Will the "Good Life" Be Ready When You Are?

The Life of Riley was a TV show from the 50’s starring William Bendix but the title’s origin came from an expression meaning that a person was living the “good life.” Most people envision themselves living the good life by retirement but don’t really have a plan to get there.

There’s a rough rule of thumb used to estimate how much net worth a person would need by the time they retire to generate a certain income. The target annual income is divided by a safe, conservative yield to determine the investable assets needed.

A person who wanted $100,000 annual income generated from a 5% investment would need investable assets of $2,000,000. If a person had $500,000 now, they would need to accumulate $1.5 million more by the time they retire. If it was estimated to be 15 years away, they would need to save about $100,000 a year, each year until retirement.

It is a sobering example that could be depressing without a plan. It might be easy to say, “I should have started sooner” which may be true but there is still hope.
Gradually, over the next several years, accumulate rental property and allow the tenant to retire the debt for you. The equity in each property will grow from the amortization of the loan each time a payment is made. It also grows as the property increases in value due to appreciation.

Single family homes as rentals offer the investor an opportunity to meet their retirement and financial goals for the following reasons:

• The ability to borrow large loan-to-value mortgages
• At fixed interest rates
• For long terms (easily up to 30 years)
• On appreciating assets
• With significant tax advantages
• And reasonable control not offered by alternative investments.

 

Breathe Easy

The benefits of regularly changing the heating and air-conditioning filters are obvious to homeowners; the real challenge is creating a system to make sure it gets done. 

A reasonable schedule would be to replace it with a new one-inch pleated filter every 60-90 days. Households with shedding pets should consider replacing them every month. Some people change their filters every month when they pay their electric bills.  A simple system would be to set a recurring appointment on your calendar like Outlook or Google.

Filters trap dust, mold and bacteria which can directly affect the air quality and play havoc with your allergies. When a filter is dirty, it prevents proper airflow and allows dust, dirt and allergens to blow through your home. Changing your filter regularly helps to avoid maintenance, improves equipment life and produces increased energy savings.

When shopping for filters, it’s understandable to look for the best bargain but the cheapest price may not be the best choice. When purchasing, recognize that HEPA-rated and HEPA-type filters are not the same thing. HEPA stands for high-efficiency particulate air. A HEPA filter meets or exceeds standards for efficiency set by the U.S. Department of Energy. Most HVAC contractors recommend HEPA filters.

Some filters need to be changed monthly and other types have manufacturer recommendations of every three months. An alternative to disposable filters are the permanent, washable types. These will cost more initially but because you can clean them and re-use them, eventually, you’ll recapture the cost and realize savings.

 

Expert Advice Does Not Mean Perfect Advice

Today's post is an excerpt from our newest eGuide, Real Estate's New Market Reality, which explains how the role of the real estate professional has changed and what you can do to successfully help more buyers and sellers. You can download the entire eGuide at www.NewMarketReality.com. – The KCM Crew

Don't be afraid of those two words-expert advice. Remember:

• An expert doesn't mean you're going to give perfect advice.
• An expert means you're going to give excellent advice.

Here's the difference:

If you go to a doctor with a serious illness, she can't tell you how it's all going to wind up in the end. She can't know for sure. Therefore, she can't offer perfect advice.

However, your doctor can only give you excellent advice. She can tell you about your illness and your options, whether it be surgery or medications. She can also explain what she believes to be the best option for you based on your history, symptoms, and overall health. Ultimately, though, you're going to make the final decision of whether you go through with the treatment plan.

Once you make that decision, your doctor will take you by the hand and walk you down the road to recovery. She will explain to you that there might be adjustments that need to be made to the treatment plan, because no one can know for certain how things will turn out.

She might have to adjust your medications or increase or decrease your treatment schedule. But every step of the way, she's there with you, helping you get to your ultimate goal. This is called excellent advice. (By the way, does this sound like what we do with our clients?)

Similarly, if you went to an attorney, he can't tell you how the case is going to end up or how the judge or jury will rule. That would be perfect advice. What an expert attorney can do is explain your options. He might pick one or two he believes to be the best ones to pursue. He will then leave you to make the decision on which option you want to take. Once you decide, he will help put a plan together based on the facts at hand. He will help you get to the best possible resolution of the case. And along the way, he'll make whatever changes are needed. This is excellent advice. (Again, does it sound similar to how we help our clients?)

Your role as a real estate professional is similar to the role of the doctor and lawyer. You can't give buyers or sellers perfect advice because you don't know what's going to happen—you can't know the future. However, you can give excellent advice based on the information and situation at hand. You can guide them through the process and help them make the necessary changes along the way. And that's exactly what your clients want…and deserve!

This article originally posted by Keeping Current Matters. Read more articles like this at www.KCMblog.com.

Benefits of Changing the Heating and Air-Conditioning Filters

The benefits of regularly changing the heating and air-conditioning filters are obvious to homeowners; the real challenge is creating a system to make sure it gets done.

A reasonable schedule would be to replace it with a new one-inch pleated filter every 60-90 days. Households with shedding pets should consider replacing them every month. Some people change their filters every month when they pay their electric bills. A simple system would be to set a recurring appointment on your calendar like Outlook or Google.

Filters trap dust, mold and bacteria which can directly affect the air quality and play havoc with your allergies. When a filter is dirty, it prevents proper airflow and allows dust, dirt and allergens to blow through your home. Changing your filter regularly helps to avoid maintenance, improves equipment life and produces increased energy savings.

When shopping for filters, it’s understandable to look for the best bargain but the cheapest price may not be the best choice. When purchasing, recognize that HEPA-rated and HEPA-type filters are not the same thing. HEPA stands for high-efficiency particulate air. A HEPA filter meets or exceeds standards for efficiency set by the U.S. Department of Energy. Most HVAC contractors recommend HEPA filters.

Some filters need to be changed monthly and other types have manufacturer recommendations of every three months. An alternative to disposable filters are the permanent, washable types. These will cost more initially but because you can clean them and re-use them, eventually, you’ll recapture the cost and realize savings.

Effective Hardship Letter for Loan Modification -

LETTER THAT WORKS

 This is an actual letter of a modification that was APPROVED...

The outcome 1st Mortgage was reduced to $325k @ a 4.1% interest rate for the next 3 years, if the homeowner refinances they will have to payback the part of the loan written off, and the loan cannot be paid off, or extra payments.

The outcome of the 2nd Mortgage was written off except for 10% which was paid to release the deed, the homeowner will have to pay what was written off as income and it was reported to the IRS.

The Line of Credit is still in process of being modified.

_________________________________________________________________________________

Tuesday, January 08, 2013

 

Loan Number xxxxxxxx9925

Address

 Dear Bank:

My husband and I are seeking a loan modification because my salary was recently significantly reduced due to the decline in the Real Estate Market and the significant decline in the value of our home.

We currently owe approximately $494,000.00 on a home that is worth $360,000.00 and our adjustable rate mortgage is due to adjust. We own $408,000.00 to Ocwen at a 7% interest rate, $50k to XXX at a 8% interest rate, and $36K to XX Bank who has reduced our interest rate to 3.5% (we are current on these payments).

My husband and I are still currently working and making a good income and would like to stay in our home if we could get the payment reduced to its current value of $360k and the interest rate of our payments to today's current interest rate of around 4% we could make the payments and continue to live in our home.

We would also like the payments we arrears on to be reduced to the modification rate and added to the back of the loan.

We are hoping that XXX Bank will work with us to help us save our home, and we can get back on track making payments as soon as possible.

__________________________________________________________________________________

The names of the banks have been XXX out, you can use the letter to modify your own loan if you find it useful.

Whose commission is it?

One of the most common reasons buyers want to deal directly with the seller is because they feel they can save the commission. It’s a valid consideration but interestingly, it’s the same reason the seller isn't employing an agent.

Both parties cannot save the commission. The buyer feels they have earned it because they've had to find the home, determine its value and negotiate with the seller. They had to arrange their own financing, title and inspections.

The seller equally feels that they have earned the commission because they too have had to research value, financing and title work.  They have incurred all of the marketing expenses and have invested hours upon hours to be available to show the property, hold open houses and answer inquiries. 

There is certainly value in all of the things that buyers and sellers are willing to do.  However, only one person can save the commission assuming the buyer and seller can reach a written agreement. The Profile of Home Buyers and Sellers survey reports that 14% of sales were For-Sale-by-Owners in 2003 and 2004 compared to just 9% in 2012. The trend shows that agent-assisted sales rose to 88% in 2012 from 82% in 2004.

The three most difficult tasks identified by for-sale-by-owners is attracting potential buyers, getting the price right and understanding and performing the paperwork. When surveyed, sellers most value the home selling in an anticipated time frame and for an expected amount. Experienced, third-party advocates helping buyers and sellers is a valuable contribution to the transaction which may determine whose commission it is.

"Please Take our Offer"

"Please Take Our Offer"


It’s interesting that the housing climate has changed so quickly. Some buyers, who think they’re still in the driver’s seat, find the market is now going up and they’re losing the home that they really want.
Multiple offers are increasingly more common and buyers are frustrated because even full-price offers don’t guarantee that they’re going to get the home. In an effort to personify a contract offer and add emotional appeal, buyers are including a personal letter to the seller.  

In most cases, the seller wants to maximize the net proceeds from the sale by getting the highest price with the least expenses and an assurance that the home will actually close on time without surprises. When a seller is faced with multiple offers that may be close to the same net, an emotional appeal might make the difference in them accepting a particular offer. That’s where the letter comes in play.
It should be a relatively short letter that gets to the point. The tone of the letter should be humble while positive and definitely, shouldn’t mention that you may have lost other homes due to multiple offers.

1. Try to identify a common feature or characteristic of the home that is important to the seller and you.
2. Don’t criticize the home or tell them about all of the improvements you need to make to justify your offer.
3. Do verbalize why living in this home is important to you and your family.
4. Assure the seller that you can indeed qualify for the home and that if they accept your offer, the sale will be consummated.

After writing the letter and eliminating the non-essential parts, read the letter a few times to your spouse or friend. Polish the verbiage and check the spelling and grammar. If your handwriting isn’t attractive and easy to read, print it. Use nice paper to appeal to the tactile senses. Attach the letter to the offer so they’re considered simultaneously.
Being pre-approved with good credit, adequate financial resources, good employment, sufficient earnest money and a reasonable offer with minimum contingencies will favorably position you. A personal letter might be the deciding factor in your favor.