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RISMEDIA, November 9, 2009—By Julie Deardorff-(MCT)—If you’re ready to take control of your health, start by washing your hands for 15 to 20 seconds, about as long as it takes to sing ”Happy Birthday” twice. Doing this simple act, while avoiding certain behaviors—smoking, excessive drinking and eating too much—can dramatically improve your health, said internist William Meller, who specializes in evolutionary medicine in Santa Barbara, Calif. 

Prevention goes well beyond the mammograms, prostate screenings or blood tests that we can get at the doctor’s office. It’s the little steps you take that can keep you healthy. 

“Ideally, prevention should also emphasize healthy lifestyles, a practice that isn’t only health-conscious, but is inexpensive,” said James Pivarnik, president of the American College of Sports Medicine. Here are 10 easy ways to get started. 

1. Take a walk. Humans are designed to be on the move, Meller said. “Walking triggers all of our bodily systems: digestion, stress relief, thinking and preparation for sleep.” It’s easy, simple, free and confers the benefits of exercise without the risk of damage from more energetic pursuits, Meller said. Walk every day—barefoot is fine—and get a pedometer to track your steps, shooting for a minimum of 10,000. Stay committed by setting walking dates with a friend. 

2. Keep a food journal. Writing down everything you eat can double your weight loss, according to a study published in the American Journal of Preventive Medicine. “The more food records people kept, the more weight they lost,” said lead author Jack Hollis, a researcher at Kaiser Permanente’s Center for Health Research. Scribble down your dietary transgressions on a note pad, use an online food journal or send yourself text messages. 

“It’s the process of reflecting on what you eat that helps us become aware of our habits, and hopefully change our behavior,” said Dr. Keith Bachman, a member of The Kaiser Permanente Care Management Institute’s Weight Management Initiative. 

3. Stop drinking soda. Soda and other caloric, sugar-sweetened beverages have contributed to skyrocketing rates of obesity and Type 2 diabetes. But there’s also evidence that drinking diet soda leads to weight gain. Researchers suspect that tricking the brain—getting sweetness without the calories—makes you crave more sugar than ever. Your best bet is to stop drinking calories altogether, said obesity specialist Dr. Yoni Freedhoff, founder of Ottawa’s Bariatric Medical Institute, a multidisciplinary weight-management center. His most confused patients seem to be doing everything right but may have two glasses of milk, one glass of juice and one glass of wine a day. “That’s roughly 40 pounds of liquid calories per year,” he wrote on his blog, Weighty Matters. Freedhoff’s advice: Don’t rely on beverages for nourishment. “A well-balanced diet replete with fruits, vegetables and proteins should satisfy all of one’s nutritional needs,” he said. “Liquid calories are not satiating and in studies tend only to add calories to a meal.” 

4. Strengthen your muscles. If you want to keep your muscles from weakening as you age, start strength training. It’s “the only style of exercise that maintains and increases lean muscle tissue and burns between 22 and 36 calories per day,” said personal trainer Jim Karas. He suggests starting with push-ups for the upper body and lunges and squats for the lower body. “Move slowly, and think about the muscles you are engaging. One slow set of 10 is all you need, but make sure to fail,” which means you can’t perform another repetition. 

5. Chill out. Stressed-out people are more vulnerable to colds and other viruses, they take longer to recover from illness, and they gain more weight than their relaxed counterparts, research has shown. We also know that “the inability to feel in control of stress, rather than the stressful event itself, is the most damaging to immunity,” wrote Joan Borysenko in “Mending the Body, Mending the Mind.”

Another stress expert, Debbie Mandel, likes to lift weights when her stress levels creep up. “Then I’m ready to reframe negatives into positives to turn stress into strength,” said Mandel, the author of “Addicted to Stress.” In addition to exercise, deep-breathing techniques, meditation, tai chi and yoga are proven stress relievers. 

6. Eat out less. We often use restaurants in the same way our parents used supermarkets, one of the main reasons for the dramatic global rise in chronic diseases such as obesity, Type 2 diabetes and heart disease, Freedhoff said.

“Nutrition and calories aren’t intuitive,” he said. “When restaurant salads can have more calories and fat than a Big Mac, you know you’re putting your health at risk. You’ll save more than your money by eating meals in. You might even save your life.” 

7. Be a social butterfly. Human beings are social creatures, if only because we need to reproduce. But research has shown that joining a club or sports team, belonging to a church group or keeping in contact with friends creates a sense of social identity that can help significantly reduce your risk of having a stroke, dementia and even the common cold. 

8. Get some sleep. Sleeping well is the single most overlooked factor critical to good health, especially during the flu season, said sleep specialist Dr. Rubin Naiman, an assistant professor at the University of Arizona’s Center for Integrative Medicine. But because focusing on doing all the right things before bed can make it harder to sleep, Naiman suggests lightening things up, perhaps by watching comedy on television before bed. 

9. Eat whole foods. Whole foods—fruits, vegetables, legumes, nuts, seeds, eggs and whole grains—are unprocessed and unrefined and typically don’t have added sugar, salt or fat. They often have a low glycemic index, which means they don’t raise blood sugar and insulin levels as quickly as processed foods. 

10. Find your passion. Do things that bring meaning to your days, said Patricia Boyle, a neuropsychologist in the Alzheimer’s Disease Center at the Rush University Medical Center in Chicago, whose research has shown that having a higher purpose can reduce the risk of death among older adults. 

(c) 2009, Chicago Tribune.

RISMEDIA, December 16, 2009—For many Americans, a home is still where the heart is during the holiday season. According to a recent survey conducted by Weichert, Realtors, a new house was the most popular item on consumers’ holiday wish list and the home was the place they most wanted to spend their time during the holidays.

The study of Weichert.com visitors found that 51% would choose a new house if they could have just one holiday wish granted this year, while 21% would wish for a new car. Surprisingly, despite today’s challenging job market, only 14% had a new job at the top of their list.

When asked where they would most enjoy spending the holidays, it was clear Americans still equate the holidays with home. A majority of respondents, 55%, said they would most enjoy spending the holidays in their own home, 27% opted for time at a relatives and 3% preferred to visit with close friends. Still, the holiday is seen as a time to get away and vacation for 14% of Americans. However, only 1% of respondents felt they would most enjoy spending the holidays at a restaurant.

“The home often serves as the backdrop for many warm holiday memories,” said James M. Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independently owned real estate companies. “From a mantle to hang the stockings to a roof to display the lights to a dinning table to gather around, a home offers many ways to celebrate the holidays and share special moments with family and friends.”

The survey also revealed that the joy of giving remains the best gift of all during the holiday season. Nearly nine out of 10 respondents said giving a gift that makes someone’s day is more satisfying than getting a gift that lets you know someone cares.

For more information, visit www.weichert.com.

RISMEDIA, November 27, 2009—SeatGuru, one of the Web’s most comprehensive resources for airline information, released its pick of the top five domestic airports to be stuck at, should travelers experience flight delays in their upcoming holiday travel season. SeatGuru founder Matt Daimler says, “We’ve picked these airports because of their amenities and attractions designed to help travelers relax and be entertained and pampered during any unfortunate, extended layovers.”

Top 5 airports to get stranded in:

1. San Francisco International Airport (SFO). SFO’s highlights include the famous Boudin’s Bakery (and their sourdough bread), upscale shopping at Burberry, Coach and Gucci, XpressSpa services including massages and facials, museum exhibits throughout, shower facilities and a play area for children.

2. Salt Lake City International Airport (SLC). Among other offerings, SLC offers free Wi-Fi throughout the airport, views of the Wasatch Mountains as well as numerous restaurants. The airport has also won awards for pollution prevention, recycling and as the best on-time airport for departures in the past.

3. Portland International Airport (PDX). Named Nation’s Best Airport by Conde Nast Traveler three years in a row, PDX is eco-friendly (new solar panels produce electricity and the Best of Nike store is powered by 75% solar energy), has free Wi-Fi, no sales tax and local restaurants have a strong presence with eateries such as Pizza Schmizza, Rose City Cafe and Laurelwood Brewing Company calling it home.

4. McCarran International Airport (LAS). In addition to countless slot machines, LAS also boasts an aviation museum, massage locations, free Wi-Fi, the Jose Cuervo Tequileria, storage lockers to stash belongings, an oxygen bar, hotel souvenir shops, room check in for the MGM Grand and for long delays, it’s just 5 miles from the strip.

5. Miami International Airport (MIA). At MIA, travelers can get manicures, pedicures, massages and even spray tanning at the JetSetter Spa, view ongoing art exhibitions, enjoy a hair cut at the salon, rent a mobile phone, and for members of the U.S. military, there’s an Armed Services center for personnel that serves food and refreshments. There are also 30 dining choices including cuisine from Cuba, the Caribbean, Japan and more.

For more information, visit www.seatguru.com.

Parents Should Consider Homes as Gifts

Parents who are looking for a gift to give their kids this holiday season should consider a house.

With prices in the cellar, this could be a terrific year to give a down payment or even the whole home.

The Internal Revenue Service says a married couple can each give gifts of $13,000 of money or property without triggering taxes for the gift givers or the recipients. That means a married couple can give another married couple a total of $52,000 a year. To maximize that they can give $52,000 in December and another $52,000 in January for a total of $104,000 to be used on a property before the federal tax credit expires.

This would buy a house in some parts of the country and be sufficient for a down payment in most others.

Source: The Wall Street Journal, June Fletcher (11/27/2009)

Predictions on Future Mortgage Rates

What will happen to mortgage rates if the Federal Reserve stops buying mortgage-backed securities next March?

If and when that program ends, mortgage rates will rise, but most financial observers say it is very likely they won’t skyrocket.

Keith Gumbinger, a vice president at financial publishers HSH Associates, predicts that the end of Fed intervention will push rates up about three-quarters of a point for a 30-year conforming loan–somewhere in the mid-5 percent range. By late 2010, Gumbinger says the rate will be closer to 6 percent.

Michael Larson, a real estate analyst at Weiss Research, is dubious that the Fed will actually end the program. He contends that the Fed will continue buying mortgage backed-securities as long as the housing recovery is tenuous. And as long as the Fed continues to dominate that market, “we’re not really going to move the needle on rates,” Larson says.

Source: Smart Money, Lisa Scherzer (11/30/2009)

RISMEDIA, October 5, 2009—By Amy Hoak-(MarketWatch/MCT)—Buying a foreclosure often is appealing to buyers trying to stretch their dollars. It’s finding a good one can that can be a challenge.

“The vast majority of the banks don’t want us to advertise them as ‘bank-owned’ because it comes with a negative connotation,” said Ryan Melvin, co-owner of More Realty Group in Las Vegas.

That means no sign on the front lawn indicating the home is anything other than a traditional sale. A buyer probably won’t find a property advertised as a foreclosure on marketing materials, said Melvin, who specializes in real-estate owned properties, or REOs, those that have been reclaimed by a bank, typically after an unsuccessful foreclosure auction.

Plus, in some markets, including Las Vegas, foreclosure inventory is actually down compared with last year as government programs attempt to keep owners in their homes and banks aren’t putting as many homes on the market, Melvin said. That’s making it harder for buyers to snag a foreclosure, and those paying with cash often win a bid over someone who needs financing.

If you’re considering the purchase of a home that is now owned by a bank, it’s also important to know at the outset just how much work you’re in for — and how much it is going to cost you. Many foreclosures are in various states of disrepair; some of the fixes are cosmetic, but some can be extensive.

Those looking for the best deal probably shouldn’t rule out non-foreclosure properties, either, said Mark Goldman, a mortgage broker with Cobalt Financial Corp., and a real estate lecturer at San Diego State University. Sometimes, people set their sights on bank-owned properties “like the word ‘foreclosure’ equals ‘good deal,’” he said.

And that’s not always true.

One option for finding foreclosure listings: Go straight to the bank.

Lender Web sites, such as those operated by Bank of America, Chase and Citibank, will list the properties the financial institution has reclaimed when borrowers defaulted. To find a list, simply do a Web search for REOs and the name of the lender. Contact information for the property’s listing agents is usually provided for each entry.

For a fee, other sites will hunt down properties for you. RealtyTrac.com, which helps people find foreclosure and pre-foreclosure properties, charges $49.95 a month, after a free seven-day trial. The company also recently launched BankHomesDirect.com, which charges $19.95 per month and lets people search just for REOs.

Foreclosures.com charges $49.95 per month, after a free seven-day trial.

Otherwise, you might want to enlist the help of a realty agent. Someone who works regularly with REOs might be able to track down the properties more easily than a traditional agent. Melvin is a member of the National REO Brokers Association, nrba.com, which has a searchable database of brokers on its site. There’s also the REO Network, reonetwork.com, which connects buyers with those who specialize in selling REOs.

Lenders aren’t held to the same disclosure requirements as sellers who have lived in the home, mainly because the lender hasn’t occupied the home to notice leaks or other problems. For that reason, an inspection is crucial.

“If there are lessons out of the last couple of years, it’s certainly buyer beware,” said Dan Steward, president of the home inspection firm Pillar to Post, which has a U.S. headquarters in Tampa, Fla.

“We have all heard the stories of people ripping the copper pipe and wiring out … people have literally gone to the light switch, disconnected the wire from the switch box and have pulled the wire through the drywall,” Steward said. Some have ripped out toilets and kicked in walls or left water faucets running before they left the house, often out of anger.

You don’t need to be told the toilet is gone, but an inspector can tell if there is damage 20 feet down the water line because of the way that toilet was ripped out, he said.

Other issues could pop up due to the property being vacant. Large banks will often hire a field service to cut the grass, shovel the snow and winterize a home, yet when homes aren’t occupied it’s harder to catch small problems before they become big ones.

“When we live at home or drive the car, if something is off we notice it. We notice it and we deal with it,” Steward said. When a place is unoccupied, pests could become an issue. If you were living in a home, a nest of raccoons probably wouldn’t be able to find a home in your crawlspace—not for long, anyway.

A neighborhood environmental report might also be worthwhile, he said, which could reveal if the property was the site of a drug lab, for example. When a meth lab is operating in a home, air quality issues can arise; when a home was used for growing marijuana, there is a tendency for mold problems from the high humidity, Steward said.

The time it takes to complete the sale can vary from lender to lender. In some cases, the process goes smoothly, Goldman said. Other lenders are disorganized.

“It really depends on who you’re doing business with,” Goldman said.

But for your best chance at having an offer accepted and for a quick closing process, have everything in order before making the offer, said Duane Andrews, CEO of Clear Capital, a company that provides valuation products for the mortgage and lending industries. That includes having the financing firmed up and writing a clean offer — for example, asking for new oven racks as part of the deal could peg you as a demanding buyer who will be annoying to deal with, he said.

“What this tells the seller is this guy is going to be a pain and they don’t have time for this pain,” Andrews said.

In fact, most bank-owned properties are sold “as is,” so if there is something you want fixed, it’s best to just factor that into the price you’re offering, Melvin said.

But don’t expect to bargain the listing price way down, Melvin added.

Banks typically price their properties at a 20 percent to 30 percent discount anyway, he said. If the property has been on the market for a week or two, don’t expect the bank to drop the price; if the listing is older, you might have more power, he said.

Also, don’t be surprised if the bank that is selling the property asks you to get an approval from its mortgage operation; you often don’t have to take the loan from their company, but they may want to get a closer look at your finances to make sure you’re a solid buyer, Melvin said.

Above all, make sure to follow directions when submitting the offer, he said. That likely includes having an approval letter from the bank and the correct amount of earnest money.

“Most listing agents will have instructions how we want buyers agents to submit the offer,” he said. Delays can occur when instructions aren’t followed exactly.

(c) 2009, MarketWatch.com Inc.

New Home Sales Rise in October

New home sales rose 6.2 percent in October compared to September, according to a report released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.

This increase was 5.1 percent above the October 2008 level.

"New-home sales are what I am focusing on because they are the ones that are going to drive" gross domestic product, said Cameron Findlay, chief economist at LendingTree.com.

The median sale price of new homes was $212,200 in October with an estimated 239,000 units available at the end of that month, a 6.7-month inventory, according to the government.

Source: The Los Angeles Times, Alejandro Lazo

RISMEDIA, November 10, 2009—HomeGain.com, one of the first websites to offer Web-based free instant home values, announced that it has released the results of its nationwide home improvement and home staging Home Sale Maximizer survey. 

HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers. HomeGain received responses from nearly 1,000 Realtors nationwide and configured a list of the top 12 do-it-yourself (DIY) home improvements that cost under $5,000 and benefit sellers most when they sell their homes. 

According to the HomeGain survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are: 

1. Cleaning and de-cluttering ($200 cost / $1,700 price increase / 872% ROI)
2. Home staging ($300 cost / $1,780 price increase / 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase / 572% ROI)
4. Landscaping ($320 cost / $1,500 price increase / 473% ROI)
5. Repairing plumbing ($385 cost / $1,250 price increase / 327% ROI) 

Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment. 

“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.” 

Rounding out the top 12, the list of low cost, do-it-yourself home improvements includes: updating electrical, replacing or shampooing carpets, painting interior walls, repairing damaged floors, updating kitchen, painting outside of home, and updating bathroom/s.

The home improvement projects with the highest price increases to a home’s resale value are updating the kitchen ($1,200 cost / $2,850 price increase), followed by painting the outside of the home ($900 cost / $1,815 price increase) and home staging ($300 cost / $1,780 price increase). 

“Inexpensive cosmetic home improvements and basic improvements greatly enhance the value of the home,” stated Carol Wilson of Carpenter Real Estate in Indianapolis, IN, HomeGain AgentEvaluator member since 1999. 

For more information, visit www.homegain.com. 

RISMEDIA, November 9, 2009—President Obama recently signed an expanded version of the $8,000 first-time homebuyer tax credit that was set to expire on November 30. “The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “Although the tax credit remains at $8,000 for homebuyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for homebuyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up homebuyers did not qualify.” Consider these three examples: 

Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.

Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.

Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight. 

The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. “If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010,” Nicholas said. “It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.” 

The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. “This means that more people will qualify for the credit – especially in parts of the country with higher costs of living,” Nicholas said. “This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.” 

There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples: 

-The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others

-If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit).

-The credit applies even if you have co-signers on your mortgage loan 

For more information, visit www.CMPSInstitute.org or contact your personal CPA. 

9 Tips For Improving Your Credit Score

RISMEDIA, November 14, 2009—Christine Van Tuyl and Margaret La Grange, an award-winning mother-daughter team with Prudential California Realty in Coronado, have compiled their latest list, “Top Tips for Improving Your Credit Score Now.” “Although interest rates are at historic lows, you need to have excellent credit to secure the best possible rate,” said Christine Van Tuyl, real estate agent. “Whether you’re looking to boost an already good score, or if you have a foreclosure or short sale on your record, it’s never a bad time to improve your credit score.”

Top Tips to Improve your Credit

1. Review your current credit report for accuracy. Everyone is entitled to one free credit report per year from each of the three credit bureaus—Experian, Equifax, and TransUnion. Get a copy of your credit report and look at it for accuracy. First, make sure that the information in your file is about you and only you, not someone who has a similar name or a similar Social Security number. It is very common for your credit reports to have mistakes or incorrect information. At a minimum, make sure that the information you are being evaluated on is current and correct.

2. Repair credit report mistakes. If you find something on your credit report that is incorrect or missing, you should dispute the mistake by contacting the credit bureaus directly. All credit bureaus have their dispute procedures on their website. They are also required by law to investigate any disputed items and these investigations will usually be done within 30 days of your request.

3. Pay your bills on time. Sounds like a no-brainer, right? Payment history accounts for roughly 35% of your credit score. Paying bills on time is the most important thing to do. If you’re struggling to catch up, contact your creditors to work out a payment schedule.

4. Increase the length of your credit history. This accounts for about 15% of your score. Don’t cancel your old card or get a lot of new ones in a short time span because this can hurt your score.

5. Keep credit card balances low. It’s a good idea to keep the balances below 25% of your available credit. Even if you pay off your credit cards every month, a high average balance will impact your score. This accounts for about 30% of your credit score.

6. Keep new credit requests to a minimum. This accounts for 10% of your score. Every time a lender runs your credit, an inquiry is recorded. If you are trying to get a loan, don’t apply for new credit cards first.

7. Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.

8. Pay off debt rather than moving it around. The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.

9. Beware credit-repair scams. By all means, don’t pay someone to wipe away the negative items in your file. If they don’t follow through, the damaging items will reappear in two or three months.

Please keep in mind that Christine Van Tuyl and Margaret La Grange are real estate agents, not mortgage lenders. For more information on how your credit score will impact your loan and interest rate, please contact your mortgage lender.

30-Year Rates Hit Record Low

The average interest rate for 30-year mortgages has fallen to the lowest level since Freddie Mac began compiling its weekly survey in 1971, declining to 4.71 percent this week from 4.78 percent a week ago.

Rates also were more attractive for 15-year fixed loans, which fell from 4.29 percent to 4.27 percent, but many consumers may not have qualified for them because they now face higher credit standards from lenders.

Still, the Mortgage Bankers Association's index of application demand, which rose 2.1 percent on a seasonally adjusted basis during Thanksgiving week from the previous week, shows that consumers were looking to take advantage of mortgage rates at a historic low.

Source: USA Today, Stephanie Armour (12/04/09)

© Copyright 2009 Information Inc.

New Homes Are More Energy Efficient

Buyers of new homes can expect much healthier and more energy-efficient properties than they get if they buy an older home.

Tom Molidor, president of Molidor Custom Builders in Clarendon Hills, Ill., recommends installing a high-efficiency furnace close to the part of the house the family uses the most, instead of putting it in the basement.

A 3,000-square-foot home that is top-rated for energy efficiency can be heated in the greater Chicago area for less than $50 a month, estimates R.A. Faganel Builders.

Other commonly included energy-friendly features include double- or triple-paned low-E windows that not only keep out cold air but also make homes quieter.

Source: Chicago Tribune, Leslie Mann (11/06/2009)

Understanding Home Owners Association Fees

By George W. Mantor 

“The Home Owners Association fee is too high!”

RISMEDIA, November 10, 2009—That is one of the most common objections to purchasing real estate where there is a community Association requiring the payment of regular dues and fees. These can range from less than a hundred dollars per month, if for example the only service is streetscaping, to upwards of a couple of thousand dollars for a luxury penthouse. Depending on square footage and amenities, most fees range between $250 and $750.

Taken out of context, the amount can seem outrageous. But, when considered from a prospective of value received, you can be pretty certain that you are getting one of the last great bargains.

When evaluating the HOA monthly fee, it is important to consider three things: how was the number arrived at, what does it cover, can anything be done for less?

1. How is the HOA fee determined?

In California, and probably most other states, developers must obtain state approvals before their projects can be offered to prospective buyers. Part of the submission process for developments with an Owners Association is the creation of a detailed budget for the operation and maintenance of the common area and the provision of necessary services.

Developers want to project the most positive scenarios in order to keep HOA dues low and not discourage prospective buyers. And, they are also aware that a $500 per month Association fee equates to another $100,000 that the buyer could have spent for the home. The higher the Association fee, the less the borrower/buyer can spend.

On the other side, the State wants to establish a realistic budget that will allow for proper funding well into the future. For the consumer, that process of compromising means that the budget is as realistic as it can be at the time it was created.

The main thing to keep in mind is that the developer will be paying the Association fees on all unsold property within the Association. The developer is not the one benefiting from high fees so there is no reason to blame them.

2. What does the HOA fee is cover?

It’s also important to consider what is included. Amenities very widely from project to project; high-rises cost more to operate and maintain than low rise buildings.

One of the responsibilities associated with real estate ownership is the obligation to maintain and protect the improvements from deterioration, damage, weathering, etc. Living out in the burbs you need a garage full of tools and a lot of weekends to stay ahead of nature.

Depending on the type of development, there could be a need for a lot of landscape maintenance. That takes labor, and labor is expensive

If there are common areas such as a lobby, pool, gym, or even hallways, they need to be cleaned regularly, maintained occasionally, painted often, and replaced over time. Garages must be swept and windows washed.

Then there is liability, property and other forms of insurance, and possibly a security force.

What utilities are included? Are water, sewer, electric, gas, trash and cable billed individually or are some paid collectively through the Association?

Then there is usually a management Association looking after things, paying the bills, and communicating all of that to the homeowners.

3. Can it be done for less?

Add it all up and you’ll see that the economies of scale allow for a high level of service at a true cost far lower than you could do it yourself.

And remember, it is your building and your Association. You want to protect your investment and to have the kind of amenities that will allow for profitable reselling in the future. Serve on your Association board. If you can economize, you can lower your HOA fee.

But, don’t lose sight of the fact that you are paying for important services with a volume discount. It isn’t just an expense; it’s protecting your investment.