Passwords

I get 2-3 spam emails from “someone that I know” each week. Why the quotes? While the email comes from my friend, my friend didn’t send it. What? Say that again!

Here is what is happening. Some bad guys out on the internet are figuring our your passwords. They love to figure them out for common email providers like gmail, yahoo, hotmail and aol. They find your email someplace and then try to log in using a computer program. They try passwords that are common English words and names.

These emails typically have only a link to some site.  Sometimes, the sites are just trying to get more traffic.  Other times, the sites are malicious sites with viruses or they are trying to collect your personal information.

Whenever, I get one of these, I inform the sender that their email has been compromised and ask them to change it.

Here are some tips to create a more secure password. Try adding a few random letters, capital letters or better yet numbers or special characters to the end of your favorite password. So, instead of “Kermit”, try “Kermit853#”

Here is another tip, pick two keys on your keyboard. Then use a pattern, like right, right, up, left, down. Here is an example. Look at your keyboard so that this makes sense. I’m picking a and j as my two letters. Anyone can remember that so my password would be asdewjkloi. If that wasn’t clear. I typed the first of my two letters “a”. Then I typed the letter to the right of that “s”. Then I typed the letter to the right of that “d”. Then I continued up and left (e and w). Then I did the same thing for the j (jkloi).

Got it? Now go change your passwords. (Especially your email password, I don’t want any spam from “you”.)

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Triple Dip–Housing Prices to Head Down!

Yikes!  Just heard this on CNN along with a scary chart.  Then I found their article on their site. 

Before you panic, remember that all markets are local.   The article reports that first bottom was in 2009 when prices fell to 31% below  peak.  The second was last winter where it was 33% below the peak.  They are now stating that another low spot of 35% below peak will be reached by next June.

So, here is the reality for our market.  RealEstate Business Intelligence shows statistics that current average sales prices are as high as February 2008.  Yes, there are seasonal peaks an valley’s, but you can see their chart here that shows that we are heading up since January of 2009.

Here is September’s Market Watch video produced by RBI.

 

The organization quoted by CNN for this information is Fiserv.  As near as I can tell, Fiserv publishes the information produced my the S&P Case-Shiller Group.  FYI: Case Shiller’s last report was October 25 and reported that the DC metro area prices are up .26% over last year.  The last quarterly report shows that DC prices are currently higher than every month since June 2008.  Additionally, the only monthly price indexes higher than the last quarterly report are September 2004 through June 2008.

So, I’m sorry if you joined me and bought a home during this time, but the good news is that as prices continue to go up locally, that window shrinks.

You can read the original (alarmist) article here.

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Time to Winterize

It is October in Virginia and we woke up to our first snow this morning.  While it may not be below freezing, if you are done with your garden hose, it is probably a good time to winterize your hose bibs.  Hose bibs are the faucets that your garden hose connects to.

Hose bibs come in two styles.  Frost free hose bibs look like this.  These hose bibs generally do not need to be winterized.  You must remove the garden hose and and splitters attached to the hose bib or it will keep water inside and be subject to freezing.  However, if the back of the hose bib is inside your home in an unheated area (garage, crawl-space), you still need to winterize or the pipes can freeze.

Standard hose bibs look like this.  These all need to be winterized.

To winterize your hose bib….

1) Remove your garden hose and any splitters that you have attached.

2) Locate the interior shut off valve and shut off.  This is usually located inside the home behind the hose bib.  Sometimes it is near the main water shut-off or above the hot water tank occasionally, you will find it under a sink.  They look like this…

Ball Valve to close turn so handle is 90 degrees from pipe (not in line).

 

Brass Stop Valve to close turn to right (clockwise) until valve stops. If you have PVC pipes, your valve may be similar to this except white.

3) Open the hose bib (on the outside of the house)

4) Return to the inside and open the nut on the side of the shut-off valve.  A little water may come out, but most should exit outside of the building.  Have a towel or plastic cup handy to catch any drips.

5) Close the nut and leave the outside hose bib open.

If you think that you don’t need to do this, take a look at this picture and you may be convinced otherwise.  Remember, the froze pipe is inside your home and the water will be inside your home also.

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20% higher!

Nope this isn’t about the price of homes in our area. Yes, those are up for the past three years, just not quite 20%.

Redbox video announced today that they will increase DVD rental prices from $1 per night to $1.20 per night. There is a phased approached.

Rentals from today through October 30 will be $1 per night.
Rentals from 10/31/11 through 11/30/11 will will be $1 for the first night and $1.20 each additional night.
Rentals after that will be $1.20 per night.

The good news is that coupon codes apparently are still working. Next time you rent use DVDONME or BREAKROOM. These codes will get you the first night free. You can use each code once per debit or credit card.

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Updated Days On Market

After a short break from blogging (due to a family illness).  I’m back.

I’ve updated our days on market chart.  This year is following historic lines.  Its fall.  Days on Market is increasing.

Click here for the updated chart.

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Four out of five dentists (and other home sellers)…

…would recommend a Realtor on their next transaction.

Home Gain did a survey of over 1000 people who sell their last home.  Some interesting stats:

83% of the sellers used a Realtor.  17% went it on their own.-For Sale By Owner (FSBO)

59% of the sellers who used a Realtor sold their home.  39% of the FSBO sellers sold their home.

81% (4 out of 5) of the FSBO sellers said that they would use a Realtor next time.

88% of the sellers who used Realtors would use one again.

24% of the FSBO sellers gave up and hired a Realtor

The full article can be found here.

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Current Interest Rates

image

Interest rates have been hovering between 4.25% and 5.25% in the past six months.  With a low of 4.25% in November and high of 5.25% in December.  Today’s rates are about 4.875%.

If you missed your opportunity to purchase last fall, your interest rate today is .625% higher.  That doesn’t sound like much, right?

take a look at this example.  you purchase a home for $430,000 and put 3.5% down.  Had you purchased in November at 4.25% your monthly payment  (principal and interest) would have been $2,065.04.  Today, the same home would cost you $2,195.95 per month.  That is a difference of $154.65.  Still doesn’t sound like much.  Over 30 years, that is $55,674.

All indicators are that mortgage rates will increase.  Can you afford it?

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Price and Cost

imageIn the DC metro are, homes hit their high price in June of 2005 and their low prices in March of 2009.  People often ask me if the price of homes will go down again. The national news likes to talk about a “double-dip” in Real Estate prices.

After the tax credit expired last year, our market cooled a little.  In some parts of the region, prices even decreased a little.  Over-all, our market is stable and will most likely have a normal seasonal upswing in prices.

The cost of buying a home is different than the price of a home.  When you buy a home, there are additional costs (lender’s fees, title insurance, closing fees, recording taxes, home and pest inspections, appraisal).  If you pay cash for a home, some of these go away and some are reduced.

The next biggest factor in cost (after price) is the interest rate.  Would you rather buy a $300,000 home with 10% down at 5% interest or a $275,000 with 10% down at 6% interest?   Would you be surprised that you save $34.47 per month in the first scenario?  ($1,449.42 vs  $1,483.89 per month).  That is $12,409.20 more over the life of the 30 year mortgage.

So, let’s sum it up.  Prices went down  8 1/3%  ($300,000 to $275,000).  Interest rates only went up 1%  (5% to 6%).  You saved $2,500 in down payment (10% of the $25,000 difference).  You will also save $158.17 in recording tax.  Grand total, you paid $9,751.03 more by waiting for the price to go down.

In the DC metro area, we are NOT expecting a price drop and certainly not an 8.3% price drop.  Nationwide, we will see higher interest rates. 

Buy while the cost is lower.  Don’t wait for the price to go down and your cost to go up.

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Four Types of Sales (Are foreclosures the best deals?)

I see people asking about foreclosures all of the time.  The supposition is that foreclosures are the best deals.  Some people think that the banks are so anxious to get the foreclosed home off their books that the homes are priced 10% or more below market value.

I recently publish links to free lists of foreclosed homes in our area on this blog, but that isn’t what today’s post is about.

Here are the four types of sales:

New Construction: This is when you purchase a home from the builder.  In our area, these homes typically sell for 3-10% above market value.  People value being the first person to live in a new home.   There is value to being able to pick out your finishes  and live in a super-clean home with that new-home smell.  But much like a new car, when you sell, you are selling a “used” home and that 3-10% extra value is gone.

Resale Home:  Also known as a traditional sale or “normal” sale.  This is when the owner of the home decides to put the home on the open market and sell it.  This is essentially the market value of homes in an area.

Foreclosures: Foreclosed homes are owned by a lien holder (typically a bank or a loan holder like Fannie Mae).  Sometimes these homes need work, sometimes not.  Unlike resale homes, there is no value to holding the home (renting it out or living there).  So, the bank is more motivated than a home owner.  Banks typically sell their inventory for 3-5% below market value.

A quick example since some people confuse the 3-5% discount with a discount for condition of the home.  Let’s say that there are two substantially identical homes right next door to each other (same size, condition, room counts, schools, views, finishes, everything).  One was foreclosed and is owned by a bank.  One is owned by the people who live there.  Let’s say that they non-foreclosed home is worth $300,000.  In this case, I would expect the foreclosed home to sell for $285,000 to $291,000.

Next example: same two homes.  Now the foreclosure home has been abused.  It needs paint on the inside.  The carpets are torn and the previous owners took all of the appliances with them.  Total damages $20,000.  In this case, I would expect the foreclosed home to sell for $266,000 to $271,600 (95-97% of  {$300,000 – $20,000}).

imageShort Sales: A short sale is a home where the owners owe more on the home than its current market value.  They want to sell, but don’t have enough money to bring to make the difference to the lender.  They are asking for forgiveness of a certain portion of their debt.  The owners hire a Realtor and put their home on the market for a price low enough to attract buyers willing to wait for the bank to forgive some of the debt, but high enough for the bank to accept.  In our area, about 2/5 of short sales ultimately get approved and closed.  (Fairfax County 41%, Loudoun County 45%, PW County 44%)

A short sale is not for the impatient.   You make an offer and often hear nothing for months.  Typically, in two to six months, you will get a response from the bank.  The bank may counter your offer, accept it or simply reject it.  More than half of these listings never get closed.

What do you get for all of this waiting and uncertainty?  A great price—typically 12% below market value!

Summary:

New +     3-10%
Resale Market Value
Foreclosure –     3-5%
Short Sale –     12%

In any case, you want a buyer’s agent that can guide you through your transaction from the home search until closing.   Contact us for a free buyer’s class to learn about buying in today’s market.

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Failed Loan Modifications

The HAMP program has helped some homeowners, but hurt many others.  With the structure of the HAMP program, some banks are making extra money by checking the boxes from the program and earning their bonus.  Unfortunately, the banks still foreclose upon some of the homeowners making this program a disgrace.

See this MSNBC video about the HAMP program:

 

If you are facing foreclosure, you only have so much time to act.  We recommend that you pursue multiple options simultaneously.  Contact us for a free evaluation of your situation.

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