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Monday, October 13, 2008

Getting Through It

As I was getting ready to leave the house this morning, I had the NBC Today Show on in the background and heard Tony Robbins discussing the current economic situation and its resulting emotional impact. He had some practical, simple ideas that I thought applied directly to many of us. While I didn't take notes, you'll get the general idea. I thought it was important and timely and a good way to start our week:

1. There have been other crises in all of our lives ... maybe financial, maybe health, maybe a disaster (an accident or fire). And - for those who remember - there have been other challenging real estate markets: 18% interest rates, Hurricane Hugo, the Charleston Naval Base closing, September 11th. Reflect back. Whatever it was, how did you handle it? What pulled you through? Did you determine that this is not going to beat you; did you decide you were going to beat it? It all starts with our own personal mental attitude; let's get tough. Remember, everything is cyclical, and nothing lasts forever.

2. Fear is physical. We must face it, and deal with it in a physical way... get exercise and work it out of your body. Work out, walk, bicycle. It doesn't matter what you do, but do something every day. It's good for your health - physically, mentally, emotionally - and it conquers fear.

3. You've heard, "You are what you eat." You are also what you think. It's important to know what's going on in the world, but fill your head - and your thoughts - with more than negative media. Seek out positive, affirming messages... books, CDs, people who nourish you.

4. With any investment, it is smarter to buy low and sell high. Whether it's the stock market or the real estate market, now is the time to make a smart investment rather than in the midst of a hot market (i.e., the 2005 real estate market). It just makes sense.

5. Offer to help someone less fortunate. It helps us count our many blessings and puts everything else in perspective.

The season has changed. It's finally getting cooler. Things have moved from consumption, materialism and greed to our core values of family, friends, helping and caring - what's basic, necessary, and what's really important. We're rebalancing and there is great value and wisdom in the adjustment - if we keep our heads on straight and our attitudes positive. We will get through this and the pendulum will settle back somewhere in the middle. Spring always follows winter in all things.

Tuesday, September 23, 2008

Wild & Crazy on Wall Street!

Having just come off of one of the most volatile weeks Wall Street has ever experienced, it’s difficult not to touch upon all the financial upheaval in our world right now.

With doom and gloom headlines splashed across the financial media, it's no wonder that everyone thinks we are headed for the next great depression. But among the negative press, there are definitely some positive economic signs out there; you just need to look a bit! Following are a few examples of recent positive economic developments that we can all benefit from now, and take as optimistic signs for the future.

Housing affordability at its highest levels. From 2000 through mid-2007, homes were almost unaffordable to the average American family. Buying a house in a good neighborhood and school district was hard to do without facing high debt obligations or having to take on exotic loans (creating the sub-prime mess). However, the silver lining from the housing crisis is that home prices have dropped all over the country. So for those who have lived within their means, enjoy stable jobs and have enough money saved for a 10 to 20% down payment, now is the time to find great housing deals.

Lower Oil and Gas Prices. Crude oil prices have dropped more than 25% in the last two months, and this is something we can all directly (transportation costs) or indirectly benefit from. While oil prices will probably go back up in the longer term (we’re currently experiencing higher prices at the pump due to Hurricane Ike), the current respite should help all our bottom lines.

Once-in-a-Lifetime Investment Opportunities. We have all read stories about investors who got in early and made millions from stock investments in companies like Microsoft, Apple and other well-known financials. However recently many once-high-flying companies have had their stock prices coming crashing back to earth. With across the board falls in stock markets, there are now lots of well known dividend paying stocks available at bargain-basement prices that offer the potential for you to become one of these storied investors. If you’re an investor with a long-term view, this could provide opportunities to get into some great brand name companies like Citibank, General Electric and even Microsoft at very attractive price points. When the economy does fully recover, as we know it will, these stocks will boom once again and so will the portfolios of those who got in on the ground floor.

So while it sounds like gloom and doom, once again there are a few “nuggets” of positive news.

Saturday, September 6, 2008

When it's Appraisal Time

Buying your next home can be a complex process with many important steps. You will probably look at many homes before finding the right one, and then you'll submit a purchase offer. After one or more counteroffers, and after the purchase offer has finally been accepted -- congratulations, you have almost bought a home.

There are still several steps necessary, which must take place to satisfy the conditions of the purchase agreement. The first of these steps is getting the appraisal done. In most instances, your lender will only loan about 80% - 90% of the value of the loan. Then you, the buyer must come up with the balance, or the down payment. And, the key to this is still the appraised value of the property.

A licensed real estate appraiser performs this service. And the lender, in most circumstances, will want to use their own appraiser. To arrive at the appraised value of the property the appraiser will assess the property using a complex set of criteria. Technically, this value is just the opinion of the appraiser of what the property is worth, but the result of the appraisal is pivotal when it comes to getting your home loan.

If the property appraises for less than the agreed-upon purchase price, then you'll have decisions to make. The bank will probably still loan you the money, but only a percentage of it. You can still buy, but you will have to make up the balance in some other way. Alternatively, you may allow the purchase agreement to lapse and keep looking at other properties. (Remember, if the purchase agreement lapses because the property doesn't appraise to the purchase price, the buyer's money should be returned.)

If the property does appraise, the deal moves forward. Still on the agenda as you move towards closing are the home inspection and title search. But, the appraisal is the most important condition met in the purchase agreement. It can make or break the deal, depending upon the results. And once the property appraises, you are well on the way to closing. Congratulations!

Friday, August 15, 2008

Good News Nugget!

It’s difficult to believe that it’s back-to-school time for some, and summer vacations are over for most. After the hot, hot, hot summer we’ve had, we’re all ready for cooler temps and less humidity.

The real estate market continues to be a hot topic in the media. Several weeks ago an article in the Post & Courier reported dire news for Charleston. The article titled Home sales stay down; median home prices decline, published on 7/11/08, stated that there had been a 29.7 percent decline in June 2008 compared to the same month in 2007.

To better understand how this 30% decline applied to Daniel Island (where I live and many of my clients live), I completed an analysis of the numbers, and I’m happy to report that I found a nugget of good news in my results. Daniel Island sales and listings for 2007 and 2008 are included in that 29.7% decline, as are numbers for other South Caroline communities that had stronger sales declines. Some of those communities that included the steepest declines are St. Stephens, Cainhoy, parts of Goose Creek and the downtown area.

Following are how the numbers look for Daniel Island in 2008 v. 2007, and this is where we see the really good news!

2008 Homes Sold: May = 11, June = 14, July = 12
2007 Homes Sold: May = 15, June = 11, July = 13

*Source: CTAR MLS

So it's clear that on Daniel Island (and in other parts of the Charleston MLS area) we had an awesome month of June in 2008, despite published reports to the contraty. The lesson learned is that not every picture tells the whole story!

Wednesday, August 13, 2008

Beyond the Bookbag

Even though we may not have school-age children, we all have friends with children, have grandchildren, nieces, nephews, neighbors and most of us care deeply about the children in our communities. That's why when I recieved this month's Wings for kids' newsletter I was excited by their feature article "Beyond the Bookbag."

I've gotten their permission to re-print it here and I hope you find it as important and worthy as I do. Once you read it, I think you'll want to forward it to your friends and family. I hope so.

Read on...


Beyond the BookbagTen Practical Tips to Prepare Kids to Succeed in School by Building Their Social and Emotional SmartsPrepared by WINGS for kids
Buying a backpack and stocking it with freshly sharpened pencils and brand new books is a great way to get kids ready for school. But there are other useful tools that parents should provide that go far beyond the bookbag.

The start of school brings social and emotional pressures that present enormous challenges for kids. Even the most capable, self-assured children approach a new year with worries.

Will they make new friends and keep the old friends? Will they measure up to what’s expected in academics and extracurricular activities? What if they can’t find the new classroom? What if they disappoint their parents or teachers? How will they sit still at their desks after a summer of freedom?

Even when returning to a familiar school, the first days back are a bit like starting a brand new job for an adult. Children are learning to rely on themselves, and they can use some help from the caring adults in their lives.

Small lessons are the best way to strengthen social and emotional skills, making use of opportunities that show up every day. These tips provide easy, practical ways to teach these lessons. The tips come from WINGS for kids, a nationally recognized not-for-profit organization that developed these field tested strategies on hundreds of kids over the last 10 years. WINGS promotes social and emotional learning in after-school programs.

1Rituals Reassure and StabilizeSelf Awareness and Social Awareness

The routines and rituals of family life are very reassuring to children. They help to create a sense of stability. Use rituals to create a predictable emotional connection as they leave for school and return home. If you drop your child off in a carpool line, maybe the ritual could be unhooking the child’s seatbelt and offering each other a “high five.” Maybe it’s as simple as a kiss on the nose as your kid heads out the door. If you walk your child into school, at the classroom you could say, “1-2-3 Bye!” and then leave. Get your child to participate in creating the ritual. Stick with it, even if your kids say, “Oh, Dad,” and roll their eyes. This is the kind of routine your kids will secretly love, so ignore their protests.

2
Pump Them Up
Relationship Skills

Help your kids by boosting their confidence before school starts. Getting support and encouragement from adults really helps them cope with the pressures and fears they are feeling at this time of year. Don’t just tell them they’re wonderful in vague terms; that’s not nearly as effective as catching your kids doing something good and giving them positive feedback—with
specifics! “When you clear the dinner dishes from the table the way you did tonight, it is such a big help to me. Thanks!”

“Putting your clothes on all by yourself made me very proud and gave me more time to make your breakfast.”

“I like how you shared your basketball at the park with that little girl, and you both had a good time playing together. That was so friendly and kind.” Kids crave attention and approval, and positive feedback with specifics makes them feel competent, confident and appreciated. See if you can give your kid 5 pieces of positive feedback a day before school starts—and forever!

3
Beat the Morning Rush

Responsible Decision-Making

It’s much better to arrive at school calm and collected in the morning, so it’s worth the effort to decide in advance with your child how to make that happen. How about a trial run with a timer to see how long it actually takes to wash up, dress, eat breakfast and depart? Make it fun.

See what your child can do in advance—laying out tomorrow’s clothes or putting the bookbag in the same spot by the door. Talk about the importance of breakfast and brainstorm some new, nutritious choices. Decide together on an especially fast option to use when necessary -- like an energy bar and a carton of milk, or peanut butter crackers and an apple
Give spontaneous and appropriate rewards for even small improvements. “Since you’ve been doing a better job of eating your nutritious breakfast, I’m taking you out for a not-so-nutritious ice cream sundae to celebrate!”

If your child has trouble getting dressed or eating breakfast in a reasonable amount of time, provide some help. Let’s say you’ve allotted 10 minutes for breakfast. Put a timer on the table set for 8 minutes. When it rings, announce that there’s 2 minutes remaining. After 2 minutes, remove breakfast – be matter of fact, don’t be negative –and move along purposefully.

4Strategize Together for a Realistic Plan
Social Awareness and Decision Making

As a family, discuss what would be a good routine to make the mornings before school and the evenings afterward run smoothly for all. Come up with a realistic plan. Don’t expect a hot breakfast every day if the schedule just won’t permit it. Have each family member write on separate pieces of paper 3 things important to them on school day mornings – for example, sleeping as long as possible, or being on time for Friday morning band practice.

Collect the papers and spread them out where everyone can see them. Brainstorm together about what will give the most people what they want. Give everyone a chance to talk. Listen respectfully to what they have to say. Be sure to include parents! Kids should not be trained to think that the world revolves around them. This is a community effort. Write up the plan – or have the kids write it up. Find a central spot to hang the plan where all can see.

5Wrestle with Worries and Fears
Social Awareness and Self Awareness

Whether kids are thrilled to be starting school or not, it’s normal to feel anxiety about what these new situations will bring. It helps when adults provide acknowledgement and practical strategies for coping with these pressures. Pick a time to talk with your child about any worries about the beginning of a new school year.

Write down the worries and talk about each in turn. “So, you are worried about finding your classroom?” “I see you are worried that nobody will like you.”

Sort the worries into two stacks—can do something about/can’t do anything about. Put each in a separate jar or bowl. “You can’t control whether people like you—except to be your wonderful self!” but “You certainly can find out where your classroom is before the first day of school.” Brainstorm solutions, write them down and put the plan in the appropriate jar.

A few days after school is under way, get together and talk about the worries again. Still worried?
How did the plans work? Make adjustments.

6
Conduct a Dress Rehearsal

Self-Management

Do a run-through of the entire routine, from departure for school to arrival back at home.
Include rituals, classroom search, carpool line, everything. Even if your child balks at the idea, this can be helpful and reassuring.

7Making Introductions
Social Awareness

What seems obvious to adults often needs to be explained to children to make their social interactions run smoothly. Set the expectation that they should introduce themselves to students they don’t already know.

Give examples using different scenarios. In a classroom, they should look at the student and say, “Hi, my name is Annie. What’s yours?” On the playground, they should approach a student who is all alone and say something similar. Help them come up with some follow-up questions.
Encourage your child to try them out in advance and choose what makes them comfortable.

Examples: “Did you go to Pinckney Elementary School last year?” or “Do you have a dog or a cat?” or “Do you know many people who go to this school?”

8Choosing Friends
Self-Awareness and Social Awareness

Set aside time to talk about friendship. Start by asking what your child values in a friend. Write down the qualities. If your child has trouble coming up with ideas, suggest some—friends who are nice, funny, fair, play sports—and the child can prioritize them.

Then have your child come up with a list of qualities they don’t want in a friend—friends who are mean, disloyal, bullies. You can help by asking them to complete this sentence: “I do not want friends who ….” Talk about keeping these lists in mind when picking friends. Remind them to play with kids who match their friendship priorities, as opposed to the kids who just seem popular.

9
Share Memories that Matter

Social Awareness

One way to ease anxieties can be to tell stories of your own school days, especially with happy endings. Let your child know it’s normal to feel nervous. “I remember feeling sick to my stomach on the first day of third grade. I was sure I would not make a single friend. But on the playground, Maggie said to me, ‘Hi, want to play?’And we are still friends, after all these years.”

10
Staying Connected

Self-Awareness and Social Awareness

Acknowledge your own feelings as well as theirs, and model for your child what will help. You might say, “When I miss you, I’m going to touch this pebble in my pocket. You can do the same. Let’s make sure there are pockets in the clothes you wear to school.”

For more information on building social and emotional smarts in kids, visit the Wings website at www.wingsforkids.org

Monday, July 28, 2008

Housing Bill Has Something for Almost Everyone

Don't ignore the housing bailout bill because you think it benefits only troubled homeowners. You may be surprised to learn that you may miss out on a windfall. The bill does offer incentives to certain over-extended borrowers and their mortgage lenders.

But it also offer many hand-outs to millions of people who have the potential to benefit in other ways.

Here are some of the new benefits:

  • Renegotiating Mortgages: Some people may be allowed to cancel their old ARMs and replace them with new fixed-rate loans lasting at least 30 years. The program officially begins on Oct. 1, 2008, but some lenders may be willing to start their negotiations with borrowers sooner. It expires on September 30, 2011.
  • Break for First-time Buyers: If you're buying a primary residence and you're a first-time homebuyer, you're eligible for a federal tax credit of up to $7,500 or 10% of the purchase price (whichever is smaller). With this credit, you subtract the tax credit from the total amount you would pay to the IRS. So if you owe $1,500 to the IRS, and you qualify for the credit, you would end up getting a $6,000 credit. This changes and phases out completedly depending upon income.

  • A Break for Vets: Lenders will have to wait nine month -- not 90 days -- before beginning foreclosure procedures on someone returning from the military. They must wait a year before raising interest rates on a mortgage held by someone returning from military service.

  • Additional Deduction: Homeowners may now take an additional federal tax deduction of $500 or $1,000 if you're married and filing your tax returns jointly. The catch here is that you must report the property taxes on your tax form. If they are less than $500 or $1,000 (depending upon if you're single or married and filing jointly), your deduction will be limited to the amount of the property tax you paid.

  • Reverse Mortgage Changes: Origination fees are limited to 2% of any loan up to $200,000 and 1% over that, up to a maximum of $6,000. Borrowers cannot be forced to purchase an annuity or other financial/insurance product as a qualification condition. The bill raises the maximum amount available for borrowing from $400,000 to a cap of $625,000.

  • Redefinition of Jumbo Loans: Any loan over 115% of the local median home price and larger than $625,500.


credit: Ron Lieber 7/25/08




Sunday, July 27, 2008

Re-work, Renovate & Remove!

The article below published today in the New York Times beautifully outlines the theory of readying your home for selling, and stresses the importance of seeing your home objectively through the eyes of prospective buyers. It also explains how to effectively "pray to St. Joseph" should it come to that. And it brings up the question of "to accept the first offer or not?!" Read on and enjoy!

=====================================================

Repointed Walls and Some Help From St. Joseph

By KEITH MULVIHILL

GENERALLY speaking, Jane Stivaletta is not one to knock on wood, and she has never carried a good-luck charm. But contrary to her nature, shortly after she put her apartment on the market last October, she found herself marching up the steps of St. Patrick’s Cathedral and into the gift shop to purchase a small statue of St. Joseph.

“I never heard of doing this before,” Ms. Stivaletta said, “but a few years ago, when my sister was selling her house, she asked me to get her a statue of St. Joseph to bury upside down in the yard. There’s a kit you can buy for exactly this purpose.”

For the uninitiated, St. Joseph is the patron saint to many categories of people, including home sellers. Since Ms. Stivaletta’s sister had sold her house a month after following the instructions in the kit, she figured she would try the same tactic, reasoning that she had nothing to lose.
Lacking the requisite yard, she upended the figurine in a potted Christmas cactus on a windowsill. “I really felt funny doing it and I was glad no one could see me putting St. Joseph in the dirt,” she recalled, laughing. “I remember the box said to pray to St. Joseph that the right person comes along and offers the right price. So that’s what I did.”

Rituals aside, Ms. Stivaletta was confident that her 550-square-foot one-bedroom apartment, in a walk-up at 152 East 83rd Street, between Lexington and Third Avenues, a few blocks from Central Park and a subway station, would sell.

She renovated the apartment after paying $250,000 for it in 2004. Dark brown paint slathered over brick walls was sandblasted away; the mustard-yellow bathroom was tiled in pristine white; and the kitchen was gutted. In all, she paid about $60,000 for the facelift. When the job was done, she was proudest of the exposed-brick walls, which she had repointed: “They’re like a work of art,” she said.

To sell her place, Ms. Stivaletta, who was planning to move to Connecticut, sought a broker. After poring over profiles of agents online, she settled on Paul Kolbusz, with the Corcoran Group.
“The first thing I thought when I walked into Jane’s place was that it would show well,” Mr. Kolbusz said. “She had done a great job renovating the apartment, and it had great light.”
But there was a small potential predicament. Upon spotting a cat-scratching post, Mr. Kolbusz immediately inquired about the litter box. “Jane had her cats trained to open a cabinet door to get to the litter box, which I had never seen before,” he said. “Her place was fine, but I reminded her to keep the cat litter fresh.”

To determine the asking price, Mr. Kolbusz checked the prices of comparable apartments in Ms. Stivaletta’s building and nearby apartments on the market. He gave Ms. Stivaletta a price range of $450,000 to $465,000. “I was leaning more toward the lower amount,” Mr. Kolbusz said, “but Jane wanted to list the apartment at the higher number, so I agreed to give it a shot.”
The first open house was in late October, and interest was strong. Mr. Kolbusz said 17 people signed the guest sheet at that showing, and the number of visitors was consistently over a dozen at open houses for the four or five following Sundays.

Mr. Kolbusz relies on a ceremonial custom of his own to help win over would-be home buyers. “I always put out a fresh bouquet of flowers and bring a scented candle,” he said. Nothing too perfumed. “Cinnamon is good.” Music rounds out the ritual. “If the homeowner has cable, I like to play the jazz-music station — it adds a cool vibe.”

Early on, a low offer of $420,000 was turned down, and despite open houses through November and December, excluding holidays, only one other offer came in, also around $420,000.
Still, neither the broker nor the seller was particularly worried. “I expected the holidays to be slow,” Mr. Kolbusz said. “I also thought that we would get a boost of interest if we lowered the price.” In January, after more than two months on the market, Ms. Stivaletta agreed to drop the price to $450,000, and interest again surged.

“I knew I had a really cute apartment and someone would want it,” Ms. Stivaletta said.
Blessing Tawengwa from Boston stopped by in late January. “I liked the place,” Ms Tawengwa said. “I thought it was well done.” Still, she admitted to being put off by the small size. “Coming from Boston, where apartments are bigger, I was still trying to get used to the fact that apartments in New York are tiny.” She kept looking and in May she made an offer on a two-bedroom apartment in Morningside Heights.

Another home seeker, Sylvie Goursaud, who is French, came by on a cold Sunday in late January. Ms. Goursaud said she had seen well over 50 apartments during her six-month search, including one she had liked, but luck there wasn’t on her side: “I had an offer in on a place, but the seller turned around and sold it to someone else,” she said. She kept up her search. “I just knew one day it would happen.”

Upon entering Ms. Stivaletta’s apartment she immediately felt that it was a good match for her. “It was exactly what I was looking for,” she said. “The brick wall was very European and made me feel at home.” She also admired the fire escape off one of the living room windows: “It was really pretty, and it’s so New York.”

Did the three flights up give her pause? “I have lived in walk-ups in Paris, Berlin and Tokyo,” she said, “Why not New York?”

Besides, she added, “Walk-ups remain one of the best values in New York.”
Ms. Goursaud came back twice more. The fact that the co-op’s rules allowed 90 percent financing sealed the deal. Ms. Goursaud made an offer of $425,000, and they agreed on $435,000. The contract was signed in February, and the sale closed in May.

Though she received $30,000 less than her original asking price, Ms. Stivaletta was satisfied with the deal. “Everyone who sells property wonders: ‘Is this the right price? Could I get more? Am I doing the right thing?’ ” she said. “In the end you just go with your gut. I was happy with my decision.”

After moving in, Ms. Goursaud is happy to own her first apartment in New York. “This is probably the only city in the world where you can be a foreigner and feel at home,” she said.
For Ms. Stivaletta, after many years in the city, it was time for a little slice of heaven. She packed up her cats and statue of St. Joseph and decamped to an apartment in Stamford, Conn., while she looks for a new house. “I bought a car and I love driving around and going to the beach,” she said. “It feels great to hear the birds again.”