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Each month, we publish a series of articles of interest to homeowners -- money-saving tips, household safety checklists, home improvement advice, real estate insider secrets, etc. Whether you currently are in the market for a new home, or not, we hope that this information is of value to you. Please feel free to pass these articles on to your family and friends.



FEATURE REPORT


Fixing Up Your Home: Protect Your Housing Investment

Your home is an investment in living as well as in savings. If neglected, it will pay no dividends. If properly maintained and improved, it will pay a high yield in comfort and usefulness for your family and in avoidance of costly repair bills. Home improvements also tend to raise neighborhood standards and, as a result, property values. From an economic standpoint, home improvements mean higher employment, increased markets for materials and home products--and therefore a more flourishing community.

Also This Month...

Why It Is So Important That Your Home Is Correctly Priced and Marketed Properly

While many agents may promise to sell your home for the money you want, the reality of the real estate market today is that this simply doesn't always happen. The fact of the matter is, the majority of homes sell for a price which falls short of what sellers may have been lead to believe.


Buying a Great Used Car

Be aware that buying a great used car requires navigating through a few special steps to ensure that you will get the most reliable and safe car. Follow these tips and you'll be rolling down the highway with confidence.  


5 Critical Questions to Ask Yourself When Selecting the Term of Your Mortgage

When considering a shorter term mortgage ask yourself the right questions.  "5 Critical Questions to Ask Yourself When Selecting the Term of Your Mortgage" will provide you with an understanding of the process and benefits of shorter term loans.   It is a fact that those who do not learn from history and the mistakes of others are destined to repeat them.


 


Fixing Up Your Home: Protect Your Housing Investment

Your home is an investment in living as well as in savings. If neglected, it will pay no dividends. If properly maintained and improved, it will pay a high yield in comfort and usefulness for your family and in avoidance of costly repair bills. Home improvements also tend to raise neighborhood standards and, as a result, property values. From an economic standpoint, home improvements mean higher employment, increased markets for materials and home products--and therefore a more flourishing community. 

If You Do It Yourself 

If you are handy with tools and have the experience, you can save money by doing many jobs yourself. But unless you are skilled in wiring, plumbing, installing heat systems, and cutting through walls, you should rely on professionals for such work. 

When you buy the required materials, it pays not to skimp. Good materials are not necessarily the most expensive. What you need are products that look good, are easy to maintain, and last a long time. Buy only from reliable dealers. 

If You Use a Contractor 

If you plan to use the services of a dealer or contractor, take care to choose one with a reputation for honesty and good workmanship. There are several ways to check on a contractor: 

  • Consult your local Chamber of Commerce, the Better Business Bureau, State Attorney General or Local Consumer Protection Agency. 
  • Talk with people for whom he has done work. 
  • Ask your lender about him, if you plan to finance the project with a loan. 
  • Check his place of business to see that he is not a fly-by-night operator. 
  • Find out, if you can, how he rates with known building-product distributors and wholesale suppliers. 
  • Ask friends and relatives for names of firms that they could recommend. 

Compare Contractor Offers 

Before deciding on a contractor, you may want to get bids from two or three different firms. Make sure that each bid is based on the same specifications and the same grade of materials. If these bids vary widely, find out why. 

Many contractors offer package plans that cover the whole transaction. Under such a plan the contractor provides all materials used, takes care of all work involved, and arranges for your loan. 

Your contractor can make the loan application for you, but you are the one who must repay the loan, so you should see that the work is done correctly. 

Understand What You Sign 

The contract that both you and the contractor sign should state clearly the type and extent of improvements to be made and the materials to be used. Before you sign, get the contractor to spell out for you in exact terms: 

  • How much the entire job will cost you. 
  • How much interest you will pay on the loan. 
  • How much you will pay in service charges. 
  • How many payments you must make to pay off the loan, and how much each of these payments will be. 

After the entire job is finished in the manner set forth in your contract, you sign a completion certificate. By signing this paper you certify that you approve the work and materials and you authorize the lender to pay the contractor the money you borrowed. 

Beware of Fraud 

Most dealers and contractors conscientiously try to give their customers service equivalent to the full value of their money. Unfortunately, home improvement rackets do exist. Here are a few common sense rules to follow: 

  • Read and understand every word of any contract or other paper before you sign it. 
  • Never sign a contract with anyone who makes fantastic promises. Reputable dealers are not running give-away businesses. 
  • Avoid wild bargains. The best bargain is a good job. 
  • Never consolidate existing loans through a home improvement contractor. 
  • Do not let salespeople high-pressure you into signing up to buy their materials or services. 
  • Be wary of salespeople who try to scare you into signing for repairs that they say are urgent. Seek the advice of an expert as to how urgent such repairs are. High-pressure and scare tactics are often the mark of a phony deal. 
  • Avoid salespeople who offer you trial purchases or some form of bonus, such as cash, for allowing them to use your house as a model for any purpose. Such offers are well-known gimmicks of swindlers. 
  • Never sign a completion certificate until all the work called for in the contract has been completed to your satisfaction. Be careful not to sign a completion certificate along with a sales order. 
  • Proceed cautiously when the lender or contractor demands a lien on your property.

 


Why It Is So Important That Your Home Is Correctly Priced and Marketed Properly


"...you need to be beware of agents who set the list price on homes at unrealistically high levels simply to get listings..."


While many agents may promise to sell your home for the money you want, the reality of the real estate market today is that this simply doesn't always happen. The fact of the matter is, the majority of homes sell for a price which falls short of what sellers may have been lead to believe.

There are two factors at play here. On the one hand, you need to be beware of agents who set the list price on homes at unrealistically high levels simply to get listings. This is really unfair because it can set homeowners up for disappointment and failure.

On the other hand, you have homes that are priced correctly, but are marketed ineffectively. Without a proper marketing program in place to ensure a home is exposed to the highest number of qualified buyers, many homesellers feel forced to accept a lower offer.

There's nothing worse to a homeseller than to have their home sit unsold for many months because of improper pricing and/or marketing techniques. Needless to say, either of these situations is highly frustrating to any homeseller. But more than that, it can be financially crushing if you're counting on the full proceeds of the sale of your home to fulfill some other obligation.

To prevent this scenario when selling your home here are some points to consider before choosing the agent you want to represent you.

Deciding Upon an Agent

A good agent knows the market and has information on past sales, current listings, a marketing plan, and will provide their back-ground and references. Evaluate each candidate carefully on the basis of their experience and qualifications.

Are they pricing your home correctly?

Home prices are determined by the marketplace not by your emotional attachment or by what you feel your home is worth. You should work closely with an agent who will suggest establishing a realistic price for your home. They will help you to objectively compare the price, features and condition of all similar homes in both your neighborhood and other similar ones which have sold in recent months. It is also important to be familiar with the terms of each potential sale. Terms are often as important as price in today's market.

Do they set themselves apart from the others by offering innovative marketing plans to sell your home fast and for top dollar?

Will they set up an aggressive marketing program to ensure your home is exposed to hundreds of qualified buyers? How much money does this agent spend in advertising the homes s/he lists versus other agents. In what media do they advertise, (newspaper, magazine, TV. etc.) Do they use a 24 hour hotline, "For Sale" signs, lock boxes, a Tour of Homes program, and Talking House signs and transmitters? What does this agent know about the effectiveness of one medium over the other?


 


Buying a Great Used Car

So, you need a new set of wheels but you can't afford to shell out more than $20,000 - the average cost of a new car. And you don't want to drive around in an unreliable "old bomb" either. What are your options? The good news is that there are lots of great deals available on "previously owned" cars. But be aware that buying a great used car requires navigating through a few special steps to ensure that you will get the most reliable and safe car. Follow these tips and you'll be rolling down the highway with confidence.

Get the Facts

Figure out which car best suits your needs and how much you are able to spend. Use the internet to do your homework. Go online to find out the value of a particular model, scan online classified ads, and search car finance loans, among other things. Each car-buying site has a certain area of expertise.

Of course, you can do your research the old-fashioned way - at your local library. Look through popular consumer publications such as Consumer Reports for reliability and repair ratings, as well as general advice on the used car-buying process.

Places to look for used cars include: new car dealerships, used car dealers, private individuals, and auctions. Unless you plan to pay cash, get quotes from at least two financing institutions, so that you know what payment and interest rate options exist before you talk to dealers.

Avoiding Problems and Pitfalls

Try to find out as much as possible about the history of the vehicle. Ask the seller to provide you with copies of the repair records, if available. In addition, get a vehicle history report. The report includes such important information as to whether the car has ever been issued a salvage title (from being in an accident), a flood title, or a junked title, and if the odometer has been tampered with.

Depending upon the mileage and prior maintenance performed, a used car could require more repairs sooner after you purchase it than a new car would. There are several additional steps you can take before you buy to insure that you are not buying a car in poor condition. Consider paying a mechanic to look the car over first. This might cost up to $100, but if you are serious about the car, this should be money well spent to insure that you are buying one that's reliable and safe. Take the car for a test drive and check out the braking, steering, shifting, acceleration, engine noise, and how well the accessories work.

A Word About Certified Used Cars

Since the mid-1990s, dealers have been selling a special type of used car - the "certified" used car. Cars which have been leased or traded-in are evaluated to see if they qualify for certification. Vehicles that qualify are usually in very good condition, with low mileage. The dealers have their mechanics perform a detailed inspection and they offer various warranties. Certification can mean different things to different car manufacturers, so it's important to check with each dealer to get the details of their certification program. Review the warranties carefully to see which repairs are covered and which are not. You can check the websites for car manufacturers or contact dealers for information on their certification programs.

Buying a certified used car is a way to pay much less than you would for a new car, and still get recent models and features. The warranties should offer greater peace of mind because the dealers have taken the guesswork out of what condition the vehicle is in.

Check for Car Safety Features

One of the most important considerations when looking for a car is what safety features they have. You should be able to understand what they are and what they are worth to you. If you haven't bought a car in many years, you may not be familiar with some of the newest safety features. Some features are mandatory and some are optional. Safety features on many recent models include:

  • Front and side air bags.
  • Head injury protection such as head air bags (shield you from impact with the upper interior of the car).
  • Anti-lock brake systems (ABS).
  • 4-wheel drive with traction control (usually with ABS).
  • Automatic dimming rear-view mirrors (to reduce glare).
  • Daytime running lights.
  • New child seat attachment systems.
  • Built-in child safety seats.

Dealing with Dealers and Private Sellers

Once you have done your homework, know which car you want, and how much you want to spend, it's time to start bargaining with the sellers.

Finding private sellers is as easy as checking the newspaper classifieds or going online to the electronic "classifieds" at websites such as AutoTrader. Don't forget to check with your family and acquaintances to see if anyone is selling their car. When you buy from private sellers, you usually pay less than you would if purchasing from a dealer. However, you may not have as many legal protections. Therefore, although you pay less initially, you run the risk of getting lower quality as well.

When talking to car dealers, remember that it is very difficult to get out of a contract once you sign on the dotted line. Therefore, do not commit to buying or sign anything the first time you go in. Since you did your homework, take the information you gathered and show the dealer you are an informed person, so you can make the deal on your terms instead of theirs. Negotiate based upon the selling price - not payment plans - and be sure to get full disclosure of every charge involved. Don't take their word on promises made - get any proposal in writing.

Finally, follow your instincts - if you feel pressured or powerless when dealing with any seller or you sense they are playing games with you, LEAVE. There is always another good deal waiting for you around the block.

Tips for Negotiating a Good Deal

  • Regardless of who you are dealing with, a good strategy is to let them know you have "cash in hand" or pre-arranged financing.
  • If you have done your homework, you should be able to tell if they are asking for too much money for their vehicle. Let them know you have checked the prices at other sources and ask them to lower the price.
  • Notice the condition of the body, paint, and tires. If it needs work, this is a reason to ask the seller to lower the price.
  • If you have had the car inspected and found it needs mechanical repairs, inform them that the price should be lowered accordingly.
  • Try to find a balance between appearing uninterested and being too anxious to buy. If you seem indecisive and hesitant, the seller might respond by lowering the price. But, be careful because this could backfire. If you seem too hesitant, someone else might be close by with cash in hand to buy the car.

 


5 Critical Questions to Ask Yourself When Selecting the Term of Your Mortgage


"... when considering any shorter term mortgage, make sure to ask yourself the right questions .."


1.     How Much Will I Save on My Interest Rate?

It is a fact that shorter term mortgages may provide you with a lower interest rate and overall lower interest payment.  However, there is a trade off, be prepared for a larger monthly payment.

2.     Should I Do A Longer Term Mortgage and Make Extra Payments?

For example, a 15 year mortgage locks you into a set payment.  With a longer term mortgage you can make extra payments which will decrease the number of years of mortgage payments, but you need self discipline to actually make the payments.  You really have to look yourself in the mirror to answer this question.

3.     What Is the Benefit of More Equity Sooner?

The benefit of home equity is that it provides a ready source to borrow against.  Often it makes sense to borrow against yourself (via your home equity).

4.     How Long Do I Want To Have A Mortgage?

Whether you are young or mature, you may want to eliminate this obligation sooner.  You may, for example, want to time at the end of your mortgage to enjoy your retirement. Consider the benefits of earlier relief from this commitment, but don't forget to consider the income tax implications.

5.     Should I Use My Home As A Primary Investment

By obliging in to a shorter term mortgage you are effectively increasing your exposure to real estate, perhaps leaving less for other investments.  Ask yourself, "How diversified do I want my portfolio to be" before making this financial commitment.