The 3 ‘D’s’ Of Selling Your Home

March 22, 2018

Before my stepson and his wife took the plunge and put in a contract for their first home, I helped them search out their new place. As we looked at place after place, I was often shocked at how sellers put no thought at all into the staging or curb appeal of their homes. If you’re planning on listing your home for sale, remember that you never get a second chance to make a first impression.

For buyers, it’s all about the three “L”s: location, location, location. But for sellers, you should pay attention to these three “D’s”:

De-clutter

Clear the clutter! It amazed me to see overstuffed closets, basements full of boxes, stacks of magazines on tables, and old DVD machines that probably haven’t been used in years with cables and cords everywhere, all of which distracted from the true living space of some of the houses that got crossed off the list. According to Noelle Barbone of Weichert Realtors, “clutter eats equity,” so less really is more.

If you can’t bear to part with all of the clutter, rent a storage unit to get it off-site.

De-personalize

No one wants to see a hallway full of your family pictures as they try to envision their own family’s future in the home. Your kid’s finger paintings may be works of art to YOU, but don’t need to be displayed on the refrigerator door when you have potential buyers coming for a visit.

Your 20-year collection of cat-shaped salt shakers should already be packed and stored away since buyers sometimes have a difficult time seeing beyond your decorating touches.

Deodorize

Even dog lovers don’t like to smell other people’s pets, so it’s a real turn-off to be greeted by the scent of a dog, even if Fido has been removed from the premises. Freshen the air by opening the windows for a few days. Most importantly, don’t try to hide smells with potpourri or candles burning since that is a dead giveaway to a smelly problem.

Messy cat litter boxes were the most common turn-offs as we went on house tours. If you have a cat, at least change the litter the day you plan to show your home or better yet, find a cat sitter for the day and take the litter box out of the house entirely.

The house my stepson and his wife finally chose met all three “D’s” since it was vacant and appeared to have had a thorough cleaning from top to bottom prior to the open house. No one’s clutter to navigate around, no family history on the walls, and a clean “new paint smell” welcomed us in the door.

It needs lots of updating in the kitchen and bath, but they were able to easily envision their own family memories being made in their first home.

Are You Committing Financial Infidelity?

October 20, 2017

Have you ever cheated or lied to your spouse or significant other regarding a financial matter? Amazingly, 42% of adults who combine their finances with a partner admit to committing financial infidelity, according to a survey last year. The survey also found that almost 4 in 10 people had hidden cash, a purchase, a bill, or even a bank account from their significant other, while 16% reported more significant lies such as how much they earned or how much they owed.

These numbers are higher than when the same survey was conducted 3 years earlier. Perhaps we need Sweetest Day as a reminder to be good to our partners after all!

Money fights can lead to divorce

I have to say that I’ve occasionally tried to pass off a new outfit as if it had been in my closet for a while, but never to the point where a financial deception would cause an argument between me and my husband. Luckily, we don’t fight about money since arguments about money and finances is the top source of marital tension based on Money Magazine‘s Americans and Their Money survey.

Fights about money that occur at least once a month were reported by 41%, followed by chores and quality time together, and this financial stress isn’t good on the state of their relationships. Utah State University professor Jeffrey Dew, an expert in money and family relationships, has found that couples who disagree about finances almost every day are 69% MORE likely to divorce than couples who rarely or never argue about money.

Spotting the signs of cheating

So how can you spot the signs that your partner in love and money is cheating on you financially? It usually gets detected with finding a stray receipt or credit card statement you aren’t familiar with, or even worse, calls from creditors.

Another red flag is if your loved one gets defensive or withdrawn when you try to bring up money issues or if they handle all the bills and you never get to see how the money is being spent (or earned). In some cases, financial deception could be a sign of a serious issue, such as gambling or a compulsive shopping addiction.

Avoiding financial infidelity

To avoid being cheated on or to fess up to your own financial infidelity, the first step is to sit down and have the “money talk” at least once a month. Clear the air and share all of your debts, account balances, and review your latest pay stubs. Talk about what is causing you to stray from your financial goals as a couple and set a spending limit like $100 for individual purchases that don’t require approval from your partner.

Paying the bills should be a joint venture so both of you know how much is owed and to which creditors. This way, the only thing left to argue about will be what’s for dinner tonight — which, believe it or not, 28% of couples argue about every month!

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Post-Hurricane Tips: Before You Go Home Again

September 18, 2017

For anyone displaced due to a natural disaster, it is tempting to rush back home as soon as possible. I get it – you want to see how bad the damage is. I felt the same way with my condo in Clearwater, FL after Irma came for a visit. I wasn’t hunkered down in an emergency shelter, but at my primary residence over a thousand miles north stuck watching the Weather Channel to get a glimpse of the aftermath.

My first reaction was to rush down to inspect the damage soon after the storm had blown through. However, I heeded the warning of local authorities to just stay out of their way and let them do their job for awhile, like getting roads cleared and power restored. When I do head down south, I’m going to follow some of the tips provided at www.DisasterAssistance.gov.

Here’s a summary:

Before you open your front door when you return, here are some things to watch out for:

Look for any downed power lines or obvious structural damage and DO NOT ENTER your home if you have any doubts about your safety.
If any of your appliances run on natural gas, do the smell test. A gas leak will have a rotten egg smell. Open a window and turn of the gas valve before heading back outside to call the gas company.
If you have lost power, turn off the main breaker and unplug your appliances. Turn off your AC. My husband’s biggest concern, being an HVAC guy, was that the outdoor AC condenser had been submerged underwater and might short out when the power came back on.
Don’t drink the tap water! Many municipalities have issued a water alert for the public water systems. If you are on a well, you may need to do a chlorine bleach shock to disinfect the water from any bacterial contamination. Imagine all that dirty flood water seeping in the ground and into your well.
Speaking of bacteria, resist the temptation to grill up those burgers in your freezer. If your power had been out for awhile but got restored before you came home, food in your freezer may have refroze but you don’t want to take the risk. Throw out all perishables, especially meats and dairy foods.
Finally, you may not be the only one who calls your place their home. Some of my neighbors reported hearing the pitter patter of footsteps in the attic, and found that a raccoon had taken refuge from the storm. If you can, simply open a window and try to get the animal to leave on its own, or call your local animal control office if necessary.

I’m hoping I don’t find any issues when I do make my way down to Florida, but even if it’s a couple months from now, I’ll still be following these steps.

Ever Wonder How Your Auto & Home Insurance Is Priced? Get A C.L.U.E.

September 12, 2017

Did you know that any insurance claims you have filed in the past 7 years for collision or comprehensive damage to your car or theft, fire, or storm damage to your home are factored in to any insurance quote you receive?

I learned this interesting fact a few years back when I noticed a clause on my homeowner’s insurance renewal that warned me that my insurance company could cancel or refuse to renew my policy if I had 3 or more weather-related claims within the past 3 years. Considering that I’m still waiting to find out if my condo in Florida sustained any damage from Hurricane Irma, this is important information and definitely had me thinking twice and doing more research.

Getting a C.L.U.E.

What I’ve learned is that insurance claims are actually reported to C.L.U.E. (the Comprehensive Loss Underwriting Exchange.) Kind of like your credit information is reported to the reporting bureaus, there’s also an insurance “reporting” bureau for insurance companies to consult when pricing your coverage. Too many claims on your C.L.U.E. report could even lead to being dropped by your insurance company.

Not just your claims

Even more interesting, it’s important to know that it’s not just claims that you’ve filed but also any claims that any previous owners of your home may have filed in the past 7 years. So you could file your first claim and unknowingly hit the 3-claim limit and lose coverage. That’s also important to know if you’ve owned your home for less than 7 years.

Getting my own C.L.U.E.

This got me curious about what might be showing on my report so I went to the website of LexisNexis Risk Solutions, which maintains the C.L.U.E. files. In compliance with the FACT Act, you can receive a free annual report of your C.L.U.E. file on your auto and property records. I had no claims showing on my property report but I did have 2 claims showing on my auto records and 4 “possible related claims” also were included.

This finally explained why my stepson had been excluded by my auto insurer from EVER driving one of my vehicles. The 4 possible related claims showing up on my report were actually collision claims that he had on his own auto policy over the past 7 years. But since we lived at the same address when he first got his licence, these claims also show up on my personal file as possibly linked. My insurance company flagged those related claims and issued an exclusion rider on my stepson a few years ago.

Checking your C.L.U.E.

Why should you care what’s in your C.L.U.E. file? Any inaccuracy on your report could be causing you to pay additional premiums or even keeping you from getting insurance coverage at all. By reviewing your report on an annual basis, you can dispute any errors before they negatively impact you.

An extra step in buying a home

You also want to order a C.L.U.E. report if you are buying a home that will be new to you but was previously occupied by another homeowner. In that case, you’ll need to ask the seller to order the property report for you to view, as it’s only available to current homeowners.

If you are uncomfortable filling out the online request form, you can also call LexisNexis at 1-866-312-8076 to request your C.L.U.E. report. Either way, be sure to get a clue.

Credit Or Debit — How To Pay Your Dependent Care Costs

February 01, 2017

Paper or plastic? Credit or debit? Common questions you hear at the grocery store, but do you consider what is the best way, credit or debit, when it comes to paying for dependent care?

Dependent care tax credit or pre-tax dependent care?

I don’t mean actually charging the cost to a credit card – what I am referring to is whether to take the Child and Dependent Care tax credit at the end of the year on your tax return, or to have the funds withheld (debited) pre-tax from your payroll using the Dependent Care Flexible Spending Account.

Your tax bracket will determine

The best answer to this is based on what your marginal federal tax bracket is.

For employees in either the 10% or 12% federal tax bracket, it may make more sense to take the credit at the end of the year and steer away from the payroll deduction. You may actually qualify for up to a 35% tax credit of up to $3,000 per child (maximum of 2, or $6,000). Here are some examples at various income limits:

AGI up to $15,000 = 35% credit

AGI $23,000 to $25,000 = 30% credit

AGI $33,000 to $35,000 = 25% credit

AGI over $43,000 = 20% credit

For employees in the 22% or higher federal tax bracket, it probably makes more sense for you to take advantage of the payroll deduction option. If you’re in the 12%, it will depend on where your income falls on the scale. As income increases, the federal tax credit phases down to only a 20% tax credit so your savings from avoiding paying tax altogether on the funds is higher than the credit you would have been eligible for.

Not just federal tax savings

This tax savings not only includes your federal and most state income taxes, but also the 7.65% FICA tax for Social Security and Medicare. Plus, you can contribute as much as $5,000 to the Dependent Care Flexible Spending Account (DCFSA), even if you only have 1 child. Some employers even match funds going into the DCFSA, so check with your HR Dept to see if this applies.

Would Winning the Dream Home Become a Nightmare?

January 07, 2014

Updated June 14, 2017

HGTV’s Dream Home Giveaway continues to fascinate people like my mom, who love watching each year’s winners tour their incredible new homes. Whenever a new contest kicks off, my mom always asks me to help her enter, since her eyesight isn’t good enough for her to fill out the form anymore. Like the good daughter I am, I dutifully set a reminder to complete the entry form each morning that the contest is open, which makes my mom happy.

What if she wins?

But what if she did win? Would my elderly parents move across the country if necessary, leaving their home state of Maryland behind? If the home they won was in a state like California, that would mean higher state taxes, not to mention the cost of maintaining their new state-of-the-art home. And first, the IRS would want their share of taxes on the value of the home she hopes to win.

When a dream turns into a nightmare

Just like many lottery winners, the stories of the prior Dream Home winners sometimes end up being more nightmare than dream. Several of the winners ultimately lost their Dream Homes to foreclosure or ended up selling the home, after not being able to keep up the carrying costs and real estate taxes of a luxury home. They often would have been better off taking the cash instead.

Ski resort dreams dashed

The 2011 Stowe, VT ski lodge winner had the idea of turning the Dream Home into a vacation home and figured they could rent it out the rest of the time. But with real estate taxes of over $27,000 and all the other expenses associated with rental real estate (including probably a local management company since the winner lived in IL) the house was put up for sale after the family only stayed there 5 times.

The property certainly met the first rule in real estate: location, location, location. But when considering the rental real estate rule of thumb that a property should be able to provide gross monthly income equal to 1% of the property value, this WAS only a dream – since the property had a supposed retail value of $3.8 million but may never have been able to yield $38,000 every month of the year.

Bed & breakfast special rules

What about a bed & breakfast business? These Dream Homes are so beautiful, with typical square footage at around several thousand feet, and of course, the setting is usually in a resort area as was the Texas Dream Home at Lake Tyler. That was the idea of the 2005 TX Dream Home winner, but town regulations wouldn’t allow him to open a business on the property.

The moral of the story

The lesson here: do your homework before considering a home-based business. Whether it’s a B&B for guests or a doggy day care for 4-legged friends, make sure local rules don’t prohibit running a business out of your house BEFORE you open the business. With the B&B idea a bust, the winner eventually couldn’t keep up with the monthly carrying costs and after a few years, lost his Dream Home but even after the foreclosure – said he had no regrets, and he’d do it all over again.

So if my mother gets an unexpected knock on the door one of these springs, it could be HGTV informing her she is the winner. I’ll pack my bags to go with her on the “winner weekend” to visit the Dream Home. Then after she’s had a few hours to admire her new home, I’ll tell her to take the cash prize of $1 million+, say goodbye to the shiny new home and leave behind all the hidden pitfalls of her probably-not Dream Home.

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Can You Change Your Workforce Culture to Increase Their Financial Wellness?

November 20, 2012

No matter how much financial education you provide to your workforce, ultimately it is up to your employees themselves to alter their financial bad habits and focus on improving their financial well-being. It all starts with creating a culture of accountability, according to best-selling author Roger Connors. I was fortunate to pick up a free copy of his book Change the Culture, Change the Game a few months ago at the SHRM Annual Expo in Atlanta. Although some of you might disagree, one of the things I like most about attending these conferences is the ability to visit all the vendors’ booths, find out what’s new in the benefits arena, and best of all, collect the freebies and giveaways. At one of the booths, Roger Connors was autographing his latest book, where he outlines a breakthrough strategy for energizing your workforce and creating accountability for results. Continue reading “Can You Change Your Workforce Culture to Increase Their Financial Wellness?”