The Price Is Right!

Bankrate.com
8 tips for pricing your home
Saturday January 12, 6:00 am ET
Cheryl Allebrand

It's tough being the seller in a buyer's market. But you can improve your odds with the right research.

In many cases, making a smart deal and getting the best price comes down to studying your market and being an educated seller.

"You've got to know more than you would have if you'd sold a year ago," says William Poorvu, professor emeritus at Harvard Business School and author of the upcoming book "Creating and Growing Real Estate Wealth." "If you want to protect yourself, you have to become knowledgeable."

8 factors to keep in mind as you prepare to sell:

1. Recognize that housing markets are local.
2. Analyze who is buying and selling in your market.
3. Ask the professionals.
4. Know what your house is worth.
5. Consider strategic pricing.
6. Rebate your "commission."
7. Evaluate whether you really have to sell now.
8. Assess the market where you plan to buy.

1. Recognize that housing markets are local.
Home prices are like the weather -- very different in different areas.

In many markets, home prices have actually gone up from last year, says Dick Gaylord, president of the National Association of Realtors.

In addition, demand will change depending on the price range and even the neighborhood. What you need to know: What's the demand for a house like yours in your area?

"You have to look at what's being sold and at what price," says Poorvu. "That's important."

Look at comparables for similar houses. Study prices and sales for one year ago, six months ago, three months ago and current numbers, says Gaylord.

What are the trends? Are prices going up or down -- and by how much? How many days are homes staying on the market? If they are on the market longer, how much of that could be seasonal? In many areas, spring and summer are the busy seasons.

Pay special attention to "the delta between the list price and the sales price," says Ron Phipps, broker with Phipps Realty in Warwick, R.I. That is, look for a meaningful relationship between list price and sales price. Perhaps most homes are selling for 5 percent less than the list price.

"An agent who works the market will be in the best position" to find "the tipping point between nice, attractive and interesting -- and being sold," Phipps says. You want to find the point between, "Hey, that's interesting," and "It's too good to pass up."

If you're not using a real estate agent, it's especially important to use the Internet, visit open houses in your area and study home sales in your Sunday paper, says Greg Healy, vice president of operations for ForSaleByOwner.com.

But you also need to realize that the paperwork alone only tells part of the story. While sales and prices are public, many times seller concessions are not.

2. Analyze who is buying and selling in your market.
What's your competition? Who are the buyers, and why are they shopping?

Do you live in an area like Phoenix, "a growing market with people coming in," says Poorvu. Or are you living in an area that doesn't attract a lot of new residents, where many shoppers are "bottom fishers" who don't have to buy but are "looking to pick up a bargain," he says.

Are you competing against a flood of new houses from builders eager to sell, or are you selling a newer home in an area where most of the housing stock is older?
3. Ask the professionals.
Don't ignore the elephant in the living room. When you interview real estate agents, ask about the market conditions for your area and price range.

Specifically, ask about the "absorption rate" says Phipps. What that means: In the current conditions with the current inventory, how long would it take the market to absorb or sell, all the houses on the market?

If the supply is much larger than the demand, ask potential agents how they would "price to offset that inventory," he says.

4. Know what your house is worth.
Talk to a handful of agents. Get an appraisal from a certified professional appraiser. Look at your comparables. Taken together, that information will give you a pretty good idea of what your home is currently worth.

5. Consider strategic pricing.
Here's how it works: If prices in your area are dropping 1 percent each month, and you want to sell within the next three months, you take 3 percent off your price right off the bat, says Phipps. So if you were going to put your home on the market for $400,000, you set the price at roughly $388,000.

The upside: You'll have the competitive edge over the guy who's dropping his price every month, without the air of desperation. Plus, in a market where prices are falling, you'll make more money if you sell quickly.

The downside: Predicting the market is a tough call, even for the pros. And it's really difficult to raise the price if your market starts to rebound, Phipps says.

6. Rebate your 'commission.'
If you're selling it yourself and need to move quickly, consider subtracting half of what would have been the commission from the sales price, says Healy. The standard commission is about 6 percent, so if you subtract 3 percent, your $300,000 house would go on the market for $291,000, he says.

Listing a home for "$9,000 to $10,000 under that value should create higher interest," especially if it's new to the market, says Healy.

The downside: If the house doesn't sell and you end up hiring an agent, you'll need to cover the commission, which may mean raising your sales price or taking a smaller profit.

7. Evaluate whether you really have to sell now.
If you want to get the best possible price for your home and the local market is tanking, "see if you can delay the sale," says Poorvu. Otherwise, in a lot of markets, sellers have "to be willing to accept a pretty good haircut over what they thought their home was worth last year," he says.

The downside of waiting: The market could decline or your circumstances could change to the point that you might need to sell quickly.

But for situations where the move is optional (or you might be able to rent the property until your local market improves), waiting is a solid option.

Just because you've already planted that "for sale" sign doesn't mean you can't change your mind if you're not seeing the interest you anticipated.

"If you know there are no sales or sales are decreasing, and you have the opportunity," taking it off the market is a decent solution, says Healy. "I think we're seeing a lot of that."

8. Assess the market where you plan to buy.
If you're selling one house and buying another, look at the market where you plan to move. Says Poorvu, "It might be that, with the housing there, it's a great time to buy."

Foreclosures

Area foreclosures well below state and national figures

By KEVIN POST Business Editor,
Press of Atlantic City 609-272-7250
Published: Saturday, November 3, 2007

Atlantic and Cape May counties are trending better than the nation and rest of New Jersey on a key measure of real estate industry distress - household foreclosures.
In the third quarter, Atlantic County foreclosure filings declined 7 percent from the prior quarter while those in Cape May County increased 13 percent, both below the statewide foreclosure filing rise of 16 percent and far below the nationwide increase of 30 percent, according to RealtyTrac Inc.

For the year ending in the third quarter, Cape May County's rise in foreclosure filings was 10 percent and Atlantic County's was 46 percent, compared to 53 percent for the state and 100 percent for the nation.

The three-month period saw 436 filings in Atlantic County; 162 in Cape May County; 13,655 in New Jersey; and 635,159 in the nation.

Trends aside, local figures also showed fewer households in foreclosure per 1,000 households in southern New Jersey than elsewhere.

For the third quarter, Cape May County had 1.6 foreclosures per 1,000 households; Atlantic County had 3.5 in foreclsure; New Jersey had four foreclosures per 1,000 households; and the United States had 5.1 in foreclosure for each 1,000 households.
RealtyTrac is a foreclosure tracking firm based in Irvine, Calif.

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Windmills

Tilting toward windmills
The Times - NJ.com
Friday, August 31, 2007

The answers to our energy needs may be blowing in the wind.

New Jersey is thinking about harvesting wind power by allowing a series of windmills to be built off of the Jersey Shore. The idea is to produce renewable, "green" energy that will not pollute or contribute to global warming. It's like having your energy cake and eating it, too.

The Corzine administration is floating the idea of constructing as many as 80 wind- powered turbines that would tower 30 stories above the surface of the Atlantic Ocean somewhere between southern Ocean County and Cape May.

But not all environmentalists are onboard with the concept. Some are concerned that giant windmills will cause unforeseen problems and destroy the ocean view that lures millions of visitors and billions of dollars to the state's beaches. As Timothy P. Dillingham, di rector of the New Jersey chapter of the American Littoral Society, succinctly put it, "We are talking about building an industrial facility out in the ocean."

The Sierra Club of New Jersey, however, supports the wind farm plan. Director Jeff Tittel points out that the biggest threat to the shore is global warming, and if we do nothing about that, "there will be no Jersey Shore left." Tittel downplayed the visual impact the windmills would have, say ing that at a distance of three miles from shore, "they will look like a pencil," and at five miles they will not be seen at all.

Using wind as a source of energy is not a new concept, as il lustrated by the iconic windmills that have long graced the lowlands of Holland. What is new is the technology and scope of wind farming. A 200-turbine farm is planned 11.5 miles off the coast of Rehoboth Beach in Delaware, and a 130-unit farm is eyed for Nan tucket Sound, off the coast of Massachusetts. A total of 16 offshore wind farms already are operational in five European countries.

Still, the new high-tech wind farms are not balancing out as cost-effective for some areas. The Long Island Power Authority recently scrapped its plans to build a 40-turbine wind energy center in the Atlantic, when costs escalated past $700 million. Likewise, a plan to erect 170 turbines off the Texas coast in the Gulf of Mexico has been called off because of the potential cost.

Here in New Jersey, the administration is conducting a se ries of studies on the feasibility and the environmental and economic impacts "to push for ward with an offshore wind project," according to a spokesman for Gov. Jon Corzine. The governor's energy policy calls for 20 percent of the state's electricity to be wind- or solar- generated by 2020, and 80 percent by 2050.

It is a laudable goal. Wind has great potential to become an important part of our energy portfolio. But we encourage Gov. Corzine to take a cautious approach and make sure that the environmental and economic questions are answered before we allow the giant windmills to sprout up along our coast.

Avoiding a Mortgage Meltdown
If the deepening lending crisis is an imminent threat, borrowers have options to improve their standing
by Emily Thornton and Lauren Young
McGraw Hill Business Week
August 24, 2007

You're reading stories every day about people losing their homes and life savings. You're wondering whether you could be the next casualty. Stop wondering. Do something. Right now.

It's impossible to know just how ugly things could become. But one thing is clear: The mortgage mess and market turmoil are signaling that you should prepare for the worst, while hoping for much better. This Five for the Money features ways you can do that.

1. Boost Your Credit Rating
The standards for loans and mortgages are getting tougher. Last year, consumers with a credit score of 650 points out of a possible 850 could expect lower interest rates. Now, the bar is up to 680. To avoid sky-high rates or outright rejection, start by going online to grab your free yearly credit report at annualcreditreport.com. The site, which provides results from all three credit reporting agencies, will let you know if you're being penalized for late payments or if you may have missed other credit problems.

Next, check out the most widely used credit score—the FICO score provided by Fair Isaac (FIC)—by going to myfico.com. For $15.95, you can learn how you rank compared with other would-be borrowers. If your ratings are below par, the best way to boost your borrowing profile is to make on-time payments and to keep the balances on your credit cards below 35% of their limits. Don't open new cards or rush out to close a bunch of them, either. Both actions will set off alarm bells.

2. Make a Deal
If you face problems making a mortgage or other payment, you have more options than you may realize. Don't throw away the threatening letters or ignore the phone calls. Instead, call your lender and make a deal. In a strange twist, struggling mortgage holders have gained—not lost—bargaining power. Banks, wary of being saddled with foreclosed homes, are more willing than ever to make special arrangements. Washington Mutual (WM), for example, plans to refinance up to $2 billion in subprime loans at discounted interest rates for customers who are up-to-date on their existing loan but anticipate payment problems in the near future.

No matter how painful, keep your bank informed of your situation. "The first day you can't make a monthly payment, you need to contact the bank, tell them what the problem is and how long the problem will persist," says Manhattan real estate attorney Andrew Sokol. Put a payment proposal in writing. Show the lender that whatever you plan to pay is the most you can afford, even if it is only the interest on your mortgage.

As a last resort, consider tapping your retirement account by taking a hardship distribution from your 401(k) or a premature distribution from an individual retirement account. Work with an adviser to minimize the taxes and penalties you'll face. "To save the farm, the negative consequences are worth it," says Mitchell Rubin, a certified financial planner in New York.

3. Re-Read Your Mortgage
The biggest mistake many homeowners made was assuming they understood the inch-and-a-half stack of mortgage documents they received on closing day. Do you really understand yours? If you have an adjustable-rate mortgage, it might be worth contacting a mortgage counselor or consumer lawyer to be sure that dangerous details aren't lurking in the fine print. They can figure out whether you face a sudden rate increase by examining sections explaining how your interest rate will be recalculated. If your rate is about to leap to a rate higher than it should be for your credit profile, "you need to start working on relief strategies right away," says Marie McDonnell of Truth in Lending Audit & Recovery Services. You may also have a right to cancel certain loans, known as a "right of rescission." It lasts for years if the terms weren't disclosed properly to you in writing.

4. Shop Around
Financial conditions are changing day by day, both for borrowers taking out first-time mortgages and for those who are refinancing. Even in upscale neighborhoods, "banks are reneging on commitments and then going out of business," says Jeffrey Seabold, CEO of Beverly Hills-based CS Financial, a private mortgage bank. Some mortgage brokers are readying back-up lenders—and you should, too. Line up both a second mortgage and broker. "You should have more than one deal in your sights," says Keith Gumbinger at financial publisher HSH Associates in Pompton Plains, N.J.

5. Rebalance Your Portfolio
During the housing boom, many people plowed every dollar they could into their homes. With most or all of their net worth in real estate, these consumers may find that the downturn has derailed plans for early retirement. Don't panic and try to sell your home in the middle of a credit crunch. Do start to think about ways to return to a healthier mix of investments. People in their 30s should put much of their net worth into equities and their homes.

But Christopher Cordaro, chief investment officer at wealth management firm RegentAtlantic Capital in Chatham, N.J., advises clients in their 50s and older to limit real estate to half their net worth. Of the share not in real estate, put 40% in fixed-income investments and the remainder in equities. A retiree should create a hefty cash reserve to weather a three-year bear market in stocks, says James Stehr, a financial adviser in Alameda, Calif. To get help with these decisions, check out the National Association of Personal Financial Advisors (napfa.org) and the Garrett Planning Network (garrettplanningnetwork.com).

Emily Thornton is an associate editor for BusinessWeek. Young is a Personal Business editor for BusinessWeek.

All Aboard!

Officials want train service into Cape May
Staff Writer, (609) 463-6713
Press of Atlantic City
Published: Saturday, August 11, 2007
By BRIAN IANIERI

Inside the historic Tuckahoe train station, public officials on Friday afternoon pitched NJ Transit for $27 million in track repairs for an excursion line from Richland to Cape May.

More than a dozen elected officials from Cape May and Atlantic counties took a ceremonious train ride on the Cape May Seashore Lines to meet NJ Transit Executive Director Richard Sarles in Tuckahoe.

Meanwhile, inside a white Ford Explorer at the station parking lot, two Middle Township officials made their own pitch to Sarles, one with a significantly different tone.

They showed him photographs of decrepit trains and asked him to forgo any possible funding until Cape May Seashore Lines moves vandalized trains from tracks in Rio Grande.

The trains have been a sore spot for Middle Township officials for several years.

The concept of sweeping passenger railroad coverage down the shore has excited some southern New Jersey officials who want to increase tourism without increasing traffic jams and parking nightmares.

“There is a real interest to build this rail line,” Buena Vista Township Mayor Chuck Chiarello said inside the quaint Tuckahoe train station. “The infrastructure is around here. We're just looking for the missing link.”

The tracks run from Richland to Tuckahoe through Woodbine down to Cape May Court House and Cold Spring, terminating in Cape May.

But Cape May Seashore Lines owner Tony Macrie has been in a contentious relationship with Middle Township officials for years about vandalized trains stored on the tracks along Route 47 in Rio Grande.

Middle Township Solicitor James Pickering said the township did not want to stop rail line improvements, but wanted its issues addressed.

He and former Mayor Michael Voll, a vocal opponent of the trains in Rio Grande, met with Sarles before officials gathered in the Tuckahoe train station.

In March, Middle Township Committee even passed a resolution requesting it be notified of any federal, state or county government funding requests by Seashore Lines.

Officials estimate about $27 million is needed to repair train tracks, particularly those between Woodbine and Cape May Court House.

Dennis Township is seeking federal funding for a train station to be built in Dennisville, Dennis Township Administrator Jody Alessandrine said. Also needed, he said, is about $6 million in infrastructure for the tracks in the township.

This week, the state Department of Community Affairs announced it is lending $435,000 to Woodbine for track repairs, a parking lot and a new rail platform for the Cape May Seashore Lines excursion.

Chiarello sees a boon to the communities and businesses located alongside the tracks. He objected to the way Middle Township officials approached Sarles at the event Friday.

“Obviously we had a group of 25 folks that were there for the betterment of the project,” he said. “That was our mission today. I was a little blindsided, and I think it was inappropriate for Mike Voll to use that opportunity to bring up an issue that's totally unrelated to that project we’re working on. “It was more of an embarrassment. I felt it was an embarrassment to Middle Township to attempt to become a spoiler to what otherwise was a positive day.”

Meanwhile, Middle Township will probably start citing and fining Cape May Seashore Lines shortly for trains stored in Rio Grande, said Township Administrator James Alexis, who did not attend Friday's event.

“It's literally come to a boiling point with the residents affected by the sight of the cars and the level of deterioration they’ve reached, and we feel we’re not getting the cooperation of the rail operator,” Alexis said.

Township officials said they are concerned about the unsightly trains and the criminal element attracted to them after dark.

Township officials have said that, despite being assured the trains would be relocated, they have remained unmoved for several years.

Macrie said he is being vilified for an issue beyond his control.

The trains were in pristine condition when he first stored them in Rio Grande but have fallen victim to serious damage and vandalism, he said.

The trains are sprayed with graffiti, windows are cracked and doors are missing.

Macrie said moving the trains now requires fixing damage done to the tracks following storms in April.

“If you owned a car and someone was vandalizing it, and you had the opportunity to move it, wouldn't you move it?” Macrie said Friday. “We’re a small company. We’re not a gigantic operation.”

“Look at the stuff here,” Macrie said, pointing to the shiny silver and black trains on the tracks in Tuckahoe. “This is the way it looked when we placed it there.”

Meanwhile, the trains can be a lure for tourism, history and transportation, he said. In 2005, about 16,000 people took the train in and out of Cape May, he said.

“Our position is, here we would love to see mass transit coming into Cape May. We have significant traffic and parking problems,” said Lou Corea, Cape May City manager.

The train had run into Cape May previously but has not done so recently due to bridge repairs over the Cape May Canal, Corea said.

Inside the train station, Sarles told officials gathered that the project was on his radar, but that there were many other priorities in New Jersey as well. He stressed that federally earmarked money could move the project along.

Chiarello said he found the meeting encouraging

The large scale of the project could be done in pieces over several years.

“We can get this done, town by town, section by section. Rome wasn't built in a day,” he said.

On Friday, Voll and Pickering's presence and statements on Friday irked some who had gathered to pitch NJ Transit for funding.

After Sarles left, Voll and Pickering were arguing with Paul Mulligan, of the New Jersey Association of Railroad Passengers.

“You guys have a lot of nerve,” Mulligan said inside the train station, adding their statements could hurt the recent funding requests.

“If you think they're going to give that guy (Macrie) $27 million,” Voll yelled, “you must believe in the Easter Bunny.

To e-mail Brian Ianieri at The Press:BIanieri@pressofac.com

Vacation Homes

Tax Tips for Vacation Home Owners
By Tracy Byrnes
TheStreet.com Contributor
6/22/2007 12:39 PM EDT

I would love to own a little place at the beach someday. Of course, since I'm a Jersey girl, it would have to be down at the Jersey shore. But nothing too big, just something comfy and close to the water that my kids and I can enjoy
Sounds dreamy to me.

But these days, folks with summer homes are not so enamored.

With increasing energy costs, rising adjustable-rate mortgage payments, and the high price of gas, many folks are finding that sweet little escape at the beach is nothing but a money pit. As a result, many vacation-home owners have no choice but to consider renting out the place for a few weeks to help defray the costs.

Once you get over the notion that a stranger will be sleeping in your bed and using your toilet, it's actually not all that bad -- at least on the tax front.

A Freebie From Uncle Sam?
Depending on how long you rent out your home, the rental income may actually be tax-free.

"If you rent your vacation home for no more than 14 days during the year, the rent you receive is tax-free," says Bob Scharin, RIA senior tax analyst from Thomson Tax & Accounting, a part of the Thomson Corporation (TOC - Cramer's Take - Stockpickr - Rating).

And you don't even have to report that income on your tax return. So take the money and run! Even better, you can still can deduct your mortgage interest and real-estate taxes on "Schedule A" -- Itemized Deductions, as if you never rented out your home.

Just don't go thinking you're a landlord now. If you rent your home out for 14 days or less, you're not and you therefore cannot deduct any rental expenses.

This tax rule is nothing new. You can also rent out your principal residence for up to 14 days and pocket the money too. So if you're going on vacation anytime soon, consider renting out your home and getting your vacation paid for.

But I Want to Be a Landlord!
If you instead decide to rent out your fabulous little summer place for more than 14 days, then feel free to call yourself a landlord.

And introduce yourself to "Schedule E" -- Supplemental Income and Loss, because you'll need to report the income you receive from rentals that exceed 14 days. While you'll now owe tax on that money, you'll also be able to deduct some corresponding rental expenses.

The rules for deducting rental expenses are not entirely straightforward -- no surprise. First, you'll need to quantify the time you rent the house vs. The time you live there.

Then decide which camp you fall into:

Do you use the place as a vacation home and rent it on occasion?
Or do you rent it out mostly, and sporadically use it for personal use?

Here are the arcane technical rules for the first scenario: Your vacation home is rented for more than 14 days and your personal use exceeds the greater of 14 days, or 10% of the rental days. Translation: You use it more than you rent it.
In this case, the rental portion of your deductions also should be reported on Schedule E. Things such as mortgage interest, real-estate taxes, rental agent fees, cleaning and maintenance costs, insurance premiums, utilities and depreciation are just some of the things you can list. Basically anything out-of-pocket that helps you keep up the home can now be deducted.

But since you use the house for pleasure more than "business," your expenses cannot exceed the gross income you make from rents. However, any excess deductions can be carried over to a subsequent year.

The part of your deductions that represent the personal use of the house still should be reported on Schedule A. In very simple terms, let's presume that only 15% of the usage is rental. Then only 15% of the mortgage interest goes on Schedule E. The remaining 85% should be reported on Schedule A.

Now, if you answered "yes" to the second question, and the home is more of an rental property (not a fun-family beach home), then it should be treated accordingly(The technical rule is ridiculous: It says that if you personally used your vacation home for fewer than the greater of 15 days or 10% of the days it was rented out, it is not considered a residence. Huh?)

Basically, if you don't fall under the first scenario, your home is probably a rental property. That means your deductions are no longer limited to your rental income, so the sky's the limit. However, they still must be allocated between your personal and rental use so the appropriate portion must still go on your Schedule A. The upside is that the piece that's allocated to your rental income can be unlimited.

Big note: now that it's a rental property, you can't deduct your mortgage interest on Schedule A any more. That's because it's not a second home for you and your family -- it's an investment property.

And one more big tip: "If you are going to rent any of your homes for more than 14 days, just be sure to keep good records of both your rental and personal-use pattern, and the expenses you incur," Scharin advises.

April is a long way off, so get your documentation now. And then, if Uncle Sam ever comes knockin', you have backup.

So enjoy your beach house. Rent it out and make some money. Just be sure to change the sheets between visits.

Beaches - Disappearing Act

Jun 18, 2007 7:28 pm US/Eastern

Disappearing Beaches A Major Shore Concern
CBS 3, Philadelphia
Cydney Long
Reporting

(CBS 3) OCEAN CITY, N.J. Aside from the stretch on five mile beach, also known as the Wildwoods, Jersey Shore beaches are disappearing.

Local leaders met on Monday in attempt to figure out how to combat the growing problem.

The beaches are crucial to the South Jersey economy as tourism is the number one industry in the Garden State.

The long walk in the hot sand to your beach towel and umbrella near the surf, whether you know it or not, gets shorter every summer.

"We've probably lost 500,000 cubic yards in last two years," Avalon Emergency Manager Harry DeButts said.

Some of Avalon's north end beaches have lost the equivalent of 125 feet of sand from the dune to the water.

And that is why concerned residents, politicians, the Army core of engineers and other experts met Monday for the annual Cape May County beach conference.

"It's an effort to learn what Mother Nature is doing and to work with her, not against her," DeButts explained.

"The majority of people who come down the shore, come because they want to enjoy our beaches and our bays, if we lose that we lose that, we lose a major economic initiative in state of New Jersey," Assemblyman Jeff Van Drew said.

Ocean City, Sea Isle, and Strathmere utilize geo-tubes to create an artificial dune that will not erode.

"To protect the shore, it's simply pumping sand into a geo-textile fabric, in effect they are long sausage like shapes, and they create a barrier along the shoreline to protect the property behind it," Ocean City engineer George Savastano explained.

But they say the best alternative, though costly, is to replenish the sand and 25-year shore resident Harold Purvis may have put it best.

"The people love the beach, if the beach wasn't here, we wouldn't have any body coming," Purvis said.

Ocean City spends roughly $8-10 million a year every three years for beach replenishment.