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Selling Your Home: The Real Estate Agent

If you are not able or willing to sell your home yourself, you’ll need to find a real estate agent. A realtor is someone who deals with all of the hassles involved in selling your home in exchange for a fee of up to 7% of the selling price.

The hassles include marketing, an objective price analysis, advertising on the internet and in newspapers, providing a yard sign, negotiating the sale price, reviewing and filling out the contracts, and navigating the entire process for you. The aren’t meaningless duties, so make sure you are getting what you pay for. You need to find the right realtor for you.

The key to to ask questions, particularly the right questions. You can ask the wrong ones if you’d like, but they tend not to help much.

Helpful questions include:

“Can I call your previous clients?” If the answer is no, run away! If the answer is yes, get the list and call them.
“Have you sold any homes near here recently?” Get the names and numbers of the customers and call them. Find out how it went and what they wish would have happened differently. If the realtor hasn’t sold nearby homes recently, keep looking.
“Will you put your sales strategy in writing?” If it’s not in writing, you may be left paying the full commission, without getting the full promised service.
“What will you tell a potential buyer that wants to negotiate?” Make sure you and your realtor are on the same page.

Now for some secrets that realtors will not volunteer.

The selling fee is negotiable. If you live in a popular development, or if nearby homes have sold quickly, you should be able to get your fee reduced a couple of points.
You don’t have to sign an exclusive listing agreement. With an exclusive agreement, you will pay the realtor a fee if the house sells. Period. With a non-exclusive agreement, you can list with several agents and only pay the one who actually sells your house. If you find the buyer, you won’t pay a selling commission at all.

Selling your house can be intimidating and realtors are there to make the task easier for you. Have you had any problems with real estate agents?

Make a Budget

Finance

: Image by r.lovewell via Flickr

In the past, I’ve gone through a detailed series of budget lessons demonstrating how to make a budget and showing my personal budget spreadsheet template. If you weren’t here to see them develop, you probably haven’t seen them at all. I’ve never built an actual index for those posts.

This is the master index of my budget planning resources. As I develop more, this will grow.

Budget Lesson #1 – In this lesson, I go over how we handle discretionary income and I explain our modified envelope system. The discretionary budget contains things like our grocery bill, or the clothes we buy. We have near-total discretion over what is purchased, hence the name.

Budget Lesson #2 – Lesson #2 contains the details of our monthly bills. These are the ones that are consistent, predictable, and actually due each month. Most people take these for granted as the bills they have to pay, but it’s not true. You can get almost all of your regular bills reduced just by asking. You would also be surprised what you can do without, when properly motivated.

Budget Lesson #3 – This is where I explain how we deal with the non-monthly bills. That is, the bills that have to be paid, but are not due on a monthly basis. I also share the personal budget spreadsheet template I developed. I am working on a few sample templates to match various imaginary scenarios. If you’d like to be an anonymous case study, and get free help setting up a budget, let me know, please.

Budget Lesson #4 – In this lesson, I describe our “set-aside” funds for things that will need to be paid eventually, but not on a set schedule. Sometimes, they are never actually due. We set aside money for the parties we throw, for car repairs and for a number of other things. A few of these items are outright optional, but they are part of what makes life fun. You can’t make a budget without including some of the extras.

Budget Lesson #5 – This is the companion piece to lesson 2. Learn how I’ve reduced–or attempted to reduce–each of these bills. For the better part of two years, I called Dish Network every few months to ask for a discount. For almost 2 years, it was granted. Then one, day, they told me they were putting a note on our account to keep us from getting any more discounts, so I canceled. 100% discounts help us save more.

Budget Lesson #6 – This is the reduction companion to lesson 3. These bills are harder to reduce. Have you ever successfully gotten your property taxes lowered?

Budget Lesson #7 – This is the reduction companion to lesson 4. Notice a pattern, yet?

Budget Lesson #8 – Here, completely out of order, is the reduction companion to lesson 1. Watch as I magically reduce–or rationalize–our discretionary budget.

So, dear readers, what part of budgeting should I address next?

Debt Burnout

Finance

You’ve got a budget. You’ve got a debt repayment plan. You’ve been paying off your debt. You’ve even paid off a few of your smaller debts. Now you’re staring down the barrel of your big debts: your mortgage, a $30,000 credit card, maybe a car payment. You’re looking at months of payments with no quick wins; no more watching your debts die every few months. You’re in the middle of a very long slog.

All of the easy milestones have been reached and the next one is a year or more away. This is when debt repayment gets hard. How can you avoid getting burnt out doing the same thing, month after month, with no major visible progress?

1. Keep your eye on the prize. Try focusing on the end result, while ignoring the time it takes to get there. Do you have a reward planned for when you pay off your debt? If not, consider that to be your new shining goal-post. My wife and I plan on taking an Alaskan cruise when our debt is repaid.

2. Ignore the prize. If #1 doesn’t work for you, try focusing on just the current month’s progress. How much did you pay off this month? Was it more than last month?

3. Make micro-goals. Try breaking the long slog into bite-sized pieces. How fast can you pay off the next $1000? How many months will it take to pay off that TV you bought last year? Sometimes, meeting a smaller goal can make the whole works feel like it’s going by faster.

4. Take a snowball vacation. For just one month, take every dollar you would normally apply to your debt–except your required payments–and have some fun with it. Take a weekend trip, have a fancy dinner, or pick up that video game system you’ve been eying. Something. Anything to take your mind off of your repayment plan for a while. Be careful not to make this a habit or you will never get out of debt.

5. Start a blog to share your pain.

A debt snowball is a long, intense process. If you’re not careful, you can burn out and let the whole thing collapse. How do you avoid burnout?

Three Alternatives to a Budget

Finance

the envelope system: day one — Image by J. McPherskesen via Flickr

Budgets aren’t for everyone. For some people, the very idea of trying to track where their money going is painful. And that’s just the idea of tracking the money. It gets far worse when you’ve got $10 budgeted for coffee, $12 for fast food, $66.50 for gas, and $0.75 for entertainment. It’s can be hard to follow a strict budget for long.

If you know you need to track your money, and you also know that a strict, zero-based budget won’t work for you, what can you do? Luckily, there are alternatives.

1. Hope and Pray. This is otherwise known as the “Call my bank everyday and see how close I am to over-drafting” system. To fully embrace this system, you need to not only abandon a written–or even organized–budget, but you should also throw your checkbook register in the garbage. Make sure you’ve got a good overdraft protection account attached to your checking account and let your money take care of itself. This is the ultimate zen of personal finance. Don’t stress or worry, just hope for the best. This system works best if you make more money than Oprah and have modest tastes. For those of us who have to watch our money a bit to make sure the month outlasts our money, this probably isn’t a great plan.

2. The Envelope System. To implement this system, you do need to create a basic budget so know what you are obligated to pay. Once you have that done, take a stack of envelopes and label them for each item you have to pay. Add another envelope for food, another for entertainment, and another for miscellaneous because there is always a miscellaneous. Divide the money among the envelopes. Now for the magic. When you have to spend something, take the money out of the appropriate envelope and spend it. That’s it. If, however, there isn’t enough money in the right envelope, but you still need to spend the money, you have to take it out of a different envelope and spend less on the category that lost money.

3. Percentages. This is the simplest of the non-budget budgets. Take 50% of your money and spend it on necessities, like the mortgage, food, and utilities. The next 30% goes to savings and retirement. The last 20% is for fun or any other thing you want to spend it on. This naturally works best if you are out of debt, but if not, just make sure most of the 20% fun money goes to repaying debt. This system works best if your bills are automated and you will need to set up a basic budget first, so you can make sure your necessities come in under 50% of your income.

Not every budget plan will work for everyone, but there are always alternatives that can still help you manage your money.

How do you track your money?

Selling Your Home: For Sale by Owner

Finance

: Image by Casey Serin via Flickr

When you’re preparing to sell your home, your first instinct is often to rush straight to a realtor. There are benefits to using a trained real estate agent, but it isn’t always necessary.

The biggest motivation to skip the realtor is avoiding the fees, which can run as high as 7% or more in some places. What does that 7% get you?

First, it gets you experience. Realtors know which hoops you have to jump through, from both a legal and a marketing perspective. Do you need an inspection? How much of your stuff should you move to storage? Are you comfortable with high-dollar negotiations?

Time is another critical item in the fee. Do you have a minimum of an hour to dedicate to advertising and screening potential buyers? Every day? Do you have a flexible schedule to show your house at times convenient for the buyers?

The third element is access to the Multiple Listing Service(MLS), which lets other realtors see your home listing. There are alternative listing services you can use, but none are as widely know as MLS.

There are some good reasons to use a realtor, but none of that means you can’t sell your home yourself. FSBOs are done every day.

If you are nervous, your local community education program may have a course on selling your home yourself. These courses are usually very affordable.

Some tips:

Be objective about pricing. Look at the selling price of similar homes in the area, NOT what your dream price is or how much you have spent on improvements.
Always keep your home ready to show. Keep the dishes done, everything put away, and the floors mopped. The “lived-in” look will not help your house sell.
Keep track of the potential buyers. Put the name, address, phone number, and any identifying notes in a spreadsheet so you can follow up later if your house doesn’t sell.
A bid is not binding. Don’t stop advertising until you close on the sale.
Make a fact sheet and blank purchase agreement that potential buyers can take home.
Hire professionals where necessary: lawyers, inspectors, and closing agents.

Selling your home yourself can be intimidating, but it is a job you can tackle yourself for a significant savings. Would you try it?

BUYING LIFE INSURANCE ONLINE: THE PROS & CONS

Finance, Life

This is a guest post.

English: $10,000 life insurance policy for Pre... — English: $10,000 life insurance policy for President James A. Garfield, the twentieth President of the United States. Discovered in a family scrap album dating from the late 1800’s. (Photo credit: Wikipedia)

In today’s day and age, nearly everything that we do in our day-to-day lives can be done online and we’ve come to not only expect that, but somewhat rely on that convenience. Insurance, however, is kind of a grey area when it comes to online purchases – no matter what kind of insurance you’re purchasing. After all, an insurance policy is no small purchase; it’s major and can have a profound financial effect on your life, and the lives of your loved ones.

Think about it like this – how wary are you of even just making a small eBay purchase? Most of us look at the seller’s rating, read their feedback, and try to accurately gauge what the risk is compared to the reward. This same mentality should apply to making a life insurance policy online and is far more deserving of it. You can follow this link to learn more from Suncorp today.

This isn’t to say that making an online life insurance purchase can’t be beneficial; depending on your situation, it can be very beneficial, indeed. However, it is going to take substantially more research on your part to get to where an insurance agent might be able to get you, sometimes in half the time.

Pros of Buying Online

One of the most alluring reason for life insurance seekers to buy online are the prices, the comparing conveniences, and sometimes the lack of medical exam. There’s plenty of aggregator sites out there that can take a sampling from across the internet and return you a quote within a matter of seconds – how’s that for convenience?

Probably the most favored feature, though, is the comparison shopping. Once an aggregator provides you with a slew of options, with a wide variety of price points, you’re able to compare all of the details among them, quickly and easily. Something that would easily take your hours if you were having to do all of that research yourself, one by one.

At the minimalist level, though, you’ll often find that some individuals just truly feel more comfortable making insurance purchases from the comfort of their own home, without any agents or appointments. Either because these situations make them nervous, or because they simply don’t have the time to sit down with an agent.

Cons of Buying Online

One of the big ones revolves around the last “pro” that I mentioned – if you don’t have the time to sit down with an agent for a limited amount of time, and let them do all of the work from there, you certainly don’t have the time to handle all of the research that comes along with going through this process on your own.

Also, you shouldn’t always assume that shopping around yourself is going to save you money with it comes to life insurance – after all, life insurance agents have personal connections, favors to call in, and think-on-their-feet knowledge that might drum up an innovative solution; something that online aggregators can’t do.

Furthermore, building that one-on-one relationship with your life insurance agent can be incredibly beneficial. For one thing, you can have every last little thing that you don’t understand about the fine print thoroughly explained to you – this is a big one. Another thing is having such a relationship with you agent, that you can call them at any time, when anything comes up, or when you need sound financial advice. Try calling an aggregator and see if you get much beyond the auto-answering system – I assure you, it’ll be a challenge.

If You Do Decide to Buy Online…

Don’t Give Out all of your Personal Information – No matter what the insurer tells you, you don’t need to provide any crucial personal data just to obtain a quote.
Enlist the Service of an Aggregator that Can Give You a Wide Variety of Options – Comparing an insurer there and an insurer there, means very little actually. You need a plethora of results in order to make a decision that will best be tailored to your situation.
Don’t Get Swindled – Make sure that you’re getting the right information, from a reputable company, that doesn’t deal in the ole’ “Bait-and-Switch”; which refers to when crooked life insurance agents inflate your worth and buy you either a higher policy than requested, or even a different policy entirely – all for their commission!
Thoroughly Research all Potential Candidates – Obtain the financial rating of any establishment, online or otherwise, to find out more about the reputability of both.

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