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Wednesday, October 31, 2012


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Down the street from my office is a very large media complex containing a TV station, several radio stations, and a large conference center.  At one corner of the massive building, there is a large fenced area where several radio and TV broadcast towers soar hundreds of feet into the air. Thousands of people drive by this complex every day and have seen the towers so many times they don’t even notice them any more.

Several months ago, a troubled young man—for reasons of his own—decided to scale the fence and begin climbing one of the towers. By the time anyone noticed this young man perched on a precarious ladder hundreds of feet in the air, it was too late to stop him. Police, ambulances, and   emergency rescue workers were called to the scene and began efforts to persuade the young man to climb down from the tower.

The young man either ignored them or periodically threatened to jump. As will happen with any large gathering, the media was soon on  the  scene.  TV, radio, and newspaper reporters began around the clock reporting of the ongoing activities of the young man who became known as The Tower Guy.

This went on for days and, somehow, the reporters found things to talk about.  The young man became dehydrated, sunburned, and appeared to be disoriented.  Finally, one heroic rescue worker was able to communicate with the young man and talk him into coming down. The final media reports described how persistent The Tower Guy was in remaining on his perch for many days.  It’s important that we don’t confuse persistence with procrastination.

It is easy to think that persistence is doing something repeatedly or constantly while procrastination might be thought of as doing nothing at all.  In reality, too many of us are like The Tower Guy in that we persist in doing nothing of importance which, in reality, is procrastination as  it relates to the things in life we know we should be doing.

Practice does not make perfect, in spite of the old adage.  Practice makes consistent. Only perfect practice will make something perfect. Persistence is only a virtue if we are persisting at doing things that  matter to us and make the world a better place.

Most people perform activities today because they performed the same activities yesterday and will do it all over again tomorrow.  Before you do anything as a regimented part of a routine, make sure you know why you are doing it, what it will accomplish, and when you will be done. As you go through your day today, make sure you’re investing every moment wisely and not just repeating mindless activities because that’s what you’ve always done.

Today’s the day!

Wednesday, October 24, 2012

How Do Credit Reporting Companies Determine My FICO Credit Score?

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Creditors determine your credit score based on a formula by which they calculate the score of each individual. It’s designed to give them an objective (mostly) method to predict how likely it is that you’ll repay a new loan.

Often, a credit score is referred to as a “FICO” score. Where did this term come from?

From two men named Fair and Isaac! In the mid-1950s, they founded a company called, Fair Isaac Corporation. Over the ensuing years, the name got shortened to “FICO.”

Fair, Isaac is a for-profit company, traded on the New York Stock Exchange (NYSE: FI). Their exact formula for calculating credit scores is termed “proprietary;” that is, it’s secret.

Each of the major American credit reporting agencies (CRAs) has a relationship with Fair Isaac. The “Big Three” CRAs are: Experian,Equifax, and Transunion. You can find them easily on the Internet.

In a common-sense world, each CRA would have the same credit score for each person. So, why don’t they? Because they each have different formulas for determining your credit score! That means your score may vary from one CRA to the other!

Each CRA formula is based on experience with millions of consumers. With each credit rating company, the higher your score, the better your credit is rated.

Now, above, I said that the credit formulas are secret. And they are, but we can sketch the general elements of those formulas. 

So, for example, we know that FICO models analyze these items in your history:

* Past delinquencies
* Derogatory payment behavior
* Current debt level
* Length of credit history
* Types of credit
* Number of inquiries by lenders and others into credit history.

Although the models vary as I stated earlier, the general formula looks like this:

* 35 percent on a borrower's payment history.
* 30 percent on debt.
* 15 percent on how long the applicant has had credit.
* 10 percent on new credit
* Another 10 percent on types of credit.

What Is the Range of FICO Scores?

Keep in mind that the following ranges sometimes change or vary with a particular source.

In general, however, the higher the score, the better your credit rating is, as stated earlier.

At the top end of the range is the perfect score of 850. As you can guess, very few, very rich people achieve this kind of perfection(only 1% of the U.S. population)! They get the lowest and best interest rates and get their loans fast. And why not? From a lender’s point of view, they’re an extremely low risk!

Eleven percent (11%) of the American population has a score of 800. That means they’ll also get lower interest rates and have their loans closed within days (just not as fast as the “perfect people” above).

So, what’s the score of the average American? 720! The interest rate for these individuals will be higher than the two categories above, and it might take days or weeks to close the loan, depending on the market.

It’s when your FICO score gets below approximately the 620mark, that you’re going to have to work harder to get mortgage money from a lender.

Here’s why: With that score, they calculate that borrowers will default on that loan better than half the time! From their viewpoint, it doesn’t make very good business sense to lend money in such situations.

However if they do loan the money, it will carry a higher interest rate to cover the added risk. Of course, in these situations, lenders look very closely at a borrower’s financial history in order to determine whether or not there are any “red flags;” that is, missed payments, late payments, unpaid debts, bankruptcies, etc.

So, there you have it! Now you know how your credit score is calculated. I hope I’ve taken the mystery out of the whole process. If not, contact me today!

Wednesday, October 17, 2012

Ten Questions Every Homeowner Should Ask an Agent

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As you embark upon what will be one of the most important transactions of your life – whether buying or selling a home – you should be absolutely certain that you are happy with the real estate agent you have hired to help you manage it. 

To help you with this all-important hiring process, here are ten important questions to ask an agent before you decide on whether or not to hire them:

Question #1
How Close Do You Get in Sale Price Related to Asking Price?
It is important to ask for this information as it relates to the past 60 days.  Given that many agents are not that active in the market, you would be best served to obtain the most recent information possible.  As a seller, your agent’s ability to come close to the asking price is a strong attribute and can mean a difference of thousands of dollars in your transaction.

Question #2
How Many Days on Average Does It Take You To Sell a Home?
What’s the average number of days on the market for properties listed by your prospective agent? Since this statistic can reach as high as six to nine months and in some cases and as much as a year, it is important to ask how your prospective agent ranks on the scale.

Question #3
What is the Rate of Homes Sold on a Monthly Basis?
Knowing the absorption rate of homes similar to yours that are on the market allows valuable insight as to how the market is performing for your particular needs.  Not only does it give sellers a glimpse into the system and how it would translate to their own sale but it also presents a broader view of the entire market in general.

Question #4
What Do You Do Differently To Get Homes Sold?
Especially with the current trying economic times, many agents have been faced with adversities trying to sell the homes on their list.  One of the best ways to learn whether your agent is a self-starter is to find out what they have done in the past when they were unable to successfully sell homes.  Ask why the agent feels the home(s) did not sell and then find out what they are doing differently to get them sold.

Question #5
What Percentage of Deals Do You Represent the Buyer Versus Seller? 
Some agents work primarily with sellers while others work mostly with buyers and still others are experienced with dual-agency deals.  Depending on your needs, you will benefit from an agent that specializes in one of the two.  It is important to ask which side of the fence your prospective agent tends to represent. 

Questions #6
How Many Homes Did You Sell Last Year?
Nothing speaks louder than numbers.  A very important statistic, ask what the total number of homes sold last year was and if possible try to get a more long-term picture of the agent’s performance in this regard. You can also ask for a month-to-month breakdown to see if there are certain stronger months.

Questions #7
Can You Provide a List of the Ten Most Current Clients You Have Worked With?
Rather than rely on the given list of referrals that many agents have handpicked, it’s a good idea to obtain a list of clients that are currently working with this Realtor.  It will provide a much-needed glimpse into the agent’s performance on various stages of real estate transactions.

Question #8
How Much of Your Work Day Do You Dedicate to the Real Estate Industry?
You want an agent that is 100% committed to their  job and if they are focusing more on a day job with real estate being a secondary thing, you run the risk of inaccessibility, lack of knowledge and experience plus lackluster motivation.  Find out how they feel about the real estate industry and whether they are passionate about their work.

Question #9
What is Your Style of Marketing – Proactive or Reactive?
What is your potential agent’s style of working?  Does he or she speak to a large number of people each day? Are they proactive or reactive in nature when it comes to marketing? See how this lines up with your real estate needs.  Are you in a hurry to buy or sell?  Does a laid back agent hinder your efforts? Or does slow and steady work better for you?

Question #10
What Does Your Daily Schedule Look Like?
The typical schedule of a real estate professional can be very telling.  By asking for a copy or general idea of how they conduct their day in terms of their work, you can get a good idea of how much time is devoted to the profession and what kind of business they are running.

Thursday, October 4, 2012

Mecklenburg, Union Counties – October Market Status Update

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Right now we are reporting a total of 4,041 available homes on the market, with the largest inventory in the $100,000 to $200,000 price range. The number of homes on the market in this price bracket is coming in at 1,262. The average list price for all the properties in the market as of this time period is $369,638.

Over the last six months we have had 5,419 contracts closed and the average sold price is reported at $250,115. The highest number of sold listings appeared in the $100,000 to $200,000 price point. On the other hand, 3,073 listings have not sold during the last six months, most likely due to non-aggressive marketing, the condition of the home or a pricing strategy that failed to work. We saw the most off-market listings (951 listings) in the $100,000 to $200,000 range.

The higher the number of Days On Market, the stronger a buyers market it is and in Mecklenburg County the current average DOM is 127 days. The average DOM over the last 6 months is 99 days with the fastest selling homes during this time frame in the $0 to $100,000 price range. The average sold price for the last 30 days was $246,210 with a DOM average of 101 days.

In terms of the number of months inventory on hand, we have 4.5 months as per the last six months of sales, pointing to a seller-centric real estate environment given the fewer available homes and increased demand.

We are reporting a total of 1,358 homes for sale in Union County with a reasonably large number of available homes in the $150,000 to $200,000 price range, with 236 listings in this group. The average listing price for the homes in this market is $321,937.

Over the last six months there have been 1,410 contracts that have closed and the average sold price was $263,980. As seems consistent with our present market statistics, the highest number of closed contracts appeared in the $100,000 to $150,000 price range. Looking at homes that did not sell, we have 937 listings still on the market, most of which come under the $150,000 to $200,000 price bracket with 171 unsold listings in that price range.

Our active listings are averaging 144 Days On Market in Union County and the number for the past six months is a relatively lower 102 days, with an average sold price of $263,980. Interesting to note is that the fastest selling properties fall in the $0 to $50,000 price point.  The average DOM for the past 30 days mirrors our 6 month DOM stats but the average sold price comes in lower at $242,222.

As inventory continues to dwindle down, we keep moving toward a seller-centric market. Right now we are holding 5.8 months of inventory according to the last 6 months of sales, indicating a fairly balanced market. What this means is that assuming market conditions remain the same it would take 5.8 months to sell all the homes in our current inventory. 
Please feel free to get in touch to discuss your real estate needs – I’d be happy to look over your home, guide you through the process and help achieve your real estate goals. 

Tuesday, October 2, 2012

PESSIMIST AND OPTIMIST (A short inspirational story)

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A family had twin boys whose only resemblance to each other was their looks. If one felt it was too hot, the other thought it was too cold. If one said the TV was too loud, the other claimed the volume needed to be turned up. Opposite in every way, one was an eternal optimist, the other a doom & gloom pessimist.

Just to see what would happen, on the twins’ birthday their father loaded the pessimist’s room with every imaginable toy and game. The optimist’s room he loaded with horse manure.

That night the father passed by the pessimist’s room and found him sitting amid his new gifts crying bitterly.
“Why are you crying?” the father asked.

“Because my friends will be jealous, I’ll have to read all these instructions before I can do anything with this stuff, I’ll constantly need batteries, and my toys will eventually get broken,” answered the pessimist twin.
Passing the optimist twin’s room, the father found him dancing for joy in the pile of manure. “What are you so happy about?” he asked.

To which his optimist twin replied, “There’s got to be a pony in here somewhere!”