Street Smarts, Holidays Without the Street

Be generous…to yourself- The holidays are a time of giving and gratitude, but don’t forget about yourself and your health.  Stress has been proven to be bad for your heat, hear rate, blood pressure and can make certain chronic diseases, like arthritis and diabetes, even worse.  So don’t let shopping be your only exercise this holiday season.  Schedule some time for yourself once a week at the gym.  Splurge on a yoga class or two, or just allow yourself time for a quiet walk or jog around the block.  After all, the best gift you can give your family is a happier, healthier you!

Plan for success…not perfection- We’ve all heard about “the best laid plans of mice and men,” but nowhere in that famous poem is perfection mentioned.  This holiday season, yes, plan ahead and avoid stressful surprises that can pop up and ruin your events.  But, at the same time, expect some surprises, and give yourself permission to let some tings slide.

Give…and receive- A great way to cut down on stress is to share the load.  Volunteering to help others will help you keep your mind off your responsibilities and remind you of how good it feels to give.  But remember, this works both ways.  Allow others that same opportunity.  Let them help you when you need it.  You just might find that these “opportunities” create the best, most enduring holiday memories.

FHA Eases Concentration, Other Condo Rules

In an effort to give condo lending a boost, last week FHA released a mortgagee letter (2009-46 A) that lets lenders make loans to condo buyers even if it means 100 percent of the project units would have FHA financing.

That’s a level of market exposure far above what FHA is allowing in its baseline rules (which you’ll find in another mortgagee letter: 2009-46 B), which limit FHA concentration to no more than 30 percent of units.

FHA is also easing its 50-percent owner-occupancy requirement—long an industry concern—by allowing lenders to exclude foreclosed properties in their calculation. That could go a long way in helping buyers in the hardest-hit areas tap FHA financing because it means none of a project’s distressed units count against the owner-occupancy limit.

The agency’s also allowing lenders to make spot loan approvals until February 1, 2010. If you’re not familiar with spot approval, it’s an authority given to lenders to finance one unit in a project that hasn’t yet been approved by FHA for financing.

These and a few other changes that reflect a realistic assessment of today’s market conditions take effect Dec. 7 and they last, with the exception of the spot approvals, until the end of 2010.

FHA’s recent guidance on appraiser selection has been widely praised for helping to bring clarity to implementation issues that have plagued the Home Valuation Code of Conduct (HVCC), the set of guidelines adopted by Fannie Mae and Freddie Mac earlier this year.

Hurray For FHA….It is a great loan for many of your buyers…..

An Article By: The Meredith Mortgage Team


Put The ‘Dream’ Back In Your Dream Home

Remember how you felt when you first bought your home?  It was a dream come true.  Since then, your dreams and needs have changed and maybe you are feeling it is time to move.  Unfortunately, the real estate market is not cooperating and you face either selling at a loss, or not being able to sell at any price.

There is an alternative to letting the housing market get you down.  Make the space you are in reflect your dreams by doing some targeted renovations to add luxury and utility.  A great place to spice things up is in the kitchen.

The kitchen is typically the most important and busiest room in the house.  A warm, beautiful and functional kitchen can have a major influence on how you and your family feel about your home and your lifestyle.  And you do not have to break the bank to create a kitchen where you will love spending time.

Before you take the first step toward these changes, here are a few vital tips to help bring your dream kitchen to life and save precious time and money.

Planning- A kitchen remodel is a big investment, so know how much you are willing to spend by planning ahead on layout and design features.  Keep in mind, hardware, paint and wall coverings can easily be updated later to reflect the latest trends.  The big purchases like cabinetry, countertops and appliances are what you will want to live with for years.  For instance, white is timeless and with stainless steel appliances- creates a look that will stay fresh for years.

Think about how you live- Your new kitchen design should reflect the way your family lives.  How many people will be in the kitchen at one time?  In addition to cooking, will you use your kitchen for dining, entertaining or homework?  Does anyone in your family have special needs?  Would lots of storage help your hectic life?  Prepare an inspiration folder of ideas you have seen in magazines or digital pictures you have taken of elements you like.  And, get the rest of the family involved in the choices.

Personal style- When selecting your kitchen cabinets, are you traditional, contemporary or somewhere in between?  Before you head to your local home center, it is very helpful to know your style.  Then you can create a unique, customized look just for you and your family.  Think about what appeals to you- styles, finishes, colors, etc.  From a practical standpoint, also review your priorities- your “must haves” – against your target budget.

Attention to detail-  It is those beautiful details that allow your personality to shine in your new kitchen.  For a custom look, consider adding decorative accents like molding build-ups, ornaments and corbels to cabinetry.  Including decorative accessories such as hardware, glass door inserts and under-cabinet lighting can also make the room sparkle.

Take measurements-  Be prepared with accurate measurements of your current space.  Double, or even triple, check your work.  You can download tools like grid paper from the Internet.  Make sure your installer validates the dimensions or obtains professional measurements.  This helps avoid measurement errors that can lead to costly delays or incorrect product orders.

For most families, the kitchen is really the heart and the pulse of their home.  It is a great place to put the “dream” back in your dream house.


Costly Mistakes Sellers Make

There are always appropriate steps to investing in real estate.  Here are 6 to avoid:

Mistake 1:  Putting the home on the market before it is ready.  Most times this happens because the seller gets impatient or is a procrastinator and has pushed himself up against a moving deadline without getting the pre-sale work done.  So it comes on the market with the horrible carpet (that gets replaced during the marketing of the home); or they are painting it while it goes on the market.  Presentation is everything—so get the work done before marketing the property.

Mistake 2:  Over improving the home for the neighborhood.  This happens with additions, bump outs, and upgrades that make the home stick out from among its competitors so much that it is an anomaly, instead of a nice addition to the community.

Mistake 3:  Pricing the home based on what the seller wants to net.  This pricing strategy always ends in failure.  Sellers can control the “asking” price, but they do not control the “sales” price.  The market does.  It does not matter what the seller wants, the price is determined by the black-and-white, matter-of-fact reality of the market.

Mistake 4:  Getting emotionally involved in the sale of the home.  This is one of the biggest challenges home sellers face when putting their house on the market.  Once you decide to sell your house, it is no longer a home, but a commodity.  It needs to be prepared as a commodity, marketed as a commodity, and priced as a commodity.  It does not matter what you “want,” only what eh market can bear on pricing.  People are going to come in to kick the tires, so to speak, and you can not get emotional about how they may or may not appreciate the nuances of your home of 7 years.

Mistake 5:  Trying to cover up problems, or not disclosing them.  Most states have a property disclosure/disclaimer form—use it wisely.  Just because you disclaim does not mean you cannot be sued later for the leaky basement, or dilapidated heating/air system that is discovered 30 days after settlement.

Mistake 6:  Not getting your ducks in a row before trying to sell.  This would involve financing, reading the fine print on your current mortgage to ensure no pre-payment penalties, not listening to the particulars of your local market, etc.  If your local market is dictating lower home prices, then lower it early, not later—it will cost you more.  If the local market dictates selling your home first, then buying second, do it in that order, or vice versa.

Avoiding these mistakes is not that difficult.  There are plenty of resources out there and your real estate professional can help you step over the pitfalls.  Do the research early, and listen to all the professionals who bring their expertise to the table and help you avoid costly mistakes in the process.

Stylish, Sustainable Fall Interior Design Ideas

When you think of the colors associated with fall, green does not necessarily come to mind.  Environmentally speaking, however, it should.  There is no better time than now to lessen your home’s impact on the environment and change the way you decorate and live.

These days, you can find stylish, eco-friendly design elements for every room in the house.  And, contrary, to popular belief, going green does not mean you have to sacrifice style for sustainability.  The 2 can coexist quite effortlessly.

You can start simple by dressing your bed in luxurious sheets, throws and comforters made from fabrics such as rich, renewable bamboo or soft, organic cotton.  Cover your floors with formaldehyde-free carpets constructed of recycled fibers or select a natural material, like stone, slate or even concrete.

Do not stop there.  Buy furniture made from sustainably harvested wood or, better yet, visit local secondhand shops and re-purpose.  Or, look around your own home and see what you already have that can be adapted for a new use.  You would be surprised what a little creativity and some good old-fashioned elbow grease can do.

If you are looking to add bold, fun color, paint fits perfectly into this overall green scheme.  It is an inexpensive, effective and, most importantly, environmentally-minded way to change the look and feel of an entire room.  Many paint manufacturers now offer coatings that contain few, if any, volatile organic compounds (VOCs), or vapors that are released from paint as it dries.

Many home improvement products are also Indoor Air Quality certified by The GREENGUARD Environmental Institute, a nonprofit, industry-independent organization that certifies indoor products that meet satisfactory indoor air emissions standards.

Keep in mind that greening your home, inside or out, does not happen in a matter of minutes or even overnight.  It is an ongoing process.  The limit to how green your home can be is up to how willing you are to adjust your lifestyle.  The choice is yours.  Tiny changes add up to make a big overall impact on the environment.


So what is your passion in lifeAre you pursuing or following your life passion?  If not, why not?  Three simple questions for you in this edition of Monday Morning Mojo … ok so I lied, they might not be so simple for most of us.  But really is there any thing more important than to regularly check in with ourselves to make sure what we are doing is what we are most passionate about?  If you listen close enough, oftentimes our successes and set backs, as well as the people around us are but reminders in our lives to live and share our passion.

This weekend I was reminded again in conversation.  Several people around me asked … so Jim, what are you really passionate about … and then the big ‘why’.  In our monthly networking meeting last week a guest (who I have never met) following the meeting asked me “what are you most passionate about?”  After sharing with her my response, she continued with ‘it would be great to bring people together based upon them pursuing their passions and not their day jobs.’ 

Gary Vaynerchuk in his book ‘Crush It’ devotes an entire chapter about pursuing your passion in life.  He sums it up by saying ‘passion is everything’ it is the ‘why’ and it is the vehicle that enables us to put the time, energy and effort into something to really make a difference.  The engine that allows for greatness!

Mike King in his blog about ‘Finding Your Passion in Life’ suggests a simple process to discover your passion.  Oftentimes the ‘what if’ gets in our way of finding our passions.  And for some of us we are not ‘wired’ to think this way; therefore, we never even ask the questions.  We are programmed to just get up and make a living … to plod along and provide for our families.  People get nervous when asked “are you living your passion” … why … well the obvious answer is probably that we are afraid the answer will come up … ‘no’!  Then what?  That ‘what’ is really ‘what if’ because the real fear is what if I pursue my passion and can’t make a living doing what I’m really passionate about.  The dialogue in our mind’s eye continues with arguments like … ‘what about the people who depend upon me every day?’  And about a dozen other excuses that prevent us from figuring out what is our real passion, and how can we live our passion.  It is that moment in time where we crawl out on the branch and discover if what we do has ‘real value’. 

Some of us believe that we don’t have to crawl out on that ledge.  That we can just join the work world and do our job.  And after a lifetime of ‘doing our job’ we get to retire, and then enjoy ourselves.  Personally that sounds more like a prison sentence than a real life.  But the other why is because we can only fake it so long; eventually everyone around us will know that what we are doing does not really ‘float our boat’ and we will probably find ourselves on the other side of the employment line. 

So like it or not, the questions of the day remain the same … what are you most passionate about; and are you living your passions?  My hope that each person reading this Mojo responds in the affirmative.  That would be really cool!!  But for those that in the personal confines of your own heart answer in the negative; then I hope you continue to ask and pursue these questions.  My hope is that you diligently engage in the process of self-discovery and never succumb to the ‘perceived’ easy way out.

National Home Prices May Be On the Road to Recovery

After 3 years of declines, home prices increased 2.9% in the 2nd quarter of 2009.  That is the 1st quarter over quarter improvement in 3 years.  We cannot ignore the fact that prices in the national index are down 14.9% compared with the 2nd quarter of 2008.  But that is better than the record 19.1% decline that was set in the 1st 3 months of 2009.

There are many positive signs in the real estate market right now.  We are seeing home prices starting to grow again and existing homes’ sales increasing consecutively over the past 3 months. 

The slide may be over partially because prices have reached affordability levels not seen in a generation, drawing many buyers into the market.

Helping housing markets, too, is the government economic stimulus effort, which includes an $8,000 1st-time homebuyers’ tax credit.  That added discount has spurred many entry-level buyers into homeownership.

The rebound may mean the potential homebuyers will have more of a feeling of urgency, afraid that they will miss the market bottom.  IN other words, buyers are creating a frenzy to get in before prices go up again.  Many buyers are more concerned about that than about getting the 1st time homebuyers’ tax credit. 

Among cities, Cleveland reported the biggest rebound; prices improved by 9.8% compared with the first quarter of 2009.  Dallas prices rose 6.5% and San Francisco 5.9%.  Prices also declined in 7 cities, including 7.8% in Los Vegas, 2.2% in Miami and 1.2% in New York.

Despite this recent news, some real estate market analysts are expressing caution, pointing out that last year’s turnaround quickly fizzled out.

In early 2008, prices were falling 3% a month.  That improved to -0.5% a month in the spring, giving the impression that the market would turn around.  But prices quickly started falling more steeply again.  The same thing could happen again, especially with the economy still in a downspin, and once the tax incentives are off the table.

The really import things affecting home prices are unemployment.  And the, the government has not yet handled the foreclosure problem.  And, foreclosure rates are relatively high in some key real estate markets.

Increased bank repossessions could unleash a flood of new supply on the market, which could dampen prices.  Plus, there is also some indication of shadow inventory—repossessed homes the banks are holding onto because they do not want to flood inventories.

Given the tremendous amount of inventory, nearly a year’s worth, it should continue to be a buyer’s market for a while.

What is a Short Sale?

A short sale means the seller’s lender is accepting a discounted payoff to release an existing mortgage.  Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it. 

Be aware that the seller need not be in default before a lender will consider a short sale.  A lender may consider a short sale if the seller is current but the value of the property has fallen.  The seller may have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.

6 Things to Know Before You Buy That Short Sale House- When you spot a short sale house that interests you, take your hand off the mouse and step away from the computer.  Before you get all excited over the prospect of buying that short sale house, pick up the phone and call your real estate agent.  Your agent needs to research that short sale listing first. 

In some real estate markets, fewer than one in 10 short sales close.  Just because that home is listed as a short sale does not mean it is really for sale, nor does it mean it will sell at the advertised price.  Here are 6 things you need to know before trying to buy that short sale.

1-Comparable Sales For That Short Sale House- Typically short sales are listed below comparable sales, yet they are priced in line with pending sales.  Why? Because short sales take anywhere from 2 to 4 months, on average, to close, and pending sales will become the comparable sales at closing.  Some short sales are priced ridiculously low.  These types of listings receive multiple offers.  But all is not lost.  To get your offer accepted, it will need to be priced near market value.  If you are not prepared to pay above a superficial price on a low-ball short sale listing, then pass.

2-Mortgage Amounts, Number of Loans and Lenders- Ask your agent to research how much is owed against the home and find out the number of loans that are recorded.  A second or third mortgage lender will receive peanuts as compared to the amount a senior lender in first position will get.  Moreover, some lenders, deserving or not, get a reputation for being difficult to work with.  If your agent is an experienced short sale agent, he or she will know who these lenders are and can advise you of the difficulty you may encounter.  If your offer is 20% or 30% of the mortgaged amount, it is unlikely that your offer will see the light of day on the negotiator’s desk.

3-Short Sale Listing Agent’s Track Record- A listing agent who is advertising a short sale but has never closed a short sale may pose a certain risk for you.  That is because it is up to the listing agent to submit the short sale package to the lender and negotiate.  Your buyer’s agent can not talk to the bank.

4-Short Sale Qualifications- Find out if the listing agent has received a completed short sale package from the seller, and ask about the contents of that package.  A complete short sale package consists, at minimum, of the following:   Sellers’ hardship letter; tax returns; w-2s; payroll stubs; financial statement; bank statements.  Some sellers do not want to cooperate and are slow to return these documents.  Other shave never been told by their agent that these documents are mandatory.  You do not want your short sale purchase delayed because the listing agent does not have the required documents.

5-Number of Short Sale Offers Received- homes priced under market value will           receive multiple offers.  An agent is not required to disclose the terms of those offers, but you do want to know how many offers you are up against.  Here is how it generally works:

When a short sale home first comes on the market, the first offer will most likely be below list price.  The second, at list price.  The third offer will be slightly higher, maybe by a $1,000 or $2,000.  The fourth offer will be significantly more.  You want to make an offer that will beat the competition yet still be below market, or do not waste your time. 

6-The listing Agent’s Short Sale Procedures- Although Realtors are required by their code of ethics to treat everybody fairly, not every agent is a Realtor.  This means the short sale listing agent may decide to submit only the first offer to the bank and withhold all other offers.  Withholding other offers could be considered to be a violation of the fiduciary relationship formed between the listing agent and the seller.  The seller is entitled to receive the highest and best price.  Realize that even if your offer is submitted to the bank, as time marches by while waiting for short sale approval, another buyer could outbid you.

Tax Credit Extended!


Feature January 1- November 30, 2009

Rules as enacted

February 2009

November 7-April 30, 2010

Rules as enacted

November 2009

First-time Buyer

Amount of Credit


($4,000 married filing separate)


($4,000 married filing separate)

First-time Buyer Definition for Eligibility May not have had an interest in a principal residence for 3 years prior to purchase Same
Current Homeowner

Amount of Credit

No Provision $6,500

($3,250 married filing separate)

Effective Date Current Owner No Provision November 7, 2009
Current Homeowner Definition for Eligibility No Provision Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years
Termination of Credit Purchases after November 30, 2009. (Becomes April 30, 2010 on Date of Enactment.) Purchases after April 30, 2010
Binding Contract Rule None So long as a written binding contract to purchase in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Income Limits (Note:  Increased income limits are effective as of date of enactment of bill) $75,00- single

$150,000- married

Additional $20,000 phase out


$225,000- married

Additional $20,000 phase out

Limitation on Cost of Purchased Home None $800,000

November 7, 2009

Purchase by a Dependent No Provision Ineligible

November 7, 2009

Anti-fraud Rule None Purchaser must attach documentation of purchase to tax return


It Still Makes Sense to Buy Versus Rent, an article by MMG Special Feature Article

 Nearly a full third of households are still renting. If you’re one of them, you could be paying a hefty price.

Before talking about purchasing a house, it’s important to note two things. First—and this is extremely important—the housing market is actually localized. So the outlook in your hometown may be different than another city across the state or on the other side of the country. Second, home prices are tied to employment. For example, if someone feels like their job is in jeopardy, it might be enough to stop them from making a move. So, if your local job market is feeling a pinch, the home prices in your area may be down as well.

But with all those factors under consideration, it still makes sense to buy instead of rent. In fact, renting may be costing you a bundle.

Let’s look at an example…

If you are paying rent at $1,500 per month and your landlord increases your payment by a modest 5% each year, you would wind up paying just about $100,000 over a 5-year period! Worse yet, after forking over $100,000, you still would have nothing to show for it.

And speaking of having nothing to show for it, how about any improvements you might make to a rental property? It’s not uncommon for renters to freshen up the paint, install new light fixtures or plant some nice flowers outside. But guess what… all your efforts, labor and the benefit of that improvement belong to the landlord, not to you.

With convenient down payment options still available for qualified buyers, affordable home prices and low interest rates, the very same money could have been used towards home ownership.

Even using a standard 30-year fixed program, a mortgage of $300,000 could be obtained with a total monthly mortgage payment—including property taxes and insurance—of around $2,200. Assuming a 25% tax bracket, this would be equivalent to the average amount spent on rent during the same period after your tax benefit.

And the benefits of home ownership are quite considerable. Because the mortgage is being paid down each month, equity is being built. After 5-years, the $300,000 mortgage could be reduced to $279,000, adding $21,000 to your net worth!

But if laying out the initial increase in monthly payment and having to wait for your tax benefit to show up next April is a tough nut to crack, the IRS wants to help. Instead of waiting to file for the tax benefits derived from your new home purchase, you can simply adjust the amount of your withholding. This allows you to have less tax withheld from each paycheck so you can handle the new mortgage payment more comfortably throughout the year. In essence, you are taking your tax refund as you go instead of letting Uncle Sam hold it all year, interest free.

Visit and use the IRS withholding calculator. This very handy tool can quickly show you the impact that a change in withholding will do to your net paycheck. Remember to balance this with the expected refund and it is always a good idea to check with your tax advisor.