Growing at the Speed of Failure
Housing market
Keep tabs on the housing market.
For Sale By Owner: Not a Good Move Right Now… Write-Up in AOL News
When we decided to put one of our homes up on the market, we didn’t realize the nightmare that we were in for. As I had done with other homes, I put this house up as a For Sale By Owner (FSBO). This transaction didn’t go according to plan…
AOL Original Story By Barbara Correa – The original story can be found here.
Do you really need a real estate agent to sell your house? Fans of the For Sale by Owner (FSBO) approach say no. But here is a cautionary tale about the potential pitfalls of going the For Sale by Owner route.
Matthew Peters and his wife, Fiona, had two FSBO home sales under their belt, so they naturally opted for the do-it-yourself strategy the third time around as well.
The average seller looking to unload a home automatically assumes the first stop is (more…)
Thank You for Buying & Buying & Buying from Us
It’s all about the continuity plan. You are on at least a dozen continuity programs if you think about it. Continuity is the idea of selling a reoccurring service – sign up once, pay every month until you say Whoa!
Everything from your cell phone service, your health club membership, magazine subscription, apartment, etc. The real money they say is in the continuity program. Selling your customer once is just as hard for a non-reoccurring product or service; why not go for the monthly charge?
One of the ways sales people fail to make a continuity sale is because the concentrate on the low monthly cost; they don’t think about the big commitment that many people are making to your product for the coming 12 to 24 months.
If they sell you an iPhone and a service contract at $100 a month, they don’t treat you the same as they may if you were to pay $1,400 to use a phone for a year.
What about an apartment lease? Did the leasing agent address you in a manner, wear the appropriate attire and respect you as a $12,000 client not a $1,000 client.
When you walk out of their office after signing a 12 month lease, you have just agreed to pay that company more than you pay anyone else in your life – even more than you pay the government in many cases.
When you walk out of that apartment office, do you feel like you were respected the same way or better than someone who just bought a 2011 Porsche Carrera? Do you realize you will be dropping about the same every month as the Porsche buyer!
Did they let you know how truly thankful they are for you to choose living at their community than any of the other places in town? As a sales person, marketer or manager, we’ve got to be sure to let our customers know how much you deeply appreciate their patronage. You can’t just say, “thanks….. Well, see ya’ when it is time to renew!”
Treat these people with respect they deserve for dumping a huge percentage of their paycheck on your operation.
Once your customer knows how much you really care about them, the more they will spread a positive word, the less you will have to spend on marketing. Marketing begins and ends with a happy customer.
Don't Buy a Condo, Make One!
You may have heard the advertisements on the radio, “Why rent when you can own your home for the same cost?” I just heard it the two days ago. It was a radio ad for a new condominium.
Well, few people who look at this scenario from the outside will ever see that as anything other than a thinly-veiled marketing scheme to get renters to take the most comfortable next step towards buying a house of their own. Their other target demographic is retirees who don’t want the hassle of their house anymore. I would be curious to ask these people who have taken the offer how much more they are actually getting in their condo deal?
Condos are for renters who are not ready for the commitment and responsibility of a house. They like the idea of ownership but not the idea of mowing the lawn, shoveling snow from the sidewalk or patching the roof; they would much rather have someone else do it for them.
To that I would say, “Fantastic, buy a house or keep the one you have and pay someone to do all of that stuff for you.” Because you are paying for someone to do it all for you in your condo fees anyway. I know of retired people who begrudgingly leave their homes for good and move into a condo situation, because the house is too much for them to keep up any longer.
Hmmm, so they would rather pay retail to have a monthly fee for all of the stuff to be done for them in a condo situation, but they can’t find other people to do all of those things for them in their own home – which is probably paid off.
Just stay in the house that you have for the last 50 years and condo it out yourself. If you can make the stairs and it is a comfortable distance to everything and everyone you need, why go through the huge life change in your 80s when it may not be necessary?
Take into account mortgage, property tax, condo fees, condo fee increases (is it yearly, bi-yearly or is it due for a hike), homeowner’s insurance. When you add it all up, I highly doubt that their “own for the cost of renting” holds up. It is far more possible that the mortgage is the same as or a little less than rent – which is just money thrown out the window every month.
If you own a home and it is paid off and you love living there, farm all of the work out. If you are retired, don’t have your kids do all of the work if you can afford condo fees at another place. Free your kids up to enjoy their visits with you by not having a laundry list of things to fix or daily or weekly duties. Give them a break and they will be happy to keep you in your current house.
If you have been renting for years and you are ready to take the first step into buying, do so with caution. Take the time to calculate ALL THE COSTS of home ownership; it’s not just mortgage and property tax.Remember, not all costs are financial in nature. There are monetary costs, sweat equity costs and mental costs. The house is never exactly move-in-ready and there are responsibilities that you now have that will always occupy a part of your brain. You’re an owner now – that big investment needs to be cared for and now it’s all up to you to keep it a solid investment and maintain the value of your home for the next several years.
Get a financial counselor and get the facts about home ownership costs and responsibilities straight before signing on the dotted line. Home ownership is kind of like marriage; You go into it with your eyes wide open and go through it with your eyes half closed.
New Work Calculations: Why You Need To Rethink Housing Costs (Part 2)
If you are like most people, those dollars you use to pay for your mortgage or rent have a very tight relationship with your time. Sure there are exceptions, but I’m not covering every exception within these pages.
Fiona and I have made the decision for this period of our life to trade very little amount of our lives for some nebulous definition of a perfect house customized to meet our every need and desire.
When it comes to comfort, we have readjusted our definition. A big, custom home in the Rocky Mountains is great, but how nice of a place do you need to feel comfortable? Don’t get me wrong; I believe in free enterprise and striving for more. If a house is what you want, then by all means go for it. In the end it is all up to you.
What value would you put on an hour of your life? Seriously, if a man came up to you today and asked you, “I’d like to buy an hour of your life, what will it cost me. What would it cost me for 10 hours of your life… or 40 hours… or 2000 hours.” You see, if you want to know what an hour of your life would cost him right now, look at your current salary or wage after taxes. That is what you have agreed right now to trade hours for dollars. If you love your job and believe you are making a real difference in this world or in the lives of others, than that would be a very worthwhile trade. I applaud you. If you feel like you are not making a difference, wonder why you are here filling a cubicle, checking lines of code for a marketing software and you already feel as if you are not paid enough, then perhaps this is your wake-up call. Later you will read that I will never ask you to quit your job. As a matter of fact, I will tell you to keep your job until you are financially stable.
For Fiona and I, we value our hours of high-quality living over low-quality earned dollars-per-hour to pay for our home. We choose to generate our income in ways that ad value and knowledge to our community, family and ourselves. We concentrate on enjoying our work and determining the ways we can get the most return on every hour we work.
As I stated above, it all comes down to this abstract feeling of what is comfortable and what is uncomfortable to me. What type of car is good enough for you, what neighborhood isn’t below the status you want to project, how many square feet of living space are enough for you and your family?
Is your current home spacious enough and in a prestigious neighborhood for you? Does it comprise of enough bedrooms and bathrooms for everyone living there and for the occasional guest. Do your friends and neighbors envy you? All of that is really just a feeling. Expectations set by others or yourself. The feelings you have for all of the stuff in your life and the comfort you associate with having all of it or discomfort for the lack of those desires in reality is all decided by a tiny part of your brain called the Limbic System[1].
Let me ask you an important question. If your home were paid for, would you be happy spending the rest of your life where you are in that house right now? What about the house you are looking at upgrading to some day in the not too distant future. That one would be the top – right? My guess is that 80% or more of you would simply answer, “no.” We want to always be moving upward and outward to a better part of town, more square feet, more garage doors, newer & nicer car, bigger lawn to mow, bigger TV, smarter phone, etc. These indicators are universally understood to prove that you are succeeding in life and that you have made it and continue to make it every day. We typically associate the adequateness of a home or possessions by mere feelings not by the necessity of them.
In college I had a close friend named Yen. If you were to ask her what she looked for in a home, most of what she described may be considered more necessity-based than I was brought up thinking. Yen is from the small island-country of Singapore. She grew up in a nice part of the city and comes from a relatively-wealthy family. From what I gathered, they own a few artisan shops that make and sell marinated meats. Her family had enough to send her away to the U.S. for her college undergraduate degree. When she moved to the U.S. for school, she had a 1 bedroom loft – probably over half the size of her parents’ house back in Singapore.
She left behind her family home – a flat in the city where her mother, father, two brothers and grandmother lived. Did they each have their own bedroom and bathroom? Nope. Did some of them sleep on the couch every night? Probably. Did they survive? Yes. Were they happy? She seemed to think they were because they didn’t tie their happiness with a building or square feet of bedroom. They based their happiness on family, relationships, health and prosperity on other forms. You find this attitude all over the world where access is not as commonplace.
Start to ask yourself questions about what you expect a home to be. Where do you see yourself living in five years, in ten years, in twenty years? What has a higher value to you?
- A big house exactly where you want and how you want it that may cost many hours of life away from it and your family to pay for it
- An adequate house with ample time to spend at your discretion rather than at the discretion of your supervisor
The bigger question I’m really asking is, what portion of your life do you want to pay for your housing?
“Because dollars can be regained, opportunities many times, hours never.”
I understand that some of you reading this are already two steps ahead of everyone else here and have generated passive incomes that allow you to both work the hours you desire and spend time at home with family. Bravo, you’re done it! (Now shut up, I’m not talking to you) 
When it comes down to it, work hours and thus hours of your life are designated specifically towards your housing and it is up to you as to what you are willing to give up in order to pay for the housing of your choice.
We all know we each have 24 hours in a day. Once you sign the lease or the mortgage papers, you have determined to allocate a set number of hours of your life toward paying rent for your apartment or mortgage (and other expenses) for your house.
There will be costs to any living situation you decide on. Some are monetary, some are hours of life, other costs are more obscure and difficult to calculate. Next I want to talk about what I consider to be the biggest costs to paying full price for your housing.
[1] http://en.wikipedia.org/wiki/Limbic_lobe
Housing Crash Continues — It’s Still A Terrible Time To Buy
Here is a great article from Patrick Killelea. Great insight into the housing market that you don’t hear about. Kudos to you Patrick for your candor.
Quoted from www.patrick.net
By Patrick Killelea
Last updated 5 Oct 2010 (minor changes)
Why?
- Because house prices will keep falling in most places. Prices are still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer’s annual income with 20% downpayment. Landlords say a safe price is a maximum of 15 times the house’s annual rent. Yet on the coasts, both those safety rules are still being violated. Buyers are still borrowing 6 times their income and putting only 3% down, and sellers are still asking 30 times annual rent, even after recent price declines. Renting is a cash business that proves what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that prices will keep falling for a long time. Anyone who bought a “bargain” this time last year is already sitting on a very painful (more…)
Why Own A Vacation Home?
When I was around twelve years old, my mom and dad started taking me and my brother and sister up to my aunt’s cabin in Minocqua, WI. I had the fortune of spending extended weekends on Twin Bear Lake almost every year.
I remember experiencing the coolness of the dark cabin as my dad creaked open the door in early spring. It felt as if we were the first explorers to enter Tut’s Tomb. The rush of cedar and damp stillness of the air added to the mystery. Dad would walk over to the curtains and slide them open with a silence-breaking woosh. Blinding light poured into the cavernous great room as clouds of dust that sat patiently on the wool curtains for seasons awoke with the thunder. My brother, sister and I then hauled in crates and bags of delicacies from the family station wagon.
The Caprice wagon was like another character in our story – adorned in its wood-panel stickers on the side & the rear-facing bench that gave me the opportunity to stare into the eyes of tailgating drivers. It was fun making them feel uncomfortable.
Mom and dad did well planning for us to all enjoy our stay. We filled our time there with quiet activities, slow pace and thoughtful presence.
I have many fond memories of the cabin, going to the local shops, inner tubing out on the lake, catching small mouth and pan fish with my dad.
Sure it was great, but it was borrowed. We were not the owners – merely one of the many enjoyers. My dad just asked his sister, Donna if certain weekends were open for us to stay up at the cedar lodge in the woods. Dad’s cousins and sister & brother in law would spend time throughout the year there. For them, it was often open and unused and they built it to be used and enjoyed by family and friends.
When we heard about the termites that had infested the support beams, I was surprised, but as a teenager, I wasn’t too concerned. It wasn’t our problem. My aunt didn’t expect my dad or I do to go up there and replace a thousand pound beam. Nor did she expect us to pitch in a few thousand dollars to get it replaced. Even though we enjoyed it for a few days every year, we were not responsible for the lodge. I know that sounds crude, but it was true.
Learn how you can get out of the Homeownership – Renter binary trap. Escape housing payments once and for all With our Community Executive Program! Click Here to Learn More
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Have you ever thought of buying a vacation home or condo? I’m going to ask you right now to not do it. Think about it for a moment. You will be taking a vacation to the same place every year or several times a year. Is that something you want to do indefinitely? You also own all of the issues that come with the pride of ownership. You have to comply with local ordinances and lake associations and pay the necessary dues. You’ll also need to trouble a trusted neighbor or hire someone to check on your place if you won’t be visiting for a while.
Would you be buying that little slice of heaven merely for the long term investment that owning real estate can sometimes give you? What if your kids want the family cottage when you get old and you no longer want to or are able to go there? Are you going to sell it to them? Of course not, they’ll want it for free. There goes your long term investment idea.
If you’re the kind of person that goes to Costco to buy a 24-pack of Cheerios so you can eat them every day for the next year, a vacation home may be right for you. Why do I say this? Think about it for a moment. What are your options? I do have a little experience in this arena.
Fiona and I purchased a home four-houses-up from one of the largest lakes in Wisconsin in the fall of 2008. Sure we only pay $400/month for the mortgage, but we still have utilities and taxes to pay on top of that. All in all, we pay almost $600/month for the opportunity of owning that home.
One issue that we face is that last summer I gutted the inside of the home. I tore out walls, the kitchen and the bathroom. I then had a new roof put on, painted the exterior and did some drywall work. Fortunately for us we have a home improvement loan that is ready to go when we are. However, we’re not so excited about pulling the trigger now. At least I’m not after what Fiona said to me the other day.
You see, my super-intelligent wife Fiona asked me a question the other day that went something like, “Do you really want to put $30,000 into the lake house to make it just the way we want it?”
I flippantly replied, “I don’t know, it’s only $400/month now – we can think about it for a while.”
Fiona replied, “It’s actually almost $600/month.”
What she said next slapped me across the face.
“Do you realize what kind of vacations we could take every year for $7,200?”
It was one of those moments where I realized just how stupid I was. Have I been this blind because of some vague notion of this house being a dream vacation destination? That I would recreate my childhood experiences for my kids by buying something that we may use five to as much as ten times a year?
We could rent a far nicer place for $100-$200/night and in different places every time. We could experience variety every time. No tie to little-old southern Wisconsin. Think more like, a month in South Beach, Miami in March or Three weeks in Hawaii or two weeks in Italy or seven vacations a year in different places costing $1,000 each stay. I think you get my point.
The beauty is that we would have no connections to a property that we rent for a month, week or weekend. When you own, there are a lot of things to consider. One item of note is that many cottages near ours were flooded two years ago – what about their dream cottage on the lake? I’m sure they didn’t see that one coming.
Fiona and I spent less than $7,000 traveling all throughout Argentina for five weeks – and we weren’t exactly being thrifty with our money either.
Here is my point. Investing in real estate that you will solely occupy (not hold and rent out to others) is a losing investment in most cases. Don’t duplicate the losses of your primary residence with a vacation property of your own too.
Gain mobility by not owning a vacation property. Discover new places and revisit the ones you like the most when you want. Rent, rent, rent! Once you find a place that is heaven for your family, go back. How many times do you have to rent a place before it makes financial sense to merely buy your own?
You know that out of the $14,000+ we have paid in less than two years, we’ve only paid down the principal of our mortgage a little over $700? That doesn’t include the thousands I put into repairs and remodeling. I hate to break it to you, but it’s the same with almost every owner-occupied home loan.
On the average home loan amortized over 30 years, more of your monthly payment will go towards interest than will go toward paying down your borrowed amount for about 20 years! So let me give this to you straight; I paid $14,000 plus improvements to realize $700 of equity in our house?
When it comes to vacations, RENT!
When it comes to paying for your primary home, I say DON’T OWN, DON’T RENT! Learn how you can get out of the Homeownership – Renter binary trap. Escape housing payments once and for all With our Community Executive Program! Click Here to Learn More
“The Case Against Homeownership” TIME Magazine
Rethinking Homeownership - TIME Magazine
Fascinating article from TIME Magazine (online) …
Homeownership has let us down. For generations, Americans believed that owning a home was an axiomatic good. Our political leaders hammered home the point. Franklin Roosevelt held that a country of homeowners was “unconquerable.” Homeownership could even, in the words of George H.W. Bush’s Secretary of Housing and Urban Development (HUD), Jack Kemp, “save babies, save children, save families and save America.” A house with a front lawn and a picket fence wasn’t just a nice place to live or a risk-free investment; it was a way to transform a nation. No wonder leaders of all political stripes wanted to spend more than $100 billion a year on subsidies and tax breaks to encourage people to buy. (more…)
4 Easy Tips to Sell Your Home
Here is a straightforward article written by personal money management expert Dave Ramsey.
It’s spring, the busiest time of year when it comes to buying and selling real estate. If you want to sell your home, make sure your house looks its best during these next few months. Since I have a background in real estate, I thought I would share some important tips that are easy to carry out but are often overlooked. Here are 4 tips to help your home sell:
1. Fix your front yard. Are the bushes out front bigger than your house? If so, they definitely need a trim or need to be removed all together. No one wants to buy your house if they can’t see it. Landscaping can be the most important detail to sell your home. Why? Your front yard is the first impression of your home. Make it a good first impression. That means you should mow your lawn, paint your front door, and clean up any dirty spots. Once the cleanup is done, ask yourself: “If I didn’t live here, would I want to go knock on the front door?”
2. Clean up pet smells. No one wants to buy a house that smells like a cat or any other animal. If you own a pet – a dog, cat, or house pig (yes, some people have pigs as pets) – be sure to really clean your house. Get rid of any hair and smells that your beloved pet leaves behind. Be sure to give old carpet a good cleaning since it can trap in bad smells.
3. Clear out the clutter. Be sure to pick up personal items and your kid’s toys. Having stuff lying around your house distracts buyers and makes your house look messy. Put your stuff in plastic bins and store them in your garage or shed. You want to keep your closets clean. Buyers love lots of storage space so your closets can be a big selling point.
4. Get a great real estate agent. This is the best advice I can give to sellers. A great agent will give you even more tips that can sell your house faster.
If you follow these 4 tips, you can bet an offer on you home won’t be far behind!
Can’t sell your house? What if I told you that you could keep your house, have other people pay for it and you move into a FREE Home of your choice? We did just that, and that is what Fiona and I teach.
Click Here to Learn More
Dave Ramsey is a personal money management expert, an extremely popular national radio personality and best-selling author of The Total Money Makeover http://www.daveramsey.com. Dave is changing the face of America by helping people get out of debt and build wealth. Ramsey exemplifies his life’s work of teaching others how to be financially responsible, so they can acquire enough wealth to take care of loved ones, live prosperously into old age, and give generously to others. Find out more of what Dave says about real estate agents Ten Things to Ask a Real Estate Agent
