Jeff Shauger, Associate Broker, ABR, CDPE, CRS, ePRO, GRI , SRES, SRS
 
Jeff Shauger, Associate Broker, ABR, CDPE, CRS, ePRO, GRI , SRES, SRS

Jeff's Blog

Utilization Ratios: Why They Are Imperative to Credit Lines

August 31, 2011 2:57 pm

Some spenders may view their credit as a maximum spending limit they can achieve before being penalized or declined. What most don’t know is that credit scores place a large emphasis on the credit utilization ratio, that is, how much of your credit is used every month. Your credit score takes a plunge whenever that number climbs high.

Credit scores do not distinguish between balances you are paying off, it only looks at the new charges you are racking up. If you want to keep your credit score high, it is of dire importance that you keep those balances low.

To calculate your utilization ratio, add up last month’s balances and divide that by the total of all your credit limits on open accounts. The two-digit number after the decimal point is your utilization rate. Do the same for each individual card as well—FICO scoring looks at how much of your total limit you’re using, along with each card individually, says Bankrate. Utilization is a significant portion of your scoring—30%. It is recommended that you try to achieve the lowest score possible. Those with the highest credit scores, 760 or above, usually have a utilization of approximately 7%.

Know the Difference between Charge Cards and Credit Cards
The main difference between charge cards is that they require you to pay the balance in full every month. They also aren’t included in your utilization rate, according to the most recent versions of the FICO scoring system. If you have a card and are unsure if it’s a charge card or credit card, call the issuer or check your latest credit report. Notations indicating “revolving” mean it’s a credit card; notations stating “open” means it’s a charge card.

Experts say that worrying about utilization rates or credit scores is unnecessary, but it can pay off to look more closely if you are a year or less away from purchasing a home or car, have unexplained card problems such as declining credit scores, or if you have a new card and want to see its impact on your credit score.

Understanding your credit can be extremely important, especially in situations when you need to rely on a good, solid credit score. By keeping your balances low and properly managing your credit card usage, you will hopefully never be financially limited by a poor credit score.
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New-Home Sales: Still Struggling but Holding Steady

August 31, 2011 2:57 pm

Sales of newly built, single-family homes held virtually unchanged in July with a 0.7% dip from the previous month to a seasonally adjusted annual rate of 298,000 units, according to newly released data from the U.S. Commerce Department.

"The fact that new-home sales fell by less than one percent in July is an indication of how little conditions have changed in the housing market," says Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "While new-home inventories are exceptionally thin, home builders are still competing with large numbers of foreclosed and distressed homes on the market and a climate of uncertainty in which consumers are reluctant to go forward with a major purchase for fear of what economic news tomorrow might bring."

"The sales pace of newly built, single-family homes in July was in line with what it has been over the last year, and this is in keeping with our forecast," says NAHB Chief Economist David Crowe. "While we expect to see some marginal gains in sales activity through the rest of 2011, we do not foresee any major advances until economic growth helps boost home buyers' confidence."

Regionally, new-home sales recorded declines of 7.4% in the South and 5.9% in the West, but rose 2.4% in the Midwest and actually doubled (100% increase) in the Northeast from a record low number in the previous month.

The inventory of new homes for sale in July fell to a 48-year record low of just 165,000 units, which represents a 6.6-month supply at the current sales pace. Putting this situation into perspective, says Crowe, "The current nationwide inventory of completed new homes ready for occupancy–at 61,000 units–is in keeping with what a single major metropolitan area such as Atlanta might sell in a typical year."

For more information visit www.nahb.org.
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New Labels for 'Most Efficient' Appliances Hit the Market

August 31, 2011 2:57 pm

According to the Environmental Protection Agency (EPA) and the Department of Energy (DOE), a new label is being produced for appliances deemed "most efficient." The EPA and DOE jointly run Energy Star. These latest efforts are being made with hopes of differentiating the many products that already have the Energy Star logo attached to them.

The Most Efficient program will begin on a trial basis throughout the rest of the year. The top five percent of energy-efficient products will be the only ones to receive the "Most Efficient" status. These products must “demonstrate efficiency performance that is truly exceptional, inspirational or leading-edge—consistent with the interests of environmentally motivated consumers and early adopters," according to the EPA.

Consumers can look for the newly designated appliances starting now, most of which will include clothes washers, heating and cooling systems, televisions, and refrigerator-freezers.

For a list of appliances that are currently available, visit energystar.gov/mostefficient.
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50 Percent of Americans Now Using Social Media

August 31, 2011 2:57 pm

Further proving the staying power of social networks such as Facebook, Twittter and LinkedIn, 50% of Americans are now reported to be members of various social media sites, according to a survey by the Pew Research Center.

This statistic is not just those who say they are online, rather, 50% of all Americans. In a study conducted nearly six years ago by the Pew Research Center, only five percent of all adults said they used social media.

The survey also found that the rates of participation are higher as well among adults who are online: 65%, up from last year's 61%.

This new data is a true sign of how pervasive social media has become in our society, transforming the way companies sell their products, how governments run, and more importantly, how people communicate.

These results are not to say that social media isn't more popular among younger people: 83% of those surveyed between the ages of 18-29 say they use social networking sites, compared to 51% of those in the 50-64 age bracket. Younger Americans are twice as likely to use these sites every day.

In addition, women 18-29 have been described as "the power users" of social media, with 89% using social networking sites, and 69% of them using them every day.

For more information, visit http://pewinternet.org/Reports/2011/Social-Networking-Sites.aspx or www.nytimes.com.
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Builder Confidence Unchanged in August

August 31, 2011 2:57 pm

Builder confidence in the market for newly built, single-family homes held unchanged at a low level of 15 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for August.

"Builders continue to confront the same major challenges they have seen over the past year, including competition from the large inventory of distressed homes on the market, inaccurate appraisal values, and issues with their buyers not being able to sell an existing home or qualify for favorable mortgage rates because of overly tight underwriting requirements," says Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. He noted that 41% of respondents to a special questions section of the HMI indicated they had lost sales contracts due to buyers' inability to sell their current homes.

"The uncertain economic climate and concerns about job security are discouraging many potential buyers from exploring a home purchase at this time," says NAHB Chief Economist David Crowe. "While buying conditions are very favorable in terms of prices, interest rates and selection, consumers are worried about what the future will bring, and builders are echoing those sentiments in their responses to the HMI survey."

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Two out of three of the HMI's component indexes posted marginal gains in August. The component gauging current sales conditions gained one point to 16 —its highest level since March of this year—and the component gauging traffic of prospect buyers rose one point to 13 following two consecutive months at 12. However, the component gauging sales expectations for the next six months declined two points to 19, partially offsetting a six-point gain from the last month's revised number.

For more information, visit www.nahb.org.
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Hearing Tests Rarely Included in Back-to-School Medical Exams for Kids

August 30, 2011 8:57 pm

Fall signals the beginning of a new school year and sports season, prompting many parents to schedule a mandatory medical exam for their budding football players, soccer stars and cross country athletes. However, most annual medical exams don’t include a routine hearing test, putting children at risk for undetected hearing loss.

Many children may head back to school with a hearing problem that could hinder their performance in the classroom and on the playing field. Parents are urged to request a routine hearing test for their child during this fall’s back-to-school medical exam and get hearing loss treatment if necessary.

It is estimated that at least 1.4 million children age 18 or younger have hearing problems, and ear infections are the most common cause of hearing loss in young children. It is especially important for young children to have their hearing checked before each school year, as many ear infections crop up during the summer months when kids are spending more time at the pool or beach.

Here is a list of common signs of hearing loss in children, including:

• Saying “huh?” or “what?” frequently
• Increasing the volume on a television or stereo to very loud levels, or sitting very close to the TV
• Switching ears frequently when using the telephone
• Having difficulty understanding what is being said in a noisy environment

Teachers and parents should also watch for other signs of hearing loss in children and teens:

• Delayed speech or language development
• Attention deficit or behavior problems
• Poor academic performance

Hearing is critical to speech and language development, communication and learning. Professionals agree that when a child has hearing loss, early intervention is critical. Even a few months can be a major delay in the rapidly changing brain of a child. Studies show that early intervention helps improve language development, increase academic success and increase lifetime opportunities for a child with hearing loss.

For more information, visit Hearing-Aid.com.
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Smartphone Users at Risk for Personal Information Theft

August 30, 2011 8:57 pm

Smartphone users are at risk of personal information theft as hackers target mobile devices and online banking mobile apps. Users are being warned to take precautions to prevent identity theft, a threat that can jeopardize the financial stability of their assets.

A new virus that records and saves a user’s private conversation has recently emerged. The recorded conversation is uploaded to a remote server, where it becomes available to thieves and hackers. These tactics are being directed at smartphone users who are unaware of the increased malware attempts to steal important personal information.

The Federal Trade Commission estimates that around nine million U.S. residents have their identities stolen each year. Thieves gain personal information to obtain credit cards, open telephone accounts and even rent properties. Information can also be used to apply for federal benefits such as Social Security payments.

These preventative measures are recommended for smartphone users to ensure the safety of their personal information and financial assets:

1. Lock Your Phone. If your phone gets lost or stolen, it can easily fall into the wrong hands. Even if the phone is not returned to you, the thief would have to restore everything to its factory settings if she/he wanted to use it. All personal information would be wiped-out.
2. Use a Secure Network. Transactions with personal information should always be used on a secure network. Avoid places with free Wi-Fi connections to ensure your data isn’t being transmitted openly, especially if you’re making money transfers.
3. Only Install Trusted Apps. Only applications from trusted companies should be installed. Always read through reviews of the app and consider the rating before downloading it.
4. Log Out. Never keep your log-in information stored on any application. Remember to log out each time you finish your online banking to terminate the username and password to your accounts.
5. Get Mobile Security Software. There are security apps available in certain mobile marketplaces that will act as a virus protection program. Packages from anti-virus companies such as McAfee or Norton can also be purchased.
6. Keep the default. Devices are on factory settings to give consumers the best type of protection – unless he/she changes it. Jail-breaking or unlocking a phone immediately voids the original software settings within a phone, which makes it much more susceptible to third-party manufacturers.
7. Beware of unknown texts. Just like emails, viruses can be attached to text messages, and if opened, the virus can infiltrate a mobile device. If you get a text from an unknown number, especially one that doesn’t look like a real phone number (e.g., 013284823157 or 82047), simply delete it.

Source: Consolidated Credit Counseling Services, Inc.
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Existing-Home Sales Down in July but Up Strongly From a Year Ago

August 30, 2011 8:57 pm

Existing-home sales declined in July from an upwardly revised June pace but are notably higher than a year ago, according to the National Association of REALTORS®. Monthly gains in the Northeast and Midwest were offset by declines in the West and South.

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 3.5% to a seasonally adjusted annual rate of 4.67 million in July from 4.84 million in June, but are 21.0% above the 3.86 million unit pace in July 2010, which was a cyclical low immediately following the expiration of the home buyer tax credit.

Lawrence Yun, NAR chief economist, says there is a tug and pull on the market. “Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” he says. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.55% in July, up from 4.51% in June; the rate was 4.56% in July 2010. Last week, Freddie Mac reported the 30-year fixed rate dropped to 4.32%.

Contract failures – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price – were unchanged in July, reported by 16% of NAR members. In addition, 9% of REALTORS® report a contract was delayed in the past three months due to low appraisals, and another 13% said a contract was renegotiated to a lower sales price because an appraisal was below the initially agreed price.

NAR President Ron Phipps says an unacceptably high number of potential home buyers are unable to complete transactions. “For both mortgage credit and home appraisals, there’s been a parallel pendulum swing from very loose standards which led to the housing boom, to unnecessarily restrictive practices as an overreaction to the housing correction,” he said.

“Beyond the tight credit problems, all appraisals must be done by valuators with local expertise and using reasonable comparisons – it doesn’t make sense to consistently see so many valuations coming in below negotiated prices, often below replacement construction costs,” Phipps says.

The national median existing-home price for all housing types was $174,000 in July, down 4.4% from July 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 29% of sales in July, compared with 30% in June and 32% in July 2010.

Total housing inventory at the end of July fell 1.7% to 3.65 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, up from a 9.2-month supply in June.
First-time buyers purchased 32% of homes in July, up from 31% in June; they were 38% in July 2010. Investors accounted for 18% of purchase activity in July compared with 19% in June and 19% in July 2010. The balance of sales was to repeat buyers, which were a 50% market share in July, unchanged from June.

Single-family home sales declined 4.0% to a seasonally adjusted annual rate of 4.12 million in July from 4.29 million in June, but are 21.5% above the 3.39 million level in July 2010. The median existing single-family home price was $174,800 in July, down 4.5% from a year ago.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 550,000 in July, and are 17.3% above the 469,000-unit pace one year ago. The median existing condo price was $168,400 in July, down 4.0% from July 2010.
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Facebook Makes Much-Needed Changes to Privacy Settings

August 29, 2011 8:57 pm

Riding on the coattails of the recent developments from Google+, Facebook has announced changes to its privacy policy. Members will now have increased control over what personal information is shared and who that information is shared with on the network.

These changes went into effect last Thursday and incorporate some of the same privacy features recently released by Google. Facebook members can now:

Choose who can read your posts: Members have full control over content posted on their walls. A new dropdown box offers options for Public (previously, "Everyone"), Friends, or Friends of Friends. Custom-created groupings can also be created in order to share with a limited selection of Friends, further protecting users' information and privacy.

Edit already-published wall posts: For already-published wall posts, users can now edit the privacy options for each specific posting. Previously, deleting the item in question was the only option, however, users may now edit the privacy settings on any selection, at any time.

The company says that further changes are on the horizon and that they plan on launching interactive tutorials alongside every new feature as they are rolled out.

For more information, visit www.consumerreports.org and www.facebook.com.
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Safety Crucial for Post Natural Disaster Clean-Up

August 29, 2011 8:57 pm

This weekend's Hurricane Irene has left many states with rubble and debris that is in dire need of proper removal. For homeowners affected by Irene's wrath (or any other weather- or natural disaster-related damage), safety is a crucial, yet often overlooked aspect of the daunting clean-up task.

Officials from the U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA) and the Louisiana Office of Homeland Security and Emergency Preparedness encourage residents to be cautious when removing harmful debris from homes, yards and roadways.

Debris piles are dangerous - follow the safety guidelines below:

• Do not place debris on or near fire hydrants, utility boxes or gas meters. Dangerous gases could escape if utility boxes or gas meters are damaged during debris removal.
• Keep children away from debris piles. They can be full of broken items, glass, nails and other sharp objects. Children could easily be injured playing in, around or on these mounds of debris. The pile may also contain rodents, snakes or bugs.
• Do not allow children near equipment and debris removal operations. Inquisitive children could be standing or playing in the equipment operator's "blind spot" and may not be seen when equipment and trucks move.
• Keep all open flames and lit cigarettes clear of debris piles. The piles often contain flammable materials.
• Don't park cars near debris piles. This will make it easier for the equipment operator to pick up the material and reduce possible damage to your car.
• Drive carefully if you're behind a debris removal truck. Leave a safe distance between your car and the truck. Materials may fall from the truck creating a driving hazard.
• Observe all traffic rules and flagger directions when driving near debris collection sites.

For more information, visit www.fema.gov.
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