Sep
3
By Christopher Solomon of MSN Real Estate
One person couldn’t believe how simple it was. Another was surprised by how much financial help was available. A third didn’t realize just how many “flippers” he’d have to battle to get a great deal.
Plenty of surprises — good and bad — wait for you the first time you buy a home. You can’t plan for all of them, but you can benefit from others’ experiences. That’s why we asked five homeowners who recently bought a first home to share what startled them most about the process.
Here’s what they had to say.
1. An easy approval
“I was really surprised at how easy it was to get approved to buy a house,” says Jon Briscoe, who closed on his 1,600-square-foot Cape Cod-style home in the Cincinnati area with his wife, Jaala, in April. “I thought it was going to be a whole huge process — and it is a process — but we went through a mortgage broker, and she was amazing,” in terms of helping the process run smoothly, says Briscoe, who is a youth minister at a church.
He also underwent a credit check. But even that was a surprise. “I think one of the biggest things that surprised me was that your credit score doesn’t have to be that great,” he says. “Mine was right around 700″ — which is solid. But, he says, the mortgage broker said it only had to be around 630 to look decent to a lender.
All in all, he concludes, still sounding a bit in disbelief, “It was extremely easy — from the time we bought the house until we closed was less than a month.”
2. Battling the ‘flippers’
As a single 24-year-old, Patrick Kussman didn’t have a lot of money when he started looking around to buy his first home. As a result, he naturally gravitated toward foreclosures, which are plentiful in many markets these days. And here came his big homebuying surprise: “To me, finding the one that I could finally buy and put a down payment on was difficult, not so much because I was competing against other people who were also trying to purchase the house to live in, but competing against guys who were bidding to buy the house to rehab and flip it.”
For instance, the first house Kussman looked at in the St. Louis suburbs was a steal at $12,000. Of course, it needed a ton of work. “I put an offer in — I don’t even remember how much — and they said, ‘We’re sorry but there’s someone who already has made an offer and they have the $12,000 in cash,’” he recalls. Cash! They were investors who were going to fix up the house a bit “and sell it for twice what they’d bought it for,” Kussman says.
Later, Kussman found another foreclosure. “I put an offer on this house and I found out there were also some other guys who were gonna do the same thing. … It was like, here we go again.” This time, however, the foreclosing bank, Pulaski Bank, saw the wisdom in a different approach. “They said, ‘We’ve got a 24-year-old kid who wants to make this his home, instead of a group of guys who want to make a profit.’” The bank sold it to Kussman for a shade less than $40,000.
And here is the second lesson, as Kussman sees it: “If you go out and give it a shot, you’ll be surprised that people are willing to help you. … As my dad says, ‘We beat the big boys.’” I feel like I was the underdog in this one, and we won.”
3. There’s money out there
Drew Barth is a do-gooder. The 26-year-old is involved with a couple of volunteer groups, including one that has focused on stopping gun violence in North Minneapolis, one of the Twin Cities’ most ethnically diverse and economically depressed areas. So when he started shopping for a house, “I felt compelled to move into the area — not that I’m the ‘Great White Hope’ or something like that,” he says.
And here’s what Barth was pleased to discover: Money is available for people such as cash-strapped first-timers who are willing to jump into an “overlooked” neighborhood and help revitalize it. In Barth’s case, his real-estate agent turned him on to a grant by Minneapolis’ Pohlad Family Foundation — $8,000 for people who purchase a home in certain distressed ZIP codes of the Twin Cities. “It’s a forgivable loan,” Barth says, “so that means if I live in the home for seven years, I don’t have to pay that loan back.”
Unfortunately, you can’t apply for the Pohlad program anymore; the $2 million program closed at the end of 2009. But other money is available. For instance, Barth looked at — but made too much money to qualify for — assistance through the City of Lakes Community Land Trust. The trust helps foster affordable and moderate-priced housing for lower income families by significantly investing in a home’s purchase price, with the stipulations that the home be sold for no more than a moderate profit later (to keep it within reach of its intended homebuyers) and that the money be shared with the nonprofit, which in turn buys still more affordable housing.
The $8,000 loan, coupled with the $8,000 federal tax credit for first-time homebuyers (also since expired), meant that Barth saved $16,000 on the price of his $100,000 home — just by asking what was available. Now, owning a home is cheaper than renting, he says — and maybe that’s the biggest surprise of all.
4. A quick homebuying process?
For first-timers Bryce and Danielle Johnson, what startled them most was that “the amount of time that it actually took to find a place that we wanted was much shorter than anticipated,” Bryce Johnson says.
But maybe the Johnsons shouldn’t have been surprised at how easy it was. Both are researchers, of a kind — he worked as a research scientist before going back to medical school in Charleston, S.C., and she’s now researching her doctoral dissertation in English — so when faced with a problem, they attacked it methodically, Johnson says.
First, they found a responsive real-estate agent. “We had a really good real-estate agent who was always on the ball, and who responded to us very quickly, the same day,” Johnson says. “For instance, we would say, ‘We want to have a house in such-and-such an area, of X square footage,’ and he would do a search and get right back to us.”
Next, “We spent a great deal of time doing research online,” Johnson says — looking at the Multiple Listing Service, finding out about schools in different neighborhoods. (The couple has a newborn son.) In short, they did most of their vetting and narrowing down before they ever left the house.
The couple closed last October on a new, 1,600-square-foot townhouse in John’s Island, about 15 minutes from downtown Charleston.
“I really think we only went to maybe three places or so in person,” Johnson says, “just because we knew (that we’d found our home), were able to narrow it down with the research.”
5. Don’t expect much
When Sandi Elliott went out looking for a house or condo for the first time, she knew 1) that money was tight, and 2) that she didn’t want to be house-poor. So Elliott, who works in accounting in the St. Louis area, looked into foreclosures, with a budget of up to about $75,000. That seemed reasonable, she thought.
Boy, did she get a rude surprise.
“I was looking at what you’d call a lower amount — but I’m a single person, so I wasn’t looking to do a lot of fixing up, and it was really hard to find something in that price range that was livable,” Elliott says. “Painting was one thing, but having to fix doors and buy doors and refinish floors — that’s another thing.”
She recalls one of the first homes she looked at, a two-bedroom condo: “I was very surprised at how wrecked it was. It needed a complete redo. The sliding door was busted. There were missing doors. There were holes in the walls. … It’s supposed to be a nice area, and you’re thinking they want $75,000-plus for this home, and I’m going to have to spend a lot more just to make it livable.”
It wasn’t an outlier. “We saw one after the other that was just trashed,” she says of herself and her real-estate agent. “I would say a good six or seven of them” were like this. “And I didn’t look in what you’d call bad neighborhoods.” (Many frustrated homeowners, forced to leave their homes, have been known to trash their homes on the way out.)
Elliott finally settled on a one-bedroom condo in St. Peters, a suburb of St. Louis, that wasn’t a foreclosure. She says she’s glad she did. Her takeaway? With any kind of foreclosure, “my take is you can pretty much expect that you’re gonna have to fix it,” she says. “There’s a lot of money in that, and a lot of time.”
Source: www.MSNRealEstate.com
Sep
2
New home sales plunge to record lows
Thursday |
Without the $8,000 tax credit from the federal government, sales of new homes in May fell by 33%. But that was yesterday. Today, the Department of Commerce reports that new home sales in May fell 33% to their lowest levels since the agency started tracking new-homes data 47 years ago.
This sharp decline — which also is the biggest monthly drop on record – follows 2 straight months of increases in new-home sales, which likely got their boost from the $8,000 homebuyer tax credit that required participants to be in contract for a home by the end of April.
New-home sales are recorded when the contract is signed; in contrast, existing home sales are recorded when the home closes, and those buyers have until June 30 to complete the transaction to qualify. No doubt we’ll also soon be seeing equally dramatic decreases for existing-home sales as we’re now seeing with new-home sales.
The Wall Street Journal warns that the post-tax credit decrease could be even worse than analysts and others have been expecting, noting that despite record-low mortgage interest rates, even demand for refinancing is low.
The answers to those questions could foretell whether housing prices drop just 5%, or if there’s truly a “double-dip” in store, that would mean drops of around 10-15%.
New-homes data for May posted the biggest declines in the West, where sales dropped 53% from April, and also were down 43% from May 2009. Sales also fell both monthly and annually in the South, with decreases of 25% from April and 17% from May 2009.
But the Northeast and the Midwest offered more of a mixed bag. Although new-home sales in the Northeast dropped 33% from April, they rose 12% from May 2009, similar to the 24% decrease from April in the Midwest, while sales rose 6% from year-ago levels.
Nationally, the 28,000 new-home sales in May put the seasonally adjusted annual rate at 300,000, which also is down 18.3% from May 2009, when the annual rate was estimated at 367,000. The median sales price of a new home sold in May also fell to $200,900, from $202,900 in April and $222,300 in May 2009.
Meanwhile, the inventory of new homes on the market rose in May to an 8.4-month supply, likely an aftereffect of builders ratcheting up their supply to meet demand from the homebuyer tax credit. In comparison, April’s 5.8-month supply is much closer to the six-month supply considered normal.
But even if sales still are low, builders aren’t giving up on buyers. Just last week, KB Home announced that it would enter visitors to its Las Vegas-area communities the chance to win four tickets to a sold-out Justin Bieber concert. Earlier this month The Wall Street Journal also wrote about “tax-credit hangover” price cuts from a number of builders.
Source: Listed – A Blog by MSN Real Estate
Aug
31
“Cool Roofs” – A hot idea?
Tuesday |
By Christopher Solomon of MSN Real Estate
Linda Hanson is accustomed to long, hot summers, and she wanted to find a new way to reduce her cooling costs.
Hanson owns a home in Canyon Lake, Calif. “The average temperatures out here are well in the 100s all summer long, so our (electricity) bills were $800 a month. It was pretty outrageous. We could not cool the house down. We’d run the air conditioner all the time.”
A big problem was the original concrete tile roof, which sat on the rafters and radiated that heat right into the house.
Then Hanson and her husband swapped out that roof for a so-called “cool roof” of green tiles on their 3,000-square-foot house. (They made other improvements, too, such as upgrading the home’s windows and adding attic insulation.)
“We also put a swimming pool in, and even with that swimming pool, with the filter running, our bills in the summer are probably 200 bucks a month less,” she says.
The best part, she says, is “my house is comfortable all the time.”
Hanson’s savings may be dramatic, but they illustrate the point: Installing a cool roof is a hidden-in-plain-sight way to cool your home, shrink your electricity bill and help the planet. It’s such a simple, smart idea that Energy Secretary Steven Chu endorsed the idea in a meeting with Nobel laureates last year.
An old idea made new
Inhabitants of places such as Bermuda and the Greek isle of Santorini have long known that painting their roofs white to reflect sunlight can keep their homes cool. Studies bear that out: While black surfaces such as traditional built-up asphalt shingle roofs can reach 185 degrees, a roof that’s white can be up to 70 degrees cooler because it bounces so much sunlight back into space.
“The science of it is very basic,” says Hashem Akbari, a leader in the study of cool roofs and a professor at Concordia University in Montreal.
White roofs make sense particularly on commercial buildings because those buildings have their cooling systems on most of the year as computers and other machinery inside them create heat, says Chris Scruton, a project manager in the California Energy Commission’s research program in building energy efficiency. With a white roof, “As much as 75 or even higher percent (of sunlight) can be reflected,” Scruton says.
That’s great, you say, but what if you don’t want a white roof on your Colonial?
You’re in luck. There’s a roof for you, too.
Manufacturers can make colored cool roofs that stay much cooler than traditional colored roofs. They add pigments or glazing to roofing materials that reflect infrared light back into space. That unseen infrared light makes up 52% of light that falls to Earth; we can’t see it, but we feel it in the form of heat.
These cool roofs can take the form of tiles, shingles or metal. California’s MCA Clay Roof Tile, for instance, makes 33 cool roof tiles, with reflectiveness ranging from just over 30% (for many of the dark-hued tiles) to 76% (for “White Buff”), says Yoshi Suzuki, president and CEO. Traditional dark asphalt roofs only have about 5% to 15% reflectiveness.
Custom-Bilt Metals of Chino, Calif., Classic Metal Roofing Systems of Piqua, Ohio, and other metal roof manufacturers have added pigments to their line of painted metal roof products.
“People are starting to catch on” to the benefits, Suzuki says, but “it’s not so much residential yet.” In 2007, about one-quarter of the commercial roofing market consisted of Energy Star-rated (that is, highly efficient) roofing products, compared with about 10% of the residential market.
Source: www.MSN.com
Aug
30
10 Tools That Fight Disorganization
Monday |
Chronic disorganization can affect every aspect of your life. The wasted time and money caused by disorganization can leave you stressed and unhappy. Disorganization is a very unpleasant way of life, but not a way you can’t work to change. Using the following tools faithfully will get you well on your way to a happier and more organized lifestyle.
1. Calendar/Planner
Find a calendar that works for your family. It can show a day, a week, or a month at a time. Just make sure there’s enough room to include everyone’s activities, as well as birthdays and anniversaries. Everyone’s activities should be placed on the calendar as soon as they are scheduled. To save space you can use small stickers or abbreviations for things like doctor’s appointments (dr.), meetings (mtg.), anniversaries (ann.), etc. Just be consistent with your abbreviations to everyone knows what they mean. Your calendar can also be color-coded with each person having their activities and appointment in one color. If your schedule is in red and your spouse’s is in black, it much easier to glance at the calendar to quickly find your activities. This system is especially helpful as you add busy children’s schedules to the mix. It is important to check your calendar at least twice a day: once before bed to plan for the next day and once first thing in the morning to see what’s going on that day.
2. Notebook and Pen
Don’t try to keep all your thought in your head. You’re bound to forget them. Writing things down makes them more concrete and much harder to forget. A small notebook is a great place to write down your To Do List, Grocery and Errand Lists, or even just short notes about things you don’t want to forget. If you don’t like the idea of carrying a notebook around with you when you’re out and about, check your cell phone. Most cell phones have a program (often called Notepad) that allows you to type and save notes on the phone. The only downfall to this method is that it may not be as easy to you’re your shopping list off to someone else in the family. Whichever method you choose to use will give you the benefit of having all of your notes in one place which makes it much less likely for you to misplace important notes.
3. Laundry Basket
A laundry basket can be used for more than just carrying laundry. Take a laundry basket around to each room with you as you straighten up the house. Any items that do not belong in the room are placed in the basket to be removed. As you enter rooms for which your basket contains items, put them away. More decorative baskets can serve a similar function when placed at the top and bottom of a staircase. Items that are upstairs but belong downstairs (and vice versa) can be placed in the basket by the stairs. As you or another family member passes the basket on their way to the stairs, they can grab the items and return them to their proper places.
4. Box for Receipts
Your box can really be anything from a shoebox to an attractive photo box. Every time you buy something from the grocery store, department store, or small retail shop, put your receipt in the box (except for high-ticket items, which should be filed in your filing cabinet). By keeping all of your receipts in one place, it will be easy to find the one you need when something needs to be returned. Just remember to weed out the box periodically so it doesn’t get too full.
5. Timer
Keep everyone on schedule when getting ready in the morning. If bathroom time seems to be an issue, allot a certain amount of time per person. When the timer goes off, it’s time to switch. Young children (and some older ones) benefit from “racing the clock” for each morning task. Be sure the timer is set for an age-appropriate amount of time for each activity. They should then try to get dressed, etc. before the timer goes off. You can also benefit from using a timer while you work. Set the timer to go off every 15 minutes. If you’re still on task when the timer goes off, great! Reset the timer and keep working. If you’re off task, reset the timer and refocus yourself on the original task. A timer will also help you keep your breaks in check so your 10-minute break doesn’t inadvertently turn into a 20-minute break.
6. Garbage Can and Donation Box
Clutter often causes disorganization. Too much of anything can slow down your morning routine and cause things to be lost. Go through your items and get rid of unnecessary things by either throwing them away or placing them in a box to be donated to a local charity. As you come across things in your daily activities that you do not need immediately place them in either the trash or your donation box. A donation box can be stored under the bed or in the closet so you can add to it whenever you find something you don’t need. The items in the box should be donated on a monthly basis to ensure the box doesn’t get too full.
7. Label Maker
As you organize your house, label each box, shelf, and drawer. You and your family will be able to quickly find items that are needed. The labels will also rid your house of excuses like, ‘I don’t know where it goes.’
8. Bill Paying System
You can create your own system or use one like the Easy Bill Paying System. It should consist of some sort of filing system for unpaid bills and paid bill categories (utilities, auto payments, credit cards, etc.). You should also keep all of your necessary items for paying your bills (pen, envelopes, stamps, etc.) with this system. As soon as you receive a bill in the mail, place it in your bill paying system. Then on the same day each week (or every 2 weeks) sit down and pay all of your pending bills. After the bills are paid, place the bill summaries in the proper categories of your system so it’s simple to look up information when necessary.
9. Filing Cabinet
Your filing cabinet should contain both hanging file folders and manila file folders. Each hanging folder should be labeled with a general category such as Insurance, Bank Statement, Warranties, etc. Within those folders you may want sub-categories like health insurance, auto insurance, etc. These sub-categories should be labeled on manila folders that are placed within the hanging folders. File papers into the proper folder as you receive them and it will be easy to find them as needed.
10. Commitment
I know this isn’t a physical tool like the rest, but without a commitment you’re likely to fall back into your old disorganized ways. You have to commit to being less disorganized. Commit to using the tools daily. Commit to getting a system in place and giving it a try before making modifications so it works for your entire family. Finally get your family committed to the system as well. Without their support, even your best efforts to have an organized household will fail.
Source: www.GetOrganizedNow.com
Aug
28
5 ways to keep your cool in a scary market
Saturday |
(Money Magazine) — You knew it couldn’t go on forever. And deep down, the spectacular run-up in stocks that began when the bear market bottomed in March 2009 was actually making you a little nervous. An 80% surge in just 13 months was starting to feel a lot like bubble territory. So yes, a breather was probably in order.
But another full-blown financial crisis? One that would hammer stock markets around the globe? You were hardly expecting that; few people were. Spiraling debt troubles in Greece, Portugal, Italy, Ireland, and Spain kicked off the chaos. Worries about a sharp economic slowdown in China and anemic job growth at home only made things worse.
In just over two months from late April to the end of June, the Standard & Poor’s 500 index cratered by 15% — the market’s first official correction (defined as a drop in stock prices greater than 10% but less than 20%) since the bull run took off last year.
That rapid descent, coupled with the still-fresh memories of the market’s painful 50% collapse in 2008 and early 2009, probably has you wondering if another brutal bear market is just around the corner. You’re hardly alone.
The most common measure of investor fear is the Chicago Board Options Exchange Market Volatility Index (known as the VIX), which uses options contracts to decipher the degree to which traders think the S&P 500 will bounce up or down over the next 30 days. For the first time in more than a year, the VIX rose above 40 in May — double the index’s long-term average.
More important, investors are beginning to act on that fear. From 1960 through 1999, the S&P 500 fell by 2% or more in a single day an average of five times a year. But in the wake of the mess in Europe, it took little more than a month for the market to deliver the same number of 2%-plus daily blows.
Shareholders yanked a net $21 billion out of stock mutual funds in May, the largest monthly outflow since March 2009, the nadir of the bear market. Says Sam Stovall, chief investment strategist at Standard & Poor’s Equity Research: “Investors have adopted a ‘sell first, ask later’ trading approach.”
In this environment, where it feels like danger lurks around every corner and steady growth is an elusive goal, you need a way to manage risk so you can still make money in stocks over the long run without needing a ready supply of Xanax. These five strategies should help.
1. Use fear to your advantage
Stocks have always been subject to sometimes dramatic price swings in the short run. And coming out of the worst economic meltdown since the Great Depression, it’s not exactly surprising that the ups and downs have gotten even more explosive, as investors veer between optimism that the worst of the crisis is over and fear that more nastiness lies ahead.
Get used to it, experts say — greater volatility is here to stay in the stock market. But understand this too: Bigger price swings over the course of a day, a month, or even a year don’t translate to a greater chance of losing money in stocks over the long run. In fact, if you have a time horizon of at least 10 years, those interim price drops can be a real opportunity, allowing you to buy promising stocks at more reasonable values.
Still, big price swings are nerve-racking, so it’s important to know what’s within the realm of normal. The most common measure of volatility is standard deviation, which tells you how much an investment’s short-term returns bounce around its long-term average.
Since 1926, stocks have averaged gains of 9.7% a year, with a standard deviation of 21.4 percentage points, according to Ibbotson Associates. That means that about two-thirds of the time, the annual return on stocks landed 21.4 percentage points below or above the average — so your results would range from a 12% loss to a 31% gain. A third of the time, your gains or losses would be more extreme.
A balanced mix of government and high-quality corporate bonds, on the other hand, typically has fluctuated less than eight percentage points off its long-term average annual gain of about 6%, Ibbotson found. But while you’d avoid a wild ride with an all-bond portfolio, those lower returns mean you’d run the very real risk of not having enough money to reach your goals in the long run.
YOUR BEST STRATEGY:
Focus on proven growth. Within the equity universe, some stocks are far more volatile than others, and often an ability to stomach big short-term price moves pays off with loftier gains long term. But not always, so it’s crucial to tilt the odds more in your favor.
For instance, stocks that trade more on hope than fundamentals (like many fledgling biotech companies working on yet-to-be-approved drugs, with no revenue or profits) can have especially wild price swings. But putting money into unproven entities can be a crapshoot.
A better bet: large-cap companies with established earnings that are growing at above-average rates. These stocks also deliver a bumpier ride than the overall market, but not nearly as rocky as companies that have yet to turn a profit. And while investors usually pay a premium for growth, the market’s recent dive means these stocks aren’t nearly as expensive anymore, with the average price/earnings ratio for large-cap growth stocks down to 18, from a historic level of 24.
Prices for big technology stocks, in particular, have been unfairly beaten down lately over fears that a strengthening U.S. dollar will crimp the value of profits earned overseas, says David Bianco, chief U.S. equity strategist at Merrill Lynch. The safest way to invest is through a diversified mutual fund with a mix of established tech firms, such as American Funds AMCAP (AMCPX). The fund, which counts Google, Microsoft, and Yahoo among its top holdings, is on the Money 70 list of recommended funds.
If you prefer individual stocks, Microsoft (MSFT, Fortune 500) is now on many analysts’ buy lists. The stock fell 25% from April to July, yet its earnings prospects remain strong, notes Goldman Sachs analyst Sarah Friar. Also garnering recommendations is Cisco Systems (CSCO, Fortune 500), down 22% over the same period. But Deutsche Bank analyst Brian Modoff expects strong revenue growth of at least 16% next year, as the equipment maker benefits from strong tech spending from companies abroad.
Set a target price. If you have a long time horizon, use market downswings to buy the stocks and funds you want at better prices. But be systematic. You might, for instance, set up a limit order that directs your broker to buy a certain number of shares when the stock drops to a specified price. So if you think XYZ stock, now trading at $100 a share, would be a good deal if the price were 10% lower, set a buy order for $90; if the stock falls to that level, your trade will automatically be executed.
Want to be able to reconsider before the order is actually placed? Instead, set up an alert through your brokerage or a portfolio-monitoring site like our website, cnnmoney.com, and you’ll be notified by e-mail or text message when the investment in question drops to the preset price or by a certain percentage. At that point you can decide whether you want to go through with the transaction.
2. Reset your expectations
Coming out of deep slumps, stocks historically have been strong for the next decade. That’s been especially true following those rare long stretches when bond returns have bested those of equities, as has been the case for the past 10-plus years.
If you bought stocks in the early ’70s, for instance, you would have enjoyed gains of about 12.6% annually over the next 25 years, according to Ibbotson.
Don’t count on a replay. Many of the conditions that propelled stocks into long-term bull markets in the past no longer exist. The great bulls of the 1980s and 1990s were fueled by a potent combination of falling interest rates, dwindling inflation, and low unemployment. Today all three of those indicators instead look like they’ll be a potentially powerful drag on future gains.
Against that backdrop, it makes sense to assume conservative future stock returns when plotting your investing strategy. Jason Hsu, CIO of Research Affiliates, says you can come up with a reasonable estimate by adding the current dividend yield on stocks (that’s the amount of income a company pays out per share each year divided by its stock price, now about 1.8%) to the long-run growth in earnings per share (1.5%) and the long-term inflation rate (2.5%).
Result: a projected gain of nearly 6%, a view shared by many experts.That’s well below the historical norm for stocks, but far better than the past decade.
YOUR BEST STRATEGY:
Create an income cushion. While you can’t expect stocks to be lifted by the same economic tail winds that drove them in the past, you can boost your chances of earning solid total returns by adding some high-dividend payers to your mix. Those regular payments can also help steady your portfolio when the market gets volatile, especially if you focus on companies with a history of consistently increasing payouts.
During the 10 years ended 2009 — which included two brutal market collapses — shares of companies within the S&P 500 that consistently increased dividends returned 6.5% a year, according to T. Rowe Price, while the overall index lost just over 1% a year.
A low-cost way to get yield is with the SPDR S&P Dividend ETF (SDY), which tracks the highest-yielding stocks in the S&P 500 High-Yield Dividend Aristocrats index. The fund has beaten the overall market by more than three percentage points a year over the past three years. Another solid choice on the Money 70 list: iShares Dow Jones Select Dividend Index ETF (DVY), which has returned 25% over the past year.
Pump up your savings. If you can’t create a big enough nest egg earning a mere 6%, you’ll need to sock more money away. Remember, investing $7,200 a year at 6% will get you to $100,000 just as fast — a bit over 10 years — as investing $5,000 at 12%. And the amount you save is something you can control, whereas earning a double-digit return is not.
Not maxing out your 401(k)? Direct your plan provider to ratchet up your contributions by one percentage point every six months until you hit your limit, and earmark half of every raise to your other investment accounts.
3. Look beyond the next move
Depending on whom you ask, stocks right now are either dangerously overpriced or a real bargain, with respected experts on both sides of the debate.
For instance, Yale professor Robert Shiller, who famously predicted the bursting of the tech bubble in the late 1990s, believes stocks are expensive: Investors are paying about 20 times earnings for stocks in the S&P 500, well above the historical average of about 16. To arrive at that price/earnings ratio, Shiller uses 10 years of historical, inflation-adjusted earnings.
But Wharton’s Jeremy Siegel, author of “Stocks for the Long Run,” says that when the economy is shifting from slowdown to growth mode, it’s more appropriate to focus on projected earnings, rather than a P/E ratio that incorporates beaten-down results from the recession years.
Under this forward-looking approach, stocks look like a good deal right now. The consensus estimate among analysts is that 2010 operating earnings for S&P 500 companies will reach $82 a share. That puts the market P/E at 13 times projected 2010 earnings, or about 20% below the historical norm.
Who’s more likely to be right? Trick question. There’s no way of knowing with any certainty. Instead of trying to pick a side and plan your next move accordingly, the better idea is to take yourself out of that game altogether and position your portfolio for steady gains if Siegel is right and cushion your losses if Shiller is closer to the mark.
YOUR BEST STRATEGY:
Add asset categories. A classic mix of stocks and bonds runs less risk of tanking in any given year than an all-stock portfolio, without necessarily sacrificing much, if anything, in long-term gains. But it’s not foolproof. For diversification to work, you’ve got to own investments that don’t move in lockstep with your core holdings, which means adding small allocations to real estate and, possibly, commodities.
From 1972 through 2009, a portfolio of U.S. and foreign stocks, REITs, commodities, and bonds produced an annualized return of 9.9%, vs. a 9.6% return for an all-U.S.-stock portfolio. What’s more, the diversified portfolio had half the level of risk. That makes it far less likely you’ll do something dumb when the market goes into one of its periodic fits.
Although investing in commodities through futures contracts has become popular lately, these complex instruments may not continue to perform as well as they have in the recent past, and Wall Street tends to find ways of charging you more for selling you complexity.
A sound, inexpensive way to invest is through a diversified fund that puts its money into the actual commodity producers, such as T. Rowe Price New Era (PRNEX), a Money 70 fund with two-thirds of its assets in oil and natural-resources companies such as Exxon Mobil and Schlumberger. Over the past 10 years, the fund has returned 9.6% a year, vs. a loss of 1.1% for the S&P. Be forewarned: No matter what commodities vehicle you choose, think really long term since these assets can go through long ups and downs, sometimes lasting decades.
Diversify within asset categories too. Small- and large-cap stocks, growth and income-producing companies, corporate bonds and Treasuries. Given the still-shaky economy and the risk that today’s historically low rates could rise, keep your bond holdings short and focused on quality. A smart choice: Vanguard Short-Term Bond Index Fund (VBISX), a Money 70 fund that invests mostly in the highest-rated government and corporate bonds.
Mix your bets globally. With a good swath of Europe apparently falling apart at the seams and even economic powerhouses like China slowing down, you can’t be blamed for feeling skittish about investing internationally. Yet foreign markets generally still provide much-needed diversification benefits.
For starters, you’re hedging your exposure to the U.S. dollar; if the greenback drops, the return on your foreign holdings gets a boost. While the dollar’s strength against a plummeting euro is instead working against you right now, currencies can change in a hurry.
Emerging markets, meanwhile, offer opportunities you can’t get at home; China’s economy, despite the slowdown, is still expected to expand 10% this year. “Emerging-market countries have entirely different demographics and economies than developed markets, and that means you can expect stock returns to be different as well,” says Nariman Behravesh, chief economist at IHS Global Insight.
That difference has already been playing out: Since hitting a low in 2009, the MSCI Emerging Markets index has rocketed by more than 75%, compared with a 57% gain in the S&P 500. A smart way to go abroad: T. Rowe Price International Discovery Fund (PRIDX), a Money 70 fund that emphasizes small and medium companies within developed and emerging countries. The fund has consistently outperformed both the S&P 500 and its international peers, gaining an annualized 7.1% over the past five years.
4. Forget portfolio protection (mostly)
The market’s rocky ride of late has given new life to a variety of complex investments that pledge to protect you from big losses. There are “long-short” or “market neutral” funds that use hedge-fund-like strategies to try to produce positive returns, regardless of how the stock market performs. There are heavily peddled equity-indexed variable annuities, which guarantee that you’ll earn a minimum return based on underlying investments that you select. There are exchange-traded notes that allow you to place direct bets on the market’s volatility as well as complicated options strategies that promise you ways to profit even if stock prices tumble. And there’s gold, which is marketed as a refuge from falling stock prices and possible economic Armageddon and recently hit a record $1,265 an ounce.
But for the most part, these investments rarely deliver on their promises of safety in the long run. Gold, for instance, has only recently emerged from a 20-year period of negative returns.
As for long-short funds and equity-indexed annuities, the only real guarantee is that you’ll pay hefty fees to invest in them — often topping 2% for the funds and averaging 2.5% for the annuities, vs. 1.4% for a typical stock fund and 0.8% for index funds.
YOUR BEST STRATEGY:
Use options judiciously only on stocks you own. Options contracts are a bet on the direction of share prices, giving an investor the right to buy or sell a stock at a future date and specific price. If you trade options on a stock you don’t own and the shares never hit the preset price, your option can expire worthless and you’ll lose all the money you put in.
But there is a more conservative approach involving options on stocks you already own. You can sell a “covered call,” granting another investor the right to buy the stock from you at a higher price in the future. You pocket money from the option sale, which cushions your losses if the stock falls. But if the stock takes off, you’ll lose gains above the preset sale price, known as the strike price.
Financial advisers recommend limiting the use of covered calls to about 10% of your stock holdings — preferably shares you don’t think are likely to take off anytime soon but don’t want to unload, maybe because they pay stable dividends. For example, if you owned 100 shares of Johnson & Johnson, which pays a 3.6% dividend, you might make about 1% a month selling calls at recent option prices.
Trade (a tiny bit) on fear itself. A more aggressive strategy: Buy an exchange-traded note — a debt security that trades like an ETF — that tracks the Volatility Index, such as the iPath S&P 500 VIX Short-Term Futures (VXX). This ETN can provide some insurance against market meltdowns because the VIX usually rises when stocks fall. In May, as the market cratered, this ETN soared 35%.
Let’s be clear about this: You’re speculating here, not investing. And you can get crushed if the market has another hot streak. For instance, during the 13-month bull run that ended in April, the VIX ETN lost a stunning 83%. If you’re so compelled, put no more than 2% of your portfolio toward playing risky short-term hunches like the VIX. If it pays off, great. If it doesn’t, well, you won’t have lost very much money and you’ll have a good story to tell.
5. Protect yourself from yourself
In the end, your worst enemy isn’t the volatility of the market — it’s your own reaction to it. Example: Research by behavioral economist Richard Thaler of the University of Chicago shows the more often people check stock prices, the greater they perceive their risk to be. That in turn can prompt you to make rash moves, like bailing out of stocks just as prices hit bottom or jumping in and out every time the market jolts.
Indeed, numerous studies over a variety of time periods have shown that the typical investor earns just a fraction of the average returns on stocks due to ill-fated attempts at market timing.
YOUR BEST STRATEGY:
Rethink your commitment to stocks. As a rough rule of thumb, advisers recommend this formula for determining the portion of your portfolio you should keep in stocks: Subtract your age from 120 or 110. But if you’re prone to the jitters when the market hiccups — and are apt to tinker with your portfolio when that happens — you’re better off substituting “100″ in this equation or, as Vanguard founder John Bogle puts it, invest your age in bonds.
Yes, dialing back your allocation to stocks by 10 or more percentage points will theoretically ding your returns in the long run. But it will also substantially cut your potential losses in any given year. If that enables you to actually stick with the program, you may end up making more money after all.
Rebalance periodically. A buy-and-hold approach generally serves you better over time than darting in and out of the market. But changes in stock and bond prices will eventually throw your mix out of whack if you don’t make occasional adjustments (say, once a year) to get back to your targets.
While that may not dent your returns too much in the very long run, you’ll have a far rockier ride getting there than if you rebalance once a year. And a rockier ride increases the likelihood that you’ll bail out of stocks at the worst possible moment.
One thing’s for sure: “Volatility isn’t about to subside anytime soon,” says Harold Evensky, a Coral Gables, Fla., financial planner. But if you tread carefully, you can brace yourself against the worst a turbulent market can throw at you and stay steady on a path to solid gains. 
Aug
27
The home, located at 100 Haddrell St., has five bedrooms, five full bathrooms and one half bathroom. It is 7,015 square feet and was built in 2003.
The plot of land is approximately 1.32 acres located off Shem Creek with views of water and the Ravenel Bridge.
Copyright 2010 WCSC. All rights reserved.
Credit-HomeFinder.com and www.Live5News.com
Aug
26
What to expect at closing
Thursday |
By Marilyn Lewis of MSN Real Estate
You’re finally wrapping up your home purchase. Congratulations. Before it’s officially yours, though, you have one last hurdle: the mysterious process known as “closing” or “settlement.” Open your wallet and hold onto your hat.
“Closing costs” — the catch-all term for a host of fees, taxes and charges — can total 2% to 6% or more of your purchase price — $4,000 to $12,000 on a $200,000 mortgage. That means you’ll need to budget a chunk of money besides your down payment.
Costs vary by region and by what you negotiate. Buyers usually pay most fees, but sellers may pay some, too. Buyers often get lenders to contribute, too. Be aware, however, that lenders offering a “zero-closing-cost” loan usually charge a higher interest rate.
Who’s in charge?
A professional settlement agent orchestrates a closing. The agent files documents, pays taxes on your behalf, ensures every task is done and recorded in the time specified by law, and also may hire an appraiser, pest inspector and other professional services. The agent represents the buyer, the seller and the lender equally.
In some states, the agent must be an attorney. In others, it’s an independent settlement or escrow company. (An escrow company is one licensed by the state to hold money and documents.) In many states, title companies — whose primary job is to make sure there are no claims on the property and to sell insurance guaranteeing that the title is clear — may be the settlement agent.
States’ requirements vary:
- In New York, only an attorney — usually a specialized “closing attorney” — oversees a closing.
- In Nevada, as in most states, title companies act as the settlement agent.
- In California and Wyoming, escrow companies are used.
The federal forms and rules used to disclose your loan costs and closing fees, however, are identical in every state:
- Your lender must give you a binding good-faith estimate (.PDF file), or GFE, within three business days after you apply for a loan. It shows loan costs and estimates your other closing costs. Your final origination charges and transfer taxes can’t vary from this estimate. Quotes for other services may vary by up to 10%. Bigger variations are a “tolerance violation” and the lender must credit you the difference within 30 days of your closing, says Cathy Blaszyk, vice president for lender services at Closing.com.
- At your closing, the settlement agent will give you a HUD-1 form (.PDF file) showing your final costs. The chart on page 3 helps you compare the good-faith estimates with your final charges.
How to shop
Closing costs vary greatly. In its 2009 survey of average total closing costs in 52 cities and states, Bankrate.com found a $1,579 difference between the highest-cost state, Texas, at $3,855, and Nevada, with the lowest average cost, $2,276.
Most of these fees are negotiable, and you can shop separately for many of them.
“The consumer has to open their eyes, because they can save a lot of money,” Blaszyk says. “People spend more time shopping for a big-screen TV.” Closing.com’s closing costs calculator lets you plug in home-purchase information to get numerous estimates and quotes on closing services from providers near you.
By shopping aggressively, you might:
- Qualify for a better interest rate than you’d expected.
- Find that a loan offer with a higher interest rate is really the best deal when all closing costs are considered.
- Spot “junk” fees.
- Find lower rates on services such as title insurance, settlement services or inspections.
- Use these lower bids to negotiate better prices with your lender.
Start shopping for settlement services and for additional loan offers once you’ve made one mortgage-loan application. A lender must stick to its good-faith estimate for 10 days. “The bank or broker can’t go back and make changes, which gives the borrower a chance to make comparisons,” says Jeanne Stell, head of compliance for Allied Home Mortgage Capital Corp., a lending company.
Don’t worry about hurting your credit score by making numerous loan applications. In “4 credit-scoring myths,” personal finance guru and MSN Money contributor Liz Pulliam Weston says that your FICO score will register multiple inquiries in a 45-day period as just one inquiry. Applying is free, except maybe for the cost of pulling your credit report — about $15, tops. Lenders can’t collect application or appraisal fees while you’re comparison shopping.
Although recent changes in federal law make it harder for lenders to pad fees, you should still get expert help in reviewing offers and closing documents. “The key is getting somebody who is trained and who can comprehensively look at it for you,” says Debra Pogrund Stark, a professor and real-estate law expert at John Marshall Law School in Chicago.
In advance, line up either of these:
- A real-estate attorney through the American Bar Association lawyer locator (choose “real estate” under the “areas of practice” drop-down menu) or find referrals from a state or local bar association (search H.G. legal directories).
- A free, HUD-certified housing counselor (call 800-569-4287 or use this HUD map to find a nearby agency).
Closing fees — a guide
There are three basic types of closing costs:
- Lender fees.
- Government fees and taxes.
- Fees from companies and providers for other services required to close your transaction.
We used cost estimates from Bankrate.com’s 2009 state-by-state map of closing costs, the site’s 2007 survey for a $200,000 mortgage loan (click on your state for a detailed breakdown) and the Federal Reserve’s estimate of closing costs.
Here are the fees that can’t be negotiated:
- Any Department of Housing and Urban Development or Veterans Affairs funding fees.
- Taxes and government charges.
- Many third-party services, such as an appraisal or credit report.
- Title insurance rates; these don’t vary much, and in some states, rates are regulated.
- Flood certification.
1. Lender fees
All lender fees are bundled into GFE line 1: “Origination fee.”
To compare costs, everything you need to know is at the bottom of page 1 on a GFE, says Brian Sullivan, HUD spokesman. “If you compare origination charges and total settlement charges, it’s going to be crystal clear which loan is cheapest,” he says.
If you want to delve deeper, request explanations for each fee. They go by many names: administration, document preparation, processing, notary public, courier services and flood certification. Be dubious of vague categories or multiple fees with mysterious titles, such as a “loan tie-in” fee or a “sub-escrow” fee, mortgage insurance application fees and fees for “processing,” “commitment,” “application,” administration,” “document preparation,” “origination” and “underwriting.”
Bankrate.com found that, in 2007, buyers on average paid lenders $565 in “commitment” fees, $187 in “document preparation” fees, $370 in “processing” fees and $246 in “underwriting” fees — all of which Bankrate columnist Steve McLinden calls highly negotiable “junk” fees.
Lenders tend to inflate origination fees to protect themselves from variations in their final costs, Blaszyk says. That means there’s room for a well-prepared buyer to negotiate.
- Reserve costs (GFE Section 9; HUD-1 lines 900 through 1007): Your first mortgage payment isn’t due for six to eight weeks, so you may need to fund a reserve account to cover interim expenses — real-estate taxes, interest, homeowners and mortgage insurance premiums — for that period.
- Origination fee (GFE: Line 1): This is the lender’s charge for receiving and processing your application and for underwriting, or approving, it. It may also include the cost of the appraisal ($325, on average) and other third-party services. Average cost: $2,130 to $3,105 with a 5% down payment; $1,984 to $2,865 with a 10% down payment.
- Broker fee (GFE: Line 1): Your loan broker, if you use one, earns a commission (typically 1% of the loan amount), included among “origination charges.”
- Points (GFE: Line 2): You can usually buy down your interest rate by purchasing “points” (or “loan discount” fees.) You pay an upfront fee in exchange for a lower rate. Consider this if you’ll hold the loan for several years. Do the math to figure out how long you must hold the loan to make the purchase worthwhile. Cost: One point costs 1% of your mortgage amount. (Example: Buying three points on a $200,000 mortgage costs $6,000.)
- Adjusted origination charges (GFE page 2, line 2): Sometimes the lender also pays the broker a bonus for selling you a more expensive loan. It’s called a yield-spread premium.A yield spread premium isn’t identified on government forms. “It is a true hidden cost,” Stark says.This item is confusing; the forms are the product of negotiations between the mortgage industry and government. “It was incomprehensible to me,” Stark says. But here’s what you need to know: If your GFE shows a “credit” (“You receive a credit of ___ for this interest rate of ___%. This credit reduces your settlement charges”), you’re almost certainly paying for a yield spread premium through a higher interest rate, HUD spokesman Brian Sullivan says.The Federal Reserve has recently banned yield-spread premiums based on interest rates, effective April 1, 2011.
2. Government fees (GFE lines 7 and 
State and local government fees — including transfer fees, recording fees and property taxes — can be negligible or cost up to 3% of your loan amount.
- Transfer taxes. Municipal, state and even county governments often tax a transaction. Cost: For one example (from DirtLawyer.com), a property sale in Alameda County, Calif., is charged a county tax of $1.10 per thousand dollars in addition to a city tax of from $4.50 to $15 per thousand dollars. In some counties, the buyer pays; in others, the seller pays; in some, buyer and seller split costs.
- Property tax. Assessed by counties; rates vary widely. Cost: Ask your county assessor’s office for local rates.
- Recording fees: Charged by state and local governments. Cost: $50 to $150.
3. Fees for third-party services (GFE page 2, “Your Charges for All Other Settlement Services”)
- Settlement agent: Some settlement companies bundle several services at one price, a possible source of savings. Cost: Varies with services provided. (Read the Federal Reserve’s explanation of all-in-one services.)
- Attorney: When shopping, ask for a flat (one-time) rate. Cost: $343, on average.
- Title search and title insurance: Cost: Varies by state or county. Americans paid $707, on average, in 2007 for title insurance, plus about $200 for title search and other title services.
- Property survey: Defines and records the property’s boundaries. Cost: $135, on average.
- Homeowners (hazard) insurance: You must purchase homeowners insurance to obtain a mortgage. Cost: $300 to thousands of dollars per year, depending on the home’s value and the coverage you select.
- Private mortgage insurance: Required by the government if your down payment is less than 20% of the purchase price. Cost: $50 to $80 per month, on average, for a $159,000 home, according to Mortgage Insurance Companies of America.
- Inspections (well, septic system, pool, radon, pest, environmental hazards): Cost: $50-$300 per inspection.
- Flood determination fee: If your home is in a flood plain, you may be required to purchase flood insurance. Cost: The fee to determine if you’re in a flood plain runs $12-$16, on average. Insurance is additional.
Source: www.MSNRealEstate.com
Aug
25
Going Green at Home
Wednesday |
e.How.com give some great Instructions on how we can live more “GREEN” at home. Check ‘em out…. Instructions are as follows-- Use less electricity. Switch to compact fluorescent bulbs each time you replace an old incandescent bulb. Compact fluorescents save 75 percent in energy use and last up to 10 times longer. As a bonus, you’ll save money on your electric bill.
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Run the washer, dryer and dishwasher only with full loads. You reduce both electricity and water usage by only running these appliances when necessary.
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Install a low-flow shower head. The newest models still produce strong water pressure while using much less water.
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Retrofit your hot-water system with a hot-water recirculation pump. These pumps recirculate cold water back to the water heater and only release water when it is hot. Go green and quit wasting water waiting for the cold water to get hot.
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Choose Zero VOC paints for your next home decorating project. Most paints contain toxic volatile organic compounds (VOCs) that are released into the air when you paint. VOCs can cause short and long term health problems.
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Look for furnishings made without glue or formaldehyde. This will green your home by improving your indoor air-quality.
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Recycle, reuse and compost. Reduce the amount of stuff you send to the landfill. Find out about recycling programs in your community. Find new uses for items. Compost yard waste and kitchen scraps.
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Properly dispose of hazardous waste. Cleaners, oils, paints, pesticides, batteries and solvents should never go out with the household garbage; they end up contaminating the soil and groundwater in your community. Contact your city government or the EPA to find out how to properly dispose of these items.
Source: www.e.How.com
Aug
24
End of McMansions?
Tuesday |
Large homes along Vineyard Avenue in Guilford sit on very small lots. Zoning laws may be changed for new homes in Guilford, restricting large homes on small properties. (Peter Casolino/Register)
GUILFORD — The end of the “McMansion” era may be on its way.
Current regulations have allowed waterfront neighborhoods to boast brand-new and renovated balcony-laden, sky-high homes that could hold their own against famous families’ multimillion-dollar fortresses featured on MTV’s “Cribs.”
But the Planning and Zoning Commission may vote as soon as Wednesday on proposed coastline regulations that set tighter restrictions on homeowners and builders. The meeting and public hearing start at 7:30 p.m. at the Nathanael B. Greene Community Center.
If approved, builders may be sent back to the drawing board to scale back plans, and home�owners could face obstacles in making even small additions, like sun rooms. And it’s a growing national trend, says Duo Dickinson, an architect based in Madison.
“There’s been a concern about houses becoming too big for the neighborhood and changing the character of some of these smaller-scale shoreline neighborhoods,” Town Planner George Kral said. “These proposals were generated by meetings with neighbors because of concerns about so-called McMansions swamping neighborhoods.”
Many residents are striving to preserve Guilford’s small-town feel and coastal resources while also recalling the quaint cottage-size dwellings that dotted the shoreline years ago.
“People don’t like change ever, and when buildings become so out-scaled, they have no precedent with anything around them,” Dickinson said.
The PZC is proposing to limit where and how large buildings can be built in a revised version of the Coastal Area Management plan, officials say. Some are concerned changes in the plan, which affect those living in the CAM zone, may hurt the town’s bottom line.
The state determines the area defined as the CAM zone, which has not changed in terms of boundaries. Proposed revisions include minor alterations and three significant changes, Kral said.
The first reduces the percentage of land that can be covered by a building; the second reduces the floor-area ratio, which is the total amount of floor area in a building compared with the size of the lot; and the third restricts the height of buildings to 30 feet, instead of 35.
The buildable lot area used in the floor-area ratio no longer includes areas of inland or tidal wetlands or slopes with grades of more than 25 percent and an area of 1,000 square feet or more. A smaller buildable lot area reduces the size of houses that can be built.
Kral said that some large houses on the coast don’t follow the regulations and will become non-conforming buildings if the proposed changes are approved. While those homes wouldn’t need to be altered to meet the plan, additions would not be allowed.
But Dickinson said the restrictions might not curb building sizes for some.
“People that really have a lot of money will buy more land and be allowed to build larger houses, but there will just be fewer (McMansions),” he said.
“A person with one-eighth of an acre who’s building a big house — you’re not going to have that unless it’s already there.”
Smaller lots will see the most impact, Kral said.
The PZC also says the proposal will have a positive environmental influence, and the plan’s modifications aren’t ones that can be delayed, said Harry Haskell, president of the Guilford Preservation Society.
“If there is one issue that we ought to be able to address in a very rational and common-sense way, then this is it,” said Haskell, who added that a few society members helped develop the proposed changes.
But it’s an issue that will remain controversial and possibly lead to lawsuits if regulations have “poorly defined terms and ambiguous aspects,” Dickinson said. “The real tough part for all of these towns’ zoning-enforcement officers and boards of appeal is that unless they get their definitions correct, they invite themselves to lawsuits,” he said.
The proposed changes are still under discussion and drawing many questions from residents and officials, which is why the PZC is not voting on them this month, Kral said.
The new rules may help maintain and raise property values, Kral added, because the quality of a town’s coastal environment increases them.
But James O’Keefe, a Board of Finance member, argued just the opposite at a recent board meeting and also knocked the PZC for not notifying residents with a letter concerning the changes.
If residents and builders can’t count areas with a certain slope or marshlands as part of their buildable square footage, “their lot becomes the size of a postage stamp,” O’Keefe said.
“Someone under the current regulations could build a 4,000-square-foot home and generate a lot of taxes and now maybe they’re only allowed to build a 2,000-square-foot home that’s generating less taxes,” he said.
“I’m afraid that in the long term, it will affect the tax revenue.”
Source:www.Yahoo.com
Aug
23
Decluttering and cleaning are the two most important things sellers can do to get their house ready for showings. But small touches — new bathroom towels, a well-placed bouquet of flowers or an accent color — can liven up your listings. Here, we spent about $70 on fresh flowers and another $400 on props to stage a few key areas of a 1920s bungalow. Other props were borrowed.
Warm it Up
Bring life to a monotone bathroom with contrasting draperies and towels. A towel rack hung upside-down is reversed, so towels can be displayed on the rack rather than the tub. A borrowed table adds elegance and carries the eye upward, making the room feel more spacious. Purchased: Drapes, $80; towels, $25; wastebasket-tissue-box-handtowel set, $18
Create Focal Points
Above, a bench and mirrored hatstand that blend into the woodwork are replaced with contrasting furniture. The boldly colored chest and pillow combine to provide a focal point. Purchased: Blue vase, $25; pillow, $30
Pare Down
Books and photos go into storage, replaced with accent pieces and flowers that brighten the dark shelves. Purchased: Square baskets, $10; white mirror, $12; white vase, $30; top-shelf basket, $25
Accent With Color
Surfaces are decluttered and red accents added to enliven a seating area. Purchased: Nothing except the flowers
Think in Threes
Odd numbers create tension that provides visual interest. This principle is applied with three grass bundles on the fireplace hearth and three varied-height vases on the kitchen counter below. A painting retrieved from storage and a larger rug improve the balance of and add warmth to the mantle area. Purchased: Grass bundles, $30
Set a Scene
Kitchen counters are transformed from utility into a welcoming oasis. Purchased: Cream vases, $40; succulents, $12; pear tray, $13; basket, $5; towels $8
Buyer’s Reps: Look Below the Surface
A good stager can minimize a multitude of flaws in a home, from awkward traffic patterns and dark bedrooms to dens without a wall long enough for a full-size sofa. As home sellers increasingly use staging to market their properties, however, buyers must learn to look beyond staging’s veneer of polish to see a home’s bones and blemishes.
“Buyers shouldn’t assume that a well-presented home is a well-maintained one,” says Jon Boyd, GRI, a broker-manager with Home Buyers Agent in Ann Arbor, Mich., and president of the National Association of Exclusive Buyer Agents.
NAEBA in 2006 surveyed its members and found that 82 percent of respondents said their buyers are likely to be distracted by staging.
The first time buyers walk through a house, they should concentrate on fundamental issues such as floor plan and a home’s location rather than on how furniture is arranged, Boyd says.
Here are some of Boyd’s tips for buyer’s reps:
- Don’t be dazzled by the light. Halogen lights can make a room seem larger, Boyd says. The same is true for torchiere-style lamps that reflect light up to ceilings.
- Don’t let shimmer hide realities. Mirrors and glass tabletops both make rooms appear larger. Measure each room to see how big it really is.
- Beware of tight spaces. Be sure that the furniture in a room is appropriate for the room’s use, Boyd says. A bedroom without night stands might prove cramped when you add in a full-size bedroom set. Also look out for love seats. They’re an easy way to make a room seem larger. Encourage buyers to measure their furniture so that they’ll know how much room they need.Staging puts a house’s best face forward, which is all well and good, but buyers need to look below the surface and think about what really will be important to them in a new home.
Source:ww.msnrealestate.com