Tennesseeans Can Claim Highest Drop in Credit Card Debt

Tennessee residents have the highest drop in credit card debt in the US, as reported by the Nashville Business Journal. Way to go, Tennessee!

Since our economic downturn, people have come to the sober reality that they need to change their spending habits. And, personally, I despise debt. At one time, I lived with plenty of debt. Yes, my credit score was in the mid-700s, but divorce created havoc with that high score. As a result, I decided to make a change in my financial life.

I'm not one to tout celebrities or to endorse anything frivilous, but today I can wholeheartedly recommend Financial Peace University. Dave Ramsey, FPU's creator, has lived through several bankruptcies, high debt, and the loss of lucrative income. People have learned, like Dave, that living in and with debt is not the best way to go.

Last fall I enrolled in an FPU class at Rolling Hills Community Church in Franklin. I was skeptical at first, because I'd dealt with some Dave Ramsey disciples - people who think that they should always buy real estate low and sell real estate high, regardless of the market. After a few weeks, I was SOLD! The principles are timeless and trustworthy. Now my goal is to get completely out of debt and enjoy my life.

Since that class, I've made a conscious effort to pay off every debt, buy only what I need, and to strictly budget for any and all expenses. Retirement is only 20 years away, so planning for that is crucial.

If you're in a predicament, or if you just want to live a clean financial lifestyle, take a chance on the FPU class. You won't go wrong. To find out more about Dave Ramsey and FPU, click HERE. Like me, you will definitely feel better, more at ease, stress free, and relaxed when you start chipping away at the burden of debt.

So, how is Tennessee climbing out of debt? The ARTICLE doesn't state how or why, but we can only hope that people are waking up to the reality that debt is not the way to live.

Like That Payroll Tax Cut?

Well, it's here. President Obama has signed into law a payroll tax cut for Americans. This cut was spurred on by a weak economy. The President has said that he wanted to help Americans bring home more money monthly. The average increase in take-home pay is approximately $40 per month.

However, what is given away must be paid for. Fannie Mae and Freddie Mac will be collecting this difference beginning April 1, 2012. The charges will be in effect through 2026.

If you're looking at buying a house, then you need to do it now. The average increase for a $200,000 will be approximately $15 per month. That means buying power will decrease slightly for all home buyers.

For more information, check out this LINK.

UP! UP! UP!

You heard it here first - mortgage loan applications are on the rise. Nationally, applications are up by 7.5%. Rates are down with the average hovering around 4%. It's a great time to buy. Check out Nashville Business Journal's article HERE.

In Williamson County (TN), prices are going up - up 18% over last year. No one is expecting the prices of 2006 and 2007, but prices are going up. We're seeing the largest increases in the $300,000+ market. Those priced homes seem to be selling quicker.

Just a few months ago, my listings above $300,000 sold in 14-16 days. Sellers were shocked because they did not expect that to happen. In fact, they were stunned!

What gets a house sold quicker? Three things - (1) PRICE; (2) STAGING; (3) PHOTOGRAPHY. Marketing gets the house recognized and noticed by buyers and buyers' agents, but the three things listed really grab the buyer's attention so they'll want to see the house. Once inside, they fall in love with it.

There's a myth out there that a house is priced too low if it sells in under several months. Nothing could be further from the truth. A house sells quickly if it's priced correctly and the other two items are done professionally.

Sometimes a house can be priced too low. Be careful about hiring an agent who wants to list your home too low. When interviewing listing agents, ask them to show you the absorption rate. If they don't know what that is or didn't come prepared with that information, then you're talking with an agent who does not understand accurate pricing of houses.

Recently I went to a listing appointment. While there, I could tell the seller really wanted to hire me, but she felt obligated to the agent who sold her the house. It was a shame, too, because when I saw that listing online, it was priced too low - $5,100 less than I would have recommended to her.

Most of my listing appointment sellers hire me because I'm honest and realistic with them - and I work hard to get their homes sold, too!

Another thing going up in numbers is short sales. More on that later.

Those Darn Lease-Purchases!

Every so often I get questions from buyers about doing a Lease/Purchase. A buyer client asked how it works, so I thought I'd address it again.

Many times buyers think that a Lease/Purchase and a Lease/Option are one and the same. They are not. A Lease/Option is a regular lease. At the end of the lease, the owner/seller, if he/she so chooses to sell the property, gives the first opportunity to the tenant/buyer to buy it. No money is paid to the seller as a down payment, and no monies paid as rent is applied to the purchase price.

The benefit of this type of agreement is that is "holds" the house for the tenant, IF the seller/owner is satisfied with their payment history. It allows for the tenant to save up money for a down payment, and it allows for the tenant to 'experience' what is wrong with the house while living there. Under this situation, the owner/seller/landlord is still responsible for all repairs and maintenance, something that will end once the buyer/tenant purchases the property.

A Lease/Purchase, on the other hand, is a Purchase and Sale Agreement that is already in place, but the closing is in the future (usually six to 12 months away), and the terms are altered in favor of the seller/owner. Since this is a risky transaction for the seller, much more is required of the buyer. In addition, the buyer must KEEP UP the house as if it is their own property. Things such as a dishwasher breakdown has to be repaired by the buyer. A leaky faucet must be repaired by the buyer as well. But since this is still a lease, the seller/owner still has the right to inspect the property at reasonable hours with reasonable notice.

Most times, there is a larger down payment for a Lease/Purchase than a buyer would make in a normal sale. This down payment is anywhere from $5000 to 20% of the purchase price. Most times, it is NON-REFUNDABLE to the buyer should the buyer be unable to secure financing. Part of the rent may or may not be applied toward the purchase price. That amount may be as small as $100 or as much as 50%-75% of the rent amount. Most of the time, owner will not apply a large portion of the rent to the down payment because of what they owe on the property.

Both of these situations are used when the buyer has impaired credit. Credit can be affected by a number of things such as a bankruptcy, previous short sale, debt that they cannot repay due to medical bills or other high debt, etc. And because of risk, sellers will usually only sell at "their" price, which is usually the list price of the house.

Sometimes sellers agree to a Lease/Purchase or a Lease/Option because they are soft-hearted and want to help out their fellow man. Other times, sellers who engage in Lease/Purchase agreements do so expecting the buyers to loose their down payment.

Lease/Options and Lease/Purchases are different from Owner Financing. Sometimes Owners will finance a purchase. The closing occurs just like in a mortgage lender-backed situation (typically 30-45 days). Owners typically amortize (base payments on) 30 years (360 months), but may require the buyer to refinance the house within 36 months of the sale.

Lease/Purchases, Lease/Options, and Owner Financing are sometimes tricky. You'll need a good agent to help you with those, whether buying or selling.