report, but don’t scrutinize it too closely. References are just as important.”
Other real estate agents agree.
James Silver, an agent with Keller Williams in Troy, Mich., said there are many good tenants to choose from.
“As long as you get everything: a credit report, the last few pay stubs, references. As long as you have everything in front of you, you’re fine,” Silver said.
And the beauty of the rental market is prices there have not fallen by 40 percent, as many parts of the sales market have.
The reason is there are a lot of renters to feed demand.
“So many people have lost their homes ... they are looking for a place to live,” said Linda Hiller Novak, a Realtor with Max Broock Realtors in Birmingham, Mich.
There are horror stories, of course, for untested landlords. Some learn quickly that the old saying, “Possession is nine-tenths of the law,” is true.
Steve Cole, an agent with Coldwell Banker Weir Manuel in Birmingham, Mich., said he knows a homeowner in Birmingham who rented his house to tenants who not only didn’t pay rent, they trashed the home before the landlord could evict them.
“When times are tough, people look to scam,” Cole said.
Tom Youngblood, a 38-year-old human resources director, is renting his St. Clair Shores, Mich., home to a responsible tenant after having to evict the first one.
He was lucky. First off, a court clerk helped him figure out how legally to evict the tenant. He had to give the tenant seven days’ notice to pay or face eviction. Then he filed eviction paperwork with the court.
In December, a judge ordered the tenant to pay or be out in 10 days. She chose to leave and did not damage the home, he said. If the tenant had not moved out within 10 days, a court officer would have done it for her.
It can take from 27 to 57 days to evict a tenant, according to the Michigan State University College of Law’s Rental Housing Clinic.
Youngblood’s home is now being rented by Danette Trice, 30, an engineer design specialist at AT&T in Mount Clemens. She had been living in Eastpointe, Mich., with her son, Ephraim Gibson Jr., 4.
Ephraim has bronchitis, and the two had to move because the air conditioning wasn’t working at their house.
Her real estate agent helped her get a $100-a-month reduction in rent and made air conditioning a requirement in the lease.
“I didn’t have to do this or that to move in,” Trice said. “There was new cabinetry in the kitchen, the appliances were nice and the tile was nice.”
Dickstein helped Cyndee Pote, who works in advertising and marketing for Real Estate One’s corporate offices, lease her home earlier this summer after Pote, her husband and three children moved to a 2,400-square-foot home in Bloomfield Hills.
Pote and her husband, Jason Pote, had their 980-square-foot house on the market for a year with no offers. Houses in the neighborhood were going for $50,000, and she had paid $94,000.
Once it was put up for rent, the showings increased, and they had it rented within a week.
The young man who rented it lived just 10 houses down the street and was losing that rental because the owner let it go into foreclosure. Dickstein did a background check, a credit check and contacted the renter’s employer before letting him rent the home.
“The rental market was strong. We were able to cover our mortgage and then some,” Cyndee Pote said.
Tuesday, October 12, 2010
Friday, October 8, 2010
RISMEDIA, October 7, 2010--Since there are complicated aspects of retirement planning, many people choose to work with professional financial planners in order to better ensure a comfortable retirement. In addition to accumulating an appropriate-sized nest egg, retirees also need to consider their debt, amount of insurance, inflation, other sources of income and how to protect their investments.
FinancialPlanners.net offers five common mistakes that people make when retirement planning that can greatly affect their golden years.
1. Retiring with too much debt. Financial planners will generally recommend not retiring until credit card, mortgage and other forms of debt are paid off. These monthly payments can quickly cut into savings, which will be paying for past expenditures -- plus interest and current expenses. Increasingly, Americans are entering traditional retirement years with heavy debt.
2. Not buying enough insurance. Although people over the age of 65 are eligible for Medicare, they will still have additional healthcare costs that are not covered. Depending on coverage, many items are not covered, such as premiums, deductibles, coinsurance, eye glass coverage, hearing aids or long-term nursing home care for longer than 100 days. Guidance from a professional is recommended if the family has significant assets to protect.
3. Not taking inflation into account. Inflation will slowly decrease the spending power of savings. However, there are steps that can be taken to avoid this. Social security, some annuities and pensions are adjusted for inflation annually. Treasury Inflation-Protected Securities (TIPS) are a government bond that promises a rate of return that exceeds inflation.
4. Depending on one source of income. A certified financial planner may recommend having four to six sources of retirement income without counting on just one. By diversifying, retirees can avoid losing all their income if one source loses value. Guaranteed sources can include Social Security, pensions and annuity payments. Other common sources can be 401(k), IRA, CDs, personal investments, cash investments, rental properties and royalty income.
5. Not protecting savings. About five to 10 years before retiring, people should start to focus more on protecting their savings rather than growing them. People can reduce risk by shifting assets to more conservative investments, avoiding borrowing or taking early withdrawals and minimizing fees and taxes deducted from savings. More funds should be placed in low-cost investments and traditional and Roth retirement accounts.
Wednesday, October 6, 2010
Tuesday, September 28, 2010
Foreclosure counselors can make the difference between losing your home and keeping it. Here’s how they work and how to choose one. Read
Here are some legitimate resources to help you fight the foreclosure crisis. Read
Know which experts provide foreclosure help—often at no cost to you—and how to find them. Read
If you’re facing foreclosure, don’t panic: Take steps right now to save your home or at least lessen the blow of its loss. Read
With foreclosure rescue scams widespread as more homeowners fall behind on mortgage payments, be smart if you seek help. Read
Visit houselogic.com for more articles like this.
© Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®
Tuesday, September 21, 2010
Wednesday, September 15, 2010
Friday, August 27, 2010
Thursday, August 26, 2010
Wednesday, August 11, 2010
By Paige Tepping
RISMEDIA, August 10, 2010--When selling your home, the goal is to sell it quickly for the highest price while investing as little as possible in renovations. With a limited budget and a little effort, you can greatly increase your home's appeal by focusing on what prospective buyers can see on their first visit. The experts at BuyOwner.com offer the following recommendations for preparing a house for sale and staging it for showings.
Tip #1: Refresh the exterior
First impressions count when it comes to selling a home. Most buyers won’t even leave their car if they don’t find the exterior appealing. The best ways to improve your home’s exterior include:
-Repairing and/or replacing trims, shutters, gutters, shingles, mailboxes, window screens, walkways and the driveway.
-Painting siding, trim and shutters and lamp and mailbox posts.
-Pressure washing vinyl siding, roofs, walkways and the driveway.
Tip #2: Spruce up the lawn and landscape
Home buyers associate the condition of your lawn and landscaping with the condition of your home’s interior. By improving the outside, you affect buyers’ impression of the entire property. The best ways to enhance the yard include:
-Mowing and edging the lawn.
-Seeding, fertilizing and weeding the lawn.
-Keeping up with regular lawn maintenance by frequent watering.
-Trimming and/or removing overgrown trees, shrubs and hedges.
-Weeding and mulching plant beds.
-Planting colorful seasonal flowers in existing plant beds.
-Removing trash, especially along fences and underneath hedges.
-Sweeping and weeding the street curb along your property.
Tip #3: Create an inviting entrance
The front door to your home should invite buyers to enter. The best ways to improve your entry include:
-Painting the front door in a glossy, cheerful color that complements the exterior.
-Cleaning, polishing and/or replacing the door knocker, locks and handles.
-Repairing and/or replacing the screen door, the doorbell, porch lights and house numbers.
-Placing a new welcome mat and a group of seasonal potted plants and flowers by the entry.
Tip #4: Reduce clutter and furniture
A buyer cannot envision living in your home without seeing it. A home filled with clutter or even too much furniture distracts buyers from seeing how they can utilize the space your home offers. If you have limited storage space, you may want to consider renting a temporary storage unit to place items you wish to keep. The best ways to declutter your home include:
-Holding a garage sale to prepare for your move, getting rid of unnecessary items.
-Removing clutter such as books, magazines, toys, tools, supplies and unused items from counter tops, open shelves, storage closets, the garage and basements.
-Storing out-of-season clothing and shoes out of sight to make bedroom closets seem roomier.
-Removing any visibly damaged furniture.
-Organizing bookshelves, closets, cabinets and pantries. Buyers will inspect everything.
-Putting away your personal photographs, unless they showcase the home. Let buyers see themselves in your home.
-De-personalize rooms as much as you can.
Tip #5: Clean, clean, clean
The cleanliness of your home also influences a buyer's perception of its condition. The appearance of the kitchen and bathrooms will play a considerable role in a buyer's decision process, so pay particular attention to these areas. The best ways to improve these areas include:
-Cleaning windows, fixtures, hardware, ceiling fans, vent covers and appliances.
-Cleaning carpets, area rugs and draperies.
-Cleaning inside the refrigerator, the stove and all cabinets.
-Removing stains from carpets, floors, counters, sinks, baths, tile, walls and grout.
-Eliminating house odors, especially if you have pets.
-Considering air fresheners or potpourri.
Tip #6: Make minor repairs
The small stuff does count, especially with first-time home buyers. Without dismissing the importance of repairing major items such as a leaky roof or plumbing, you do not need to spend money on replacing these items. Instead, focus on the minor repairs that will make your home visually appealing. The best ways to improve your home include:
-Repairing ceilings and wall cracks.
-Repairing faucets, banisters, handrails, cabinets, drawers, doors, floors and tile.
-Caulking and grouting tubs, showers, sinks and tile.
-Adding fresh paint to ceilings, walls, trim, doors and cabinets.
-Tightening door handles, drawer pulls, light switches and electrical plates.
-Lubricating door hinges and locks.
Tip #7: Showcase the kitchen
The heart of any home is the kitchen. If you are going to spend any money on renovations, this is the one area where you will see the greatest return. Even with a modest budget, focusing on a few key areas can make a great difference in getting the asking price for your property. The best ways to showcase the kitchen include:
-Replacing cabinet doors and hardware.
-Installing under-cabinet lighting.
-Replacing light fixtures.
-Replacing outdated shelving with pantry and cabinet organizers to maximize space.
-Baking cookies or cupcakes for a showing, to create a homey smell.
Tip #8: Stage furniture
Furniture placement can enhance the space of your home while giving buyers an idea of how to best utilize the space with their own belongings. Take some time to rethink how different areas in your house could be used. Some ideas to think about include:
-Moving couches and chairs away from walls in your sitting and family rooms to create cozy conversational groups.
-Creating a reading corner in the master bedroom.
-Clearing an empty room to set up a reading space.
-Turning an awkward space into a home office.
-Setting the dining room table with your best china.
-Set wine glasses in front of the fireplace or next to a Jacuzzi tub.
Tip #9: Light up the house
Create a sense of openness and cheerfulness in your home through its lighting. To improve the lighting try:
-Opening shades and drapes to let the sunshine warm and brighten rooms.
-Installing brighter light bulbs in rooms that tend to be dark.
-Adding additional lamps for ambient lighting.
-Turning on all the lights for a showing.
Tip #10: Add fresh touches
You can easily add color and style to your home by adding fresh touches throughout. Some ideas to consider include:
-Placing fresh floral arrangements in the entry and master bedroom.
-Placing bowls of bright-colored fruit in the family room and the kitchen.
-Filling an empty corner with a potted leafy plant.
-Setting new hand soap in the bathrooms.
-Displaying fresh towels near sinks.
By Stephanie Andre
RISMEDIA, August 7, 2010--The dog days of summer are here, alive and well. Getting out in the garden and keeping your lawn green are very important but so is conserving water. Remember - it's the summer; it's going to rain. From checking the kitchen faucet to watching your laundry loads, there's plenty we can all do to save water.
Here are some tips from Pennsylvania American Water on how you can conserve water and reduce the environmental impact of water consumption both indoors and outside the home:
1. Water your lawn only when it needs it. An easy test to tell if your lawn needs water is to simply walk across the grass. If you leave footprints, it's time to water. (An added benefit of watering less often is that fewer, deep-soaking waterings encourage deep root growth and stronger turf.)
2. Water in the early morning. As much as 30 percent of water can be lost to evaporation by watering during midday.
3. Set your lawn mower one notch higher to make your lawn more drought-tolerant.
4. Use drip irrigation hoses to water plants, and water in the early morning or evening.
5. Use a broom instead of a hose to clean your sidewalk, driveway, or patio.
6. Forego the hose and wash your car with a bucket and sponge instead. According to EPA WaterSense, a hose left running can waste as much as six gallons per minute while a bucket and sponge uses only a few gallons to do the job.
7. Keep a bottle of cold tap water in the refrigerator. You'll avoid the cost and environmental impact of bottled water and you'll have cold water available in the summer without running the faucet.
8. Run dishwashers and clothes washers only when they are full. If you have a water-saver cycle, use it.
9. Adjust the water level of your clothes washer, so that it matches your load size.
10. Regularly check your toilet, faucets and pipes for leaks and have them fixed promptly. An easy test for toilet leaks from EPA WaterSense: Place a drop of food coloring in the tank. If the color tints the water in the bowl without flushing, there's a leak. Check your water meter before and after a two-hour period when no water is being used. If the meter changes at all, you probably have a leak.
Tuesday, August 10, 2010
By Stephanie Andre
RISMEDIA, August 7, 2010--With so much uncertainty in the current economic climate, one thing’s for sure: protecting your financial health is a top priority. For some who may have lost their jobs—or may know someone who has—there’s a lot to consider.
From health insurance to your plans for retirement, read these tips from Family Wealth Management Group, LLC to help protect your assets and financial future.
-- Evaluate your financial health. Review your income, expenses, assets and liabilities. Don't wait until your savings is depleted to alter your spending habits. Even if you have an emergency fund, pinching pennies now will help ensure that money is there when you need it.
-- Review your health insurance options. If you have lost your job, some workers and their families (who might otherwise lose their health benefits) have the right to choose to continue group health benefits provided by their group health plan for limited periods of time under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA).
-- Investigate unemployment benefits. Workers who are unemployed through no fault of their own and meet other state eligibility requirements, may be eligible to receive unemployment benefits under the Federal-State Unemployment Insurance Program.
-- Plan for retirement. Review your pension plan, 401 (k), IRAs, Social Security benefits and other savings plans to assess whether they meet your long-term retirement goals and will generate an income stream to meet your projected expenses.
-- Protect your assets. Review your life, disability and long-term care insurance coverage, especially if you are the primary breadwinner. Are they portable (i.e. can you continue the coverage at your present group rate), once you are no longer employed? Ask your financial advisor whether individual coverage is appropriate in lieu of the group coverage and/or to supplement the group coverage.
-- Analyze your spending habits. How much do you spend on trips to the market, afternoon lattes, video rentals or dry cleaning? Try to eliminate a portion of these expenses. Home-brewed coffee can shave four dollars a day from your food budget and save up to $120 a month.
-- Call your creditors before you fall behind. Don't let the default notices pile up before calling your lenders and credit card companies. These days, many companies are willing to defer or temporarily lower payments, while you look for employment.
-- Re-define your financial goals. Redefine where you see yourself in five, 10 or 15 years. You may not be able to retire when you expected to, or pay outright for a four-year college, but instead of saying, "I can't afford it" set new goals and ask, "How can I afford it?"
-- Meet with a licensed financial professional. Get professional advice about investment losses, financial products, insurance coverage and other important issues. Addressing your current situation and making choices based upon your new reality will help rebuild your self-confidence and your bottom line.
Monday, August 9, 2010
By Paige Tepping
RISMEDIA, August 7, 2010--Now that summer has arrived, homeowners across the country are taking advantage of the warm weather by tackling home improvement projects they have been putting off. If you are looking for ways to add value to your home, the following home improvements may be just what you’re looking for.
Tip 1: Remodel your kitchen
Kitchen updates are one of the best ways to increase the value of your home. Adding modern appliances and refacing your cabinets to give it a more modern look is well worth the investment.
Tip 2: Add a Garage
Homes with at least a two car garage are more attractive to potential home buyers. Having a home with a small garage is almost as bad as having no garage, so consider upgrading before putting your home on the market.
Tip 3: Remodel your bathroom
Bathrooms are very important to home buyers. Just as with the kitchen, home buyers look for modern conveniences. Adding a Jacuzzi bathtub, painting the walls and adding appropriate flooring will go a long way toward increasing your home’s value.
Tip 4: Install the right flooring material
Natural materials such as wood and ceramic are popular among home buyers today. Laminate flooring is a good option, as well, as it creates a natural look without the headaches associated with natural flooring materials.
Tip 5: Install granite counter tops
Granite counter tops are popular in both kitchens and bathrooms. These countertops are low maintenance and quite attractive and can add significant value to your remodel.
Tip 6: Increase curb appeal
Your home needs to grab a potential home buyer’s attention and look great as soon as he or she pulls in the driveway. Add flowers to the outside of your home and make sure it looks bright and cheery.
Tip 7: Add natural light
Home buyers like homes that are bright and cheery on the inside as well as the outside. Look for places to add windows or patio doors that will allow more natural light to come in.
Tip 8: Open up the space
Homes with an open floor plan are more valuable to home buyers than those that feel closed up. Knock out walls wherever possible and open your home up. A great place take out a wall is between your kitchen and your dining room.
Tip 9: Apply a fresh coat of paint
A fresh coat of paint makes a home look new again. When repainting walls, choose neutral colors that don’t stand out too much. Bold colors may be attractive to you, but they may be a turnoff to potential buyers.
Tip 10: Clean up clutter
A cluttered home appears small and dirty. Make certain all clutter is cleaned up on the inside and the outside of the home. Rearrange furniture or remove furniture in order to make the home feel less cramped.
Friday, August 6, 2010
1.)Identify your financial resources and determine purchase power
2.)Based on your purchase power, decide how many properties you will buy, at what pace, and whether you will hold and lease them or flip them for profit. (Most investors do both)
3.)Select areas to purchase in that you are very familiar with.
4.)Use multiple resources to identify values like the web and professional realtors.
5.)Create a checklist of costs associated with repairs that may be required or you can use mine Click here.
6.)If you are going to be holding some properties for a long-term gain, decide if you will manage them yourself or hire a professional property management company. (The cost of property management varies between 8-12% of monthly rent)
7.)Know the market! Two years ago you could present low offers and get them accepted – now that the banks are pricing so aggressively and the investor market is flooded, you Will have to bid over asking price in many cases to secure a property.
8.)Know your margins! Based on the work required and your cheat sheet of estimated repair costs (see item 5), you should be able to calculated what the cost of fixing up any property will be.
9.)Decide if the property is one that qualifies to bid on: Here’s the formula –
Resale Value after repairs – Cost of repairs – Your Profit (You determine this value) = Offer price.
10.) If your offer price is less than asking price and the property already has multiple bids, you may not want to bother. If your offer price is higher than asking, and there are multiple bids, offer your calculated price. If your offer price is higher than asking and there are no other offers, you may want to bid full price to secure the purchase.
***** The unwritten rule: Don’t get greedy
If you lose a property that was going to net you $10,000 because you were trying to save $2,000, you’ve lost $10,000. In fact, if you never secure a purchase, you’re not an investor at all. Good luck!
Monday, August 2, 2010
Friday, July 30, 2010
Monday, July 19, 2010
Friday, July 9, 2010
Wednesday, June 30, 2010
The market has improved at all price points in terms of months supply of For Sale inventory, the most in the under $100,000 market.
Under $100,000: May 08' - 9 months supply vs. 4 months today - 55% improvement
$100,000 to $400,000: May 08' - 16 months vs. 7.5 months today - 53% improvement
Over 400,000: May 08' - 24 months vs. 15.5 months today - 35% improvement
If you are one of those carry over buyers, you would be wise to take advantage of the prices and current inventory before the interest rates rise. Even a marginal increase in interest rate means much more money than an additional decrease in value. In other words, the percieved savings as you are trying to time the bottom of the market will be far outweighed by any increase in rates.
In terms of market activity, our sales type breaks down as follows: Bank Owned: 27.2%, Leases: 19.4%, Short Sales: 32% and Traditional Retail: 21.4%. So financially distressed sales still make up nearly 80% of all transactions, it is just that the mix has shifted from mainly bank owned to an even mix of bank, short sales and leases. As banks learn the importance of avoiding foreclosure, Short Sales may move to as high as 50% of all transactions. It is important for Sellers to keep in mind that Traditional Retail properties make up nearly 50% of all listings, yet 20% of all sales, highlighting the importance of getting your price to a level that will draw attention competing with the financially stressed sales. As a Seller, if your home has been on the market during the past four months and has not received an offer (in the most active time in the past 6 years) then it is pretty clear your price/condition balance is out of whack.
Here is a good snap shot showing the importance of strong pricing when a home is first placed on the market.
No Price Reductions 1 or more Price Reductions
Sale Price Range SP to OLP% DOM SP to OLP% DOM
$0-100,000 96% 52 71% 155
$100,001 - 400,000 96% 80 83% 176
Over $400,000 90% 158 73% 373
From the chart we can make some general conclusions: For under $100,000, if priced right, on average, you can expect an offer in less than 60 days at 96% of asking price. Homes that are not are most likely over priced by over 20% and will remain on the market for another 100+ days. For $100-400m if the home does not sell in 80 days it is on average over priced by 13% and will stay on the market an additional 100 days. The $400m market on average will take 5 months to sell for 90% of asking price. If it missed that market, then it will likely remain on the market for another 7 months and will be over priced by 27%.
The overall conclusion regardless of price range is if a Seller is not getting offers within the "No Price Reduction" market times, a fast price adjustment is in order.
The even better news to the improving market activity is our Company market share grew significantly this past month, as it has all year as well. In May our Pending Business share % increased by 22%, more that any of our top competitors (CB, Re/Max, KW or C-21) and more than the market as a whole.
Monday, June 7, 2010
Friday, May 28, 2010
It is nearly impossible to predict what effect this will have on the balance of the year. There are a number of positive signs (buyers tired of waiting, low rates and prices, low inventories, improving economy) but an equal number of negative (foreclosure bulge, increasing rates, no more federal subsidies). Which will dominate or will they work to cancel each other out is anybodies guess. Government intervention has had a significant impact on the improved market numbers. As we move into the second half of the year with fewer artificial supports you will see the sales pace slow and corresponding home inventories rise. To give you a feel of just how active the market has been year to date, it matched the activity and inventory levels of our peak year of 2005 (with prices off 45%+)!
Our for sale inventories are under 30,000 properties for Southeast Michigan compared to over 60,000 in 2008. With inventories at that level, we are in a good position to weather any slowing during the balance of 2010.
For Sellers, price will still be king, since although the decline in home values has slowed considerably, most homes currently for sale are priced significantly higher than the market. By way of example, homes sold without requiring price reductions sold on average at 95% of asking price vs. 88% for all others and sold in 63 days vs. 96 days for all others. Buyers have become very good at finding the best opportunities and are even willing to set a bidding war for them.
Thursday, May 27, 2010
Thursday, May 13, 2010
Tuesday, May 4, 2010
2010 1ST Quarter Market Update
From Dan Elsea, President - Brokerage Services
Real Estate One Family of Companies
March Market Update
Business has heated up in the past 45 days. The market activity certainly reflects the tax credit activity (up 40-50% from last year - but the first quarter of last year was really slow, so the comparison is relative). We had initially projected a modest level of activity since we felt about 75% of those who were going to take advantage did last year, but it appears we were light on that number and further, the move up credit, although still modest in comparison, does also seem to be stronger that we had anticipated. It looks like we may have had another 40% or so left to roll into this year.
A view of the Months Supply of Inventory (MSI) for the first quarter of 2010 shows the differences in the pace of sales within pricing segments. MSI represents the number of months it would take to sell the For Sale (or available) inventory at the current sales pace. A Buyers Market is a MSI of over 6 months; a Neutral Market is a MSI of 3-6 months; a Sellers Market is a MSI under 3 months.
We are seeing the first signs of pricing stability in the under $100,000 market and even in some segments of the under $200,000 market. For our five county market the under $100,000 the MSI is at 3.2 months, a neutral market. For $100-200,000 the MSI is 6.3 months, just above neutral and for over $200,000, 10.4 months, still a strong Buyer's Market.
We are anticipating a roller-coaster year, furious activity the first six months with a slow down in the second half. But keep in mind the hot first half is being compared to a really slow 2009' and the second half of 2010' is being compared to a really strong 2009'. So the stats will show a market looking much worse after June than it really is. None the less, it will be slower, since the core economy has not picked up enough to make up for the loss of tax credits and the possibility of rising rates. All that said, the web traffic increases we are seeing show that just as there is a shadow inventory of bank owned homes hanging over the market, there is also a shadow inventory of buyers just waiting for some consistent good economic news to jump into the market.
The Annualized Home Sales Rate graph gives you a relative feel for the strength of the market, by showing the seasonally adjusted annualized rate of sales for the five counties. You can see that the annual sales pace has been on the rise since the summer of last year. Most signs are good; however the value appreciation light is still not green, so sellers need to remain aggressive with pricing.
Here are our numbers for March and The Annualized Home Sales Rate Graph.
March Market Report
Monday, April 19, 2010
Credit Issues by Jeff Mandel and Marlin Brandt Print Article
RISMEDIA, April 14, 2010—The activation in February of the Credit Card Act of 2009 (the “Act”) has made building credit harder for young people. To compound this challenge, everyone’s credit profile needs to be more effectively managed today than in prior years in order to:
1) Demonstrate the requisite level of credit worthiness to qualify for a new credit card, auto loan or even to rent a home
2) Minimize the interest rates they pay on their loans
Although risk-based pricing has been used by banks for a long time, its use has become significantly more prevalent in recent years. Simply defined, if a borrower represents a low risk then they will likely get lower interest rates, whereas if they represent a higher risk then they could see double-digit interest rates or no approval at all.
So what does someone who is trying to establish and build a good credit profile (history) for the first time need to do to effectively begin the process?
The new law bans credit card offers for young adults under the age of 21 unless they have an adult co-signer or provide solid proof that they have the means to repay their debts. Credit cards, such as a simple gasoline service card, have long been the basic starting point of establishing new credit. Anyone younger than 21 must get permission from parents, guardians or spouses to increase credit limits on joint accounts they hold with those adults.
The law bans offers of freebies (e.g., pizzas and T-shirts) if students sign up for credit cards on or near campus or at college-sponsored events. This was much-needed legislation when considering that 42% of college graduates were leaving school with derogatory credit. Much of this was due to their lack of knowledge on how credit works and how to manage it. The challenge has now shifted since many young adults will not really begin to build credit until they are over 21 years old.
There are still some options to help newer borrowers start building their credit profile. First, many young people own a checking account with an ATM card. Most ATM cards now double as a VISA or MasterCard secured by their checking account limit. If your bank doesn’t report your ATM card usage, ask them to start. Some banks will arrange to have charges on your ATM reported on your credit report.
Another positive change in the Act allows any consumer to add information to their credit report that supports their credit worthiness. The credit reporting agency may charge a small fee to process this type of request. If your credit history has little to demonstrate your creditworthiness, consider adding unreported repaid debts, utility payments and rent payments.
Send a certified letter to the credit bureau asking that it contact the creditor and ask that they list the payment history on your credit report. For the avoidance of doubt, it’s imperative to make sure that the payment histories associated with these types of requests demonstrate a solid history of making payments on time.
Jeff Mandel is president and Marlin Brandt is COO of ApprovalGUARD.
For more information, visit www.ApprovalGUARD.com.
RISMedia welcomes your questions and comments. Send your e-mail to: email@example.com.
Tuesday, April 13, 2010
Detroit Free Press
There are more than 10000 properties being held back, according to estimates from Southfield-based Real Estate One. "If the inventory continues to drop, ...
See all stories on this topic
Thursday, April 8, 2010
Monday, March 29, 2010
2.) The Fed has announced it will no longer manipulate the interest rates to keep them at all-time lows.
3.) The new short sale requirements going into effect April 5th will accelerate the process putting short sale properties in direct competition with those that are not short sales. In other words, buyers will no longer have to suffer long periods of waiting to buy a short sale.
All of these factors will work to reduce the number of potential buyers for your home in the next 30 days and beyond. It is therefore crucial that your property is positioned to sell now!
Thursday, March 25, 2010
A new wild card in the process is the implementation of HAMP (Home Affordable Modification Program - for loan modifications) and HAFA (Home Affordable Foreclosure Alternative Program - for short sales) in April. These two Federal initiatives are designed to reduce the number of foreclosures and stream-line the Short Sale process for homeowners likely to suffer foreclosure. Their success will depend on the lenders ability to shift, staff up and train to the new program. We expect it to be a slow start, but, if effective, they do offer the opportunity to help bring the market into balance
For homeowners who are under financial pressure, it will be important to understand how HAMP and HAFA can help. The implementation details of each program are still being defined. However, if you are still employed and have means to make a mortgage payment, the goal is to alter that payment by reducing your interest rate and bring the payment to within 31% of your income. If that is not possible through reducing the interest rate or extending your mortgage term, chances are you will be advised to short sale your home.
Although the market is by no means robust, this will be the best spring in the past three years for Sellers as the reduction in inventory brings less competition and in relative terms the best values in years can still be found for Buyers. A rare perfect moment for all parties!
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Wednesday, March 17, 2010
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Thursday, February 25, 2010
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Tuesday, February 23, 2010
Tuesday, February 9, 2010
Thursday, February 4, 2010
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