MD Homestead Tax Credit Application Deadline Tip!

Last day to mail in your application for the MD Homestead Tax Credit.  Your application must be postmarked today.  Tip: you can go to the main post office in Columbia and print postage there with the date on it if you use a credit card to buy postage for the envelope from the postage machine in the lobby up to whenever the mail post office doors close.....I do not know if they stay open up to midnight.  I have used this when mail was due for college applications etc. and needed to be postmarked by a certain date and the counter was either closed or the mail for the day had already gone out and what they were accepting after 5 pm or so would be postmarked the following day. FYI.

Winter Energy Saving Tips

Borrowed from an email to Baltimore Gas and Electric Company customers(me):

Colder temperatures make your heating system work harder to keep your home feeling comfortable. Now is the time to make a WinterReady checklist, with the following energy-saving improvements that can make a difference in your winter heating bill. Schedule a Quick Home Energy Check-up with an energy-efficiency professional. Have your heating system tuned up, and save with rebates from approved participating contractors. Lower the temperature on your water heater, and conserve hot water when you can. Install efficient-flow faucets and showerheads to reduce water heating costs year-around. Seal holes and seams in your ductwork. Caulk and seal gaps around doors, windows and even electrical outlets. Save an average of 2 percent on your energy bill for every degree you lower your thermostat.

End of Year Thoughts

I hope you are enjoying your holidays and that you are planning for a happy 2013!

According to the RBI Stats provided to me by the Metropolitan Regional Information Systems, Inc.(MRIS), the system we agents use to input, update and advertise property listings, data is showing that home values are beginning to hold steady if not rise slightly when averaged together in our area, it continues to take a little less time to sell a well priced home relative to its condition and both the sales volume and the total dollar value have risen considerably over the previous year and the previous month. This is good news for November statistics.  December is seeing some of the usual seasonal slowdown as our attention has been on holidays and family which is appropriate.  Continued low interest rates and lower volume of homes on the market combined with rising rents is putting some pressure on home values:

 

November 2012 Real Estate Market Statistics for

Howard County, MD

Statistic	Values	YoY	MoM
Total Sold Dollar Volume	$99,090,795	+30.14%	+22.51%
Closed Sales	244	+19.61%	+15.09%
Median Sold Price	$375,500	+9.07%	+7.29%
Avg Sold Price	$406,110	+8.81%	+6.44%
Avg Days on Market	80 days	-11.11%	-2.44%
Avg Sold to Orig List Ratio	94.4%	+1.55%	+0.19%

10 Useful Tips Using Baking Soda

Baking Soda, or bicarbonate of soda is a product found in every home. Baking soda is a naturally found substance used for cleaning, baking and deodorizing.  Since it will not harm the environment it is the perfect "green" cleaner.

1. For stomach indigestion put 1/2 teaspoon of baking soda into 1/2 cup of water then drnk for an effective antacid.
2. Sprinkle baking soda on minor oil and grease spills on a garage floor or driveway. Scrub with a wet brush.
3. For deodorizing food containers, mix 1/4 cup of baking soda with one quart water. Pour solution in food containers, and soak overnight, then rinse clean.
4. Substitute as a deoderant by dusting baking soda under your arms to absorb body odor.
5. Sprinkle baking soda on burnt casseroles and roasting pans and let sit for five minutes. Lightly scrub and rinse.
6. Brush teeth with a paste of baking soda and water.
7. Baking soda can be used to fight class-B fires (flammable liquids, such as gasoline, oil and grease).
8. Remove build-up from hair conditioner and styling gel by washing hair once a week with a tablespoon of baking soda mixed with your regular shampoo and rinse thoroughly.
9. Sprinkle baking soda on a damp sponge to erase crayon, pencil, ink, and furniture scuffs from painted surfaces and then rub the mark clean, and rinse.
10. Wash your face, then make an exfoliatng scrub made of three parts baking soda and one part water and apply with a circular motion massaging gently. Avoid getting it in your eyes; then rinse with water.

Happy Holidays And Homestead Tax Credit Deadline!

Happy Hanukkah to my friends who celebrate this week and best wishes to all who are still shopping for Hanukkah and Christmas presents!  While you are enjoying your holiday festivities, please take a moment to check on www.sdat.org and see if you remembered to send in your application.  About 30% of the streets and communities I have checked have not applied.  That might mean that one third of the homes in our communities are rental properties, but that is not the case.  You may have remembered but did your neighbor, son or daughter?  That nice lady or man up the street who lives alone?  Maybe if you looked to see if a few people you know have already applied, you might do a good deed this season and help someone else get the application in before the December 31, 2012 deadline for Homestead Tax Credit Applications.  Investors who rent properties are not entitled to the credit and the only benefit you receive is that when and if home values rise more than 5% per year, yours is capped at 5% per year.  True, values are just now beginning to show an upward trend and prices are still considerably lower than they were at the unrealistic peek of about 7 years ago, give or take a year depending on the area in which you live, but in the event prices were to rise again suddenly as they have done on a number of occassions in the past, if you live in your home as your primary residence, this gives a modicum of protection from sudden large tax increases from one year to the next in the future, but only if you qualify and only if you get your application postmarked by the 31st of December.  Happy Hanukkah, Merry Christmas and Happy Holidays everyone!

The market has turned stats begin to show.

Since September 2011 I have been referring to the "Soggy Bottom" as where our real estate market has been here in Howard County and the surrounding Maryland suburbs and Baltimore City.  Some areas were finding firm footing for housing prices to stabilize and begin to rise.  Enough distressed homes have been renovated and resold or moved into which has brought up home values in some areas and some homes still await that sort of tender loving care(TLC).  Rents have continued to rise, seemingly unaffected by the economy in recent years, so it is still a fabulous time to buy or sell if you have good credit, reasonable debt(according to the lenders) and some money saved to put into the transaction. Check out stats of foreclosures in Maryland below:

http://www.realtytrac.com/MarketTrends/NewsLetter.aspx?guid=4ccf0aed-574c-479c-982c-d0d6e3e05c26

Go to www.sdat.org to check and see if you remembered to apply for the Homestead Tax Credit already.  If not, get with it!  The deadline to apply is December 31, 2012.  After that, no guarantee you can apply.  The purpose is to limit your tax liability should home values rise more than 5% a year in the future.  Right now that doesn't seem like a concern, but I saw recently that in some areas of Baltimore City, home values have risen more than 20% over the previous year. It is a rather safe than sorry proposition and only applies for your primary residence in Maryland. Call me if you have questions about this.

Happy Holidays everyone!

Homestead Tax Credit Program Deadline

The deadline for applying for the Homestead tax credit is December 31, 2012.  If you have not applied by then you will not be able to apply for the foreseeable future so if you own your own home, you should apply now if you have not done so already.  Why? Because the market is improving and although the expectation is for slow growth over years, if there is any bump or bubble in prices, your taxes would be capped at 5% over the previous years taxes.  If you are not granted the tax credit, then your taxes will rise with the estimated tax value just as it does for investors.  This program has been extended for several years now, but this seems to be the real deadline.  It seems from sampling that fully a third of my neighbors and your neighbors have not applied. Go to www.SDAT.org to check if yours was received and/or approved or not.  You can check on your loved ones and friends as well while you are at it. It couldn't hurt. Happy Holidays everyone and best wishes in the New Year!

Happy Thanksgiving + Enjoy these good sense tips!

CRS Consumer Article

HANDYMAN HELP

 

HELP FOR HOMEOWNERS: CHOOSING A HANDYMAN

 

Whether it’s a big project such as a bathroom remodel, something small like putting up shelves, or repairs and routine maintenance, many homeowners turn to handymen to get the job done. It used to be that everyone knew “a guy in town who can do everything”, but these days finding a qualified, professional, and reliable handyman can be a real challenge. Here are some tips to ensure that you choose the right person for the job:

 

1. MAKE SURE THEY ARE QUALIFIED FOR THE WORK

Certain projects require specific skills that all handymen may not have. You will of course want to know that they have the qualifications and experience to do the job. In addition, many states and provinces require persons performing certain work to be licensed; electrical and plumbing often fall into this category.

 

2. ASK FOR REFERENCES

Request at least two local references from previous customers. The handyman should be willing to do this without hesitation. Then, contact those references! Ask about the quality of the work, timeliness, professionalism, and how the handyman handled any changes that may have occurred during the course of the project. Also ask how satisfied they were with the work overall.

 

3. CHECK ON INSURANCE COVERAGE

Liability insurance is always a good idea. If the handyman or another worker is injured while working on your property, you may be held liable for medical costs. Ask for evidence of coverage before agreeing to any work. Uninsured handymen often charge less for their services because they lack the overhead expense of insurance, but it could cost you in the long run.

 

4. GET WRITTEN ESTIMATES AND A CONTRACT

Ideally, ask three handymen for written estimates for the work you have in mind. Be sure that each estimate contains enough detail so that you can make a comparison between them. For example, are the specified materials of the same quality? Does the cost include cleanup and hauling away any debris or old/broken items? Read all contracts carefully and be sure to ask about anything that you are unsure of.

 

5. DETERMINE THE PAYMENT SCHEDULE BEFORE YOU SIGN

Beware if you are asked to pay for the entire job up front – this is not an accepted business practice and could leave you open to fraud. Handymen will often ask for 50% when the contract is signed, which will allow them to purchase materials for the job and assure them that you are committed. Be sure to request receipts for all payments.

 

Article courtesy of Pillar To Post Professional Home Inspection

Pillartopost.com

 

Market Moving, Bye Bye Bottom!

The market indicators have been turning over like the fruit in a casino gambling machine over the past two years and with interest rates arguably the lowest ever and properties having contracts on them within weeks of being listed, I think we are seeing the jackpot in that the market meets the criteria to be labelled a "sellers' market" in many areas now.  Prices are the lowest they have been in ages, many are in reasonably good or great shape and banks are lending to qualified buyers.  Cash buyers have been about a quarter of all buyers nationally for most of the past year dodging the banks altogether.  I have called the last twelve months of the "soggy bottom" because while many people have continued to complain about the poor market, others have been rushing around finding their own private funding and buying up all the propertues they could afford.  Some of those investors don't want to advertise the great deeals they have been getting so they continue to moan about the state of the economy, but prices are stabilizing and consumers who would like to become homeowners for the first time are realizing that they are paying more in rent then they would pay if they bought a place.  The inportant question is whether they know they will remain in one area or if they will be able to manage it as an investment if they move out of the area.  Prices are not expected to rise suddenly or dramatically, but they are beginning to not fall and you will observe over the next year that prices will begin to rise in your neighborhoods if they have not already because a lot of those short sales and foreclosures were bought by people who had the money and the skills to improve those vacant or run down properties in your neighborhoods. Some buyers can buy now and build real sweat equity.  It is a win/win. 

I have a lovely 2 bedroom , 2 1/2 bath, upper level townhouse condo listing overlooking a cove on Wilde Lake in Columbia, Maryland, that needs a little updating but has a brand new gas furnace, new air conditioning system, new carpet and fresh paint, 2 balconies, original oak cabinetry, bathroom tile and parquet floors for the low discount price of $210,000, As-Is, No closing help if you can close by the end of November this year.  Otherwise, next year's price will include updates made over the holidays. 

The Market is moving!  The Soggy Bottom will be solid soon.

Best wishes,
Linda

Soggy Bottom News-End of Summer '12

The Market in our area continues to be active. People are making moves whether they are buying, selling or renting. Statistics are bearing out the predictions made last Fall by Anirban Basu that the market would turn from a Buyer's market to become a Sellers market in such a way that the rise in home values would resemble a slow moving tide washing up a little and back a little, then up a little then back a little. This can be seen in sales numbers. Builders and other real estate professionals who were able to ride out the past few years are seeing an uptick in their business and the people who became proficient in the business of helping banks, buyers and sellers qualify and process short sales have been working very long hours, weeks, and months. As with everything in selling and buying homes, it is sometimes to no avail. Rents are rising. Young Buyers who know where they want to live are saving money to buy. Investors continue to buy up abandoned properties at auction and distressed properties which are in need of work. Contractors who know investors have been able to continue to stay busy even if they have to travel hours from where they live. Some sellers are still struggling with the memory of the peak of the market a few years ago when a home could sell for way over market value even if it was in terrible condition. Home values have come down a full third of that peak value in most areas give or take. For the past few years the hottest selling properties were either full of all the latest upgrades and reasonably priced (often below the latest sales)or selling well below market due to poor condition or distressed in some other way. Many buyers and sellers have completely forgotten that in a balanced market a home would take 6 months to sell. Less than 6 months is a Sellers market. More than 6 months is considered a Buyer's market. Many homes in our area, even distressed properties have been closing in less than 6 months which makes it a Seller's market. Many Buyers and their agents continue to want to make offers as though it were still a Buyer's market. There have been multiple offer situations for months in our area and properties in good condition and priced well have sold within the first month, in some cases in the first week. As with all changes in the market, the most desirable areas begin to sell faster and prices rise before less desirable areas in the beginning of a Seller's market and the reverse occurs at the beginning of a Buyer's Market. Prices peaked in Federal Hill in Baltimore at the end of October 2005. The peak came later in other parts of Maryland. Prices in Washington D.C. have continued to be strong and rising for the last couple of years as jobs remain strong in that area. Access to rapid transit and local shopping play a role in the stability and desirability of many neighborhoods as well. Walkability is a word that has come into common parlance for communities where people want to live and set down roots and that is perhaps the best part of what people have been coming around to in recent years. Homes are places where people live their lives more than investment decisions. While a home remains one of the most and often the most expensive investment(s) many people will ever make, it is so much more. I try to help people find and buy homes that they can look forward to coming home to at the end of a long work day or at the end of a long vacation away. It is much more than a financial investment, it is part of the way you live your life. Slow growth makes for more stable neighborhoods than rapid growth which attracts investors who can afford to outbid homeowners and often leave vacant properties across the landscape. It has been hard work this year as it was last year, but this year more of it has produced the kind of results where people were able to make the moves they wanted to make and not just the ones they had to make. Looking forward to a great Fall season!

Soggy Bottom News Update

Eleven months into what I call the Soggy Bottom there continue to be signs of recovery. Really there have been signs for more than 2 years that the turnaround was coming, but as Anirban Basu suggested last year, it will be a slow recovery looking more like a slow incoming tide than the record breaking rises that usually precipitate a real estate bust. My office manager shared with us today that, "According to Lawrence Yun, Chief Economist for the National Association of Realtors, the first half of 2012 is the best half year we have seen in five years. Although credit standards are still too strict, in Yun's opinion, there are plenty of buyers that are swooping in and taking advantage of the prime opportunity to buy while both interest rates and home prices are still low. Yun notes that that there has been an uptick in investor purchases, citing that 53% of Realtors own at least one investment property..... Yun says that the greatest opportunity in the coming months will come from the increased cost of rental housing which will cause more people to consider purchasing. As well, there is a pent up demand for home ownership caused by the three million immigrants that come to the United States each year. In the past few years, the immigration traffic has not created the usual one million household formations which suggests that many coming to this country have taken up residence with family until the housing market improves. Such is the case with many college students who, for the past five years, have elected to move back home rather than seek out their own households." As for me, I have been busier this year than I can remember in the past 10 and I also managed to get away for a week in July during which time I earned another designation from which I learned a little more about how to help sellers sell and buyers buy in the ever changing world of short sales. I still have time for you though, so give me a call or shoot me a text or email. Enjoy the last weeks of summer and best wishes, Linda

Home Maintenance and Inspections

All homes, old or new, need ongoing maintenance. First, buyers should understand the 1% rule. This rule postulates that normal maintenance on a home is about 1% of the value of the home per year. For example, a $250,000 home would require $2,500 per year to maintain. This would be enough to replace the roof covering...and then, a few years later, to replace a failed hot water tank...and then a few years more until a new central air system is required. Then there is the 3% rule. Some experts say that home buyers should plan on spending 3% of the value of the home in the first year of ownership. This is because new homeowners will most likely have to buy drapes, blinds, a washer and dryer, a stove, maybe even a new roof covering. Also, new homeowners often customize the environment to their taste, so they need to budget for repairs, replacements and maintenance. In addition, most home components have fairly predictable life cycles. For example, the typical life cycle of a high-efficiency furnace is 15 to 20 years. What this means is that most high-efficiency furnaces last between 15 and 20 years. One way to know the extent of the maintenance needed and the costs to repair and/or replace items is to have a home inspection conducted. Home inspectors are required to let the buyer know if a component is significantly deficient or if it is near the end of its life cycle (service life), and a reputable home inspection company may offer up-to-date repair-cost guides to help clients with their planning. Home inspectors work with REALTORS(R) and buyers to help them understand the issues that are found in the home, regardless of age, offering the right perspective and objective information. Home buyers need to understand that it's normal for items in a home to wear out. This should be regarded as normal "wear and tear" and not necessarily a defect. A good home inspection determines the current condition of the house, offering a report of all the systems and components in need of maintenance, service, repair or replacement. For example, consider a home inspection that uncovers that the heating system is old and requires replacement. A home buyer may see this as a huge problem. However, this problem may be the only item in the home that requires attention. If a buyer were to look at this situation in perspective, this home could be well above average-a home merely requiring a new furnace. A good home inspection provides objective information to help the buyer make an informed decision. Knowing what items need to be budgeted for repair or replacement will help home buyers plan or negotiate better and not be stuck with unexpected costs of hundreds, or even thousands of dollars in the long run. Also, fixing these items will make a marked improvement on the performance of a home and minimize issues that could affect its future integrity...and value. For more information, please contact your local Pillar To Post Home Inspector.

It’s Drafty, It’s Old, but It’s True Love — and a Chance to Win $100

• It’s Drafty, It’s Old, but It’s True Love — and a Chance to Win $100

  Follow Curbly’s Bruno Bornsztein as he insulates, caulks, and adds an HVAC to his ‘new’ 100-year-old home. Leave a comment to win $100. Read

Visit houselogic.com for more articles like this.

Copyright 2012 NATIONAL ASSOCIATION OF REALTORS®

Real Estate Roller Coaster Ride

Dear Readers, Friends, Neighbors, and Family, Welcome to the Real Estate Roller Coaster Ride. Prices historically go up over the long term, but it is normal for there to be peaks and valleys on the way. The most recent peak was so high that many investors and home purchasers bought and refinanced homes for as much as 30-40% more than they are currently worth. If they keep their homes for decades and can qualify to refinance at the current historically low interest rates, they will come out ahead in the wash. If on the other hand they have experienced financial hardships in recent years they are poised to lose a significant amount on their investment. For those who have lost their homes in this way, the devastation continues for several more years due to the impact short sales and foreclosures have on one's future ability to buy and even to rent. That being said, this is the eighth month since I started using the term, "soggy bottom" to describe where we are in the current market. The transition between Buyer's Market and Seller's Market is slowly occurring as if in slow motion. The increase will be hardly noticeable to those of us who thought homes should sell in a week or two with multiple offers for way over asking price. The traditional market nationwide has always been that a home takes about 6 months to sell. Longer than that and we are in a Buyer's Market; less than that and we are in a Seller's Market. I just had a listing close which I listed in the first week of December. It closed in 6 months and 2 weeks, but it was also one of those very trying sales about which you have hopefully only read, not experienced. That would indicate that we are still in a Buyer's Market, except that short sales take longer than even foreclosures to close often. And in this case the property was listed with several agents, including myself before over the previous fews years. The good news is that short sales tend to sell for more than foreclosures. Which brings me to the point that if the longest types of sales are taking just a little longer than the turning point then what is happening to regular sales? The ones I am watching in our area are selling in less than the 6 month marker which says we are already in a Seller's Market. The adjustment in the market is only really visible when a house for sale is realistically priced remembering that our values are back to about where they were over a decade ago and staged well to compete and invite homeowners to want to beat out the competition who want the same house. The perks for the sellers are not having to wait in limbo so long and closing costs for transfer taxes are much lower than they were at peak, saving homeowners money on both the selling and buying sides. For homes that need a lot of work or are not looking their best, prices are still under market due to the obvious work required to bring them up to par. All in all, the mood is optimistic for people wanting to buy and sell homes and a bit of normalcy is returning to the market. For those who are just now coming to terms with their banks on mortgages that are in arrears, the national banks are making some headway in creating systems to get decisions made and process contracts in a more transparent manner. It will be a long while for our area to process these lost homes, and home values will hopefully not be skyrocketing anytime soon, all good news for our daughters and sons who would like to join the ranks of homeowners in living the American Dream where their hard work can buy them a piece of their own property in America. Many thanks to my friends and their families who have served and lost loved ones defending our way of life. Best wishes for a safe and happy Memorial Day, Linda

Markets Stabilize

Bloomberg reports today: "Home Prices Rise in Half of U.S. Cities as Markets Stabilize". For several years now I have been watching the indicators change over from Buyers Market to Sellers Market. Slowly the signs are stacking up and 8 months ago I heard a national speaker at the annual conference for the Maryland Association of REALTORS(R) (MAR) tell agents that sometime this year we would see rising prices again, albeit a slow 1% per year rise. The economic guru Mr. Anirban Basu who has done presentations for many groups in our area with charts showing small wave like improvement over the next few years, barring unforseen events. Steve Harney also predicted last Fall that prices would fall another 6% nationally before that happened. He spoke again 2 months later at the national conference for the Council of Residential Specialists(CRS)in November and said much the same thing. I am seeing houses in our area selling in less than 6 months which is the standard measure of "normal" and if priced and staged right, entertaining multiple offers. Below is an excerpt from an email I received today from Michael Fagan, PHH Home Loans: "The National Association of Realtors (NAR) said that of the 146 Metro cities surveyed, home prices rose in 74 of them in Q1 2012. This is up from 29 cities that saw an increase in home prices in Q4 2011. In addition, the NAR also said that inventories for existing homes fell 22% since this time last year and are down 41% since the peak in mid-2007. While the housing market has a long way to go, this report was a nice step in the right direction. There was also news from the National Federation of Independent Business, which said that its small business optimism index gained 2% in April as the survey revealed that companies have increased plans for hiring and investing in the future. While companies added new employees at a slower pace in April than in March, the index rose to 94.5 — the highest level since February of 2011. Overall, though, the report showed that our economy is improving but is still fragile. The state of our economy is part of the reason for the improvement in Bonds (and home loan rates, which are tied to Mortgage Bonds) of late. Another big reason that Bonds and home loan rates have been improving is the fresh round of uncertainty out of Europe. France elected a new president, and this change of the guard represents the ninth EuroZone leader swap since the financial crisis began. Greece is also back in the news and their citizens are not taking to the austerity measures either. The New Democracy government, a pro-bailout party, is having trouble gathering the support to rule the government. This has sparked some safe haven trading into our Bonds, as investors see our Bonds as a safe place for their money. The bottom line is that now continues to be a great time to purchase or refinance a home, as home loan rates remain near historic lows."

The Truth About Appraisals

"The Truth About Appraisals; Knowing the Guidelines Solves the Mystery The appraisal process often baffles consumers. They may feel that their home is worth a higher dollar amount, and so the appraised value doesn't always make sense to them. It is important to know that the appraiser is completely independent from lenders, buyers, sellers, and real estate agents, and that the guidelines to which they adhere are dictated by the Uniform Standards of Professional Appraisal Practice (USPAP) and Fannie Mae. In most states, the mortgage lenders must also disclose the purpose of the appraisal, as each transaction carries its own set of rules. In essence, these important guidelines help appraisers put a fair market value on homes based on comparable sales in the same area, and the home must be bracketed in size and value. For example, there is no set dollar figure associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, but the local marketplace supports the value of a pool at $15,000, then that item will be bracketed as [$15,000] on the appraisal. Upgrades can usually be expressed at a higher percentage of their value in newer homes because the only way to obtain those upgrades was to put more money into the cost of building the home. On the other hand, the upgrading or remodeling of an older home is rarely reflected in full in the final appraisal. This is because typically 25-40% of the project involves demolition and the fixing of issues that aren't uncovered until the project has already begun, such as plumbing or wiring that may need updating. Ultimately, the value of the upgrades must be supported by comparable examples within the same marketplace. These comparisons must be drawn from current market activity within the last six months. This is a safeguard to prevent appraisers from attaching too high a value to the home in question, and opening up the appraisal for review. This guideline further states that appraisers can only base their opinion on the value of home sales that have actually closed. " Thanks to Michael Davidson for the use of the content above. Senior Loan Officer, Embrace Home Loans, Rockville, Maryland

Housing News 11 Trends from 2011 The National Association of Realtors® surveys homebuyers and sellers each year to uncover housing trends and monitor changes taking place in the industry. This year's report highlights a number of trends that haven't been seen in years. Here are just 11 highlights from the 2011 report. 1. In 2011, 37% of homebuyers were first-time buyers – which was down from 50% in 2010. 2. Last year, 88% of homebuyers used the Internet to search for a home. That number was down slightly from a high of 90% in 2009. 3. The typical homebuyer searched for 12 weeks and viewed 12 homes. 4. The number of buyers who purchased their home through a real estate agent or broker climbed to 89% – a share that has steadily increased from 69% in 2001. 5. Nearly 1 out of 4 buyers said the application and approval process was "somewhat more difficult" than expected...and 16% reported it was "much more difficult" than expected. 6. About half of home sellers traded up to a larger and more expensive home...and 60% traded up to a new home. 7. The top 3 factors influencing neighborhood choice were: the quality of the neighborhood, the convenience to job, and the overall affordability of homes. 8. The typical seller lived in their home for 9 years. That number has increased from 6 years in 2007. 9. Although 61% of sellers said they reduced their asking price at least once, the average home sold for 95% of the listing price. 10. Only 10% of sellers sold their homes without the assistance of a real estate agent. Of those people, 40% knew the buyer prior to the sale. 11. The typical "for sale by owner" home sold for $150,000 compared to $215,000 for the average agent-assisted home sale. If I can answer any questions for you about the housing market in our area, call or email me anytime. All Contents ©2012 The National Association of Realtors®.

The Official Newsletter of The Real Estate GuysTM Radio Show Education for Effective ActionTM Volume 12 Number 2 Home Facebook Podcasts Events Feedback A Notable Quote "Champions do not become champions when they win the event, but in the hours, weeks, months, years they spend preparing for it." - T. Alan Armstrong Feature Article Is NOW the Time for Single Family Homes? - When billionaires talk, people listen When we interviewed Donald Trump a couple of weeks ago, he told us that NOW is a great time to get into real estate - and he specifically pointed to houses. Fellow billionaire, Warren Buffett, appeared on CNBC a couple of months ago and essentially said the same thing. In fact, he said if there was an efficient way to do it, he'd like to buy 200,000 single family homes! You may or may not agree with them at first blush, but when two billionaires (neither of whom are trying to sell you houses) both say the same thing, it's probably worth taking a closer look, don't you think? Why are billionaires Buffett and Trump bullish on real estate right now? Prices are low relative to replacement cost. Rising commodity costs (oil, lumber, steel, concrete, copper, etc.) make it more expensive to build new homes. And even though land and labor are soft in many areas, it still costs more to build a new house than what existing homes are selling for. Until that changes, there won't be too much building (not to mention the tight construction funding). Eventually, a growing population (the U.S. is projected to reach 400 million in the next 20 years), should increase demand to where new housing will be a necessity. When that happens, the new houses will pull up the value of existing houses. Or more accurately, competition for existing houses will push prices up until it makes sense to build new ones. Either way, it's a wave a "value investor" like Warren Buffett recognizes- and would like to ride. Rents are high relative to purchase prices. At the end of the day, rental real estate is an income investment. When you can pay less for more income, that's a good thing. And with more people entering the renter population, increasing demand is propping up rents in many markets. Robert Kiyosaki's Rich Dad(TM) real estate advisor Ken McElroy tells us that every 1% decrease in home ownership is another million people who need to rent. And home ownership is several points down from its peak of nearly 70% just a few years ago! That's a BIG demographic shift. Again, the law of supply and demand says that without new houses coming to market, and more people competing for available housing, rents (and prices) will eventually rise. But even if they don't, RIGHT NOW the rent to price ratio is VERY favorable for income property investors. Great! That means we don't have to wait for the numbers to make sense. In many markets, they make sense now. The foreclosure inventory remains high. Why does this matter? First, the people living in those houses haven't yet joined the renter population. As they do, there will be more demand for rentals. And as those properties work their way into the market, they'll keep prices down. That's good if you want to acquire properties at good prices (value investing). If you're a buyer of investment real estate, how long do you want the sale to last? For us, we hope the sale lasts awhile, so we can stock up! Interest rates are at record lows. The biggest expense a real estate investor has is the interest on the mortgages being used to control the property. Low interest rates and solid rents mean better cash flows. Right now, the cash flow on many properties (the capitalization or "cap" rate) is higher than the cost of the mortgage (the interest rate). If you can borrow money at 5% and invest it and earn 8%, how much 5% money do you want to borrow? How about ALL of it! And last but CERTAINLY not least.... Inflation benefits real estate investors. Donald Trump told us that "real estate and inflation get along very well". Great! What does that mean? When the Fed "eases" more money into the system, it causes interest rates to drop (the topic of an epic blog last summer called The Great Debt Ceiling Debate). In fact, lower interest rates are a major reason the Fed "eases". But easing also means that the dollar falls - that is, it takes more dollars to buy the same stuff (which is why gas, food and almost everything costs more in dollars). Hey! Don't tune out now! This is where it gets interesting. Trust us, a little understanding of real estate macroeconomics can go a long way. There's a reason Trump likes real estate when there's inflation. Real estate is one of the items that eventually goes up in dollars because of inflation. But that's not the reason to buy property. Because whether the property goes up or down in price over time, as long as it cash flows, you win. Say that again: As long as it cash flows, you win. Let's take a look... For example, if you put $20,000 down on a $100,000 property and it throws off positive cash flow of $200 a month, you're getting over 10% return on our your $20,000, plus tax breaks! That's pretty good. But what if (gasp!) Buffett and Trump are wrong, and the house goes DOWN? Let's say that after 30 years, you wake up and discover the property is only worth $50,000. A 50% decline over 30 years! Ouch. But did you really lose? Grab a cup of coffee and let's do some math! C'mon, it'll be fun. First, let's say you paid cash. Not that you'd want to (for reasons to be described), but you may have to. Not everyone is running around with a pristine credit score. So you pay $100,000 today. Without a mortgage, after expenses, you pocket $700 a month...for 360 months! That's $700 x 360 or $252,000. Now the property is worth only $50,000 and it still generates cash flow. So you get ALL your money off the table, still have a property that's paid for, and it's paying you each month. How are you doing? But, you say, if the price drops, wouldn't the rent drop too? Take a look around. We just watched properties lose half their value in many markets. Did the rents go down by half? Maybe in certain isolated markets, but that's certainly not been the norm. And if home prices are dropping precipitously, are builders adding new supply? Probably not. So unless the population shrinks as much or more, then demand should prop up rents. However, for sake of argument, let's say that rent dropped over time so that on average, your take home income on your free and clear property was reduced from $700 to $350. What's $350 x 360? Survey says... $126,000. Have you lost yet? Isn't this fun? But let's go back to our 20% down scenario.... So you put in $20,000 (down payment) on a $100,000 property and earned 10% plus a year for 30 years ($200 a month = $2400 a year income on your $20,000 down payment). Less cash flow than when you paid $100,000 cash. But we can think of about 80,000 reasons why getting a loan is a good idea. And more than 10% cash on cash is pretty strong. Good luck getting that in a CD. Plus, at the end of 30 years, the tenant has completely paid off your $80,000 loan and you now own the house free and clear...PLUS, it's still supplying you with monthly cash! There's no bank account or mutual fund that can match that deal. We know. We asked. They laughed so hard, they....well, let's just say they laughed real hard. Now if Trump and Buffet are right, and today you're buying houses below the future value, in 30 years the property might be worth $200,000 or more. Nice, stable, steady long term inflation of 2-3% - just like Bennie and the Fed target. As in, the Fed is COMMITTED to inflation. But what about all this talk about hyper-inflation? There are some doom-and-gloomers out there heralding hyper-inflation. Hyper-inflation means you wake up in the morning and a pound of coffee is $5, but when you go back that afternoon, it's $7 and by the following morning it's $10. In other words, the dollar is in free fall and it takes more and more dollars to buy the same goods and services. It's happened many times in other countries in just the last 50 years. It's ugly, especially for those who don't know how to see it coming, how to prepare and what to do when it happens. Now we understand the argument for hyper-inflation and it's a good one. So let's take a look at why real estate right now makes so much sense. Real estate is arguably the best vehicle to hedge against hyper-inflation, and as we've already discovered, even if we have long term deflation and the property falls in price over time, as long as it cash flows, you're fine. So what happens to our real estate if we get hit with hyper-inflation? First, everything real costs more in dollars. The more dollars created (easing), the less valuable they are. That's why gold goes from $800 an ounce to $1800. It's why oil is up (and you thought it was Iran). And in our previous scenario, it's why it takes more and more dollars to buy the same pound of coffee. So if you know that today's $5 pound of coffee will be worth $10 tomorrow, do you want $5 in your pocket or a pound of coffee in your cupboard? Duh. You want the coffee in your cupboard. It's holding its value, while the dollar crashes. Now if you could borrow $5 from a friend today and add it to the $5 in your pocket, you could buy 2 pounds of coffee today. Then tomorrow, you could sell 1 pound for $10 and pay back your friend his $5 and you'd have a pound of coffee in your cupboard AND $5 in your pocket. Pretty good. Meanwhile, your friend has his $5 back, which will now only buy a half pound of coffee. Ouch. So do you want to be the borrower (you) or the lender (your friend)? If you didn't track with all that, then go back and read it again and again until you do. Even better, go find a friend and discuss it until you both get it. It's an important survival skill if the hyper-inflationists are right. So what does this have to do with your real estate investing? A lot! And remember, when most financial pundits talk about real estate, they're talking about the home you live in. We're talking about owning homes that OTHER people live in - and pay you rent. Now, in the aforementioned "coffee" scenario, how much money would you like to borrow EARLY in the inflation cycle so you could go stock up on coffee? Say ALL of it because that's the answer. Why? Because every dollar you borrow today becomes easier to pay back tomorrow as inflation roars. Debt is how you short a falling dollar. Think of it this way: If hyper-inflation hits, you can either short the dollar or lose your shorts. Of course, the dangerous part of using debt to short the dollar is making the payments until you pay the loan back. But that's why we have tenants - and last time we looked, having a roof over one's head at night is a top priority (even over coffee...at least for most people). And because housing is an essential human need, while many aspects of the economy will suffer, residential income property will probably be more stable. And owners of properly structured residential real estate will be in a position to do quite well as we'll see next. So let's take a quick look (we know you're getting antsy) at our example property in a hyper-inflation scenario, then class is dismissed. Let's say you put $20,000 down on a $100,000 property today and it rents for $1000 a month. And just like before, you have an $80,000 loan with a $500 a month payment. At the current rent, after expenses you clear $200 a month. So far so good. Now hyper-inflation shows up and before too long, your $200 a month positive cash flow will only buy 10 cups of coffee each month. It sounds crazy, but go look at the what happened to prices in other countries (Mexico, Argentina, Yugoslavia to name a few) that have experienced hyper-inflation in recent history. So now your $1000 a month in rent is now only worth 50 cups of coffee. But guess what? Your $500 a month mortgage payment is fixed. So even though your $1000 a month rent isn't worth much, it's plenty to make the mortgage payment. So you're okay. Whew! Now let's say that at the beginning you were paying attention (what a concept!) and saw the possibility of hyper-inflation. So when you originally purchased the property, you put $20,000 down, but took another $5000 and bought 100 pounds of coffee at $5 a pound. Just in case. Now when hyper-inflation shows up, coffee goes to $20 a cup and $1000 a pound. Of course, if coffee is $1000 a pound, what's your house worth? Probably millions. But it doesn't matter because you aren't selling. Why would you? For dollars that are growing more worthless every day? Nah. But what about your mortgage? Could you sell 80 pounds of coffee stash for $1000 per pound and use the $80,000 to completely pay off the mortgage? Yes, you could. And although the argument could be made that you wouldn't want to pay off a loan, in a chaotic economy it might makes sense to remove all claims to the property. Of course, you don't need to use coffee to hedge. You could use gold, silver, copper or some other commodity, ideally something in high demand, but you get the idea. The point is that the last thing you want to be in is dollars, which is why Robert Kiyosaki tells us "savers are losers". The converse could also be said to be true, which is that "debtors are winners" IF you have the right debt (secured by an asset that cash flows at less than the cost of the debt). We're not saying real estate is "no risk". There's no such thing. But there's also risk in doing nothing. We've been at this for awhile, and we get to talk with lots of really smart people, and from our vantage point, there's nothing we see on the horizon that looks better than properly structured residential income property for either deflation, inflation or hyper-inflation. But if you can think of something, let us know and we'll check it out! Knowledge is power, but only when acted upon. The hardest part of real estate is finding the right markets, the right team and the right deals - especially if you don't happen to live in an area where the numbers make sense. That's why we do our educational market field trips. We'll spend two and a half days showing you a market, introducing you to prospective team members (property managers, real estate brokers, lenders, etc.), talking strategy and risk mitigation. And no one will push you to buy anything. We're all there to learn together. Here's where we're going next this quarter: Dallas, Texas - May 4-6 Business friendly, oil rich, strategically located (distribution) and affordable, Dallas is one of the strongest markets in the country. Come see it first hand and decide for yourself! Click here to learn more. Atlanta, Georgia - June 1-3 Boasting the nation's busiest airport, Atlanta is a major distribution hub and headquarters for UPS, along with several other Fortune 500 companies. Atlanta has a strong, diverse economy and a big renter population, cash flows are strong in Atlanta. Click here to learn more. *** The Real Estate GuysTM radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed. • Connect with The Real Estate GuysTM on Facebook • Subscribe to the FREE podcast on iTunes • Send us your comments and question on our Feedback page. Upcoming Events Featured Resources • Dallas Market Field Trip - May 4-6, 2012 • Atlanta Market Field Trip - June 1-3, 2012 • Secrets of Successful Syndication - June 22, 2012 • Analyzing Markets and Properties: The Due Diligence Process- July 20-21, 2012 More... • Free Special Report: Fortunate Choice: From High-Tech to the Heart of Texas by Tom Wilson • Hot Read: Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes by Tom Wheelwright • More Free Special Reports Visit The Real Estate GuysTM Recommended Reading bookstore Encore Episode Practicing Safe Syndication with Special Guest Attorney Mauricio Rauld "I have listened to all of your podcasts multiple times. I have been investing in real estate for almost 10 years and I still learn new things from your show. Thank you and keep up the great work." - Nicholas K., 4/17/12 Not yet a podcast subscriber? Sign up today! It's free! About The Real Estate GuysTM Radio Show Since 1997, The Real Estate GuysTM have been broadcasting on conventional radio. In late 2008, the podcast version of the show was introduced and has become one of the most downloaded real estate podcasts on iTunes. Hosted by Robert Helms and Russell Gray, The Real Estate GuysTM radio show features lively discussion about topics that matter most to real estate investors. Notable guests include billionaires Donald Trump and Steve Forbes, best-selling author Robert Kiyosaki, former presidential candidate Herman Cain and many industry leaders and subject matter experts. The Real Estate GuysTM mission is to provide our audience with ideas, information, perspectives and resources useful to building wealth through real estate investing. For more information, visit www.realestateguysradio.com Get more than one copy of this newsletter? Sorry about that! Click here before you unsubscribe. Thanks for being a subscriber! The Real Estate GuysTM Radio Show and Newsletter are intended for educational and entertainment purposes only and should not be construed as tax, legal or investing advice for any specific person or circumstance. Always consult with properly qualified and retained professional advisors when making financial decisions. The Real Estate GuysTM Radio Show is supported in part by our sponsors. Some of the links and resources referred to in this newsletter may lead to products or services for which The Real Estate GuysTM Radio Show is compensated. © 2012 TREG Holdings LLC. All Rights Reserved. Permission is granted to freely share this newsletter in its entirety. Partial duplication or distribution is prohibited.

Short Sales exceed Foreclosures Deals!

Short Sales Start to Outpace Foreclosures Daily Real Estate News | Thursday, April 19, 2012 Banks are agreeing to more short sales, and for the first time, short sale transactions are exceeding foreclosure deals, according to the most recent housing data from Lender Processing Services (LPS) Inc. In January, short sales made up 23.9 percent of home purchases, according to LPS. Meanwhile, foreclosures made up 19.7 percent of sales. Just one year prior, foreclosures made up the bulk at 24.9 percent of transactions while short sales made up 16.3 percent. “It’s a fairly recent phenomenon that short sales have been increasing,” Jonathon Weiner, a vice president with LPS, told Bloomberg News. So why are banks getting more agreeable to short sales? Banks are realizing that short sale transactions usually sell for higher prices than foreclosures. In fact, foreclosed homes tend to sell for 29 percent less, on average, than comparable non-distressed properties. Short sales tend to sell at a 23 percent discount, according to Lending Processing Services data from January. Banks and government agencies in recent weeks have taken steps to speed up the short sale process, setting new timelines for how long mortgage servicers have to respond to short sales offers. Also, some banks, such as Wells Fargo and JPMorgan Chase, are even offering some home owners cash incentives — up to $35,000 — if they agree to do a short sale instead of let the home fall into foreclosure. Source: “Short Sales Surpass Foreclosures as Banks Agree to Deals,” Bloomberg News (April 17, 2012)

Advice from PODS to People Planning a Move: Dos: 1. Be flexible. Often it's the little things that push a buyer into the "yes" zone. If the buyer goes on and on about how much they love your ice maker, throw it in. If the buyer would like to close earlier and your new home is not ready, use a PODS container and store your belongings so you can meet the buyer's request. 2. Clean up. One person's baseball card collection is another person's cluttered nightmare. Declutter your home before you list it. PODS containers work well to store personal collections that cause clutter and can distract buyers from seeing the true potential of a home. 3. Wash the windows. Inside and out. 4. Clean your kitchen and bathrooms. Scrub like crazy, particularly the kitchen and bath (s). The kitchen may be old but it can still sparkle. De-clutter here too, especially counter top appliances, canisters, etc. Dont's: 1. Don't be greedy. The market-not your emotions-dictate's the price of your home. If comparables in the area, and several trusted real estate agents tell you your home is worth $400,000, you are not fooling anyone by pricing it at $500,000. 2. Don't get personal. If you're selling your house for a certain amount, and someone offers something much lower, don't take this as a personal affront and refuse to counteroffer. Negotiation is part of the process and letting your emotions get in the way can potentially ruin the deal. 3. Don't procrastinate. If you are serious about selling, consider doing it now. PODS would also love to have you use their services. I have a 15% off coupon good until the end of April or go to www.PODS.com/REMAX and use the promo code: RMA15.

Well Care and Water Testing By Wellcare®

Most of the words of wisdom below come verbatem directly from an E-Newsletter sent to me by the Well Owners Network:

Remember regular well maintenance is an important part of keeping your drinking water clean and pure and your well operating at peak performance.

WELL INSPECTION

You should keep all well records (testing, maintenance, and repair) with your original well log. If you don't have a well log (also known as a water well record or drilling report), ask your well contractor for a copy or contact the wellcare® Hotline for assistance.

Inspect your well head several times a year. Check the condition of the well cap and casing to make sure all are in good repair, leaving no cracks or other entry points for potential pollutants. Keep debris, chemicals, and decorations away from your well head.

Have the well system, including the pump, tank, pipes and valves, and water flow inspected every 10 years by a licensed well contractor. If you have no
inspection record and cannot determine the age of the well, have it inspected immediately.

If you need assistance locating a well contractor in your area, contact the wellcare® Hotline at 1-888-395-1033 or view our wellcare® information sheet on Selecting a Well Contractor Click here!


WATER TESTING

At a minimum, your water should be tested every year for bacteria, the most common water quality problem. Other tests may be recommended, depending on where you live and what is located near your drinking water supply.

For example, if your well is in an area of intensive agricultural use, test for nitrates and pesticides commonly used in that region. If you have problems with taste, odor, staining or color of your water, then test levels of iron, manganese, sulfate, and tannins.

Testing more than once a year may be warranted in special situations:
• someone in your household is pregnant or nursing
• there are unexplained illnesses in the family
• your neighbors find a dangerous contaminant in their water
• you note a change in water taste, odor, color or clarity
• there is a spill of chemicals or fuels into or near your well
To get more information on local water testing recommendations and to obtain a list of state certified water testing laboratories in your area contact your local or state health department or the wellcare® Hotline at 1-888-395-1033. Keep a copy of your water test results with your well log.

If you have questions on your test results, contact the wellcare® Hotline or view our wellcare® information sheet on Understanding Drinking Water Test Results Click here!

WATER TREATMENT

You should always test your drinking water
before installing any water treatment device. The more you know about the quality of your water and what treatment may be needed, the more likely you will be to avoid unnecessary, costly or inappropriate equipment. If you already have a water treatment device you should test your treated water annually to make sure the device is working properly.

Always follow the inspection and maintenance schedule provided by your water treatment device manufacturer or water treatment professional. Treatment
systems must be properly maintained to ensure water quality. Create a treatment maintenance log and keep it with your well log.

For more information on drinking water treatment contact your local water treatment professional or view our wellcare® information sheets on

Drinking Water Treatments
Drinking Water Treatment Devices
Drinking Water Treatments & Costs


SEPTIC SYSTEMS

Don't forget your septic system! Your septic system, just like your water well system, needs a regularly scheduled maintenance program. Create a septic maintenance log and keep it with your well log.

Inspect your septic tank each year for capacity and leaks. Have your tank pumped out as needed, usually every three to five years. Frequency of pumping depends on demand which is based on the number of people in the household and the size of the tank. Repair the tank or drainfield system as needed to prevent leaks.

A poorly maintained wastewater treatment system poses a serious threat to the quality of your drinking water and can require expensive repairs. The cost of pumping a septic tank is far less than the expense of replacing one.

For more information on maintaining a septic system contact your septic service or to receive the kind of information provided here in this newsletter where you will find tips to help you through the maintenance process, contact the wellcare® Hotline at 1-888-395-1033. Wellcare® Well Owners Network members have access to the wellcare® Hotline, a free, friendly service that can answer your well and well water questions.

FHA TAKES ADDITIONAL STEPS

"Earlier this week, FHA announced that it is increasing FHA mortgage insurance premiums. Upfront premiums will be increasing by 0.75% on all loans. Annual premiums on loans less than $625,500 will increase by 0.10%. The increased premiums will affect all case numbers assigned on or after April 1, 2012. Annual premiums on loans exceeding $625,500 will increase by 0.10%, for all case numbers assigned on or after April 1, 2012 and by an additional 0.25% effective with case numbers assigned on or after June 1, 2012. An FHA mortgagee letter will be published soon with details.", shared by Kathleen Dartez with RE/MAX 100.

FOR RELEASE
Monday
February 27, 2012


FHA TAKES ADDITIONAL STEPS TO BOLSTER CAPITAL RESERVES
New premium structure will help protect FHA’s MMI fund

WASHINGTON – As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans. FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount. Upfront premiums (UFMIP) will also increase by 0.75 percent.

These premium changes will impact new loans insured by FHA beginning in April and June of 2012. Details will soon be published in a Mortgagee Letter to FHA-approved lenders.

“After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante. “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP it collects by 0.10 percent. This change is effective for case numbers assigned on or after April 1, 2012. FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500. This change is effective for case numbers assigned on or after June 1, 2012.

The UFMIP will be increased from 1 percent to 1.75 percent of the base loan amount. This increase applies regardless of the amortization term or LTV ratio. FHA will continue to permit financing of this charge into the mortgage. This change is effective for case numbers assigned on or after April 1, 2012.

FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month. These marginal increases are affordable for nearly all homebuyers who would qualify for a new mortgage loan. Borrowers already in an FHA-insured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.

Taken together, these premium changes will enable FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund, contributing more than $1 billion to the Fund, based on current volume projections through Fiscal Year 2013.

###

HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the
need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build
inclusive and sustainable communities free from discrimination; and transform the way HUD does business.
More information about HUD and its programs is available on the Internet at www.hud.gov and
http://espanol.hud.gov. You can also follow HUD on twitter @HUDnews, on facebook at
www.facebook.com/HUD, or sign up for news alerts on HUD's News Listserv.

MOLD: PREVENTION AND CONTROL

MOLD: PREVENTION AND CONTROL

Mold is a common occurrence in homes, but it can potentially cause health problems as well as damage to structures and surfaces if it is not controlled. Mold begins growing indoors when spores come in contact with wet surfaces or substances. Once established, mold can be very difficult to remove successfully – so prevention is the key.


MOLD PREVENTION
Mold cannot grow in the absence of moisture. Moisture can take the form of leaks, spills, condensation, and humidity, so controlling sources of moisture is the most important step in mold prevention. Here are some ways homeowners can avoid creating conditions in which mold will thrive:

• Be alert for signs of leaks in supply and waste lines for bathrooms, kitchens, utility sinks, and laundry areas. Have any leaks fixed and dry the area thoroughly.
• Check the condition of grout and tile on shower walls, floors, and around bathtubs. Repair damaged grout, and seal it to prevent mold from being absorbed.
• Increase ventilation to the outside by using exhaust fans, and be sure the attic is properly ventilated.
• Regularly empty and clean drain pans and hoses for air conditioning units and dehumidifiers.
• Check for roof leaks that allow water to enter attic spaces or build up under roof shingles. Even a small amount of moisture can cause big problems down the road.
• If possible, lower the overall humidity in the home to decrease condensation and create a less mold-friendly environment.

Places that tend to stay damp, such as showers, may be more difficult to keep entirely free of mold but it can be minimized. Diligent cleaning, opening a window or regularly using a ventilation fan are often enough to keep mold at bay.


MOLD REMOVAL
Once mold has become established in the home it can be difficult to eradicate. Depending on the location and severity of the mold problem, a homeowner may need to engage a professional certified in mold remediation to remove it. A qualified professional will also take preventive measures to lessen the likelihood of recurrences.

Article courtesy of Pillar To Post Professional Home Inspection
www.pillartopost.com

Hertz and radio waves

Heinrich Rudolf Hertz

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Born: 22 Feb 1857 in Hamburg, Germany
Died: 1 Jan 1894 in Bonn, Germany

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Heinrich Hertz's parents were Gustav Ferdinand Hertz and Anna Elisabeth Pfefferkorn. Gustav Hertz was a Jew who converted to become a Lutheran. Anna, the daughter of a Frankfurt doctor, came from a Lutheran family, so Heinrich was brought up as a Lutheran. He was the oldest of his parents' five children, having three younger brothers and one younger sister. Gustav was a barrister in Hamburg, later moving to Oberlandsgerichtsrat, and finally in 1887 becoming a Senator. Let us note that one of Heinrich's brothers was named Gustav Hertz and he had a son, also named Gustav Hertz who also has a biography in this archive.

Heinrich's formal education began at the age of six when he was enrolled in a private school run by Richard Lange [1]:-

... a taskmaster who had no patience with error. [Heinrich's] mother watched closely over his lessons, determined that he should be - as he was - first in his class.

For ten years Hertz studied at Richard Lange's school. He showed a whole host of talents: he had considerable practical skills which he used in doing woodwork with tools he had been given, and later he used a lathe to make apparatus with which he carried out experiments. He also had great language skills, both with modern and classical languages. In 1872 he entered the Johanneum Gymnasium in Hamburg and there he continued to excel at a wide range of subjects. He even took additional subjects with a private tutor, such as Arabic and technical drawing, which were outside the range offered at the school. Not only was he good at many subjects but he also liked these topics and struggled to make decisions about which he should specialise in at university. Should he take engineering and use his practical skills, or should he study the natural sciences which he also loved? He took his Abitur examinations in the spring of 1875 and, having decided to make a career in engineering, he went to Frankfurt to gain practical experience. He had made the wrong decision.

Hertz spent the year 1875-76 in Frankfurt where he gained practical experience in the building industry and also studied for the state examinations in engineering. Already at this stage he began to feel that engineering might not be the right topic for him. He did not enjoy the work environment, he was too isolated and this he felt was due to working in the private sector. He was now struggling to come to terms with having made the wrong decision; should he waste the time spent on this false start and begin again or should he make to best of a bad job and persevere? He decided to continue to follow the engineering route, going to Dresden Polytechnic for a short while in 1876 before leaving to do military service for a year in Berlin. After completing this year in the railway regiment, he went to Munich with the intention of continuing his engineering course at the Technische Hochschule there. That he was on the wrong road was by now so clear to him. There were several new factors in the equation which affected the issue such as, on the negative side, his unhappiness with the working environment of engineering firms, and on the positive side, his enjoyment of the mathematics he had learnt as part of his engineering studies. Hertz's father was supplying the financial support to allow him to undertake higher education so if he were to change direction he would certainly need his father's approval. He explained his soul searching problems to his father and asked if he would continue to support him if he entered the University of Munich and aimed at a research career. McCormmach writes [1]:-

To him engineering meant business, data, formulas - an ordinary life on a par with bookbinding or wood working - and he was uninterested. Although the Technische Hochschule had a good physics laboratory, a course of study there led to state examinations and usually a practical career. The university by contrast promised a life of never-ending study and research, one that suited Hertz's scholarly, idealistic tastes; he knew above all he wanted to be a great investigator.

The arguments convinced his father that he should support his son's change of direction. Hertz matriculated at the University of Munich in 1877 and spent the first semester gaining the necessary background in mathematics. He was advised by von Jolly to read works of Lagrange, Laplace and Poisson [1]:-

Although Hertz thought that, when properly grasped, everything in nature is mathematical, he was in his student days - as throughout his career - interested primarily in physical and only indirectly in mathematical problems.

He took courses on physics, zoology and astronomy as well as on mathematics taking courses in the second semester both at the University and at the Technische Hochschule. After a year at Munich he moved to Berlin, not due to any unhappiness with what he was now doing but rather because it was the standard practice at the time for German students to move between institutions. At Berlin he studied under Helmholtz and Kirchhoff. Immediately, despite only one year of university study behind him, Hertz wanted to start research. A prize had been announced by the Philosophy Faculty for the solution of an experimental problem concerning electrical inertia and Hertz was very keen to enter. The prize had been proposed by Helmholtz and, despite Hertz's lack of experience, he realised his great potential and offered Hertz a room in his Physical Institute and considerable support in directing Hertz to the background literature.

Now Hertz knew he was on the right road [1]:-

He wrote home that his great satisfaction lay in seeking and communicating new truths about nature. Occupied any other way he felt a useless member of society; private study as opposed to research seemed selfish and indulgent.

He was awarded the Philosophy Faculty prize and gold medal in 1879. Helmholtz now suggested that Hertz work on the prize topic proposed by him for the Berlin Academy of Sciences. This asked for experimental evidence for or against the assumptions that underlied Maxwell's theory. This sounded interesting to Hertz yet wanted to progress rapidly in his chosen area and felt that he could not embark on a project likely to take around three years. He declined to follow Helmholtz's proposal, and instead wrote a theoretical work Über die Induction in rotirenden Kugeln on electromagnetic induction and submitted it for his doctorate in January 1880; it had only taken him three months to complete. Hertz's work on the electromagnetic fields associated with a circular disk turning about its axis of symmetry in a magnetic field parallel to the axis of the disk is considered in [7]. He took the necessary oral examination in the following month and was awarded his doctorate with distinction by the University of Berlin. He was then employed as an assistant to Helmholtz at the Berlin Physical Institute.

During the three years 1880-83 that Hertz worked at the Berlin Physical Institute, he wrote fifteen papers on a variety of topics. Most related to electricity, two were on cathode rays, and several were on instruments such as a new ammeter and new hygrometer. Hertz had to decide on the best way to progress his career. He was already in the best place to undertake research in physics and working with Helmholtz who, Hertz felt, was the best physicist in the world. However to become a privatdozent in Berlin would put him in competition with a large number of scientists who were already in privatdozent positions there. He made a decision to try to take advantage of the expansion of mathematical physics throughout German universities and, although his real love was in experimenting, to seek a privatdozent position in mathematical physics. The University of Kiel was seeking someone in exactly that area so, with strong recommendations from Helmholtz, he habilitated in Kiel.

It was in Kiel that Hertz first showed his strength as a lecturer. He had deliberately taken a position in mathematical physics at a university which had no physical laboratories fitted out for research. As a consequence he undertook theoretical work, writing three papers during the two years he worked there. One paper was on meteorology, one was on electric and magnetic units, while the third was the most important since it represented his first work on Maxwell's theories. After two years he was keen to return to an institution with a strong experimental reputation and the offer of an extraordinary professorship in the Technische Hochschule in Karlsruhe seemed ideal. He accepted the position and gave his inaugural lecture On the energy balance of the Earth on 20 April 1885. (See [24] where the lecture is published for the first time.) The Technische Hochschule in Karlsruhe is today the Universität Karlsruhe, and it was here that Hertz made his most important discovery, the one with which his name is mostly associated, namely his famous discovery of long-wavelength electromagnetic waves in 1888. However, when he first took up the post it was far from clear that he was on the verge of greatness [1]:-

His stay began inauspiciously; for a time he was lonely and uncertain about what research to begin next.

He was then distracted from research for the first time since he first arrived in Berlin in 1878. He met Elizabeth Doll, the daughter of one of his colleagues, soon after arriving in Karlsruhe and they married in July 1886; they had two daughters, Johanna and Mathilde. It was in November 1886 that he began work on the problem which Helmholtz had posed for the Berlin Academy of Sciences and had tried to persuade him to become involved with back in 1879. However, it may have been a wise decision to delay beginning the work as S D'Agostino [11] suggests that Hertz's derivation of Maxwell's equations in 1884 formed an important part of the structural background to his studies on the propagation of electric waves which he now carried out. Doncel examines Hertz's thinking in [14]. He writes:-

This paper provides new elements for reconstructing Heinrich Hertz's conversion from an electrodynamic concept to a concept of field theory, a process that took place between September 1887 and February 1888. ... It is concluded that Hertz's idea of 'air waves' belongs at the very end of this process, and was mainly attained through experimental hints found within Helmholtz's theoretical framework.

Now Hertz saw his discovery as merely a step towards a deeper understanding of Maxwell's theory. He certainly did not foresee the incredible applications which, after Marconi read Hertz's paper and saw its practical application, would transform communication and entertainment. Hertz wrote:-

I do not think that the wireless waves I have discovered will have any practical application.

D'Agostino in [13] adds more to understanding Hertz's research in electromagnetic theory and his development of Maxwell's experiments. Hertz needed new apparatus to prove Maxwell's theory of the existence of electromagnetic waves and he worked his way towards this which was finally achieved in 1888. During four years in Karlsruhe Hertz published nine papers. His fame was now considerable and he was approached by the University of Giessen with a persuasive offer. However he was also asked to go to Berlin as a replacement for Kirchhoff. As always, Hertz thought deeply about the consequences of accepting the positions. Berlin, he mused, would mean a position of high responsibility, considerable administrative duties, and little time for research. He felt that this would be a good research move later in his career, but he was only 31 years old and he wanted to devote most of his time to research. Helmholtz told Hertz that he would make sure he had a top quality laboratory in Berlin but still Hertz did not feel it was the right move. Then he received an offer of an ordinary professorship at the University of Bonn in December 1888 [1]:-

He gladly accepted, more for Bonn's beautiful and quiet setting on the Rhine than for its scientific prospects.

The vacancy at Bonn came about because Rudolf Clausius had died in August 1888. When Hertz moved to Bonn in the spring of 1889 not only did he move into Clausius' chair but he also moved into his house. He undertook more research into Maxwell's theories, publishing two theoretical papers in 1890. He searched for a mechanical basis for electrodynamics starting from Maxwell's equations. As he wrote in the Introduction to Electric waves (an English translation of some of his papers published in 1893):-

Maxwell's theory is Maxwell's system of equations.

Hertz was a fervent believer in the aether and during this work proposed identifying electromagnetic fields in free space with polarization of the aether. McCormmach writes [1]:-

Hertz brought an unparalleled clarity to Maxwell's theory, organising its concepts and its formalism so that others were able quickly to go beyond him.

Even before moving to Bonn, Hertz suffered the first signs of his serious health problems. He had already complained of toothache and had major dental treatment. In 1889 he had all his teeth removed in an attempt to cure the persistent condition. However, by early 1892 the problem returned, this time in his throat and nose. The pain became to intense that he could no longer work. He was given hay fever treatment and went to health clinics to try to find a cure. Nothing was successful, and this was not too surprising since the condition was caused by a malignant bone condition. Bravely he began teaching again in the spring of 1893, undergoing several operations which at least provided a short spell of respite but one consequence of the illness was that he now suffered from depression. He began his 1893-94 lecture courses in the autumn of 1893 and on 3 December he sent the manuscript of his book Die Prinzipien der Mechanik to the publisher. He gave his final lecture on 7 December. He died less than a month later.

In mechanics Hertz followed Kirchhoff and considered only length, time and mass as the fundamental entities, force being a derived concept. In Die Prinzipien der Mechanik (Principles of mechanics) Hertz hoped to explain all electromagnetic phenomena, in terms of a mechanical aether [1]:-

Hertz explained in the Introduction to the 'Principles' that to construct a mechanics capable of accounting for the lawful interaction of perceptible bodies it was necessary to add a hypothesis to the three concepts [length, time and mass]. The hypothesis was that in addition to perceptible masses the universe contained hidden, moving masses bound to one another by rigid constraints.

In [18] Lützen discusses Hertz's introduction of hidden mass. In [19] he talks about Hertz's approach to mechanics having three novelties: (1) a philosophical introduction, (2) an account of mechanics that does not introduce force as a basic concept, and (3) a geometric form. In fact in [26] Tougas claims that the philosophical introduction to Die Prinzipien der Mechanik strongly influenced Wittgenstein's Tractatus logico-philosophicus. (See also Barker [6]. Hamilton [15] and Kjaergaard [17] where Hertz's philosophy is discussed.) Another interesting approach to the same question is by Wilson in [27]. He writes:-

During the past decade and a half, several scholars have tried to gain a better understanding of Wittgenstein's early thought by examining the philosophical aspects of his scientific education. Those taking this historical approach have focused almost exclusively on the connection between Wittgenstein's picture theory of linguistic meaning and the epistemology of mental pictures developed by the physicist Heinrich Hertz in the introduction to his Die Prinzipien der Mechanik, published in 1894. They have taken their cue, quite naturally, from Wittgenstein, who refers twice to Hertz's work in the Tractatus logico-philosophicus. In addition to Hertz, but to a much lesser extent, they have also discussed the role played by Ludwig Boltzmann's philosophical writings in Wittgenstein's intellectual development. ... While analysing and stressing the importance of Hertz's influence on Wittgenstein, however, they have misconstrued the chronological and substantive relationship between Hertz's philosophy and the philosophical writings and ideas of Boltzmann. This, in turn, has significantly affected the current understanding of the genesis and development of Wittgenstein's early thought.

An English translation of Die Prinzipien der Mechanik was published in 1899, and reprinted by Dover Publications in 1956.

After Hertz died, one of his friends gave this eulogy:-

He was a noble man, who had the singular good fortune to find many admirers, but none to hate or envy him; those who came into personal contact with him were struck by his modesty and charmed by his amiability. He was a true friend to his friends, a respected teacher to his students, who had begun to gather around him in large numbers, some of the coming from great distances; and to his family a loving husband and father.


Article by: J J O'Connor and E F Robertson

Practical Advice for New Homeowners

Home News Thanks to Tim Higgins 2010 -thiggins@embracehomeloans.com

Practical Advice for New Homeowners

There's nothing more exciting than opening the door to your first new home and knowing that it's actually yours, that you actually own it! No landlord bothering you about every little thing. No silly rules about what colors you can paint or what renovations you want to make. Finally you can do whatever you want to do in your home!

And while this is a great feeling, and the pride you feel is natural and well deserved, don't allow yourself to get too carried away with your newfound freedom. You worked hard to earn this opportunity and you don't want to potentially jeopardize your investment by letting your emotions get the better of you.

If you've recently bought your first home or you plan to do so soon, take a few moments to think about the practical side of home ownership before you start making any major changes or renovations. Doing this will help ensure that your first home becomes the personalized place you always wanted and worked so hard to get.

Get properly insured – Before you decide to build or tear down anything, be sure that you are properly insured. Even if you enjoyed the full $8,000 tax credit for first-time home buyers (or the full $6,500 tax credit now available to qualified "repeat" buyers), sit down with your insurance provider and make sure you're covered on all fronts before you do anything. It doesn't make sense to spend your tax money upgrading your home if you're not protected in advance.

Maintenance before makeover – It's true that you no longer have a landlord looking over your shoulder for every little thing. But, you also don't have a landlord to turn to if something should go wrong. So, before you think about beautifying your new home, think first about fortifying it. Invest in necessary repairs first and avoid surprises down the road.

Go with the pros – When the time does comes to make those changes, be sure to hire the best, most qualified people. This doesn't mean you can't paint or do the little things that can make a big difference. But when it comes to the big stuff, hire the pros for the best results and to avoid injury. Remember, your new home is an investment and it deserves the highest care and attention you can give it.

Budgeting for maintenance on a home

It's important to remember that all homes-old or new-need ongoing maintenance.

First, buyers should understand the 1% rule. This rule postulates that normal maintenance on a home is about 1% of the value of the home per year. For example, a $250,000 home would require $2,500 per year to maintain. This would be enough to replace the roof covering...and then, a few years later, to replace a failed hot water tank...and then a few years more until a new central air system is required.

Then there is the 3% rule. Some experts say that home buyers should plan on spending 3% of the value of the home in the first year of ownership. This is because new homeowners will most likely have to buy drapes, blinds, a washer and dryer, a stove, maybe even a new roof covering. Also, new homeowners often customize the environment to their taste, so they need to budget for repairs, replacements and maintenance.

In addition, most home components have fairly predictable life cycles. For example, the typical life cycle of a high-efficiency furnace is 15 to 20 years. What this means is that most high-efficiency furnaces last between 15 and 20 years.

One way to know the extent of the maintenance needed and the costs to repair and/or replace items is to have a home inspection conducted. Home inspectors are required to let the buyer know if a component is significantly deficient or if it is near the end of its life cycle (service life), and a reputable home inspection company may offer up-to-date repair-cost guides to help clients with their planning.

Home inspectors work with Realtors and buyers to help them understand the issues that are found in the home, regardless of age, offering the right perspective and objective information. Home buyers need to understand that it's normal for items in a home to wear out. This should be regarded as normal "wear and tear" and not necessarily a defect.

A good home inspection determines the current condition of the house, offering a report of all the systems and components in need of maintenance, service, repair or replacement.

For example, consider a home inspection that uncovers that the heating system is old and requires replacement. A home buyer may see this as a huge problem. However, this problem may be the only item in the home that requires attention. If a buyer were to look at this situation in perspective, this home could be well above average-a home merely requiring a new furnace.

A good home inspection provides objective information to help the buyer make an informed decision. Knowing what items need to be budgeted for repair or replacement will help home buyers plan or negotiate better and not be stuck with unexpected costs of hundreds, or even thousands of dollars in the long run. Also, fixing these items will make a marked improvement on the performance of a home and minimize issues that could affect its future integrity...and value.

For more information, please contact your local Pillar To Post home inspector.