Could Prescott Become The Next Sun City?
Probably not. The idea is born from the misconception that the overwheming majority of Prescott residents are retired. While it's an easy assumption to make (the largest segment of the Prescott population-21%-is seventy years and older), the average age for the area, which includes Chino and Prescott Valley, is 46 - and yes, I realize that compared to most metro areas, that's on the "older" side.
Here's what's happening: Much of the entertainment, restaurants and shopping is either now (or will soon be) centered in and around Prescott Valley. (For those who don't know the area, Prescott Valley is about five miles east of Prescott on the main highway. Ten years ago, Prescott Valley (or PV for short) was a wide place in the road. Now it shows promise of becoming the financial and entertainment center for the area, with lots of potential for growth.
I believe this is primarily due to PV's positive development attitude, designed to welcome and encourage new business, home buiding, and commmercial development - just the opposite of Prescott (just my opinion, but supported by many folks in the real estate business).
While we're on the subject, here's some other common misconceptions about Prescott:
1. All residents must own three dogs, two of which must constantly bark day and night.
2. All employed residents work for the city - they spend most of their time citing each other for zoning infractions (see number 3)
3. To achieve maximum views, or to derive increased enjoyment from a piece of property, you may build your home anywhere you like, including on the next door neighbor's lot.
4. Prescott is really a California town that was levitated by aliens and placed in the Arizona mountains, hoping the locals wouldn't notice. (paraphrased from a bumper sticker with a California license plate, but it makes you wonder - Could Arnold really be from another planet???)
Posted at 01:48PM Dec 06, 2009 by Jill Reid in General |
Time To Tell It Like It Is...
First, I will tell you right up front, that as a real estate agent, my business depends on banks for mortgage loans. Without mortgage lending, the real estate business would die. Second, the following represents my experiences, and I relate them to you in the hope you can protect yourself, if and when necessary, from what I believe are predatory business practices.
A couple of weeks ago, I called Citibank and asked the credit card department if they were implementing the banking industry's now common practice of reducing the available credit line to the amount owed for my account - which essentially changes a credit card account from a revolving line of credit to a simple declining balance personal loan (and makes the account useless for new charges.) I was assured they had no plans to do so. Looking back on that conversation, I am reminded of the old song: "Liar, Liar, pants on fire."
I just received a notice from good ol' crappybank (my new term of personal endearment for that great financial institution) that they were not only reducing the available credit on the account, but also increasing the interest rate on the unpaid balance to 30 percent. No, that is not a misprint, I'm saying THIRTY PERCENT. (And to the odd bank employee purusing this article - no, I have never missed or been late on a payment - ever.)
Were these actions due to my previous phone call? Did my efforts to communicate my concerns and questions as a long term - over 15 years - customer initiate a targeted assault to penalize me for daring to approach the mighty giant? "Oh no," the customer rep assured me. The action taken by crappybank was not a focused attack on me personally. It was a general action by management (whoever that is) to "re-align the financial responsibility of the bank to it's customers." (whatever that means).
I don't believe them. My efforts to better manage my financial future obviously angered the great and omnificent money wizards that occupy those gilded and granite accented offices that reside alongside the lesser gods of Greed and Deception.
I began to wonder...if I had been treated this way by a restaurant, would I continue to eat there? If crappybank were a auto dealer, would I buy another car from them?
The banking industry is on a rampage. And their own customers have become the enemy. And before you write off my ranting as resentful venting, I would suggest you consider the following suggestions as a defensive posture against policies and actions by any and all financial institutions who either have control of or the responsibility for your money:
1. Separate your money from your debt. If you have a savings/checking account with the same bank that provides you with a credit card, keep the accounts open, but move all but a minimum required balance to another bank that is not a financial partner of the institution that issues your credit cards. If for some reason, you fall behind in payments on a credit card, and you have money in the bank who issued the card, the bank may simply debit your account for the back payment(s), including penalties and interest. We have received phone calls from several clients who have found their bank accounts drained without notice because they fell behind on their credit card payments. (Don't think it could never happen to you - three years ago, these clients were financially sound, had high-paying careers and never thought they would be in their current situation.)
2. Don't automatically accept new terms and conditions from any bank that you don't agree with. Just because you've had a "relationship" with a bank in the past, that doesn't mean you should continue it based on history alone. In my opinion, banks no longer measure the value of their customers on "long-term" relationships. In fact, very little if any consideration is being given to past business or future profits potential. They are looking at what's on the table RIGHT NOW, and how much of it can they move to their side of the ledger.
Okay, I'm sure by now some of you may think my protests are too strong. But ask yourself this: How would you feel if I decided to raise my commission rates to 30 percent? And that brings me to my final question: If we wouldn't consider tolerating such behavior from any other businesses, why do we put up with it from banks???
Posted at 02:15PM Nov 17, 2009 by Jill Reid in General |
November - December Newsletter in the mail!
The first half (last names A - L) of the next issue of our newsletter went out in yesterday's (11-9-09) mail. The balance will be mailed tomorrow (11-11-09). The main article discusses the possibility of an "overcorrected" real estate market in the Valley and how it could affect prices in the future recovery. There's also a report on a new study indicating that eating red meat is far more dangerous (and life-shortening) than previously thought. And of course, a new article about living life to the "max" and being happy in the process. We enjoy and encourage your comments, questions and suggestions - send your emails to jillreid-AT-jillreid-DOT-com
Posted at 04:29PM Nov 10, 2009 by Jill Reid in General |
Thinking About Starting An Internet-based Business?
Over the past few months, at least a dozen clients have emailed us asking our opinion about starting an internet-based business. I suppose it's because we maintain a website for our business and that should give us some kind of background on the subject. Unfortunately, it doesn't. But we did a little research, and what we found was interesting. Let's start out with one of the emails we received:
Jill and Roger - I'm constantly deluged with emails and newsletters that tell me how so-and-so from Podunk, Iowa was broke and nearly homeless before starting her web-based business. Now (of course) she's got thousands of dollars pouring in daily and expects her income to triple over the next six months. Then at the end of this rags to riches story is an offer to sell a course, book, CDs or a newsletter subscription that will provide the same results. Do you know anyone who has actually made money on the web?
We see these kind of emails, too. Are we skeptical? Absolutely. If you look at these offers carefully, you'll find the overwhelming majority are selling the same thing - a step by step guide or "template" on how to make money. And most promise success based on a "secret" or "new" system or formula. And what will you sell? INFORMATION! What kind of information? You guessed it - how to use the web to make money. Sounds a bit like a ponzi scheme, doesn't it?
Okay, time for the big question: Does it work? Do people really make money on the internet after buying these books and CDs? The facts are pretty depressing. For every internet-based business that nets its owner $50,000 a year, there are a thousand that fail. So are the odds stacked against anyone starting a successful web-based business? Without reservation - YES.
But there are exceptions: Here's a few businesses that have found success on the internet: Vitamin and health supplements, books, DVDs, CDs, software, custom generated information for a specific nitch market, and social networking.
So if you have or own proprietary information that others could benefit from (financially, physically, spiritually) you MIGHT be able to sell it from a website. Remember, there's nothing magical about the web. It's just another method of marketing - like direct mail, print advertising, radio, television, seminars, etc.
We asked a few of our clients who are internet "experts" (that means they actually make money from a web-based business) if they would provide us with five qualifing questions that an internet novice would find helpful before they made any kind of a financial commitment. Here they are in no particular order of importance:
1. Do you have a product that a potential customer can evaluate without touching it? How will you convince someone of the feature/benefits of your product without being able to physically put it in front of them?
2. Does your product have a shelf life? Does it become less valuable, or less useful over time? If so, forget it.
3. Are there similar products currently for sale? If not, why not? If so, why is yours better?
4. Do you have a marketing plan (promotion) that does NOT rely on responses from social sites, such as facebook. While these sites boast millions of members, no one has been able to get them to spend money consistently on products and services not directly related to the use of the site.
5. Can you allow potential customers to "sample" your product, free of charge or obligation? This might mean giving away something of real value to convince a potential customer that what you're offering is worth buying.
Finally, our experts recommended spending no more than a few hundred dollars for books or CDs to learn the basics of setting up an internet business. According to their collective wisdom, you will learn just as much as you will by attending a weekend seminar that can cost thousands of dollars.
Hope this helps, and good luck!
Posted at 02:33PM Oct 17, 2009 by Jill Reid in General |
The Virtue of Commitment
(Author's note: This article is a continuation of the introductory material published in the October, 2009 issue of our newsletter. If you need a copy, just e-mail us and let us know where to send it.)
How good is good enough? Could life be ready to offer you more - happiness, financial success, relationships - if you were in the right state of commitment to receive it? The following little story illustrates what I mean:
About 30 years ago, my then boss invited an important client and myself to dinner at the Golden Eagle in Phoenix. (The Golden Eagle was very expensive restaurant perched on top of what used to be the Valley National Bank building in downtown Phoenix). The view was phenomenal. And so were the food and service - and prices. At that time, dinner at the Golden Eagle was completely out of my budget, so I looked forward to an experience that would be truly unique for me. What I didn't anticipate was the lesson that awaited me - and even more important, the source from which I would receive it.
Our waiter was extraordinary. We never had to ask for anything. He seemed to have a sixth sense about what was needed and would appear out of nowhere with extra butter, rolls, more drinks, ice, etc. I don’t know what the total bill was for the three of us, but I saw my boss add a $100 tip. That was a lot of money in 1979 - especially for a gratuity. But I realized that I had never experienced service to the degree this waiter provided. And that’s when the lesson began.
As we prepared to leave, the client and my manager took a minute to use the restroom and make phone calls. This left me alone in the restaurant lobby, and while I was waiting, our server approached me. He simply walked up and smiled and asked if everything was alright. I told him dinner was excellent and his service had been outstanding. He thanked me for the compliment and then explained that his shift was over, but he would not leave until all the guests he served had left the building. Since we could both see the men in my party were still on the phone, we struck up a conversation about our respective careers and more specifically, what our supervisors were like, and what was expected of us before we received recognition for our efforts.
I mentioned that most of our new hires had no idea of the amount of time and energy it required to be successful in our business, and because of it, one of my responsibilities was conducting training classes for salespeople in our industry, hoping to improve their productivity and effectiveness. I asked the waiter - he told me his name was Matt - if the restaurant had a similar program. He told me there was a introductory one day training session to acquaint their new hires with policy and procedure, but the program did not contain any material on how to be a better server, or how to provide outstanding customer service. In his opinion, the restaurant’s employees were already operating at exceptional levels before they had been hired, and their presence at the Golden Eagle was simply a confirmation of their on-going ability to consistently meet and exceed the customer's expectations.
He went on to tell me that he started out five years ago waiting tables in Denny's. As he increased his rapport skills and dedication to the job, he quickly saw the difference between his income and that of the other employees. Customers often asked for his station. They enjoyed his level of service and remembered him for it. From Denny's he moved up the ladder to work at more expensive restaurants, realizing that his income would also increase where customers would typically spend more money.
He had simply decided to be the best at what he was doing. When he went to work, he concentrated on work. While other employees chatted with each other about their weekend plans or daydreamed about what they would rather be doing, Matt was busy checking on his tables, bringing out samples of food for customers to try, re-filling drinks and always making sure he offered eye contact with every customer as he moved from station to station.
The point? He had committed to being the best server he could be. He didn't think of his job as "temporary until he could find something better," or in any way beneath his social station in life. He understood the value of doing something to such a degree of perfection, that others would recognize his efforts and be willing to compensate him accordingly.
How much is accordingly? He told me his income from tips was just over $100,000 a year. At that time, I was working for a Fortune 200 corporation, and had recently received recognition for being one of the top ten most productive sales people in the company - and I made about $50,000 a year. This restaurant waiter was making twice my salary. Because of his commitment.
The main reason people fail in some aspect of their life is due to a lack of commitment to making that part of their life work. They simply "go along for the ride," doing the minimum necessary to make their lives bearable.
If you can't fully commit to do your absolute best, you'll never realize the maximum rewards from what you're doing - regardless of whether it's your choice of career, spouse, religion, relationships...you name it. There isn't any part of your life that can't be improved by deciding to fully commit your time, energy and attitude to making it better.
Final thoughts: Life is pretty much a neutral experience - you get out of it what you put in. And if you're not getting what you want, not receiving what makes you happy, content, and satisfied, it's time to fix it, change it, and make it into something you can commit to. And obviously, if you get the premise of this article, you know what I'm really saying is: You need to fix you, change you, make you into the kind of person that does whatever is necessary to make your life a committed experience with everything and everyone in it. Get the idea?
Posted at 02:05PM Oct 01, 2009 by Jill Reid in General |
Waist Size Can Predict Lifespan
Posted at 01:55PM Sep 08, 2009 by Jill Reid in General |
Don't Look At The Man Behind The Curtain (You May Not Like What You See!)
It's called web 2.0, and it refers to establishing relationships over the internet by the use of websites, blogs, Twitter, Facebook, and a host of other social sites.
Realtors are climbing onboard as if social networking is the key to financial salvation. And why not? A couple of years ago, business consultants told us that about 65% of all potential home buyers start their search on the internet. Now they tell us it's about 90% (some estimates are even higher, approaching 95%).
We asked a few of our clients for feedback on the changes we're making to our website. We wanted to know what they thought about its current content and give them some idea of the proposed changes that are already in the works or will be available shortly. We received several great ideas, but there was one response in particular that was so...different, that we asked if we could reprint some of it. And so with permission, here are the main points from our client's email:
"Before I talk about specifics, I want to offer a few general comments on your site, the changes you've made, and the use of the internet in general. So now you're offering more reports (on the website), and now a blog, and from what you're telling me, I'll be able to download the newsletter directly from the website. Well, whoop-dee-doo!
Over the last couple of years, I've looked at other Realtor's sites because they were representing the other side of the transaction, or I'd met them at an open house, or wanted to get more info on one of their listings. Some of the sites are absolutely incredible. There are more links than I can possibly open and read even if I took an entire day to do it. A lot of them have billboard style ads and self-serving rhetoric proclaiming their expertise, experience and personality. Promises of superior service ring out loud and clear with pictures of their family, pets and mentions of personal hobbies, clubs and service to the community rounding out the picture.
In general, I'd have to say that someone has gone to an awful lot of work to try to convince everyone of something - but I'm not exactly sure of what. Until you recently asked me to take a look at your site, I hadn't seen it in two years. Not since I saw it the first time. And at that time, I didn't read the articles or explore the links. I went there for one purpose - to read the testimonials. I was considering using you as my agent, and I wanted to know what other people thought after the deal was over. Were they happy? Satisfied? And most important, would they do business with you again?
I think in general, a Realtor's website reminds me of that old movie, The Wizard of Oz, with lots of flash and color and graphics, but what really counts is still behind the curtain. And it makes me realize how many times I've been left waiting for a response to an email or phone message I've left for another agent. Sometimes the wait is several days. Sometimes an answer never comes. And these are some of the folks who have spectacular web sites. And pages on Facebook and My Space. They send out daily tweets and blog like crazy. But when it comes to the basics of business - responding to inquiries and questions, returning phone calls and following up on requests for information...well, I guess they're too busy posting to all the social sites they belong to. (That's part of the reason we've done three transactions together, and as long as you continue with the same level of service, when I'm ready for number four, I'll call you.)
I know this isn't what you asked for, but it was what came to mind when I received your request for feedback. Hope it helps."
(end of quoted material)
He was right about one thing: his response wasn't what I expected, but I do agree with one of his points. In some cases, websites, blogs and all the other web-based flag waving have become the internet equivalent of smoke and mirrors. While it's a common assumption that an agent who has a website that just screams professional service and success will provide nothing less, it may not be a wise assumption.
Real estate is work. It's answering phones, email, and meeting clients at their convenience. It's being available - sometimes on the spur of the moment, if that is what it takes to get a potential buyer into a house they want to see.
So what's the real purpose of an internet presence? It's a pre-introduction. It lets others know a little about the agent's background, experience in real estate, and if they know how to comb their hair and dress appropriately for the job. In our case, we also try to provide additional information - for those who want it - on getting a home ready to sell, on choosing an agent, and we even have a link for other agents who are preparing to do a cross-transaction with us. It explains what we expect them to be able to do, how quickly we expect our phone calls and emails to be returned and what to do if they experience a problem. Unfortunatley, it's one of the least viewed links on our site.
There was a recent survey done to determine which factor was more important in a Realtor's website: design or content. Design won hands down. That means what makes folks respond to an agent's site is based on flash, geometry and color - and not the actual information it contains. And that's a shame. Because in most cases, the agent has very little to do with the design of the site - it's usually a template or a custom design done by professional website designers.
So the next time you visit a website or blog, take it for what it's worth. It's a advertisement. A piece of marketing. It might have been done by the agent's son or daughter, or perhaps a commercial webmaster who is paid to keep all those web pages current.
Here's the point: The best source from which to choose an agent is from someone's referral. It's always been that way, and internet 2.0 hasn't changed it. If an agent does a great job for past clients, it's a pretty good bet they will do a great job for you. Enough said.
Posted at 11:10PM Aug 31, 2009 by Jill Reid in Real Estate |
Big Fat Lies
Neither did I, until now.
Bon appetit!
Posted at 03:10PM Aug 16, 2009 by Jill Reid in General |
How Do YOU Decide When To Forgive?
A recent article on MSN/FOX announced the NFL's decision to progressively restore Michael Vick's membership in their organization, clearing the way for his eventual return to the NLF league.
Mr. Vick, as you may remember, was the highest paid player in the NFL (130 million over a ten year contract), playing for the Falcons until he pleaded guilty of funding a dog fighting ring on his property and personally participating in the killing of non-performing dogs by "shooting, hanging, drowning or slamming them to the ground." (MSN/Fox quote)
The article included Vick's assurances that he "understood the terrible mistakes he had made in the past and what type of life he must lead moving forward."
Apparently, in Mr. Vick's mind, "moving forward," also includes the restoration of his 10 million dollar plus a year income as revealed on his repayment plan filed in conjunction with his filing of bankruptcy last year.
So goes the logic of the forgiven.
I suppose it's possible that Mr. Vick has learned a lesson from his 18 months in prison. I suppose he could be truly repentant and remorseful over his past actions. I also understand there are trials and temptations that I will never understand - nor do I want the opportunity to try. But I believe the news article presents an opportunity to learn something about forgiveness, and about second chances. And I think it's best illustrated by the following little story:
We have an older, wealthy client who, in our opinion, represents the highest example of someone who has lived - and continues to live - a moral life. His conduct is exempliary - responsible, fair, trustworthy, respectful of others and their opinions, and in every sense of the word, a true gentlemen. He's also a religious man, attending church, counseling younger men, and conducting himself as an example to others.
Perhaps just as important, I have never heard him say anything negative towards another person, nor have I heard him disparage anyone even when he had been obviously wronged and had every right to criticize them for trying to take advantage of him. He would simply say that because he can't possibly know their circumstances, motivations or situation at the time, he cannot stand in judgment over them. All in all, a pretty good guy.
I talked with him last night. We spent fifteen minutes on business and then our discussion turned to personal issues - the news, the economy, the general state of our country. He talks, I listen. That way, I learn something. During most of our conversations, I learn a lot.
He mentioned he had read the story about Vick and the NFL's decision to progressively re-instate his status. And then he asked me what I thought about it. He asked because he knows that Jill and I care very deeply about animals and donate both time and money to no-kill shelters as well as being involved in wild animal conservation efforts.
I told him that I was grateful that I was not being asked to forgive Mr. Vick and those like him, since I was far too biased in favor of the humane treatment of all animals - and conversely, the punishment of those who subject animals to pain and suffering for money or pleasure.
He was quiet for a few moments, and I wondered if I had said too much. Then he spoke. And what he said speaks to responsibility, and for being held accountable for what we do, both for and against others.
Word for word, here it is:
"Well, I know forgiveness is a quality reserved for the Divine, and we're cautioned to "judge not, that ye be not judged." But I'll tell you something. When I read about people like this, who make money or find enjoyment in the intentional mistreatment, torture and acts of cruelty to defenseless animals, or to any living thing for that matter, it's hard for me to understand what kind of person could do such a thing. Even as old as I am - having lived as many years as I have - it still bothers me a lot. I suppose some of these people change their ways, understand what they've done and try to make amends, but I also know there are others who don't. They talk a good game, and make promises and say they're sorry and that it will never happen again, but then months or years later, we read about them committing some terrible crime, and then we see the previous convictions and arrests for the same thing. But I've found there's something I can do that helps me keep these things in perspective - letting me get on with my work. What I do is to say a special little prayer, in which I ask God for two things: First, I ask Him to prepare a special part of hell for these people who refuse to change. And if it's possible, to make it a place that is worse that the rest of hell - an extra horrible place that exists to punish those who forced the innocent to suffer.
And second, I pray that God puts me in charge of it."
His answer surprised me, but the more I thought about it, the more I realized that his definition of forgiveness was not based on apology or a statement of remorse prepared by a media agent. For him, the act of forgiveness was on-going. And was justified only as long as the behavior of the forgiven continues to warrant exoneration - every day - for the rest of their life.
In this man's personal efforts to strive at living a "good life," he had learned that character is reflected by long term - and consistent - behavior. And that our nature - good or bad - is reflected daily in what we accomplish and who we serve by doing it.
And so, mr. Vick, maybe you will "turn your life around." Maybe you're actually sincere about your rehabilitation. Maybe you will be able to make a positive contribution to society of such a magnitude that God will find a way to forgive you when it is your time to be judged.
I hope so.
Because if you don't, I wouldn't be surprised that on judgment day, you're going to find the Almighty pointing to an older gentleman who has been waiting for you, and who will no doubt have some very specific ideas about how you will spend eternity.
"Why should man expect his prayer for mercy to be heard by What is above him when he shows no mercy to what is under him?" ~Pierre Troubetzkoy
"The greatness of a nation and its moral progress can be judged by the way its animals are treated." -Gandhi
Posted at 03:37PM Aug 04, 2009 by Jill Reid in General |
Wishing You could Live Someone Else's Life?
Ever wish you could live the other guys (or gals) life? I'm not talking about the neighbor next door, or the classmate who worked his way up to be the manager of the bank, or your brother-in-law who just won the best-in-the-state award for selling life insurance. I'm talking about someone you see on TV. Someone who makes a ton of money, drives an expensive car, lives in a mini-mansion, has a spouse who looks like a movie star and is heir to the Microsoft fortune.
Reality shows have become the new cash-cows of the television industry. They are - supposely - an on-camera peek at someone who lives the good life. He or she simply goes through the same actions as they normally do, and we get to watch. And because this person actually exists-because the show is reality based-what we see must be real, right?
It's amazing how much frustration and even envy these types of shows generate. A recent survey found a large percentage of viewers actually compare their own lives to these over-hyped reality stars, asking "why can't I be more successful, better looking, live in a great place, with career, friends and a family who thinks I walk on water...like...like...like the guy on that reality show?" But keep this in mind: For every reality-show-based astronomical success that is real, there are a hundred that are not (most of which you never see).
These (reality) shows should be viewed as nothing more than entertainment. Believe it to be anything else (the truth?) and you're buying into the very fantasy that the producers and sponsors were hoping for.
Here's a couple of examples from our own (real estate) industry. Remember the TV show "Flip this house"? The original (now re-named The Real Estate Pros) revolved around this good 'ol southern boy (Richard Davis) who seemed to have the midas touch when it came to real estate. It was fun, interesting, and Davis had a personality so loaded with rapport skills that he brought viewers back week after week to see what kind of mischief he would get into next (and how much money he would make while doing it.).
Because of the show's success, the format was used to create several similiar shows that showcased other investors who were supposely also - and equally successful. In one series, (in this case, a man and wife team) the experts would search for run down homes to buy that could be remodeled and/or updated and then sold. According to the story line of these episodes, this particular couple was shown being very successful at their business - selling their remodeled properties on a regular basis and for a healthy profit. In reality, it turns out that many of their properties were never completed and only a few selected rooms were shown on camera to give the impression that the propety was ready for market. Obviously, the assumption that these homes sold for big profits was also false.
Here's another example: Last year's reality series called "Million Dollar Listing" followed the lives of three competitive real estate agents. They were young men (early twenties), made incomes in the high six figures, and appeared to be permanent fixtures in LA's collection of movers and shakers. The reality? One of the boy wonders, Josh Flagg (not the arrogant one with the mushroom haircut or the model-looking other one. Got it?) has got big problems. It seems he was accused of stealing artwork from his rich clients' homes. Currently under investigation for theft by the LA city attorney and the FBI, an initial investigation found several missing objects inside Flagg's home. Can you imagine what kind of future he has in store? Want to trade places with him?
Many media touted fortunes are little more than a flash in the pan. But we seldom hear about the contract that gets canceled, or the once-famous TV or movie star who was forced into bankruptcy and/or foreclosure. And it happens far more frequently than you might imagine.
The bottom line? Give yourself a break. Stop comparing yourself to others, expecially those whose lives - and success - is probably more imagined than real. Certainly seek out advice from mentors and learn from the examples of the truly successful, but leave the envy and jealousy out of the equation. It won't add up in your favor.
Posted at 12:20AM Jul 26, 2009 by Jill Reid in General |
Banks, Credit Cards and How They Are Affecting Your Credit Report
It's no secret that banks are taking action to reduce their risk of delinquencies and write-offs on credit card accounts. They are cutting limits (many times to the remaining balance owed on the account), closing open accounts that are used infrequently, and imposing severe penalties on cardholders whose payments are considered late. This isn't just happening to folks who have lost jobs, or are in other dire financial straits. It appears to be happening across the board, even to cardholders with high incomes, good job security and money in the bank. And who, by the way, make their payments on time or early, and for more than the "minimum payment due".
One result is the obvious inconvenience of having your credit limit cut or lost completely. And as frustrating as that may seem, the damage done to your credit report can make things a lot worse, especially when you realize the impact to your credit score is due entirely to the bank's action. Let's use an example of a credit card account with a $7000 limit. Let's say you owe a balance of $3200. You've never missed a payment or been late. Then you get the letter in the mail that reduces your credit limit to $3500. You've just lost half of your credit capacity. But that's not all. Your credit score is partially based on the ratio of available credit to the amount used. Before the reduction in limit, you were below 50% of the available credit. Now, you're over 90%. Can that lower your credit score? Absolutely. What if you pay down the balance to under 50% of the new limit? Is there any guarantee that the bank won't cut your available credit line again? None...and we know it because it happened to one of our clients. And while we've been talking about credit card accounts, the same situation holds true for home equity lines. We have several clients who have had their credit lines immediately suspended or reduced to the balance owed after they made a substantial payment to the principal amount due.
What about late payments? If your payment arrives after the payment date cutoff, you can find your interest rate on the remaining balance suddenly raised to anywhere from 26 to 36 percent. That's quite a jump when you may have been previously paying between 8 and 12 percent. And your reason for being late doesn't seem to matter. Let's say you were getting ready to take a vacation and knew a payment would be due while you were gone. Not wanting your payment to be late, you send it in early - a separate check in a separate envelope with a full explanation, including the account number, your name, address, etc. So what happens? If the early payment is received before the current payment cycle end date, the money is applied to the principle balance of the current cycle. And when the next payment cycle rolls around (the one you sent an early payment for), the bank marks your account delinquent, activates the penalty interest rates and sends you a late notice, because as far as they are concerned, unless the correct payment is received during the payment cycle window when it is due, it was late. The lesson here is never try to send in a credit card payment early. The credit card payment processing center has no way to receive, acknowledge, or credit an early payment to the account.
So what's the answer? The so-called "money experts" are about evenly split on what to do to protect your buying power and credit report. Half say that all debt is bad in the current economic situation and should be paid off as quickly as possible. The other half recommend minimum payments to credit card accounts and home equity lines while putting every extra dime into a savings account. The logic of the second half may make more sense as savings may provide a financial buffer in the event of job loss or other economic problem. Bottom line, having cash in the bank is a better defense against the unknown than open credit lines that could be reduced or eliminated tomorrow.
Posted at 03:35PM Jul 17, 2009 by Jill Reid in General |
It's Not Really Free, Is It?
We've been having a few problems with our web site provider because of the contact form we use. It's custom and was re-designed to eliminate any and all "required" fields and information. It hasn't been working correctly and that's why it's been temporary replaced with a simple email link until the problem can be resolved.
Why do we use a custom form that is obviously giving the web site provider problems? I don't know about you, but I get irritated when a company or individual promises to give me something for free if I click the appropriate link on their website, and then find I have to provide my name, address, phone, email before I can have access to the "free" information. In my opinion, the information offered isn't really free, but is being offered in exchange for my personal information.
I know it's a common practice, and it's the standard method to build a mailing list. But common or not, I don't like it, and I don't believe anyone should have to reveal anymore about themselves on a contact form than they are comfortable with.
From the standpoint of our website, our contact form is often a future client's first experience of what it's like to work with us. Asking them to provide anymore than an email address (or some other way to respond to their request) is presumptuous and rude. So we don't do it.
So for now, just shoot us an email (use the link on the main page) if you have a
question or comment or would like a copy of a report that isn't directly available on the web site. That's also true if you want a market analysis of the current value of your home. We will need the address of your property and obviously, your email. But that's all we need. If you decide you would like more information about our services or just have a question, please feel free to contact us again. Over the years, we've found that our clients decided to choose us as their agent for lots of reasons - one of which is that we respected their privacy.
Please feel welcome to use any and all of the information on our site to your advantage. If there is something else you need or can't find, just ask. We'll respond right away. No hassle, no pressure. We promise.
Posted at 06:56PM Jul 11, 2009 by Jill Reid in General |
Behind On Your Mortgage? Your Bank Accounts Could Be Tapped For Back Payments!
Let's talk about banks, and more importantly, what you need to do to protect yourself against some of the current policies and actions that many banks are taking to reduce their risk against default. It's best summed up in the following little story:
We have a client who fell behind in their house payments. He was a homebuilder who simply lost his source of income due to the economic downturn. Although his wife was able to keep her job, the single paycheck was not enough to pay all the bills. They listed their home with us, but based on the amount of the mortgage, they were upside down, owing about two hundred thousand dollars more than the home was worth in today's market.
Our client made repeated attempts to contact the first and second mortgage holders, asking for their assistance in evaluating the home for a short sale. While the first mortgage holder was receptive to considering a short sale option, the second mortgage holder, Wells Fargo, was not. We also tried to contact Wells Fargo in our client's behalf, but the appointed bank representative would not take or return our calls.
Here is where things go from bad to worse: About a month ago, our clients mother, a 73 year old widow whose main income is social security, received a notice from her bank (yep, you guessed it, Wells Fargo) that her checking account was overdrawn and several checks had bounced. At first, the local bank employees would not tell her what had happened to the approximately $2000 that had been mysteriously withdrawn from her account. But after she threatened the branch manager with arrest for theft, he reluctantly admitted that Wells Fargo had , without permission and without prior notice, withdrawn the money and applied it to her son's delinquent account.
How could they do it? Because several years prior, she had added her son's name to her account as part of her estate planning to give her son access to the account at the time of her death. Even after repeated explanations by her son - citing that the money in this account belonged to his mother and he had never deposited any of his funds into the account – the bank refused to return the money, saying that because his name had been added to the account, the money was equally his - and subject to confiscation by the bank.
The process is called "offsetting", and it allows the bank holding a delinquent mortgage to search for assets under their management or in some cases, the management of financial partners, and simply take the money owned to them without notice.
Is it legal? I don't know. I'm not a lawyer. Is it ethical? Not in my opinion. The withdrawal of funds from the mother's account created financial hardship. It also affected her health, requiring a doctor's visit and medication for stress and insomnia. Even though the son's name had been added to the account years prior, the money it contained was not his, and accordingly, should not have been subject to confiscation for his debts.
So have banks become this ruthless? Obviously, some have. The lesson? If you anticipate falling behind in any of your financial obligations, make sure you remove any money you have in banks and other financial institutions under the same name or financial family umbrella. The loss of a job and income is difficult enough without the added stress of having your remaining cash stripped away without notice. Preserve your right to manage your money, especially during times of hardship, by reviewing loan documents, moving and/or closing bank accounts if necessary to eliminate unauthorized access to your funds by creditors, and finally, spend the money to have an attorney make a review of your situation, it can save you thousands in the long run. (Obviously, set a time/cost limit on any lawyer's services, making sure he/she can accomplish what you need within an affordable limit.)
There's more about the banking situation and how it is affecting the real estate market in the current issue of our newsletter, scheduled to be mailed on Friday the 10th. If you're not currently receiving our newsletter and would like to, drop us an e-mail at jillreid@jillreid.com and tell us where to send it.
Posted at 02:16PM Jul 08, 2009 by Jill Reid in Real Estate |
Welcome!
Welcome to our new blog!
Here we'll provide expanded content from articles that were originally published in the newsletter, as well as new and updated information about the market. And when it's appropriate, we'll also include our opinion and advice. We want to keep you informed and ready to take advantage of changes in our real estate market - whether you're a buyer or a seller!
Posted at 04:31PM Jul 05, 2009 by Jill Reid in Real Estate |
