It's time for digital decluttering and unloading 'stuff'

REALTOR® Notebook By Teresa Boardman
Inman News®

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It started in 2010 when my water heater blew up and flooded the basement. That is when I first started to realize that I have way too much stuff, and that is slowing me down. I spent hours cleaning and getting rid of stuff.
When I hear my young first-time homebuyers, who wonder how they will fill all the rooms in a large house, I tell them about how we all start out with a little but end up with piles of stuff -- and how it tends to expand to fill up the space we have.
Stuff takes up space and creates clutter, which is a distraction. The more stuff we have, the more space we need and the harder we have to work to pay for that space. I want less instead of more.
My home office has been one of my biggest challenges. I cleaned out the dreaded top drawer and discovered all sorts of office supplies that I no longer use. They all have to go -- someone else can use them.
Why is it that we think we need to hang onto everything if it is business-related? Most of my files are electronic, but whether they are paper or electronic I will never again look at 90 percent of them -- so why keep them?
Installing more shelving and storage containers defeats my goal of having less -- and yet so many of the articles I have read about decluttering encourage the use of storage systems. I am on a mission to donate, throw away, recycle, shred or sell anything that I do not use and have not used in the last year or two.
I don't want to have to reorganize the same stuff next year. I want to go beyond organizing and storing. I want less -- much less than I have now.
It wasn't until I moved my data from one computer to another that I realized I am guilty of digital hoarding. I have too much digital stuff. I scanned files that I should have discarded, and digital stuff is just as detrimental to my business and even my happiness as the stuff I have in the dreaded top desk drawer.
I accumulated hundreds of notes and photographs and receipts in my Evernote account in the last year. I have a premium account for extra space. It helps me stay organized, but it also helps me collect digital stuff.
My Evernote account is just like a file cabinet. I need to go through it, organize and delete the extra stuff at least once a year.
My Instapaper account, Google Docs and my email inboxes are other examples of digital hoarding and they all need to be put on a diet. We have all heard of "Inbox Zero" -- ways to manage your incoming email -- but most of us have bloated email accounts. Do I really need to save each email that a new buyer sends, and keep them in a folder?
As I started going through the data on my old computer I realized that I have been moving the same files from one computer to another for the last 10 years and I have hundreds of files that have not been opened yet this decade.
Hard drives get bigger all the time and that space is less expensive than it was 10 years ago, so it is easier to move the data than to look at it.
Each time I get a new computer it takes longer to deal with the data on the old one -- and like the other stuff in my life I feel as if the stuff on my computer is slowing me down. For the first time ever I bought a computer with a smaller hard drive instead of a larger one. Much of what I store goes into the cloud, and if I don't have unlimited hard drive space maybe I won't accumulate as much stuff.
The 1-terabyte desktop drive I use for photography is half full. It is very well-organized but there are duplicate files, and do I really need that many pictures? Maybe it is time to save the best and delete the rest.
Getting organized isn't about taking paper and converting it into digital files. It is about reorganizing and getting rid of the stuff that we don't need -- otherwise we end up dragging it around and moving it from place to place, or computer to computer, year after year.
I believe that if I get rid of the clutter in my life I will have a better life, and if I fail to complete my mission this year it is worthy of continuing into next year.

Top 5 tax breaks for homeowners

REThink Real Estate By Tara-Nicholle Nelson
Inman News®

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Q: We bought a house this year! We put $33,000 down and the bank financed $28,000. Can I write this off on my 2011 taxes? How much of it?
A: First things first: Congratulations! You've become a homeowner, and seem to have done so using an enviable financial arrangement. But now that you own a home, you might need to shift the way you think and look at some things, including your taxes and other financial matters.
Owning a home is one of those landmarks that signify financial adulthood. And one of the things that responsible financial adults do is get professional help when the situation requires it. Taxes are one of those areas that often do warrant calling the pros in.
I'm not just shilling for the tax prep industry here, either: The ultimate aim of using a tax professional is to make sure you get every deduction, credit and other tax advantage for which you qualify, without jacking up your chances at triggering the universally dreaded Internal Revenue Service audit by claiming dubious deductions.
Your mortgage debt is fairly small, as was your home's purchase price, though I don't know whether they are large or small in the context of your overall financial picture (i.e., income, assets, investments, etc.).
The fact that you saved or somehow came up with such a sizable chunk of change to put down makes me hesitate to assume that your finances are as simple as your mortgage balance might otherwise lead me to believe.
So, it might be the case that you can easily handle your own taxes -- in fact, it's even possible that your real estate-related deductions won't even outweigh the standard deductions, so that filing a simple form without even itemizing your deductions is actually the financially advantageous move.
Whether that's the case cannot be determined in a vacuum -- you may have other financial and tax issues going on. But with software and tax preparation services as inexpensive as they are, starting at under $20 for simple returns, I think it behooves you to get some professional advice and ensure you get the deductions you need.
Hiring a tax preparer might be a worthwhile investment to make, even if just this year, so he or she can brief you on what records you should keep and strategies you should do moving forward, like home repair and improvement receipts, or documentation of your use of an area of the home as a home office.
Now, let's talk more substantively about the deductions that are available to you, in the event you do decide to itemize your taxes (IRS Publication 530 offers a more nuanced view into Tax Information for Homeowners):
1. Mortgage interest deduction. Assuming this home is your personal residence, 100 percent of the mortgage interest you owe and pay before Dec. 31, 2011, is deductible on your 2011 taxes. In January, your mortgage lender will send you a form documenting the precise amount of interest you paid, although most lenders also now make this form immediately available to borrowers online.
Chances are good that you paid some amount of advance interest on your home loan at closing -- expect to see that on your statement from your lender, but you should also be able to find it on the HUD-1 settlement statement you received from your escrow agent at closing.
2. Property tax deductions. Again, assuming that this is the home you live in most of the time, you should be able to deduct 100 percent of the property taxes you've paid to your state and/or local taxing agency this year.
3. Closing-cost deductions. Discount points and origination fees paid to your mortgage lender and/or broker at closing are frequently deductible, but there are rules around this, which tax software and/or professionals can help you make sure you meet. Also, state and local transfer or stamp taxes paid at closing are generally deductible on your federal returns.
Beyond these basics, there are various home improvements (especially those that increase your home's energy efficiency), state and local tax credits for buying a foreclosure, and other tax advantages that might be available to you.
My advice is to work with an experienced, local tax preparer or, at the very least, use reputable tax preparation software to ensure that you get the maximum tax advantages available to you as a result of your new role as a homeowner.
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

An Inspiring Christmas Story (The Gold Wrapping Paper)

Here is a wonderfully inspiring story I wanted to share during this love-filled Christmas season.  

Once upon a time many years ago, there was a gruff man who worked very hard just to keep food on the table for his wife and children. This particular year just days before Christmas, he punished his little five-year-old daughter after learning that she had used up the family’s only roll of expensive gold wrapping paper.

As money was so tight, he became even more upset when on Christmas Eve he saw that the child had used all of the expensive gold paper just to decorate one large shoebox she had put under the Christmas tree. He also wondered where she had gotten the money to buy whatever was in the shoebox.

Nevertheless, the next morning the little girl, filled with excitement, brought the gift box to her father and said, “This is for you, Daddy!”

As he opened the box, the father was embarrassed by his earlier overreaction, now regretting how he had punished her.

But when he opened the shoebox, he found it was empty and again his anger flared. “Don’t you know, young lady,” he said harshly, “when you give someone a present, there’s supposed to be something inside the package!”

The little girl looked up at him with sad tears rolling from her eyes and whispered: “Daddy, it’s not empty. I blew kisses into it until it was all full.”

The father was crushed. He fell on his knees and put his arms around his precious little girl. He begged her to forgive him for his unnecessary anger.

An accident took the life of the child only a short time later. It is told that the father kept this little gold box by his bed for all the years of his life. Whenever he was discouraged or faced difficult problems, he would open the box, take out an imaginary kiss, and remember the love of this beautiful child who had put it there.

In a very real sense, each of us has been given an invisible golden box filled with unconditional love and kisses from our children, family, friends and God. There is no more precious possession anyone could hold

Should You Purchase or Rent?

There are many factors to be considered when deciding to move to a new location with the first critical decision being whether to purchase some property or rent. Depending upon your circumstances, it may either be a clear-cut decision or one that requires a more thorough analysis to make that determination.

Factors to Consider

Career - For some individuals, it may not be practical to purchase property if their career will require them to relocate frequently. Although some people have the resources and inclination to accumulate property each time they move, for most of us that is either not an option or would be an undesirable outcome to find ourselves in the role of landlord. For the majority of us, that means we need to sell property each time we move, so careful analysis is required to determine whether it is better to buy or rent property for the duration of the assignment. One item to consider is that it generally takes 3 - 5 years under average real estate market conditions to reach the breakeven point for recouping the closing costs incurred at the time of purchase. Individual situations will vary, but in a stagnant real estate market it will take longer to realize enough in property appreciation to cover the transaction costs related to acquiring and selling property.

Property Resale - Not all properties or real estate markets are equal when it comes time to sell property. Factors to weigh include the typical length of time it takes to sell property in your area or the area you are interested in which you are interested, and if there is something unique about the property (price range, location, size) that you are interested in that would make it either easier or harder to sell. Whether or not you have relocation benefits available to you through an employer if you are unable to sell your property may also be a factor.

Finances - The purchase of property typically involves significant upfront cash outlays: pre-purchase inspections, a down payment and closing costs. Equally important is whether or not sufficient income is available to cover the mortgage/escrow payments while still having enough income to adequately take care of other living expenses, car payments as well as saving for retirement. The lack of sufficient funds may quickly eliminate any thought of purchasing property and dictate that in the interim renting, living with family members or some other living arrangement will be required until enough funds can be saved.

Relationship Status - Personal relationships can play an important part in deciding to purchase property. Engaged or newly married couples often are looking to establish a single common property on which to build their future together. Single or newly divorced adults may not be ready or interested in making a long-term obligation to a specific location and prefer to leave their options open as they pursue relationships, careers, other interests and hobbies.

Personal Preference - While some people feel a strong need to own property, others don't want the responsibility of maintaining property and prefer to simply pick up the phone at the first sign of any possible trouble and have someone else be responsible for remedying the issue at hand.

Benefits of Purchasing a Home

Ownership - For most people, owning their home is a key element of attaining the American Dream. And there is nothing quite like buying your first home and realizing it is all yours (provided of course that you continue to make your mortgage payments on time). Homeowners also tend to view their purchase an investment and have incentive to keep their property in good repair.

Building Equity - Obviously the largest benefit is that you are now building equity in your own property instead of contributing to the equity in someone else's property via rent payments. Historically, home ownership has been a long-standing means of building long-term wealth.

Decorating Without Limitations - As an owner, you have the freedom to personalize your property to your heart's content, subject only to local code and any applicable Homeowners' Association rules, unlike when you rent and experience many restrictions as to what you can and cannot do to the rental property. No need to get approval to paint interior walls, change flooring, install custom closet organizers, or complete minor home improvement projects. Although larger remodel projects may require getting permits, other than meeting code requirements, you are limited only by your budget and creativity when making changes to reflect your personal tastes and style.

Financial Stability - Fixed rate mortgages result in both greater financial stability and predictability. Assuming a fixed-rate mortgage, over time your housing costs should become a smaller percentage of your monthly budget as your income continues to grow while the mortgage remains constant. Additionally, fixed mortgages offer a great deal of predictability when preparing long-term budgets. Although repairs and maintenance will need to be factored in, there will be no surprises with unexpected hikes in rent.

Personal Benefits - Owning property frequently allows you a greater opportunity to meet neighbors and develop friendships with others that hold values similar to your own. And unlike apartment dwellers that tend to be more nomadic and view their unit as just a place to sleep at night, homeowner's tend to move less often and view their homes as investments. It is also not uncommon to find neighbors that were drawn to the area for many of the same reasons that caught your attention - good reputation of schools, easy access to public transportation, close proximity to outdoor activities, the architecture of the homes, or the availability of shopping, dining and entertainment within walking distance - giving you something in common right from the beginning to build upon.

Limited Commitment - Perhaps one of the greatest benefits of renting is the limited commitment that is required of tenants allowing, them more flexibility to relocate as circumstances change. Leases often only require an initial six-month or one-year term, allowing a lot of flexibility for tenants. At worse case, if something unexpected comes up and you need to move before the initial lease is up you are frequently out a deposit for breaking the contract, but you don't need to sell a house before you can move or to free up your cash.

Repairs and Maintenance - In many circumstances, a tenant needs only to contact the property owner or manager to have repairs taken care of. And for those who don't have the time or inclination to keep up a yard, renting a property where the upkeep is taken care of can be a real plus.

Roommates - Many people choose to have roommates to help defray housing costs by splitting the cost of rent as well as utilities. Although this tends to appeal more to young adults, it is not limited exclusively to the younger crowd. As the economy has created new challenges, some homeowners have begun seeking roommates to ease financial burdens by filling empty rooms in their homes.

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The Federal Reserve and Mortgage Rates Understanding What Causes Interest Rate Movement

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Consumers are often misled when it comes to the subject of the Federal Reserve and how it affects mortgage interest rates. Often the media is the culprit causing the confusion. Many times, the Fed has taken action that caused mortgage interest rates to move in a direction other than what consumers expected, because the media provided weak reporting on the subject.

The Federal Reserve affects short-term interest rate maturities, the Fed Funds rate, and the Overnight Lending rate. These factors have a direct impact on the Prime rate. If you took only this into consideration, you may mistakenly conclude that changes made by the Fed will cause a similar movement in mortgage interest rates. However, mortgage interest rates are dictated by the trading of mortgage-backed securities, which trade on a daily basis. The real dynamic at the heart of interest rate movement is the relationship between stocks and bonds.

Stocks and bonds compete for the same investment dollar on a daily basis. There is literally only so much money to be invested. When the Federal Reserve feels that interest rates need to be decreased in an effort to stimulate the economy, this reduction in rates can often cause a stock market rally. When the market becomes bullish, the money to invest in stocks comes from the selling of mortgage-backed securities.

Unfortunately, selling mortgage-backed securities to fuel stock market rallies causes interest rates to go up, not down.

Historically, there have been many times when the Federal Reserve has increased interest rates. Stocks then sell off in fear that the increase will affect corporate profit margins, and the liquidated stock assets need a place to park until the next rally comes along. The safe haven is found in mortgage-backed securities which cause mortgage rates to drop.

The daily ebb and flow of money is what matters most when it comes to the movement of mortgage interest rates. I make it a point to continuosly monitor interest rates for my clients, and advise them of opportunities to manage their mortgage debt at a better rate. This is the foundation of my business model as a Trusted Advisor.

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Guidelines On How To Reduce Home Insurance Costs

All people know that homeowners insurance is an excellent move for financial protection against unfortunate events. However, it is considered a costly brand of risk management.

Slashing expenditures and being pennywise is crucial in today’s struggling economy. There are various methods that a homeowner can carry out to lessen the cost of their South Jersey Homeowners Insurance rates.

Here are some ways to slash homeowner’s insurance fees:

1.    Improve the actual state of home security. You can accomplish this by setting up security pieces of equipments, from plain deadbolts to buglar alarm or motion detectors, to hinder housebreaks in your homes. For fire prevention, set up fire alarms and smoke detectors.

Most insurers will bid discounts even if you only have one or two of these preventive safety devices. However, you may have to inquire purposely for a discount to be sure.

2.    Having a high credit report is also one of the ways of reducing the cost of insurance. So, it is imperative that you pay attention to your credit score since excellent credit reports denote that an individual is responsible. Insurance providers greatly consider this correlation and consequently, give the homeowner they see as responsible lower insurance costs.

3.    Combining all of your policies into a single package can significantly lower your insurance costs. Yet this may mean extra study and research. Keep in mind that most insurance companies have packages and plans to provide. For example, a package deal for home and auto insurance. These plans will notably cost less than acquiring the insurance policies separately.

4.    Owners of up to the minute and well preserved homes are likely to get discounted homeowners insurance costs. Therefore, as much as possible, keep your house up to date and in excellent form. Many insurers will willingly reduce your insurance rates for having new plumbing, electrical, and HVAC systems. Having a new roof will also qualify for discounts.

5.    You may lessen your insurance rates by making sure that you’re receiving the right amount of coverage. Having covered more than you need is not good because, as a rule, the amount of insurance that you have to pay should not be the matching amount as you paid for the home.

If you perceive that the amount you’re paying is curiously high, you should inspect and attempt to find out the causes that make your fees high and then, adjust accordingly. Through this, you will also demonstrate to the insurance company that you are conscious of your insurance condition and willing to alter things if they are not going properly.
You can go and visit Salt Lake City Insurance and get free Utah insurance quotes.

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House Flipping Fundamentals: Boost Your Profits With 3 Hints

A great way to earn a living is by acquiring an income generating asset then rapidly selling for double the initial selling price. No real estate trading experience, no worries; you can earn through this industry even when you're a newbie. Find a good house being sold for cheap, then resell it after you’ve spruced it up a bit. That's all there is to it. The truth is, you can learn how to flip a house. While the idea is simple enough, you will need a few tips to really improve your earning potential.

1. Always Evaluate the Property

Unfortunately, unless you’re a housing or building expert, you can’t tell whether the home is built well or not. You need to look at the house yourself, with someone who knows how to evaluate a property. Once you've done this, you'll have a clearer picture of how much you want to pay for the house.

You can do this yourself without an expert's help, by checking for obvious signs of structure damages. More importantly, check for molds. Walk around the house and find out if there is a rotten smell. You may need to pay more for repairs if there is mold inside the house.

2. The Value of the Property

One thing you need to figure out is if a family would want to live in the location. Is a school accessible from where the neighborhood is? How many bus stops is the supermarket? Check the lifestyle of the people living in the general area. If the place is a joy to live in, then you can definitely sell the house fast.

3. Sell Aggressively

Marketing a house once you're ready to sell is crucial. Selling fast is important, especially if you have loaned the money you used to purchase the house. If the property piles up on interest rates, you may be hard pressed to sell the house when you can no longer afford to pay for the loan interest. Find potential buyers to sell the house to even before you've completely finished the renovations.

Whenever you can, don’t live in the house you plan to sell. If you are emotionally attached to a property or home can be a pain if you know you have to sell it in the near future. These basics should get you moving in your business of flipping houses.

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