5 Reasons to Buy a Home This Fall

The days may be getting shorter, but the list of home-shopping benefits is getting longer.

Real estate markets ebb and flow, just like the seasons. The spring market blooms right along with the flowers, but the fall market often dwindles with the leaves — and this slower pace could be good for buyers.

If you’re in the market for a home, here are five reasons why fall can be a great time to buy.

1. Old inventory may mean deals

Sellers tend to put their homes on the market in the spring, often listing their homes too high right out of the gate. This could result in price reductions throughout the spring and summer months.

These sellers have fewer chances to capture buyers after Labor Day. By October, you are likely to find desperate sellers and prices below a home’s market value.

2. Fewer buyers are competing

Families who want to be in a new home by the beginning of the school season are no longer shopping at this point. That translates into less competition and more opportunities for buyers.

You’ll likely notice fewer buyers at open houses, which could signal a great opportunity to make an offer.

3. Sellers want to close by the end of the year

While a home is where an owner lives and makes memories, it is also an investment — one with tax consequences.

A home seller may want to take advantage of a gain or loss during this tax year, so you might find homeowners looking to make deals so they can close before December 31.

Ask why the seller is selling, and look for listings that offer incentives to close before the end of the year.

4. The holidays motivate sellers

As the holidays approach, sellers are eager to close so they can move on to planning their parties and events.

If a home has not sold by November, the seller is likely motivated to be done with the disruptions caused by listing a home for sale.

5. Harsher weather shows more flaws

The dreary fall and winter months tend to reveal flaws, making them a great time to see a home’s true colors.

It’s better to see the home’s flaws before making the offer, instead of being surprised months after you close. In fact, the best time to do a property inspection is in the rain and snow, because any major issues are more likely to be exposed.

Top photo from Shutterstock.

Related:

Originally published October 2015.

Source: zillow.com

Are the Low Mortgage Rates a Home Buyer Trap?

Despite a slight uptick this week, mortgage rates are still pretty much rock bottom, and unarguably at ridiculously low levels.

This has sparked yet another refinance boom, with mortgage application volume rising to its highest point since May 2009, per the latest data dump from the Mortgage Bankers Association.

This is great news for existing homeowners with plenty of home equity looking to refinance to a lower rate. It’s also working out nicely for those who don’t have equity thanks to programs like HARP 2.0.

All in all, it’s a gift to these borrowers who are experiencing some serious monthly mortgage payment relief.

But what about new and prospective home buyers?

Are People Buying Because of the Low Rates?

With rates this low, you have to wonder if it’s all a big trap (whether intentional or not) to lure would-be buyers off the sidelines and into the game.

If you’ve followed the housing market lately, at least in certain regions of the country, such as Los Angeles, homes are speeding into pending status just days after being listed.

In fact, many are pending just one or two days after being listed. It’s looking like a serious seller’s market, though obviously a very unconventional one.

The low rates have increased affordability so much that a new pool of buyers has essentially been created, which has facilitated both standard and short sales.

Again, great news for those who have waited very patiently to sell their homes; many can finally do so!

And perhaps even better for the housing/mortgage market, with seemingly bad loans being replaced with better ones.

Heck, I’m even seeing a ton of flips that are actually selling for a tidy profit. I thought flips were dead?

Reminder of the Homebuyer Tax Credit

But it all seems reminiscent of the boost seen with the now infamous homebuyer tax credit.

That “free money” created a short-lived, yet steep run-up in home prices as first-time home buyers came out in droves.

Just a short time later, it became clear that those who purchased a home did so at a premium, and their tax credit was quickly eclipsed by a larger loss in home value.

If you take a look at this home price chart, you’ll see how the homebuyer tax credit stoked demand, but its effect was clearly fleeting.

In fact, those who purchased before the tax credit expiration were actually worse off compared to those who bought later on.

To bring it all together, home prices were pumped up as a result, similar to what we may be seeing with the record low mortgage rates.

With rates so low, homeowners and their clever real estate agents probably feel they can list their homes for more than they could have six months ago.

And the whole “it’s never been a better time to buy” adage is back.

Economy Still in Disarray

The big problem is that the economy is still a huge mess, with the European crisis hanging over our heads, and domestic unemployment still far from unresolved.

Then there are the millions of homes in the process of foreclosure, or knocking at its door.

So is this artificial stimulus actually going to help the real estate market long-term, or is it just another quick fix with no staying power?

My gut tells me that this recent run-up in prices and virtual 180 in consumer sentiment is bad news.

Getting into a bidding war over a house just months after no one was interested seems really fishy.

Additionally, all these calls of a “housing bottom” are concerning as well. You always have to wonder when every single media outlet (including your local news channel) is claiming that the worst is behind us.

Of course, the low rates have led to lower mortgage payments, even with the recent home price increases factored in.

So there’s some serious power behind those rates. The question is will you be able to buy a home next year at an even better price with a similar (or even lower) interest rate?

Read more: Home prices vs. mortgage rates.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.

Source: thetruthaboutmortgage.com

Stock Analyst Accuracy – Why Ratings Can Be Wrong & When to Listen

The stock market is a complex machine made up of intricate technologies, financial experts, and investors.

Some of the most highly-regarded experts on Wall Street are the research analysts who spend their days looking into opportunities in the stock market. These analysts make their money by sharing their opinions about what they believe will happen in the future.

Knowing that successful investing is born in research, many beginner investors make the decision to blindly follow the opinions of analysts rather than doing their own research when making investment decisions.

This is a very dangerous activity. Here’s why.

What Do Stock Market Research Analysts Do?

Research analysts — also called investment analysts, securities analysts, equity analysts, sell-side analysts, or financial analysts — are financial professionals charged with analyzing the financial stability and potential for growth of publicly traded companies.

Research analysts look into company metrics like historic revenue growth and earnings growth. They also dive into market conditions.

For example, if the company being analyzed is in the computer gaming industry, the analyst researches how large that industry is, how fast it’s growing, and what percentage of the industry the company has tapped into.

Once their research is complete, research analysts make predictions, including:

  • Earnings Per Share (EPS). Stock market analysts will attempt to predict the earnings per share (EPS) that companies they follow will produce. EPS divides the total net income generated in any given period by the number of shares of the company in existence.
  • Revenue. Research analysts also take a stab at predicting how much revenue the company will generate over the next year. Investors pay close attention to revenue because when revenue grows, it shows that sales are increasing, helps to increase profit margins, and ultimately leads to increased profitability for the company.
  • Share Price. Finally, research analysts make an attempt to predict what the price of the stock will become over the next year. This statistic is known as the price target.

Stock market analysts also make recommendations and providing ratings, generally including:

  • Buy. A buy rating, sometimes called an Outperform or Overweight rating, insinuates that buying the stock at the current share price is a good deal. This rating means the analyst believes that the stock has the potential to produce gains that outperform the overall stock market’s returns in the next 12 months.
  • Hold. A hold rating, sometimes called a Market Perform or Equal Weight rating, suggests the stock is likely to perform in line with the overall stock market. Analysts don’t believe that you’re going to earn returns any larger than the average across the market but believe that growth is still likely ahead.
  • Sell. The sell rating, also called the Underperform or Underweight rating, is a recommendation that investors avoid the stock if they don’t already own it and sell it if they do. This rating means that the analyst believes the stock’s performance will lag compared to the stock market as a whole, and purchasing of the stock could lead to losses.

Why You Shouldn’t Blindly Follow the Opinions of Research Analysts

With predictions surrounding earnings per share, revenue, and share price, coupled with ratings from research analysts, many newcomers believe the research legwork has been done for them, deciding to dive into any stock analysts deem to be a strong investment opportunity.

After all, isn’t that the analysts’ job? Why put the time into researching something that the professionals have already analyzed?

There are plenty of reasons to research your own investment opportunities rather than blindly following analysts. While research analysts are highly paid experts that have a knack for making decisions in the stock market, their opinions often can’t be trusted as the basis for objective investing decisions, as you’ll see below.

1. A Vested Interest

Research analysts don’t make predictions on stocks for the pure joy of helping investors. They have to make their six-figure salaries somewhere. As a result, these analysts often work for:

  • Brokerages. Although regulatory authorities are supposed to keep sell-side analyst opinions as far away from brokerages as possible in order to maintain objectivity in the investing process, that doesn’t seem to be happening. Brokerages often make investment recommendations based on the research provided by their analysts. This often creates a bias, with analysts recommending stocks that are best for their employers rather than the investors their employers serve.
  • Mutual Funds, ETFs, and Index Funds. Analyst opinions have the ability to move the market. A positive opinion about a company can send a stock soaring while a negative opinion can cause sharp declines. Mutual funds and many exchange-traded funds (ETFs) employ research analysts, which gives the analyst a vested interest in forming an opinion about a stock that’s in the best interest of the fund’s portfolio, and not always an unbiased depiction of what to expect from the stock.
  • Hedge Funds. The Big Short Squeeze involving GameStop, AMC, and several other stocks outlined the battle between hedge funds and retail investors. However, some of the research analysts most trusted by retail investors happen to work for the hedge funds that bet against them. Again, the analysts’ employment at hedge funds creates a potential bias when making predictions about trending tickers.

The bottom line is that research analysts aren’t working for you. Who they work for can create biases that make their work unreliable at best; the average retail investor simply shouldn’t trust them.

2. Analysts Are Highly Inaccurate

You would think financial professionals who spend their lives analyzing opportunities in the stock market would be pretty good at what they do. You might be surprised to learn that the average stock market analyst isn’t nearly as accurate as you may think.

Here are the stats analysts don’t want you to know, courtesy of FactSet.com:

  • Historic Performance: The majority of publicly traded companies listed on the S&P 500 beat analyst expectations when reporting financial results, and this percentage is growing quickly.
  • EPS Surprise: In the fourth quarter of 2020, 81% of companies listed on the S&P 500 reported a positive EPS surprise, meaning that these companies beat analyst expectations. That’s a huge miss on a key valuation metric used by most investors.
  • Revenue: In the fourth quarter of 2020, 79% of companies listed on the S&P 500 beat analyst expectations in terms of revenue.

Those are staggering statistics that show the highly paid research analysts who are expected to be pretty accurate had up to an 81% failure rate. If your investment advisor admitted to being wrong 81% of the time, would you continue to pay them to manage your investment portfolio?

3. Misleading Predictions Artificially Inflate Success Rates

Unfortunately, Wall Street doesn’t gauge the success of Wall Street analysts based on the accuracy of their EPS, revenue, or share price predictions. Research analyst success is gauged solely on their ratings system. What percentage of buy-rated stocks grew, and what percentage of sell-rated stocks fell?

Analysts use this incomplete view to their advantage, artificially inflating their success rate.

For example, say an analyst has a buy rating on a stock and expects earnings per share will come in at $0.50 on revenue of $50 million for the quarter. They know that when companies beat analyst expectations, investors react in positive ways.

So the analyst may make a public prediction that the company will report earnings of $0.45 per share on $47 million in revenue. These publicly stated estimates leave room for error and then some.

When the company reports its financial results, it is more likely to beat expectations than it would be if the analyst had shared their true opinion.

Moreover, as a result of the beat expectations, the stock is more likely to climb, making the analyst’s buy rating more likely to be placed in the books as an accurate one.

4. Stock Price Predictions Are Only Good for One Year

Building wealth in the stock market is a long-term process. Most successful investors invest with a time horizon measured in decades.

However, research analysts only follow 12-month time frames. A stock with a great outlook in the short term may be a horrible long-term investment.

Moreover, short-term predictions in the stock market are exposed to the short-term volatility that’s become the norm, making them highly unreliable. After all, stock market analysts can’t predict major events that may cause short-term volatility.

One of the best examples of this is the COVID-19 pandemic.

An analyst may have seen great promise in a well-run and profitable travel company in May of 2019, with no sign that a pandemic was coming that would grind most travel to a halt. The analyst may have expected strong revenues and earnings over the next year, coupled with incredible share price growth.

By the end of the 12-month time frame, the analyst would have been way off. In May of 2020, travel stocks were having a horrible time. Almost nobody could expect a travel stock to have a great year when half the country is locked down.

Many of these stocks saw a strong recovery as 2020 came to a close and travel restrictions eased, but the research analyst’s view doesn’t go any farther than the 12-month mark.

So was the analyst right or wrong for liking the travel stock in May 2019? This example demonstrates why the short-term nature of analysts’ predictions makes them pretty unreliable.

5. Research Analysts Are More Likely to Rate a Stock a Buy Than a Sell

The vested interest research analysts often have in the stocks they cover clearly comes out when you look into the statistics of the ratings they provide.

According to FactSet, there were 11,147 analyst ratings on S&P 500 companies as of December 31, 2017. Here’s how the total universe of analyst ratings broke down:

  • Buy Ratings: 49.5%
  • Hold Ratings: 45.3%
  • Sell Ratings: 5.2%

Sure, it’s true that more publicly traded companies do well than fail. However, you’d be right to question whether 94.8% of stocks are worth buying or holding.

Moreover, it’s impossible for 49.5% of stocks to outperform the market, 45.3% of stocks to trade in line with market performance, and just 5.2% of stocks to underperform the market. The numbers just don’t add up.


Wall Street Analysts Have Their Place

Although it’s never a good idea to blindly follow anyone into an investment, including research analysts, these analysts do have their place. For all their shortcomings, here’s how research analysts can provide valuable insights to everyday retail investors:

1. As a Source of Validation for Your Own Research

Hopefully, by now, you know that you should do your own due diligence before you invest in a company. However, it’s nice to have some way to validate your research.

Analyst opinions are a great way to do that.

Sure, analyst predictions aren’t always accurate, but if you’ve done your own research and believe that a stock is going to rise in value, it’s a good idea to look into what percentage of analysts rate the stock a buy.

If the overwhelming opinion among analysts is a buy rating, chances are you’re on the right track with your research.

TipRanks is a free way to go about seeing how many analysts cover a stock and what their overall opinion on the stock is.

2. As a Clear Red Flag on Stocks In Trouble

Analysts generally have a bias when it comes to stocks they cover, and they tend to rate stocks in a positive way. As such, if the vast majority of analysts that cover a particular stock rate it a sell, that acts as a big red flag that something is wrong with the company.

Sure, you don’t want to blindly follow analysts into a fire, but you also shouldn’t ignore blatant warnings that a stock is likely to fall. If lots of analysts are heading for the exits, they might be smelling smoke.

3. As a Gauge of Popularity Among Investors

Analysts don’t tend to waste their time researching stocks that nobody’s interested in. Instead, they want their research to be read and their name to be seen.

As a result, you can use the number of analysts that cover a stock to gauge that stock’s popularity. After all, the more popular a stock is, the more liquid an investment in it becomes.

For example, consider the following:

  • Amazon.com (AMZN). Amazon.com has 31 analysts covering the stock, all of which rate it a Buy. This suggests that an investment in Amazon.com would be a highly liquid one — there are lots of buyers for it on the market — because the stock has garnered quite a bit of positive coverage.
  • Tesla (TSLA). 29 analysts are weighing in on Tesla stock, with seven Buy ratings, seven Sell ratings, and 15 hold ratings. Once again, the high level of analyst coverage suggests that an investment in Tesla would be highly liquid.
  • Gevo (GEVO). Gevo, on the other hand, has two analysts covering it, both of whom rate it a Buy. Although the ratings and opinions are positive, the lack of widespread analyst coverage suggests that the stock is less popular than Amazon.com or Tesla, and thus, less liquid. That means you may have a harder time finding a buyer to pay your asking price if you decide you want to sell your shares.

The simple fact is that it takes investors to move the stock market. If nobody’s buying or selling, prices aren’t going up or down.

As such, the popularity of a stock you’re considering investing in should play into your decision to invest.


Final Word

This article admittedly has been critical of stock market analysts. The fact is, professional analysts are human beings who make their best efforts to succeed in their careers, just like you. They’re not bad people, but their interests aren’t always aligned with yours.

Interests among two conflicting parties rarely align; that’s why nothing gets done in Congress. Nonetheless, each party plays an important role, with analysts and retail investors essentially representing separate parties in the case in the stock market.

The bottom line is that nobody is going to hold your best interest as highly as you will. As such, you shouldn’t trust anyone’s opinion more than your own when it comes to your money. Instead, do your own research and look to experts to validate your own educated opinions.

Source: moneycrashers.com

5 Myths (and 5 Truths) About Selling Your Home

True or false: All real estate advice is good advice. (Hint: It depends.)

Everyone has advice about the real estate market, but not all of that unsolicited information is true. So when it comes time to list your home, you’ll need to separate fact from fiction.

Below we’ve identified the top five real estate myths — and debunked them so you can hop on the fast track to selling your property.

1. I need to redo my kitchen and bathroom before selling

Truth: While kitchens and bathrooms can increase the value of a home, you won’t get a large return on investment if you do a major renovation just before selling.

Minor renovations, on the other hand, may help you sell your home for a higher price. New countertops or new appliances may be just the kind of bait you need to reel in a buyer. Check out comparable listings in your neighborhood, and see what work you need to do to compete in the market.

2. My home’s exterior isn’t as important as the interior

Truth: Home buyers often make snap judgments based simply on a home’s exterior, so curb appeal is very important.

“A lot of buyers search online or drive by properties before they even enlist my services,” says Bic DeCaro, a real estate agent at Westgate Realty Group in Falls Church, Virginia. “If the yard is cluttered or the driveway is all broken up, there’s a chance they won’t ever enter the house — they’ll just keep driving.”

The good news is that it doesn’t cost a bundle to improve your home’s exterior. Start by cutting the grass, trimming the hedges and clearing away any clutter. Then, for less than $50, you could put up new house numbers, paint the front door, plant some flowers or install a new, more stylish porch light.

3. If my house is clean, I don’t need to stage it

Truth: Tidy is a good first step, but professional home stagers have raised the bar. Tossing dirty laundry in the closet and sweeping the front steps just aren’t enough anymore.

Stagers make homes appeal to a broad range of tastes. They can skillfully identify ways to highlight your home’s best features and compensate for its shortcomings. For example, they might recommend removing blinds from a window with a great view or replacing a double bed with a twin to make a bedroom look bigger.

Of course, you don’t have to hire a professional stager. But if you don’t, be ready to use some of their tactics to get your home ready for sale — especially if staging is a trend where you live. An unstaged house will pale when compared to others on the market.

4. Granite and stainless steel appliances are old news

Truth: The majority of home shoppers still want granite counters and stainless steel appliances. Quartz, marble and concrete counters also have wide appeal.

“Most shoppers just want to steer away from anything that looks dated,” says Dru Bloomfield, a real estate agent with Platinum Living Realty in Scottsdale, Arizona. “When you a design a space, you need to decide if you’re doing it for yourself or for resale potential.”

She suggests that if you’re not planning to move anytime soon, decorate how you’d like. But if you’re planning to put your home on the market within the next couple of years, stick to elements with mass appeal.

“I recently sold a house where the kitchen had been remodeled 12 years ago, and everybody thought it had just been done because the owners had chosen timeless elements: dark maple cabinets, granite counters and stainless steel appliances.”

5. Home shoppers can ignore paint colors they don’t like

Truth: Moving is a lot of work, and while many home buyers realize they could take on the task of painting walls, they simply don’t want to.

That’s why one of the most important things you can do to update your home is apply a fresh coat of neutral paint. Neutral colors also help a property stand out in online photographs, which is where most potential buyers will get their first impression of your property.

Hiring a professional to paint the interior of a 2,000-square-foot house will cost about $3,000 to $6,000, depending on labor costs in your region. You could buy the paint and do the job yourself for $300 to $500. Either way, if a fresh coat of paint helps your home stand out in a crowded market, it’s probably a worthwhile investment.

Related:

Originally published April 1, 2014.

Source: zillow.com

Staples: Save $5 on Activation Fee of $200 Visa Gift Cards (4/11/21 – 4/17/21), Limit 5

The Offer

Direct link to offer

  • Staples stores are selling $200 Visa gift cards with a $5 discount off the regular activation fee cost ($6.95) from 4/11/21 – 4/17/21.

The Fine Print

  • Limit 5 per customer
  • Valid 4/11/21 – 4/17/21
  • In-store only

Our Verdict

Not as good as the deals where the full activation fee is waived, but still good enough for people with cards that earn at a high rate on office supply store purchases.

Source: doctorofcredit.com

How to Hire An Attorney

Maybe you’re buying or selling real estate, trying to resolve a dispute with a neighbor, starting a business, or going through a divorce. When life gets legal, you’ll likely need access to a good attorney.

But there’s a lot to think about when hiring the services of a lawyer, especially if you’ve never retained one before.

While personal referrals can be a great place to start, it’s also important to find an attorney who has experience that is relevant to your legal situation.

Fortunately, there are a number of resources and websites that can help you hone in on a reputable lawyer that fits your needs, as well as your budget.

Knowing the right questions to ask before you sign on the dotted line is also key to getting the right fit.

Here are some beginner tips and tricks to help guide you through the process of hiring a lawyer.

Knowing Where to Look

Most lawyers concentrate in a few legal specialties (such as family law or personal injury law), so it’s important to find a lawyer who not only has a good reputation, but also has expertise and experience in the practice area for which you require their services.

Below are some simple ways to begin your search:

Word of Mouth Referrals

One of the best ways to find a lawyer is through word of mouth. Ideally, your family and friends may have worked with someone that they can refer you to. Better still if their situation is similar to yours.

But even if a recommended lawyer doesn’t have the right expertise, you may still want to contact that attorney to see if they can recommend someone who does.

You might consider asking your accountant for a recommendation as well, since these two types of professionals often refer clients back and forth.

Local Bar Associations

Your local and state bar associations can also be a great resource for finding a lawyer in your area.

County and city bar associations often offer lawyer referral services to the public (though they don’t necessarily screen for qualifications).

The American Bar Association also maintains databases to help people looking for legal help.

Your Employer

Many companies offer legal services plans for their employees, so it’s worth checking with your human resources department to see if yours does.

You’ll want to understand the details, however, before you proceed. Some programs cover only advice and consultation with a lawyer, while others may be more comprehensive, and include not only advice and consultation, but also document preparation and court representation.

Legal Aid or Pro Bono Help

Those who need a lawyer, but can’t afford one, may be able to get free or low-cost help from the Legal Aid Society. You can often find out who to contact by searching online and typing “Legal Aid [your county or state]” in your computer’s search bar.

Consider reaching out to local accredited law schools as well. Many schools run pro bono legal clinics to enable law students to get real world experience in different areas of law.

Online Resources

There are a number of online consumer legal sites, such as Nolo and Avvo , that offer a way to connect with local lawyers based on your location and the type of legal case you have.

Nolo, for example, offers a lawyer directory that includes profiles of attorneys that clue you in on their experience, education, fees and more. (Nolo states that all listed attorneys have a valid license and are in good standing with their bar association).

Martinedale-Hubbell also offers an online lawyer locator , which contains a database of over one million lawyers and law firms worldwide. To find a lawyer, you can search by practice area or geographic location.

Doing Some Detective Work

Once you’ve assembled a short list, it’s a good idea to do a little bit of sleuthing before you pick up the phone.

This includes checking each attorney’s website–does it look cheap or professional? Is there a lot of style but little substance?

By perusing the site, you can also get details about the lawyer or firm, such as areas of expertise, significant cases, credentials, awards, as well as the size of the firm–and, size can actually be an important consideration.

A solo practitioner may not have much bandwidth if they have a heavy caseload to give you a lot of hand holding if that matters to you. However, their prices may be more budget-friendly than a mid-sized or larger firm.

While larger firms may be more expensive, they may have more resources and expertise that makes them the better option.

You may also want to make sure the lawyers on your consideration list are in good standing with the bar, and don’t have any record of misconduct of disciplinary orders filed against them.

Your state bar, once again, is a good place to get this kind of information. Some state bar websites allow you to look up disciplinary issues. The site may also have information on whether the attorney has insurance.

You may also be able to search the state bar’s site by legal specialty, which can help you confirm the lawyers you’re looking at really do have expertise in the area of law you need council in.

The Martindale-Hubbell online directory can be helpful here as well–it offers detailed professional biographies and lawyer and law firm ratings based upon peer reviews, which may help when choosing between two equally qualified candidates.

Asking the Right Questions

Many lawyers will do a free initial consultation. If so, you may want to take advantage of this risk- and cost-free way to get a sense of the attorney’s expertise and character. This is also a good opportunity to get a sense of the costs.

Whether you’re able to arrange a face-to-face meeting, or just speak over the phone, here are some key topics and questions you may want to address:

•  Do they have experience in the area of law that applies to your circumstances?

Further, you may want to get the percentage break-down of their practice areas. If you need someone to help you with setting up a business, for example, and that’s only 10 percent of what they do, that practice may not be the best fit.

•  Do they work with people in your demographic? If the practice only represents high net worth clients, and you’re not in that income bracket, they could be a mismatch. You can also get a sense of their typical clientele by asking for references from clients.

•  How much time can they commit to you? And, how do they like to communicate–phone calls? Email? Ideally, you want a lawyer who can make you a priority and is able to respond to your questions in a timely manner, rather than leave you dangling for days or weeks.

•  What are the fees and how are they charged? For example, they may charge hourly, or they may work on a contingency basis, meaning if you successfully resolve your case they get paid. Also find out if they require a retainer (an upfront fee that functions as a downpayment on expenses and fees), as well as what is included in their fees, and what might be extra (such as, charges for copying documents and court filing fees). Ideally a lawyer will explain their fees and put them in writing.

You may also want to use this meeting or conversation to judge the lawyer’s character and personality, keeping in mind that chemistry counts.

The attorney you’re interviewing could have all the right credentials and awesome experience, but in the end, if their personality strikes you as a little prickly, or the vibe is off, even if you can’t exactly put your finger on it, you may want to trust your gut, walk away and keep searching.

The Takeaway

Choosing an attorney is an important decision–much like choosing a financial advisor, doctor, or other professional who will have a significant impact on your life.

As much as you want to just get on with what may be a challenging or stressful situation that you need legal help with, it’s a good idea to take your time, cast a wide net for referrals, then create–and carefully vet–your short list.

Finally, you’ll want to have an open conversation with any lawyer you are considering to make sure you feel he or she is a good fit for you and that you understand, and can afford, all the fees involved.

Whether you’re looking for a lawyer to help you buy a home, start a business or facilitate any other life transition, it’s a good idea to get your finances in order as well.

One simple move that can help is to sign up for SoFi Money®. SoFi Money is a cash management account that allows you to earn competitive interest, spend and save–all in one account.

Another perk: SoFi Money doesn’t have any account fees, monthly fees, or many other common fees.

Check out everything a SoFi cash management account has to offer today!



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Source: sofi.com

Blanket Mortgage Loans – Definition, Pros & Cons of Using for Real Estate

For real estate investors, juggling multiple property deals and loans can get complicated.

Blanket loans often help simplify matters. Borrowers take out a single loan to cover multiple properties.

Even so, blanket loans come with their own quirks and have their pros and cons. Before entering into a blanket loan as an investor, make sure you understand exactly what you’re getting yourself into.

What Is a Blanket Loan?

A blanket loan is simply one loan that attaches to several real estate investment properties.

For example, if you buy a portfolio of five properties, a blanket loan allows you to take out one mortgage that covers all five buildings. The lender attaches a lien against each property, so if you default on your loan, the lender can foreclose on all five properties to recover their money.

Lenders do typically include a release clause, allowing the borrower to sell individual properties held as collateral as part of a blanket loan. However, they require the borrower to either repay a portion of the loan at the time of sale or put the money toward another investment. The lender then attaches a lien to the new investment property as a replacement for the sold collateral property.

That keeps their collateral — your remaining properties secured by the blanket loan — sufficient to cover their loan risk.

Who Takes Out Blanket Loans?

Blanket mortgages are exclusively for real estate investors and developers, not homeowners.

Investors can use blanket loans in many ways to invest in real estate. Landlords can take out a blanket mortgage to buy a portfolio of turnkey rental properties, as outlined above. Flippers could do likewise, to buy several fixer-uppers to renovate and flip, all with one loan. As they sell off properties, they typically repay a proportion of their loan.

Real estate developers use blanket loans to buy large swaths of land that they plan to subdivide into many units. As they build and sell off those units, they can either repay portions of the loan or put the money toward adding more properties to the portfolio.

Businesses with multiple locations and commercial properties can also use blanket loans. That could mean refinancing multiple existing loans into one blanket loan, or using a blanket loan to buy several new locations in one sweep.

When You Should Use a Blanket Mortgage

As touched on above, you can either use a blanket loan at the time of purchase or you can refinance to consolidate multiple mortgages into one loan.

It makes sense to use a blanket loan at the time of purchase if you plan to buy multiple properties simultaneously. You may also be able to negotiate staggered funding if you buy multiple properties in rapid succession but not quite simultaneously.

Another possibility with blanket mortgages includes buying only one new property, but securing the loan against other properties you own for additional collateral. Real estate investors sometimes do this in lieu of making a down payment on the new property.

For example, say you own a property worth $100,000, but you only owe $50,000 on it. You want to buy another property for $100,000, and the lender demands a $20,000 down payment.

Rather than cough up the $20,000 in cash, you offer your existing property as additional collateral for the new mortgage loan. The lender agrees to fund the full $100,000 for you to buy your new property, but puts liens on both properties. They now hold the first (and only) lien against your new property, and they have a second lien against your old property.

Advantages of Blanket Loans

Blanket mortgages come with several upsides for real estate investors.

To begin with, they can save on lender fees and settlement costs by holding one combined closing rather than having to pay separately for several. Lenders charge flat fees in addition to points, and those flat fees add up quickly. Title companies also charge many flat fees for each closing. With blanket loans, borrowers can pay those flat fees once, rather than at each settlement.

Aside from saving money, combining financing for several properties into one loan can also keep your finances and cash flow simpler. Rather than keeping track of 20 mortgage payments and loans, you need only track one or two.

When buying new properties, blanket mortgages can potentially reduce or eliminate your down payment if you use equity from an existing property for a cross-collateralized loan. Consider it one more way to pull equity out of your properties — and one that doesn’t require a totally separate settlement with its attendant costs.

Larger loans often mean more negotiating room for you as the borrower as well. Lenders don’t need to charge as many points on a $1 million loan to make it worth their while, compared to five $200,000 loans. Similarly, borrowers can often negotiate lower interest rates as well.

Downsides of Blanket Loans

Blanket mortgages come with their share of risks and disadvantages.

To begin with, it can be hard to find lenders that offer these loans. Up to this point in your real estate investing career, you may have established relationships with two or three lenders — none of whom might offer blanket loans. That forces you to go out and build new relationships with lenders who do.

Expect more intensive scrutiny by the lender for these larger, more complex loans. Rather than using a garden variety underwriter, bank managers might underwrite these larger loans themselves. Lenders might ask more probing questions and require more extensive documentation and paperwork from you. They may require higher credit scores than their typical loan products.

Blanket loans often come with shorter loan terms than traditional mortgage loans. Rather than the 25- or 30-year loan terms you’re used to, lenders often limit blanket loans to 10 to 15 years. That could come in the form of a balloon payment, or the loan could be entirely amortized over those 10 to 15 years. In the case of short-term amortization, that means higher monthly payments.

Finally, blanket loans pool your risk for many properties into a single loan. If you default on that loan, you could lose all the properties secured by it to foreclosure, not just one. In contrast, if you hold separate loans for each property, in a crisis you could isolate your losses to one property as long as you can afford to make your other monthly payments.

Where You Can Borrow Blanket Loans

Conventional mortgage lenders don’t typically allow blanket loans. Commercial lenders, portfolio lenders — who keep loans on their own books rather than selling them — and hard money lenders often do allow them.

Make no mistake, these lenders usually charge more than your personal home mortgage lender. But they also allow far more flexibility, and as a real estate investor, that flexibility is often necessary.

Call up your local community banks to ask whether they offer blanket loans for real estate investors. You can also reach out to portfolio lenders such as Lending Home and Rental Home Financing to inquire about them. For commercial loans, make sure you choose a commercial lender, because even many portfolio lenders only handle residential (single-family and 2-4 unit multifamily) properties.

Word to the wise: start building these connections now, before you actually have a time-sensitive deal on the line. Real estate investors need to be able to move fast and close deals quickly, else they risk losing the deal entirely.

Final Word

The average mom-and-pop property owner with a couple units on the side of their full-time job will probably never need to take out large blanket loans. But for real estate developers and full-time real estate investors, blanket loans can help them scale their investment portfolios faster and cheaper.

Start expanding your network of lenders now, before you have a hot deal at risk of falling through. Think in terms of building a financing toolkit of many different options for buying your next investment property — or portfolio of properties.

Source: moneycrashers.com

4 Tips Before You Buy Your Teenager a Car

Roughly 26% of car buyers feel that they overpaid for their vehicle, according to a 2014 survey from TrueCar, Inc. That same survey admittedly also found consumers believe car dealers make about five times more profit on the sale of a new car than they actually do — but whether you truly paid too much for your now-old ride or you simply think you did, there are ways to save the next time you hit up a car dealership. For starters, the rates on auto loans are largely driven by your credit, so simply bolstering your credit score can potentially save you thousands of dollars over the life of your loan. Plus, it never hurts to comparison shop and negotiate when it comes to auto loans and the actual vehicle itself — you may be missing out on savings by doing one and not the other.

But First… How Much Car Can You Afford?

According to Credit.com contributor and car insurance comparison company TheZebra, automotive experts generally suggest auto loans not exceed 10% (if it’s just the loan) to 20% (if it’s the loan and related expenses like car insurance) of your gross monthly income. Of course, that’s a broad rule and every potential car owner is going to have to take a long, hard long at their finances and current debt levels to decide what they can, in fact, afford. Following these three simple cost-cutting steps can help you save big on your auto loan and next car purchase.

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1. Do a Credit Check

Not checking your credit before you start shopping for a car is a huge mistake. Because your auto loan rates are directly tied to your credit scores, even a small inaccuracy on your credit report could cost you. Before you start shopping for your dream car, take an hour to check all three of your credit reports and credit scores online. You need to check with all three major credit reporting agencies — Equifax, Experian and TransUnion — because you don’t know which one a lender will use for your application. If you have a credit score above 750, you can probably qualify for the best rates available and negotiate an excellent deal on your car. If your credit score is lower, see if you can give it a boost before you apply for a loan.

You can view two of your credit scores, along with your free credit report snapshot on Credit.com. The snapshot will pinpoint what your specific area of opportunities are and what steps you can take to improve. However, as a general rule of thumb, you can raise your credit score by disputing errors on your credit report, paying down high credit card debts and limiting new credit applications.

2. Shop Online

Unless you have a credit score in the 800s and can qualify for a 0% auto loan offer, you are probably not going to get the best deal on a loan from the dealership. Auto loan rates and fees offered by online auto lenders are usually a lot lower than the rates offered by dealership financing programs. Plus, you can shop and compare rates online without causing damaging inquiries to your credit report (provided you’re not formally applying for every offer you see). Most online lenders have calculators or rate guides that show you what rate you could receive based upon your credit score. (Note: Be sure to vet any lender, whether online or within a dealership, before taking them up on an offer.)

With many online loans, you fill out the application and receive an approval by email within a few hours. Then the lender mails you a check that is ready to be made out to the person or business selling the car. If you end up not buying a car or not using the loan, you toss the check (shredding it first, of course). Plus, the check from the lender usually specifies a certain price range (for example, $9,000-$10,000). This leaves you with some room for negotiating a lower price with the seller even after you have received your loan approval. Speaking of which …

3. Negotiate the Price

Many people may wind up overpaying for a car simply to avoid negotiating the price of a car with a salesperson. Luckily, the Internet makes negotiating with car dealers a whole lot easier. Before you start shopping, look up the listed price, invoice and MSRP of the car you want through an unbiased site like Kelley Blue Book and request free price quotes online. Armed with these facts, you’ll have an advantage over the salesperson when you start the negotiations. You should be able to save a couple hundred dollars, if not a few thousands, by negotiating with the car salesperson before you decide to buy.

Proving It

You may be thinking: This is all fine and dandy, but does it really add up to $3,000 in savings? Let’s crunch the numbers using this auto loan calculator.

According to data from Experian, the average interest rate on a new car loan for prime customers as of the last quarter of 2015 was 3.55%. The average rates on a new car for non-prime customers and subprime customers during that timeframe were 6.24% and 10.36%, respectively.

So, let’s say you wanted to buy a $16,000 car and had $1,000 saved for a down payment. If you chose a loan repayment period of 60 months, had a non-prime credit score (think just below 700), and got a loan through a dealership, you could receive about a 6.3% annual percentage rate (APR).

  • Dealership option: $292 a month – $17,525 total costs

However, if you checked your credit reports and scores before you applied and found a way to boost your score to prime (think around 750), your interest rate from the dealership could drop to about 3.5%.

  • Improved score: $273 a month – $16,373 total costs

You would have already saved $1,152 dollars, just by checking your credit reports! That’s a pretty good return on your investment. Next, you might be able to reduce your rate even more by shopping for a loan online with your new credit score of 750. Let’s suppose, for argument sake, you qualify for a 2.7% APR (the average interest rate for super-prime customers during the last quarter of 2015, according to Experian).

  • Online loan: $268 a month – $16,052 total costs

You would have saved almost $1,473 by working on your loan options using Step 1 and 2. Finally, if you went to negotiate with the salesperson you could probably make a deal with the seller to reduce the price of the car down to $14,000. In this case, you would only have to borrow $13,000 with your 2.7% APR loan from an online lender.

  • Negotiated deal: $232 a month – $13,912 total costs

Your total savings from following these three simple steps would equal $3,613 over the life of your auto loan!

Source: credit.com

When Selling a Home, the Neighbors Matter

Getting on the neighbors’ good side can be an essential part of your sales strategy.

Few sellers consider their neighbor’s home when preparing to sell their own. Why would they? Their biggest concern is getting the soon-to-be-listed home painted, cleaned and landscaped for great curb appeal.

But all that effort could be for nothing, if just one of your neighbors doesn’t care much for appearances.

If you find the neighbor’s home unappealing, imagine your potential buyer’s first impression. The fact is, your neighbor’s unsightly property can diminish your own home’s curb appeal, no matter how much you’ve done to improve it.

The good news is, you have options — you’ll just have to plan ahead a bit. Here are some steps you can take to ensure your neighbors don’t cost you money when you sell your home.

Build good relationships

Even if you don’t have a plan to sell now, it’s good practice to maintain a friendly relationship with the neighbors. You never know when you’ll need them.

It’s not uncommon for issues to come up during a sale. Problems regarding fence repair, retaining walls or easements can often bring a neighbor into your home sale process.

Having a good relationship with your neighbor from the beginning will help to ensure their cooperation when you need them at a critical time in the home sale.

Keep them in the loop

If you plan to sell your home in the near future, it’s a good idea to give the neighbors a heads-up well in advance.

If you think you’ll need assistance from a neighbor for whatever reason, it will be easier to approach them if you’ve given them notice. Knocking on their door to tell them you’re selling and then requesting their cooperation right away won’t help.

Offer to pay for improvements

It will be difficult to ask your neighbors to reseed their lawn, pull their weeds, change their fence or paint their door to help your sale. Ask them to pay for it, and you can expect resistance.

If you need your neighbor to do some curb appeal work to help your sale, the money should come out of your pocket.

On top of that, you can’t force the neighbor to use your landscaper, painter or contractor, even if you’re paying for it. It’s their home, not yours, and you need to tread lightly.

Although many neighbors will appreciate the offer to spruce up their home on your dime, others may be hesitant. Bullying them to work on your timeframe or within your rules won’t help, and it could backfire once your home lists publicly.

With luck, a home sale can proceed smoothly without the need to involve neighbors. But if you hope to sell in the future, understand that your neighbors’ cooperation may be necessary.

If you plan in advance, open the doors of communication and offer to make things easy, you’re more likely to get what you want.

Ready to put your home on the market? Check out our Home Sellers Guide for tips and resources.

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Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Originally published March 20, 2017.

Source: zillow.com