27 May 2010

5 Most Dangerous Hazards in a Home

Home owners beware: Several dangers may lurk in a home. If you’re not careful, they could make you sick. Pillar to Post, a home inspection company, reviews how to spot these dangers in the home and encourages you to contact a home inspector if your home may be at risk for any of these potential dangers.

1. Radon: a colorless, odorless gas that can seep into the home from the ground. Radon has been called the second most common cause of lung cancer.
What to look for: Basements or anything with protrusion into the ground offer entry points for radon. The Environmental Protection Agencypublishes a map of high prevalence areas for radon. A radon test can determine if high levels of radon are present.

2. Asbestos: a fibrous material once popular in building materials because it provides heat insulation and fire resistance. But asbestos was banned in 1985. It may still be found in older home’s insulation materials, floor tiles, roof coverings, and siding. If disturbed or damaged, it can enter the air and cause severe illness.
What to look for: Homes built prior to 1985 are at risk of having asbestos within construction materials. Home owners should especially be careful when remodeling because disturbing insulation may cause the asbestos to become airborne.

3. Lead: a toxic metal used in home products for many years that can contribute to several health problems, especially among children. Exposure can occur from deteriorating lead-based paint, pipes, or lead-contaminated dust or soil.
What to look for: Homes built prior to 1978 may have lead present. Look for peeling paint and check old pipes. To get a HUD-insured loan, buyers must show a certificate that homes built prior to 1978 are lead-safe.

4. Hazardous products: stockpiles of hazardous household items — such as paint solvents, pesticides, fertilizers, or motor oils — that can create a dangerous situation if not properly stored or disposed. They can cause illness or even death if small amounts are ingested.
What to look for: Make sure these items aren’t tucked away in corners, crawl spaces, garages, or garden sheds. Home owners often don’t realize these products can pose a danger and may forget they’re storing them. But buyers don’t want it to become their problem — and expense — to dispose of. If these products are found, make sure the buyer requires their removal and gets a disposal certificate prior to closing, which proves the products were disposed of properly and not just dumped in the backyard.

5. Groundwater contamination: the result of hazardous chemicals that are illegally disposed of and then seep through the soil and enter water supplies. A leaking underground oil tank or faulty septic system can contribute to this.
What to look for: Look for any conditions that may be conducive to leakage. Homes near light industrial areas or facilities may be at risk. Also a concern: areas once used for industry that are now residential. Pillar to Post offers a Neighborhood Environmental Report that details any dangers or remedies of environmental incidences and sources of contamination that have occurred at a specified address and within its vicinity.

Source: Pillar to Post
Wishing you all a safe and wonderful Memorial Day Weekend!!!
All the best,
Jillian Bos

22 May 2010

Interested in a Short Sale?

What You Need to Know

Are you looking to buy a new home? Are you thinking that now's a great time to find bargains?

If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.

A short sale is different from a foreclosure, which is when the seller's lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.

You're a good candidate for a short-sale purchase if:

You're very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.

Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you're preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.

You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property—or you need to be in your new home by a certain time—a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.

If you're serious about purchasing a short-sale property, it's important for you to have expert assistance. Here are some people you want to work with:

A qualified real estate professional.* You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many buyers they've represented in a short sale and, of those, how many have successfully closed. A qualified real estate professional will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communications with the lender.

Title officer. It’s a good idea to have a title officer do an initial title search on a short-sale property to see all the liens attached to the property. If there are multiple lien holders (e.g., second or third mortgage or lines of credit, real estate tax lien, mechanic’s lien, homeowners association lien, etc.), it's much tougher to get that short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you’ve waited for months for lender approval. If you don’t know a title officer, your real estate attorney or real estate professional should be able to recommend a few.

Some of the other risks faced by buyers of short-sale properties include:

Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.

Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.

No repairs or repair credits. You will most likely be asked to take the property “as is.” Lenders are already taking a loss on the property and may not agree to requests for repair credits.

The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.

* Not all real estate practitioners are REALTORS®. A REALTOR® is a member of the NATIONAL ASSOCIATION OF REALTORS® and is bound by NAR’s strict code of ethics.

18 May 2010

Secrets to Keeping Your Credit Score High

A happy consequence of this Great Recession is that Americans are widely expected to be better consumers. 

That means we'll only take on loans that we can afford, pay off credit-card debt at the end of each month and sock money away. It also means our credit scores will reach what the industry calls super prime, the top score achievable.

Or will they? Turns out our scores are not just a reflection of our ability, or lack thereof, to pay on time, but they tell a story of how we run our lives. If there's a blip in that story, say a 30-day late payment, the red flags pop up and all those years of paying dutifully can fall flat quickly.

Much attention has been focused on credit scores during this recession as consumers have struggled to keep up with their mortgage payments and revolving debt. Many consumers — even those who have long had outstanding credit ratings — have complained that their scores have fallen as credit-card companies slashed limits and closed inactive cards.

But people shouldn't worry so much about their scores, according to experts. "It's less about the score than it is about the information that's contained in the report," said Steve Katz, senior director of consumer education for TransUnion. "The score is only a reflection of what's in the report."

The most important information in your credit report is your bill-paying history. It bears repeating: Pay your bills on time every single month. A whopping 35 percent of your FICO credit score is tied to that payment history.

Another 30 percent of your score is based on your outstanding debt. Lenders expect you to use credit cards but to do so prudently. If you have three credit cards with a total of $30,000 in available credit, they will look at how much of that you're using. That's called your utilization rate. Don't max those cards out. In fact, don't even come close to it.

Figuring out your utilization rate is easy math. Add up all your outstanding balances and divide by your total credit limit, which should produce a number less than 1. If it hits 1, you're maxed out.

Most credit experts, including the credit bureaus, will advise you to keep your credit utilization under 30 percent of the total limit.

But here's a secret: Make sure you do it for each card. If you exceed that threshold on one card — say you use 70 percent of that limit but only 10 percent on another card and nothing on a third card — you're under 30 percent of the total limit, but you'll still get dinged for using so much of the limit on the first card.
How much of your limit you use in any given month can turn the tide on your card. If, for example, you max out your American Express card every month but pay it in full, you can still get slammed for hitting your limit. The credit card companies don't report if you've paid off your card; only how much you spent.

"Whether you pay in full or not is not relevant," said Maxine Sweet, vice president of public education at Experian. "If I charge $5,000 this month, the credit history is not going to know if that $5,000 is part of a longer-term bill or not.

"From a scoring standpoint, what's important is: How does my balance of $5,000 compare to my total credit limit?" she said.

Also, some 15 percent of your score is based on your credit history, which doesn't bode well for college graduates just getting on the bandwagon. But if you've been managing your credit well for a couple decades or more, chances are your numbers are pretty lofty.

But remember this: The higher you climb, the further and faster you fall. If you've been doing a stellar job of managing your credit for 20 or 30 years and one month you miss a payment — say, you landed in the hospital with a bad leg break — not only do the red flags go up but the warning sirens go off at full blast. You automatically get put into a much riskier credit category than the neighbor who tends to be a bit late on his monthly payments.

Seems unfair, you say? It's because you're exhibiting uncharacteristic behavior. The system reads that as something is wrong, so wrong that you now might not be able to pay your car loan and the department-store credit card on time.

Craig Watts, public affairs director at FICO, which produces credit scores, described it metaphorically as this: You're the perfect angel of a child during all of grade school and junior high, but then you get to high school and discover partying is not the bad thing your parents said it was. You become so good at it that your angelic history is now mud.

"Your reputation is suddenly skewed heavily to the left," Watts said. "It will take time to restore that pristine reputation. The same thing happens with credit risk and credit score."

The lesson here: Your credit score is your credit reputation.

Here's another thing you probably didn't know: Many banks rely on a proprietary statistic known as the odds-to-score ratio that has more to do with people like you than you alone. It tells lenders what the likelihood is of a 90-day delinquency based on what your score is.

For example, a FICO score of 780 tells a lender that for all the consumers in his marketplace with a score of 780, one out of every 400 will become 90 days late in the next two years, meaning your odds-to-score ratio is 400-to-1. The ratios fall in tandem with the scores.

Your credit scores are also affected, though less so, by your pursuit of new credit. And they are a catch-all of your history.

"Everything in your credit history will have an impact," Sweet said. "A credit score will have many factors and considers every element in the credit history."

When you actively seek new or more credit, your rating gets what's called a "hard inquiry" that pares a few points off your score. When the banks check your credit — most of them do it every 30 days — that's considered a "soft inquiry" and won't affect your rating. Same is true for mailers with pre-approved credit lines.

"Don't apply for too much credit in a short period of time," Katz said. "You start to look credit-hungry, and each one of those applications triggers an inquiry. Three or four in a short period of time start to add up."
The type of history you have also shows up in your scores. Banks typically like to see that you have a good track record with revolving credit and installment loans.

"A good mix of credit can be useful to your score, but not so useful that you should open a credit card to get it," Watts cautioned.

Given all this, it might be hard to swallow that credit scores are actually a good thing for consumers. They're discriminatory for sure, but on risk, not on race, age or gender.

"It's the kind of tool that the courts and government have favored because by design it doesn't discriminate in an unpalatable manner," Watts said.

Finally, should you be checking your credit score regularly? The answer is: It depends. There are services you can sign up for that will track even the tiniest of changes to your score, for a fee.

TransUnion's Katz said everyone should know what their score is at all times. "Your accounts are being updated by your creditors every 30 days," he said. "You should know what they contain because it can change."

But Experian's Sweet, who has a regular check on her score, doesn't think it's necessary to be obsessive about it.

"People are chasing their score too much," she said, adding that consumers should spend more time understanding how their credit actions affect their scores. "You have to be educated enough to know what is in your credit report and how it is scored."

FICO's Watts said you should simply be financially fit. "Rather than micro-manage your FICO score, it's way easier to adopt careful management habits," he said.

"If you do that and your score is high, like the upper 700s, you don't have to worry about dings if you close an account and open another one. Who cares?" he said. "Don't worry about the little stuff."
And don't forget the good news: credit scores are salvageable.

"The worse the situation, the longer it's going to be to recover," Watts said. "A bankruptcy or foreclosure will take several years to fix. But the nice thing is your score can recover," he said.

"Bankers have come to respect the fact that people do learn new rules, and that many can go through difficult times and become good borrowers again."

Jennifer Waters, RISMEDIA, May 18, 2010

14 May 2010

5 Advantages of Effective Pricing

Brought to you by the Real Estate Genius who taught me just about everything I know....Nick Segal, The Partner's Trust, Brentwood.
Let’s just start at the beginning: what is an “effective” price?
Simply put, the effective price is the asking price you place on your home that most accurately aligns with both the recent sales activity and the number of homes currently on the market in your immediate area. Getting to this number is best achieved when you can separate your emotion from your clinical quest to get to the truth of what the market is telling you.
This is more easily done if you review the data from the perspective of a buyer looking to buy your home. It’s kind of bizarre at first, but if you have the discipline to analyze what the buyer has to choose from in your marketplace – and consider what recently sold and what those homes had to offer – you’ll find that you can literally divorce yourself from your attachment to your “one of a kind” gem and start to see it as a product whose price either makes fiscal sense or it doesn’t. From this objective state of mind is the most fertile ground to make sound business decisions.
So, you find your place of zen from which to review the data and you set your effective price. What’s in it for you?
  1. You get offers. And not just “low ball” offers but offers from qualified buyers who are sincere in their effort to purchase your home. And with multiple offers, whatever the upper price point that could be achieved will be achieved because the bidding-up process in most cases drives the price there.
  2. Luxury of choice. With quality offers, you get to be more discerning. Consider that price is not the only value in any offer: speed to closing, the possibility of a lease-back, or even having the buyer pay for a host of negotiable elements such as the termite work or other fees, are all wonderful assets secured when you price your home effectively.
  3. Shorter “invasion” process. The most basic of truths when selling your home is that the market is quick to tell you what your home is worth. Because brokers can expose your home to both a local and global market in mere days, those looking to buy what you offer will immediately descend upon you with requests for showings — this means fewer open houses and fewer people trudging through your home.
  4. Creating urgency. Buyers are very smart. They know what’s available and what sold when and for how much because of the advent of the Internet and its associated transparency. If a buyer walks into your house and deems the asking price “fair,” that buyer knows that other buyers will come to the same conclusion.  This collective consciousness – or “fear of loss” – will stir people to act and write offers for your benefit.
  5. Negotiation strength. Consider that it is much easier to walk away from one buyer when there are other buyers trying to get your attention.
These are just the top five most compelling reasons to steel your nerves and trust that the concept of “effective pricing” will ultimately serve your needs and desires in both the short and long term. I would love to hear from any sellers or prospective sellers out there with a point-of-view or an experience that either supports or challenges this mindset.

12 May 2010

The Expertise of a REALTOR vs. "For Sale By Owner"

"Why do we need a real estate agent?  Let's save money and sell our home ourselves!"

For your protection....I encourage you to think again.

- Sellers who use a real estate professional make 16 percent more on the sale of their home than do sellers who go it alone. Unrepresented sellers often do not understand the complexity, range and timing of tasks they will have to perform if they don’t use a professional.

- Buyers who look for "FSBOs" usually offer 6-10% below the price of comparable properties because they know you are not paying a commission.

- There are substantial risks involved when a seller agrees to "carry back" a note from the buyer; risks that can cost you thousands of dollars.

- Your good credit rating can be ruined by your buyer's default, many months, or even years, after that buyer "assumes" your loan.

- A clever buyer can stay in possession of your property for many months after he defaults on the contract, and in effect "live for free" at your expense.

- Alleged failure to disclose such things as previous repairs, insects, exact lot lines, and the presence of certain types of mold/fungus in the property are the source of many lawsuits against sellers.

REALTORS are real estate professionals who are experts in marketing and negotiation. REALTORS can help a seller set a realistic price and ensure the proper paperwork and various disclosures and inspections are handled correctly. REALTORS know best how to prepare a home and maximize value, provide broader exposure to the market and are more likely to generate multiple bids than a seller on their own.

In addition, REALTORS are experts in attracting qualified buyers. A professional can show a home more objectively than can a seller who may be emotionally attached to the home, and who might become unnerved by prospective buyers’ critical comments. The real estate pro also checks the financial capability and bona fides of buyers before allowing them onto a seller’s property.

Experienced, professional real estate agents understand risk, and they can help you to minimize it in a variety of ways. They devote many hours to training and educational programs which emphasize risk reduction, and protecting their clients' interests.

When a problem arises in the transaction, an experienced agent can move swiftly to "nip it in the bud." Their thorough understanding of the myriad facets of modern transactions can help them to identify the real problem, and to either solve it themselves, or by calling upon resources that the typical seller simply does not have access to.

Are you, or anyone you know, looking for an experienced REALTOR to represent you?  If so, I'd love to chat.

Very sincerely,

11 May 2010

Could it be?!

Some "positive" news for once?

I don’t want to misrepresent that the world is coming up roses, but these sorts of consistent offerings of optimism start to positively affect our communities which spreads the seeds of growth throughout our nation. Spread the word!

Below is some information that jumped of the page of USA Today's Money section:

WHOLESALE INVENTORIES AND SALES RISE IN MARCH - Inventories held by wholesalers rose for a third month in March, while sales increased by more than twice the expected amount. Rising demand is making businesses more confident about the future, a key development needed to sustain the recovery.

Wholesale inventories rose 0.4% in March, slightly lower than the 0.5% gain expected, the Commerce Department said Tuesday. Sales shot up 2.4%, more than double the 1.1% increase economists had forecast.

It marked the 12th month that sales have risen at the wholesale level, an encouraging sign for the economic rebound. The hope is that businesses will step up ordering and restock depleted shelves, giving a boost to factories and prompting them to rehire laid-off workers.

The 0.4% rise in March inventories followed gains of 0.6% in February and 0.1% in January.

Inventories have risen five of the past six months. A 0.5% increase in October was the first gain after 13 consecutive declines. Before October, businesses had gone through a massive liquidation of their stocks as they struggled to contain costs during the recession.

The move away from slashing inventories has played an important role in supporting growth the past two quarters. Increased orders have helped make manufacturers the standout performers in the recovery so far.

The rise in inventories and even bigger jump in sales pushed the inventory- to-sales ratio down to 1.13 in March. That means it would take 1.13 months to deplete existing stocks at the March sales pace. The ratio had been at 1.16 in February and 1.39 in March 2009.

The overall economy, measured by gross domestic product, grew at an annual rate of 5.6% in the final three months of last year. About two-thirds of that growth came as companies slowed the reduction of their inventories.

HIRING, JOB OPENINGS RISE IN MARCH - New hiring rose in March to its highest level in more than a year while job openings moved up slightly.

The Labor Department said Tuesday that employers hired 4.24 million people in March, up from 4 million the previous month. Job openings edged up 47,000 to 2.69 million.

But new hires and job openings remain well below pre-recession levels, as many employers are still cautious about adding to payrolls.

That is particularly true for small businesses. A separate survey by the National Federation of Independent Business found smaller companies were more optimistic in April about future economic trends than the previous month. But slightly more are still planning to cut jobs than create them, the NFIB said.

The group's small business optimism index rose to 90.6 from 86.8, the highest since September 2008, when Lehman Brothers collapsed and the financial crisis intensified. It was the first time in 18 months that the index topped 90. But the index rarely falls that low, and was below 90 for only one quarter in the steep 1980-82 recession.

"The level of the index is still very depressed," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a note to clients. "If the whole economy were small businesses, this survey suggests it would still be contracting at a 3% rate."

Economists generally cite two reasons for the divide: Small companies are less likely to export than larger firms and therefore aren't benefiting as much from improving economies in Asia and parts of Latin America.

Smaller companies are also more dependent on bank lending than larger firms, which can issue bonds in order to borrow.

In the government's report, the construction and retail industries reported the largest jumps in hiring, while manufacturing and government also reported gains. The increase in construction hiring is likely a rebound from February, when severe weather shut down many projects.

The report, known as the Job Openings and Labor Turnover survey, illustrates the rapid churn that takes place in the job market, even when hiring is fairly weak. In addition to the 4.24 million hires that took place in March, about 4 million people were laid off, fired or quit their jobs.

Last week, the Labor Department said employers added a net 290,000 jobs in April — the most in four years — as confidence in the economic recovery increases. But the unemployment rate rose to 9.9%, as the new jobs weren't enough for the more than 800,000 people that resumed job searches.

With nearly 15.3 million people unemployed, competition for jobs remains stiff. In March, there were nearly 5.6 jobless workers, on average, for each opening. That compares to 1.7 jobless workers for every opening in December 2007, when the recession began.

Dyke Messinger, president of Power Curbers, a Salisbury, N.C., company that makes road construction equipment, said his U.S. business was closely tied to the housing industry, which is still struggling.

His company, which has around 130 workers, isn't hiring. He doesn't think that will change any time soon — even though he expects his international business to improve in the current quarter.

"While there are certainly some good signs for companies in other sectors of the economy, we're expecting a slow U.S. recovery this year," Messinger said.

10 May 2010

10 Tips for Home Safety and Security

  1. If out of the house for an extended period of time, create the illusion that someone may still be home. Leave a TV or stereo on in the room where a burglar would most likely break in. Use exterior lighting and motion detectors to minimize burglar concealment.
  2. Make sure all exterior doors have good proper locks. Install 1-inch deadbolt locks on all exterior doors.
  3. If you get an unexpected knock at the door, check to see who it is before opening it.
  4. Do not leave extra keys under doormats, potted plants or any other obvious outdoor location. Thieves will generally find them. Find an inconspicuous place to hide the keys, or give a set to a neighbor you can trust.
  5. Burglar-proof your glass patio doors by setting a pipe or metal bar in the middle bottom track of the door slide. The pipe should be the same length as the track.
  6. Keep garage doors shut.
  7. Keep drapes and blinds shut - especially in rooms where there is expensive equipment. Don't advertise the items in your home.
  8. Store cash, jewelry and other valuables in a safe or safety deposit box instead of leaving them lying around the home.
  9. Don't leave notes on the door for service people or family members. These alert the burglar that you are not home.
  10. If you're going to be away from home for a few days, adjust your telephone ring to its lowest volume setting. An unanswered phone may tip off a burglar that no one is home. Also, have a neighbor or friend collect your newspaper and mail. Never cancel delivery - you don't know who will get that information.
For more tips, news on current real estate market conditions, the need of a good electrician or any other real estate related need, I stand ready to assist you....

Have a wonderful week,