YodZiaN

We are planning to buy a home without a realtor. We approached the owner about selling as he is an acquaintance of friends and the house wasn’t on the market. There are so many websites with real estate contracts, some free, others not and I am not sure of which to go with? Should I look for a state specific site? Any guidance would be appreciated. I do not entirely trust the guy…if that makes any difference!

Real estate is so interesting to me. I think I owe it to myself to at least try. I got a job last year at a mortgage place and my boss was not willin got train me. I even had a customer, but had no idea what information I needed to take from her, and my boss wanted me to let him to the work and give me part of the commission. Which I did not want to do..I need to learn for myself, and I did not trust that. Anyway, am I dreaming? I do not plan on making a ton of money the first year. If I could make 1500 per month I would be satisfied. I did find one company that pays you a base of 1500 per month after the first three months? I don’t know anymore. I just need a little help.
Or is it better to start off getting a job at a bank or a place like Countrywide or something? HELP!

Is it ethical for a real estate agent to have us sign an exclusive buyer agent contract while we are the process of filling out papers in her office to put a bid on a house she had shown us? She did not explain it other than saying it is for houses I have shown you or will show you. Trusting her and in the excitement of filling out the other papers for the house we were planning to buy we signed the buyers agent contract without reading it. The deal on the house we were going to buy fell through. Looking through our papers we found we did not get a copy of the buyers agent contract. She gave us one at our request and that is when we discovered it was exclusive and did not expire until one year later. Call me stupid! I have! Was that process ethical and is there any way this contract can be broken?

I am a student (university) who is getting ready to finish and move on with his life. I have a wife and child and I’d say I’m fairly competent with a hammer and saw (a figure of speech). I have a collection of trusted contractors and I have several 3-ring binders (at least 10) with a plethora of plans and design products/ideas that I have amassed throughout the years. These range anywhere from counter tops, to drywall, to floor plans. The only thing I have left to learn is how to finance such an expedition. Obviously, I do not have a lot of money right now, given that I am a college student.
I looked at http://geltfinancial.com/loanrehab.asp
Is this place reliable? What options do I have?
PS: I would like this to be short-term investments (e.g., 1mo. or less–and yes, I can do it in less than a month).

I am planning to visit Iloilo in a year and a half, but I have a sister that would like to visit in a few months. I would like to rent a furnished 2 bedroom apartment for 1 month for $250 max. It needs a clean bathroom and working shower – no bucket and tabo for washing or flushing the toilet! I am also open to suggestions, but I am fixed on the clean bathroom and working shower.

I heard that REIT(real estate investment trust funds) are the way to go, I plan to invest in REIT through Fideletity, and was wondereing which company has the best reit funds I can invest in?

According to the U.S. Census Bureau, people today can expect to live longer in retirement than ever before. Increased life expectancies mean we?ll all probably have to do a better job of planning for our retirement and protecting our estate assets than previous generations. Working out a sound retirement plan now?before you need it?may help achieve retirement and other important financial goals.

Retirement Planning

Creating a retirement plan can help with a comfortable retirement. In drawing up your retirement plan you should take into consideration your:

. Anticipated costs of living during retirement

. Current retirement assets

. Current retirement savings and investments

. Expected rates of investment, and present and potential inflation rates

Once this information is determined, you can calculate any shortfall between projected retirement income and anticipated costs of living during your retirement. It?s important to plan so that you have enough assets to get you through, not merely to, retirement. You might include in your comprehensive retirement plan such elements as:

. 401(k) plans

. Roth or traditional IRAs

. Education savings plans

. Life insurance or annuities

. Tax-advantaged investments

Estate Planning

Most of us already know that our estate includes every asset and debt we have. However, few of us probably also realize that:

. Federal tax rates begin at 45% and rise to 47% for estates valued at $2,000,000 or more for 2006

. Estate taxes are due within nine months of death

To help meet estimated future needs, investors can employ the following strategies:

. Updating current estate plans

. Titling assets to maximize credit available against federal estate taxes

. Purchasing life insurance to cover estate tax and settlement costs

. Establishing certain irrevocable trusts, which may help remove assets from your taxable estate

. Making gifts of $12,000 or less to reduce the value of your estate

In short, talking with a financial and tax advisor Read more…

?It’s all about quality of life and finding a happy balance between work and friends and family.?

-Philip Green

Probate and estate sales usually occur when someone wealthy dies. Estate sales have to be conducted because the decedent did not leave a will and everything is in his name. If there is more then one person who can receive the inheritance then it must be shared.

Sharing can become a problem. Even if everyone involved cooperates, if they live in different places and have different lives sharing a house and cars can be difficult. What usually occurs in this instance is that all the property is sold at a probate or estate sale, and the profits from that sale are split between the heirs.

The second type of situation is when a person dies and leaves behind a great deal of debt. For example, perhaps the decedent owed taxes or had huge credit card bills. If this occurs, then the decedent’s property is sold to make enough money to pay his debts. The heirs can split what is let of the estate.

The sale is usually done by a personal representative. Usually the court appoints someone who is subjective but knew the family. His responsibility is to sell the estate or place it up for auction. He must do everything with the family’s consent.

However, he does not need the court’s approval unless there is some sort of problem with the family cooperating. Most states, and counties have their own rules for how probate or estate sales are conducted. Probate and estate sales can be fairly rough on the family and have to Read more…

There are so many financial planning strategies that make sense when using reverse mortgages. Some times adult children of aging parents need just as much or more education than the seniors themselves. After all, this is a relatively new concept, and often seems to good to be true. The important thing to remember is that reverse mortgages (also called Home Equity Conversion Mortgages) are backed by the federal government, and protections have been put in place for seniors and their families.

Heirs need to understand that with proper estate planning, they stand to inherit more than the value of their parent?s home. A reverse mortgage is one way to make that happen.

The National Council on Aging supports and advocates the use of reverse mortgages for long-term care planning and for managing the crisis of long-term care. Obviously, there are times when a client will not qualify for long-term care insurance, but fortunately, if they are a homeowner, there are still ways that we can help them. That?s why it?s so important for you to know the basics about reverse mortgages. Anyone who serves the senior market should have access to this important financial planning tool. For the NCOA statement and press release go to www.ncoa.org and search for ?reverse mortgages?. AARP is also a supporter of this federally backed program for seniors. www.aarp.com

Let’s look at an example case scenario, with a client who wants to purchase long-term care insurance and life insurance.

Jane Smith lives in St. Louis, Missouri.

? 65 years old

? Owns a home worth $200,000

? Standard health rating

? 5 year plan

? Compound inflation protection

? 90 elimination period

? $150/day coverage- comprehensive

? Annual premium total for both to have coverage: $4548

Jane is eligible to receive a lump sum of $99,657.03, from the equity in her home. Jane will purchase a life insurance policy by paying a one time premium of $50,000.

? Jane leaves the remaining $49,657.03 in a line of credit that grows at 6.35% per year.

? She pays her annual LTCi premium from the line of credit every year.

This means that Jane will leave her heirs a death benefit of $222,736, plus the value of her home minus her loan balance. She will be protected from the catastrophic cost of long-term care, and will be able to stay in her home to receive that care.

You have now helped her heirs to receive a tax free inheritance that is worth more than the current value of her home.

Jane did all of this without touching a penny of her savings, investments, or current income. In fact, you handed her and her heirs the cash flow they needed to keep her safe for her remaining years.

Get educated.

If you want to sell more LTCi, my suggestion is to have access to all of the tools you need to make that possible. Team up with someone in your community who can write reverse mortgages, or learn how you can write them yourself! Below is a review of common myths and misconceptions about reverse mortgages in case you missed this column last month.

Common client myths and misconceptions about reverse mortgages

(a.k.a. Home Equity Conversion Mortgages):

The Lender will own my home.
FALSE!

You, your Read more…

The human mind is very dangerous.

I am not talking about the capacity, unique to the descendants of the Homo lineage, to wage war, inflict destruction on to one another, ruin Nature and the environment, run other species to extinction, deplete natural resources, forge the powers of the atom for evil purposes, alter the genome and, in general lines, destroy anything and everything that Whoever is out there, by pure folly, one day decided to hand over to us. No, I am not talking about any of the above.

I am talking about the myriad different ways the brain can work against our own best interests in everyday aspects of life.

The very same capability for generating complex thoughts that allows mankind to be infinitely creative and which gives our lives richness and meaning, also contributes to less, far less desirable behaviours. Specifically as it relates to the investments landscape, it leads us to make inappropriate decisions the end result of which is a detraction from our investment returns. The good news, however, is that Behavioural Finance has made significant progress in uncovering some of the mysteries of investing psychology. Behavioural Finance is a particular specialty of the Science of Economics that applies scientific research on human and social cognitive and emotional biases to better understand economic decisions and how they affect market prices, returns and the allocation of resources.

Behavioral Finance distinguishes among three general psychological traits common to investors that have a bearing on investment mistakes. They are:

Unawareness

This is probably the most inoffensive of the three psychological traits. It basically consists of two elements: lack of knowledge and innumeracy. The first is self-explanatory. As it applies to real estate investing, many investors generate sub-par returns because they either do not know or do not understand some of the investment basics. Or they simply have not been educated in the fundamentals of how real estate markets work and how to use markets characteristics to their own advantage. Lack of knowledge applies equally to general investors as well as to all those with specialized expertise, such as realtors and lawyers.

Innumeracy is a form of unawareness that is insidious, in that it is less obvious to most people. This is so, because it has to do with how most of us struggle with the Theory of Probability. Behavioural Finance asserts and recognizes that probability, specifically conditional probability, plays a much more significant role in investing than most of us realize. In very simple terms, conditional probability is the likelihood that event A will occur, given the known occurrence of event B. The reason why most investors get it wrong is because they underestimate probability. We all tend to think of unusual events as unlikely to occur, because our innumeracy inclines us to underestimate random patterns. When unusual events do occur, we label them as coincidences. But probability explains that there is a frequency of randomness between events, that can be expressed in Cartesian Algebraic form (this is, incidentally, the same frequency of randomness that Stephen Hawkings cites in his bestseller “A Brief History Of Time”, which postulates The Theory Of Chaos as the basis for the formation and development of the universe).

In fact, the probability of some unusual event occurring at any given time is generally high. It is the probability of a particular unusual event occurring at a particular time that is low.

Perceptions

Real estate, we all know, is mainly a matter of emotion. Unfortunately emotion leads to distorted thinking, defined as the faculty of rendering superficial, quick judgements about reality. Have you ever been interrupted and cut short while you were trying to make an important point? It happens to me all the time in the course of my real estate practice. I used to think that ?people don’t listen’. Oh, they listen alright, but they jump to conclusions. It is an emotional form of irrationality that affects the human brain to varying degrees, and which is entirely counterproductive in the context of real estate investing.

Specifically, Behavioural Finance recognizes that heuristics (from the Greek ?heurisko’, i.e.:”I found it”) are mental shortcuts that the brain develops in order to organize and synthesize information quickly. Unfortunately, data tends to become lost and, because of this, the representation of reality in the mind lacks focus. A common form of heuristics that relates to money is known as ?gambler’s fallacy’. The specific example is that of a gambler who, after tossing three heads in a row, is absolutely sure that the forth toss will be a tail. This thinking stems from our use of Read more…