January 27, 2012 6:30 am
Making the decision to buy a new home is a life-altering event…in a good way. But the process can be daunting. Take the following advice from CNNMoney into consideration before heading out on your home-buying journey.
- Don't buy if you can't stay put. Given today’s challenging marketplace, don’t buy a home unless you can commit to staying there for at least a few years. The days of flipping for profit are long gone and you stand to lose money if you sell too soon after buying.
- Shore up your credit. Securing a mortgage in today’s market requires excellent credit so take the time to clean up your credit report well before you begin looking for a home.
- Be honest about what you can really afford. The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But CNNMoney recommends using one of the many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
- If you can't put down the usual 20 percent, you may still qualify for a loan. There are a variety of public and private lenders who, if you qualify, can provide options in terms of interest rates and down payments.
- Schools affect home values. Even if children aren’t a part of your life now or in the near future, look at homes in areas supported by a good school system. Good schools are paramount for many homebuyers and have a direct impact on the value of your home.
- Work with a real estate professional. Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Today’s market requires expert guidance through every stage of the home-buying process.
- Choose carefully between points and rate. When picking a mortgage, you usually have the option of paying additional points - a portion of the interest that you pay at closing - in exchange for a lower interest rate. If you stay in the house for a long time - say three to five years or more - it's usually a better deal to take the points, says CNNMoney. The lower interest rate will save you more in the long run.
- Get pre-approved. This will help you avoid the emotional rollercoaster of falling in love with houses you can’t afford. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
- Make an educated bid. Work with your real estate professional to make the right opening bid. Bids should be based on the sales trend of similar homes in the neighborhood, so review with your agent sales of similar homes in the last three months.
- Hire a home inspector. In addition to the appraiser your lender hires, you should also hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.
January 27, 2012 6:30 am
According to Microsoft Corp.’s recently released data on consumer behaviors online, everything we do, from responding to emails and texts, to clicking "like" and "retweet,” to uploading photos and making purchases online, contributes to our online reputation. According to the tech giant, now is the time to take charge and resolve to actively monitor and safeguard our online reputations.
Microsoft commissioned a survey of 5,000 people that revealed a wide variance of online behaviors and attitudes and explored the resulting impact to people's overall online profiles and reputations. With respondents from the U.S., Canada, Germany, Ireland and Spain, the research shows that although 91 percent of people have done something to manage their overall online profile at some point, a smaller percentage feel in control of their online reputation (67 percent) and fewer than half actively think about the long-term consequences of their online activities (44 percent).
To help people put their best digital foot forward, Microsoft offers the following tips to help cultivate and maintain a positive online reputation:
- Stay vigilant and conduct your own "reputation report" from time to time. Search all variations of your name in popular search engines, and evaluate if the results reflect the reputation you'd like to share with the world, including current or future employers, colleagues, friends and family members. Research found that 37 percent of adults rarely or never do this.
- Consider separating your professional and personal profiles. When you are job hunting, applying to school or looking for new insurance or a loan, remember that your online profile can be a determining factor for hiring managers and application reviewers. Be sure to use different email addresses, screen names, referring blogs and websites for each profile, and avoid cross-referencing personal sites. Fifty-seven percent of adults think about taking steps to keep their work and personal profiles private; however, 17 percent of people have inadvertently shared information online that was intended to remain private. Most commonly shared are details about one's personal life (56 percent) and personal photos (38 percent).
- Adjust your privacy settings. Review and use the privacy settings on the Web browsers, social networking sites, and personal blogs you use. Privacy settings help manage who can see your information, how people can search for you, and who can comment, along with giving you the opportunity to block unwanted access. According to the survey, 49 percent of adults do not use privacy settings on social networking sites.
- Think before you share. Think about what you are posting (particularly personal photos and videos), who you are sharing the information with, and how it will impact your reputation. Talk with friends and family about what you do and do not want shared about you, and ask them to remove anything you don't want disclosed. Fourteen percent of people have been negatively impacted by the online activities of others. Of those, 21 percent believe it led to being fired from a job, 16 percent to being refused health care, 16 percent to being turned down for a job they were applying for, and 15 percent to being turned down for a mortgage.
- Be a good digital citizen. The Web has a long memory. Conduct yourself in a civil manner, showing respect for those with whom you engage.
January 27, 2012 6:30 am
Home appraisers are in the news a lot these days as many housing pundits blame inadequate appraisals for lagging home sales. As a real estate consumer, you can take matters into your own hands by becoming as informed as possible about the appraisal process. The following tips are from the Appraisal Institute and break down the key facts you need to know about appraisals.
- Appraisals directly affect your mortgage. Lenders order appraisals to get a stronger understanding of risk relating to the underlying collateral offered in a mortgage. Lenders want to know how much the property could sell for so that they can make sure the loan has the right collateral to back it.
- Make sure your appraiser is licensed/qualified. Encourage your lender to look for appraisers with the MAI, SRPA or SRA designation and/or those who are members of the Appraisal Institute. Many of today’s financially pinched lenders are utilizing third-party firms to outsource administrative functions, which can result in the hiring of a low-cost appraiser that lacks the proper market knowledge. Make sure your appraiser has field experience in your market. According to the Appraisal Institute, a qualified appraiser knows how to conduct a thorough market analysis and make appropriate adjustments if/when distressed sales are used as comparables.
- Follow your appraiser. While you may have heard that the appraisal needs to happen independently, the truth is that most appraisers welcome your presence and the detailed information you can provide about your home. Ask your lender for permission to do so, and confirm the appointment. This will also give you an opportunity to ensure that an adequate appraisal is performed. Make sure the appraiser spends a reasonable amount of time assessing the home and takes note of the details.
- Get a copy of the appraisal report. According to the Appraisal Institute, federal law requires lenders provide consumers with the appraisal report, regardless of whether credit is granted, denied, or the application is withdrawn. A mortgage appraisal should not be used for any other purpose.
- Know how to review the report. While a professional appraiser is needed to accurately interpret the report, there are some red flags you can keep an eye out for. Common errors in appraisals include: misuse of adjustments to comparables; disregarding special financing and concessions; or miscalculation of gross living area. Ask yourself how your home compares to other properties in your area to help determine if the appraiser’s review is accurate.
- Appeal the appraisal. Most lenders have appraisal appeal procedures, known as “Reconsiderations of Value.” If you are aware of recent, comparable sales information or items that may not have been available or considered by the appraiser, provide those to your lender.
- Ask for a second appraisal. If problems were found with the first appraisal, you can and should obtain a second appraisal. Once again, make sure a qualified appraiser is used the second time around.
- File a complaint. If you have a legitimate beef, file a complaint with the appropriate state appraisal board or professional appraisal organizations. Lenders are required under federal law to report legitimate complaints with appropriate regulatory authorities.
January 26, 2012 6:30 am
Winter storms and a whole host of other natural disasters and emergencies can take homeowners by surprise anytime. The Outdoor Power Equipment Institute (OPEI) recommends that homeowners have certain equipment on hand to cope with unexpected weather or public health emergencies.
While first aid emergency kits and general preparedness kits for power outages are commonplace, OPEI recommends that homeowners also have an appropriate assortment of power or utility equipment on hand to stay safe and self-sufficient during an emergency.
Assess your preparedness for an unexpected weather event or other emergency with the following list and corresponding tips:
- Pole saws or pruners can help clear away dead or damaged limbs near your home or on your driveway. Make sure you always keep a firm footing on the ground when using such equipment. Do not use a ladder, and stay away from electrical conductors.
- A chain saw can help clear away trees and more massive limbs, but first read and understand the instruction manual and ensure equipment is in good condition. Do not work around power lines, since they can be the biggest threat to safety.
- Power generators can keep the lights on, refrigerators running and water flowing in an emergency. Do not operate power generators, however, in enclosed areas. Carbon monoxide is a colorless, odorless gas that can become concentrated in enclosed areas and cause serious injury or death.
- Snow throwers/snow blowers come in handy for significant snow events and are easier than shoveling for those who have medical conditions. Be sure to read your operator's manual and dress warmly to guard against exposure.
- Chippers and shredders help ease the physical hardship of post-storm cleanup. Keep bystanders, pets, and children at least 75 feet from the machine while it is in operation. Stop the machine if anyone enters the area.
- Utility vehicles can be an important piece of equipment to help move branches, haul sandbags or maneuver through areas inaccessible to other vehicles.
January 26, 2012 6:30 am
Consumer Reports recently released its latest ratings of LCD and plasma televisions just in time for Super Bowl Sunday, when many Americans consider purchasing a new set. Those who are in the market can expect to find a whole host of new high-tech features, too, such as built-in Internet browsers, 3D, remotes with more interactivity, and bigger and wider screens to choose from.
In the latest Consumer Reports Ratings of LCD and plasma TVs, there are 10 models with 60-inch or larger screens, including a 70-inch Sharp LCD TV. Additionally, the ranks of 3D-capable sets have grown; so, too, have models with full 1080p resolution and LCD TVs with 120Hz or higher refresh rates designed to reduce motion blur. And very good or excellent picture quality is nearly a given, with 135 of the 142 models tested by Consumer Reports achieving that level – even secondary brand models with relative low price points.
LCD or plasma?
Both LCD and plasma TVs can offer top performance, but they have different characteristics that consumers should weigh. There's a greater variety of brands and screen sizes to choose from with LCD models, and most have ultra-thin designs and tend to be better in very sunny rooms. However, they do have limited viewing angles, which might concern people who like to watch anyplace but front and center.
Plasma TVs, on the other hand, only come in sizes 42 inches and up – and they typically give consumers more screen for their money. They also offer unlimited viewing angles and blur-free motion with more movie-like picture quality. And both plasma and LCD models should deliver years of good service.
3D or not 3D?
Even if consumers don't envision themselves using the 3D feature now, there are still good reasons to consider investing in a 3D-capable TV. Many of the 3D TVs in Consumer Reports' latest ratings are among the highest-scoring sets it's ever tested, and many of them are top-notch for regular HD, too. Furthermore, they often have other attractive features such as Internet access and Wi-Fi. Internet-connected TVs significantly expand the viewing possibilities available to consumers.
Consumers who are shopping for a new TV for the Super Bowl should keep the following tips in mind:
- Go bigger. A big game deserves a big screen, especially when watching it with a crowd. The good news is that price drops have been greatest on larger screen sizes.
- Get 1080p resolution. Unlike smaller sets, a TV with a big screen will benefit from "full-HD" 1080p resolution. Viewers will not only be able to see the difference in fine details—say, the textures in players' uniforms or individual blades of grass—they'll also avoid the "screen-door effect" that comes when you sit close to a TV, especially a very big TV.
- Go wide when it comes to viewing angles. While plasma TVs offer virtually unlimited viewing angles, the picture quality of many LCD sets starts to suffer if viewers move off-angle—something to consider for those who will have the gang over to watch the game,
- Don't blur the action. Some LCD TVs can blur during fast-moving scenes, such as those in many sports games. Sets with 120Hz or 240Hz technologies, which speed up the TV's frame rate, can help. Motion blur typically isn't an issue with plasma TVs.
January 26, 2012 6:30 am
During his State of the Union address on Jan. 24, President Barack Obama called on Congress to approve new legislation that would give all homeowners who are current on their mortgages the opportunity to refinance at record low mortgage rates.
According to a follow-up article by Nick Timiraos in The Wall Street Journal (WSJ), administration officials declined to immediately outline specifics of how the program would work, stating that details would be forthcoming as the legislation emerges in the coming days. In theory, however, the new legislation is intended to give responsible homeowners a chance to refinance without “red tape” or a “runaround from the bank,” as the President said in his speech.
The existing refinance program, which was unveiled in 2009, limited opportunities to borrowers with mortgages backed by Fannie Mae and Freddie Mac. This newest proposal would remove such limitations.
As Timiraos explains in his WSJ piece, while mortgages have fallen to their lowest recorded levels, many borrowers haven't been able to qualify because they owe more than their homes are worth, while others feel that refinancing isn't worth the upfront costs. According to CoreLogic, an estimated 28 million homeowners could cut the interest rates on their loans by more than one percentage point if they could refinance.
Some are speculating that the new refinance legislation would involve the Federal Housing Administration (FHA). FHA, Fannie Mae and Freddie Mac are already responsible for backing nearly nine in 10 new loans, reports the WSJ.
Refinancing has been particularly limited in five states that have seen the biggest home-price declines: Arizona, California, Florida, Michigan and Nevada. In those states, some 6.4 percent of borrowers with credit scores between 680 and 719 refinanced in 2010, compared with 9.7 percent of borrowers in the remaining 45 states, according to Federal Reserve data.
To read the complete Wall Street Journal article, visit online.wsj.com.
January 25, 2012 6:30 am
Real estate information website Zillow® recently announced the launch of Neighborhood Advice on Zillow.com®, a social home-shopping experience that helps buyers and renters learn about neighborhoods from their Facebook friends.
While shopping on Zillow, users are prompted to activate Facebook Connect and then see locally where their Facebook friends live or "check-in" the most. As shoppers search for homes in a specific city or neighborhood, Neighborhood Advice will recommend Facebook friends connected to the area to contact for personal tips and advice.
For example, if a user is searching for homes in the San Francisco neighborhood of Noe Valley, Neighborhood Advice will identify friends who have shared that they live in Noe Valley, or who frequently "check-in" at places in Noe Valley. The home shopper can then send these friends a private message on Facebook to ask questions about the neighborhood.
According to Zillow CEO Spencer Rascoff, Neighborhood Advice allows real estate consumers to tap into their Facebook network as they shop for homes. "When people are looking to rent or buy a new home, they always ask friends, family and co-workers questions about different neighborhoods. Neighborhood Advice takes this further and deeper by allowing shoppers to quickly and easily tap into their broader online social network," says Rascoff.
January 25, 2012 6:30 am
According to a report earlier this month from the Government Accountability Office (GAO), the Appraisal Subcommittee, which oversees the appraiser regulatory programs established by each state, needs to improve its monitoring procedures. A faulty appraisal process is believed to be hurting home values and hampering a full housing recovery.
The GAO report found the Appraisal Subcommittee’s “enforcement tools and procedures for reporting compliance levels have been limited.” The GAO cited “several weaknesses” that have potentially limited the subcommittee’s ability to monitor state appraiser regulatory agencies, the federal financial institution regulators and the Appraisal Foundation, a private, non-profit corporation that sets criteria for appraisals and appraisers.
Under the Dodd-Frank Act, the Appraisal Subcommittee was granted the authority to establish a national hotline to receive complaints over noncompliance with appraisal independence standards and grievances from appraisers, individuals or other entities over attempts to improperly influence appraisers or the appraisal process. Currently, no such hotline exists and the GAO report states that the creation of a national hotline could strain the Appraisal Subcommittee’s resources.
The National Association of Home Builders (NAHB) believes that an effective oversight system needs to be put in place to ensure that appraisals accurately reflect market values. How homes are valued can have a dramatic effect on homeowners’ mortgages, foreclosure rates, the health of banks and, ultimately, the condition of the U.S. financial system, says NAHB.
A recent NAHB survey shows that one out of three builders have lost signed sales contracts because of flawed appraisals and a fall survey conducted by the National Association of REALTORS® shows that 18 percent of REALTORS® reported a recent contract cancellation or delay as a result of a low appraisal.
Numerous flaws in the appraisal system have been causing inaccurate home valuations, both in times of housing weakness and strength, says NAHB. NAHB has been actively seeking improvements in appraiser education and training, particularly for appraisals of new homes, as well as more rigorous oversight so appraisal guidelines are enforced and errors can be corrected as they occur.
January 25, 2012 6:30 am
HGTV plans to roll out more than a dozen new original series and 20 specials in 2012, including a new season of the hugely popular HGTV Design Star, the new design series White Room Challenge and Selling London—a spin-off of the hit HGTV real estate series Selling NY. Here are some of the highlights from HGTV’s 2012 lineup:
White Room ChallengePremieres Tuesday, April 24, at 9 p.m. ET/PTInspired by a popular episode of HGTV Design Star, it's now a series all its own. Each week David Bromstad hosts four up-and-coming designers who compete to create the most original, eccentric and outrageous rooms using a variety of unusual materials. HGTV's Jamie Durie heads the expert judging panel which will award the grand prize of $10,000 cash.
Premieres Saturday, January 28, at 9:30 p.m. ET/PT
Eight talented, energetic designers led by Jonathan Pierce make their "home away from home" at the Nashville-based design firm Pierce and Company. In each episode, HGTV will follow this cast of experts as personalities clash and collaborate to create stunning room makeovers for VIP clients such as LeAnn Rimes, Eddie Cibrian and American Idol finalist, Danny Gokey.
Airs Saturdays at 1:30 p.m. ET/PT
Beautiful Homes takes viewers inside the gated communities, prestigious neighborhoods and most magnificent residences from around the world, from traditional classic abodes to fantastic contemporary retreats.
Premieres May 2012
Contractor Chip Wade comes to the rescue of families who love their home and love their neighborhoods, but whose houses no longer suit them. In each episode Wade updates and customizes homes with smart and eye-popping renovations.
Airs Sundays at 8 a.m. ET/PT
Contractor Kristi Hansen comes to the rescue of homeowners whose neglected homes are on the verge of disaster. Hansen relies on her 19 years of experience and a no-nonsense approach to save these homes before it's too late.
January 24, 2012 6:28 am
According to the U.S. Small Business Administration (SBA), only one out of every two new start-ups survives after the first five years of business. That means that half fail, many times due to financial missteps.
Cash flow is a major factor in a business' success. Regardless of its size, a business' cash flow drives everyday operations, expansion and purchasing power. As most businesses face continued unpredictability in the local economy, managing the ups and downs of cash flow can have a major impact on reaching future goals.
Few business owners realize what untapped - and often free - resources are available to help them manage finances and stimulate positive cash flow.
To help meet the challenge of effectively managing accounts payable and accounts receivable in your small business, here are five simple tips from the SBA:
1. Pay your company first. A cash reserve can go a long way in making certain that in times of low cash flow, you are able to continue day-to-day operations.
2. Create a budget and track expenses. Even if your business' profit is more than the monthly expenses, it's important to keep a budget and continually track monthly operating costs and income. Always knowing the state of your business' finances allows you to spot red flags and issues before they become unmanageable.
3. Don't let past due accounts slide. If you're having trouble with receiving payment, re-invoice three to five days after the account is overdue. The longer a business waits to get paid, the less likely they are to receive all of the payment or even get the funds.
4. Focus on your largest debtors. Invoice customers who owe the most first.
5. Consider giving a discount for paying within 20 days. Depending on the nature of your business, it might make sense to offer a slight discount for those that pay by credit or debit within 20 days of the invoice. In addition to cash flow management, financing can help provide business capital.
Understanding financial options can help manage everyday expenses and purchasing needs. There are three primary ways to meet financing needs:
1. Business loans. For businesses that meet all credit and financial criteria, a conventional business loan allows for an infusion of cash that can allow a business to expand, buy necessary equipment or meet cash needs. SBA loans can be a great option for many businesses. For information on SBA loans, visit www.sba.gov.
2. Credit card. A business credit card can be used for everyday spending and has a set repayment schedule.
3. Credit line. A credit line can provide cash in a crunch to help cover the cost of operating expenses, unexpected expenditures or the purchase of additional inventory. A line of credit is not the right option for the purchase of capital assets, which might be better suited for a business loan. A credit line is great for purchases that are too large for a credit card but are not large enough to warrant a business loan.