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Tips to Saving Money on Auto Insurance

January 10, 2012 4:14 am

With the gift-giving holidays behind us, people may now be looking for ways to save, making this the perfect time of year to learn a few tips on how you can save money on auto insurance.

The major ways to save money on car insurance include a multi-car discount and a combination discount, which would include the insured’s car(s) plus homeowner’s or renter’s insurance.

Here are some other ways:

Increase your deductibles. If your deductible is low ($200-$250), ask an agent to show you the difference in price if it’s raised to $500 or $1,000.

If your car is older and the loan is paid off, consider dropping collision and/or comprehensive coverage. The general rule of thumb is if the car is worth less than ten times the premium, consider dropping it.

Take advantage of low mileage discounts. The discounted mileage varies by carrier. Some give discounts at 6,000 annual miles driven and others at 10,000 miles driven.

It is also a good idea when shopping for a new car to compare the insurance rates of the various cars being considered. You should also check rates of different models of the same car. Insurance rates can vary quite a bit depending upon the engine size and whether or not a particular vehicle is considered a sport vehicle.

Other discounts to keep an eye on include anti-theft devices, student drivers with good grades, college students who go away to school, and a good credit score. Above all else, be a good driver. The lack of tickets or accidents will save thousands of dollars.

Source: BMCC Insurance

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Flexible Job Openings on the Rise Heading Into 2012

January 10, 2012 4:14 am

According to a recent monthly index report on flexible job openings, telecommuting, part-time and other accommodations, work/life-balance employment opportunities have increased heading into the new year.

Job openings that offer some type of flexibility, such as telecommuting, freelance, part-time or flexible schedules, were highest for Business Development, Non-profit and Philanthropy, Account Management, Medical & Health, and Data-entry positions heading into January, says the report by FlexJobs. Fresh off the heals of several predictions, 2012 will be a big year, in general, for telecommuting jobs.

Medical & Health reclaimed the top position as the career field with the highest percentage of flexible job openings, a position it held for the majority of 2011 (9 of the 12 months). Following Medical & Health with the next highest number of flexible job openings were Administrative, Education & Training, Computer & IT, and Sales, respectively.

“It’s exciting to see more and more telecommuting, freelance, part-time and flexible schedule jobs being offered in wide range of careers. There are many, many studies that have been concluding the overall benefits for companies to offer jobs that provide work flexibility for their staff, such as cost savings, increased productivity, and overall happier and less stressed employees,” said Sara Sutton Fell, CEO and founder of FlexJobs.

Career fields which saw the largest declines in available positions in December of 2011 were Graphic Design, Bilingual, Web & Software Development, Art & Creative, and Customer Service.

The ongoing Flexible Job Index report demonstrates the growing depth and variety in the employment market for telecommuting, part-time, and other flexible jobs, and provides reliable data on top career fields that offer work flexibility. Only professional jobs that can both be confirmed as legitimate and as having some kind of work flexibility (telecommuting, part-time or flexible schedule, or freelance contracts) are included in FlexJobs’ job database.

For more information, visit www.FlexJobs.com.

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Presenting a Perfect Offer: CMAs Help Take the Guesswork Out of the Equation

January 9, 2012 3:30 pm

One of the most nerve-wracking aspects of buying a home is preparing your first offer. While you don’t want to make an offer that is so low that it shuts down negotiations, you also don’t want it to be higher than the true value of the home. Coming up with the perfect offer isn’t just a guessing game as there are numerous factors that go into determining what a home is actually worth. One thing that can help you when preparing your offer: a Comparative Market Analysis (CMA).

Once you’ve found a home that you’re interested in and you’re ready to make an offer, the first thing you’ll want to do is obtain a CMA, which will detail the home’s essential characteristics and compare it with other homes in the area. The report will include the sales price of homes similar to the one you’re interested in, how long these homes were on the market before they sold and what the competition looks like.

Your real estate agent will conduct this analysis for you, providing a good foundation for making a proper offer. However, it’s not totally out of line to perform your own CMA to help decide if a home is within striking distance of an amount you’re willing to pay.

The outcome of a CMA should narrow the infinite world of potential prices to a fair range of prices, with clear upper and lower limits reflecting the realm of realistic prices an average buyer would pay for the home. The CMA will also include realistic appraisal values for the home.

Once you have the CMA, it might be a good idea to drive by each of the comparable properties that recently sold to get a good sense of the neighborhood and evaluate the home from the outside. A comparable property is one which lines up closely with the home you’re looking at in terms of square footage, upgrades, features, condition, school system and location. The sales price of a very similar property can be highly predictive of the market value of the home you’re interested in buying.

A good rule of thumb is to calculate a fair value range for your target home and multiply the average price-per-square-foot of the comparable homes by the square footage of your target home. This will provide a baseline for the market price.

Then, if the target home has characteristics that make it more or less desirable, adjust the value up or down to account for those.

Another thing to take into consideration is when a comparable home sold. For instance, if the comparables that sold for the highest price occurred during periods when there was little inventory, you may amend your offer considerably if the current market has a significantly higher inventory.

One strong piece of advice: Don’t always try to lowball an owner on a house you love, because you may find that it’s gone before you have a chance to negotiate.

For more information about CMAs, contact our office today.

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Are You Paying Too Much for Homeowners Insurance? Keep More Money In Your Wallet with the Following Tips

January 9, 2012 3:30 pm

In today’s tough economic climate, homeowners across the board are doing everything they can to save a few dollars here and there. If you’re in the process of cutting back, one area where you may be able to save money when it comes to your home is your homeowners insurance.

Data over the last five years reveals that homeowners insurance coverage has increased significantly, but the good news is that there are things you can do to lower the cost.

The easiest solution is to bundle your insurance. Many insurance companies offer discounts if you package multiple policies such as your car, boat and home insurance, so be sure to shop around and see where you can get the best deal. On average, you can save 5 to 15 percent if you purchase two or more premiums.

While most people look for insurance policies with small deductibles, in the long run, taking on more of the financial burden if something should happen to your house is a great way to save money. By raising your deductible, your monthly costs can decrease 5 to 10 percent.

Safety also helps with savings. Something as simple as installing carbon monoxide detectors, smoke detectors and alarm systems can reduce your monthly bill. It’s a good idea to ask your insurance agent what steps you can take to make your home more resistant to natural disasters as well. You may be able to save money on your premiums by adding storm shutters, reinforcing your roof or even buying stronger roofing materials. Older homes can even be retrofitted to make them better able to withstand earthquakes.

Just as you would do with a car or any other big-ticket item, taking the time to shop around is always smart. Be sure to check consumer guides, companies and online insurance quote services, which will give you an idea of price ranges and tell you which companies have the lowest prices. Keep in mind that you must obtain insurance in order to close your sale, so make sure you have compared different companies and found the best deal ahead of time so that you don’t get stuck with an expensive policy.

Also, it’s not necessary to insure a house for the amount that it was purchased for. Even if your house were to completely burn down, you would still have the land, so take this into consideration when deciding the total amount you need to insure for. A good insurance agent will be able to help you calculate the proper replacement cost of the house.

In addition to these tips, it’s wise to talk with your broker and see if they have any thoughts on how to lower the cost of your homeowners insurance policy. It’s also important to review your policy each year to ensure it still accurately covers your home.

For more information about homeowners insurance, contact our office today.

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What You Need to Know Before Purchasing a Home with a Friend

January 9, 2012 3:30 pm

Whether it’s to focus on a career, education or simply themselves, people are getting married later in life these days, however, that doesn’t mean they’ve given up on the prospect of owning a home.

In fact, buying a home with a friend or non-spousal family member is a trend that has been gaining popularity over the last decade. Not only does taking part in a group purchase provide individuals the opportunity to buy something bigger and better than what they would have been able to afford on their own, it also provides each person a real estate investment and takes away the prospect of renting. Additionally, it can even strengthen the friendship.

While the prospect of owning a home with a friend may seem like a great idea, it’s important that the parties involved understand that they are taking a risk when it comes to their friendship surviving the financial and emotional toll that comes with homeownership.

Before any decisions are made, it’s crucial that each party be willing to disclose their financial information, agree upon the type of home and location and make sure each is comfortable living with the other. Getting a lawyer involved isn’t a bad idea either.

In addition, a contract between both parties is vital, as is listing each person’s name on the deed and mortgage papers. The percentage of ownership must be clearly stated in the contract, including details pertaining to each person’s share of the down payment and the way in which mortgage payments will be divided. This information will help set the stage for deciding each person’s share when the house is sold at some point down the road.

Money can also be a problem when trying to purchase a home with a friend. Mortgage companies aren’t always thrilled to be lending to two unmarried or unrelated people. In most instances, you will need to jointly qualify as co-borrowers on a single mortgage in order to purchase a property held in TIC or Joint Tenancy.

Since house options, mortgage rates and contract terms are contingent on each individual’s credit history, financial health and short-term and long-term obligations, it’s a good idea to discuss these issues ahead of time so that you know your options well in advance.

It’s also important to have an exit strategy in place should one or both of you need to move elsewhere unexpectedly. Be sure to take into consideration an unexpected job change or a surprise romance that could lead to marriage and have a plan in place as to what will happen to the house should any of these situations occur.

The process doesn’t get any easier once all of the above details are agreed upon and you have a mortgage commitment in hand. Finding the perfect home is hard enough on its own, but finding the perfect home for two can be even more challenging.

Sitting down together and coming up with a list of must-have features is one way to take the stress out of the home search process as you will most likely each have different ideas when it comes to what you’re looking for.

Most friendships are strong enough to easily deal with housing issues, so don’t be scared off by the notion. Take the time to plan ahead and do your homework, and most importantly, don’t let the friendship cloud your judgment.

For more information about buying a home, contact our office today.

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A Fresh Assessment: Determining Property Value Can Save Money Come Tax Time

January 9, 2012 3:30 pm

The expenses associated with owning and maintaining a home can be a shock to new homeowners, however, a current estimate of what your new home is worth can often times work in your favor when it comes to lowering your property taxes. If you recently purchased a home, it’s a good bet that you may have bought the house for a price lower than the property value, so sometimes taxes can be lowered if the value has changed.

“A tax assessment is an estimate on the value of your property solely for the purpose of determining how much you owe in property taxes,” said Peter Hoegen, an attorney with Hoegen & Associates, PC in Pennsylvania who specializes in tax assessments.

Lowering property taxes isn’t the only reason that homeowners go through the reassessment process. Another reason for a reassessment is for insurance purposes, to make sure the home has an appropriate level of coverage. Additionally, homeowners may opt for a reassessment due to changes in value that have been caused by the downturn in the economy.

For those who may be thinking of selling, an assessment is a good way to learn if the house is worth more than what is owed, and can provide valuable data for homeowners who are looking to get a lower mortgage rate.

“If you are thinking of having your home assessed for a possible readjusting of the value, it’s important to understand the protocol and timelines that your city or state has, because all are different,” Hoegen said.

The first step is to begin with the county assessor’s office. In 2012, the process has become much simpler for some, as more places are allowing homeowners to appeal tax assessments online. If that’s not an option where you live, plan a visit to your local assessor’s office to register for an appeal.

The appeal process is most commonly conducted by someone coming out and inspecting the property and comparing it to neighboring houses. Some will rely on computer models, but that could be problematic because you’re not seeing everything that can be viewed with the naked eye.

Although the appeal process itself can be relatively quick, if it’s clear that a change needs to be made, actually having someone come out to your property to perform the assessment can take anywhere from a month to a year, depending on the amount of people following suit. In today’s housing market, with property values decreasing in many areas, more people are turning to reassessments to lower their taxes.

When making your case, be sure to have documents ready that show what homes in the neighborhood have sold for. Prices of comparable homes that have sold in the past six to 12 months will be most helpful to build your case. Much of this data can be found on the Internet, but the real estate agent who helped you buy your home can assist in gathering the information as well.

Remember, assessed value is often not equal to market value. Many times, an assessment is only a percentage of what the home could actually be sold for, so appealing the value of your home might not be as financially advantageous as you think. The last thing you want is for your taxes to rise because the house is now worth more.

For more information about property reassessment, please contact our office today.

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Laundry Room Revamp: Add a Touch of Convenience to Laundry Day with Updated Appliances

January 9, 2012 3:30 pm

Anyone who has recently gone through the process of getting their home ready for sale can attest to the fact that there is no shortage of things to be done before putting a home on the market. If you’re planning on taking advantage of the spring selling season and listing your home within the coming months, be sure to add the laundry room to your list of projects that can’t be overlooked.

For sellers who really want to make a statement with their laundry room, adding new, energy-efficient washers and dryers can go a long way toward attracting prospective buyers. Thanks to new washer and dryer technologies, today’s models will not only save time and energy, they may even make laundry feel like less of a chore.

According to the U.S. Department of Energy, installing machines with the ENERGY STAR label will cut water costs by up to 50 percent. There are also machines that automatically adjust the water temperature and the amount of water used for each load to prevent excess and waste.

Many new models are available in a variety of designer finishes and bright colors that give the look of stainless steel without the stainless steel price tag, which can really make a bold statement.

If you’re planning to add a new washer to your laundry room, the first thing you need to decide is whether to go with a front- or top-loading machine. While a top-loading machine requires enough water to cover all the clothes in its drum, a front-loading washer needs only a third of that amount because its drum is set horizontally in the machine. One downside to front-loading washers: cost. In addition to being more expensive, there’s also a better chance for front-loading washers to develop mold since they don’t empty dirty water as efficiently as a top-loading machine.

When it comes to dryers, sensors are the thing to look for. Consumer Reports revealed that dryers with a moisture sensor tend to recognize when laundry is dry more quickly than machines that use a traditional thermostat. Because they don't subject clothing to unnecessary heat, moisture-sensor models are easier on fabrics. And since they shut themselves off when the laundry is dry, they use less energy.

The use of steam washers and dryers for greater energy and water efficiency is also a rising trend. Steam machines offer enhanced clothing care options such as short, steam-only cycles that help to reduce wrinkles and remove odors from clothing.

Laundry rooms used to be relegated to the basement, but today, people are finding space for washers and dryers in more convenient areas of the house such as the kitchen or near bedrooms. Housing experts agree that installing a laundry nook will not only raise the value of a home, it will also make laundry day much more convenient.

For more information about revamping your laundry room, contact our office today.

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In this Edition: CMAs, Property Reassessment

January 9, 2012 3:30 pm

Our lead story in this month’s Home Matters, brought to you through our company's membership in RISMedia’s Real Estate Information Network® (RREIN), examines how you can revamp your laundry room to attract prospective buyers. Other topics covered this month include going through the home-buying process with a friend, simple tips to lower your homeowners insurance, and more. We hope you enjoy this month’s edition of Home Matters and as always, we welcome your feedback. Email us anytime!

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Tips on Closing Your Credit Cards: The Real Consequences

January 9, 2012 4:14 am

When someone is considering paying off debt, they are often under the misconception that closing a credit card will damage their credit score. While this may be true in some circumstances, there are many instances in which it will not cause a score to drop. When helping people decide whether to close a credit card account, there are two important factors to consider.

First, consider whether you still owe a balance on the credit card. If you do, this is probably not the time to close the card. By electing to close a credit card before it is paid off, you effectively lower your available credit limit-to-credit balance ratio (utilization ratio). To have a good credit limit ratio, you need to keep balances at 30% or less of your available credit limit. When you close a credit card with a balance on it, you effectively lower the credit limit to the level of the current balance.

Here is an example:
Open credit card: credit limit is $1,000; current balance owed is $300.
Ratio = 30%
Closed credit card: credit limit is $300; current balance owed is $300
Ratio = 100%

That 100% is very hard on a credit score and will cause it to drop. It is important to note that utilization rates do not look at one card at a time. If someone has multiple cards, the rate will consider the total limits and amounts owed on all cards. If possible, pay off your credit cards in full each month.

Another misconception about closing credit cards is that the card will be removed from the credit report after seven years. The truth is that positive credit history can remain on your credit report forever; even if you close the account. The only items required to come off a report in seven years are negative entries (10 years for some items like bankruptcy and judgments). It is true that items that have not been reported in the last 24 months may not be as heavily weighted in a credit score. However, they will still be included.

Finally, think about how you may be using your credit in the next six-to-12 months. If you are considering purchasing a home or a car, you may do better to wait to make changes to your credit until after you have completed the purchase. It is not a time to be opening a new credit account or incurring additional debt on existing accounts. At that point the focus should be on paying down any credit card debt you may already have.

Bottom line, when considering closing credit card accounts make sure the accounts are paid-in-full first. Also, understand that a positive account in good standing may remain on a credit report indefinitely. That is a good thing.

To learn more about managing credit and credit cards or to learn more about options for getting out of debt, visit www.myfinancialgoals.org.

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Study Examines Impact of Social Networks on Homeowners' Decision to Default

January 9, 2012 4:14 am

Unemployment and other factors have caused many homeowners to involuntarily default on their mortgages. At the same time, falling home prices, the possibility of being underwater for many years and advice from certain influencers, or "mavens," may have encouraged others to simply stop paying, with deleterious consequences in some markets, according to a study released today by the Mortgage Bankers Association (MBA).

The study entitled "Strategic Default in the Context of a Social Network: An Epidemiological Approach," conducted by Michael J. Seiler of Old Dominion University, Andrew J. Collins of the Virginia Modeling, Analysis and Simulation Center and Nina H. Fefferman of Rutgers University and sponsored by MBA's Research Institute for Housing America (RIHA), received the Governor's Technology Award for 2011 for Virginia in the category of "Cross-Boundary Collaboration in Modeling & Simulation." The study examines the factors that can lead to mortgage default, the role that influential members of our society play in people's decision to stop paying their mortgage, and the impact on the broader housing market. The award was presented at the 2011 Commonwealth of Virginia's Innovative Technology Symposium (COVITS) in Richmond on September 26, 2011.

"Recently, the overwhelming media coverage of the current financial crisis has made homeowners aware - or at least alerted them to become aware - of their equity position in their home," said Michael Seiler. "While the merits of such a choice can and will continue to be debated, what is indisputable is that the possibility to strategically default has certainly been brought to the attention of current homeowners like never before, with potentially negative consequences for housing markets," said Seiler.

Key findings from the study include:
• The study, citing other research, reviews the main drivers of default including unemployment, declines in home prices, life changes such as illness or divorce and other shocks to household income or wealth. Strategic default is a result of a borrower's unwillingness to pay, even if able. It can be very difficult to determine whether a borrower is unable or unwilling to pay.
• Ideas are transmitted through the population in ways similar to those in which diseases are transmitted. Thus, they can be modeled in a similar manner. Certain corrective factors may lead some borrowers to be resistant to the temptation to strategically default, including the ability of lenders to pursue deficiency judgments, provisions of the tax code and bankruptcy laws.
• The model shows that real estate experts can influence market dynamics, but not in all cases. Markets are strong or weak due to fundamentals, however, markets in between can be pulled down or lifted up depending upon individual and expert behavior.

The study highlights those factors that distinguish an "economic default" (caused by hardship) from "strategic default" (selected as an option by homeowners who may be underwater on their mortgage), and the methods by which an idea such as "strategic default" can be transmitted through a population by contact with individuals and through social networks. Through simulation modeling, the authors demonstrate that because defaults and foreclosures lead to lower home prices, an epidemic of strategic defaults initiated by advice from those who might be considered experts can lead to the collapse of a housing market.

"Housing pundits share their expert opinion with a large audience on a frequent basis through the media. These social networks create the potential for much faster disease spread/cure than in the past. They can greatly impact mortgage markets through their use of behavioral advocacy. In fragile markets, advice by those considered to be experts, can result in a flood of strategic defaults, causing a contagious downward spiral of home prices and potentially a market collapse," said Seiler.

"Whether by choice or necessity, as foreclosures increase, they have an increasingly negative impact on the price of the healthy homes around them," said Selier. "One default does little to negatively impact the price of surrounding homes. However, as more and more mortgages in the neighborhood go into default, the negative impact is felt at an increasing rate. Much the same way as a disease spreads throughout a population, so, too, do decisions to 'strategically' default."

Michael Fratantoni, MBA's Vice President of Research and Economics added, "Research has clearly shown the factor that is most predictive of a mortgage default - a borrower's inability to continue making mortgage payments. It is much more difficult to predict or even detect a strategic default - a borrower who has the ability to pay, but simply stops in expectation of a financial gain. This research illuminates the consequences of strategic defaults on housing markets, finding that they can be destabilizing, particularly in markets that are already on the edge. From a policy standpoint, the research supports the contention that opinion and information (or disinformation) can move markets. More specifically, that policymakers and Mavens have the ability to stabilize or de-stabilize markets."

To access a copy of the report, please visit the RIHA website at www.housingamerica.org.

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