In times of prosperity, being smart with your finances and planning for the future are forgotten - there is a feeling that you can get to it later.  Now is a time for us to get back to basics, and be efficient and wise with our finances and lifestyle - I think this helps us appreciate what we have so much more, and is a much deeper lesson for our children than that of getting everything you want with no consequences.

As Warren Buffet said:

Now isn't a time to live in fear and go hide under our shells, but to get out there and think about what kind of investments can pull us through until the market comes back.  Now is the time to think about finding investment properties, or to take the plunge and buy a home - with record interest rates and all real estate being "on sale" from a few years ago, it really is the smart thing to do.

I also am so optomistic about my company, RE/MAX Innovations.  In just over a year we have gone from 3 to 8 agents, and pulled in a market share that is impressive - and people are taking notice!  I look forward to working with you in the coming year.

Happy New Year!

Misty Soldwisch

By Judith Graham

RISMEDIA, Dec. 17, 2008-(MCT)-You may think your attentive spouse, your loving children and your good friends are what make you happy. But something else may be going on: The people they're connected with are making you happy too.

So suggests a new study proposing that happiness is transmitted through social networks, almost like a germ is spread through personal contact. The research was published Thursday in BMJ, a British medical journal.

It's the latest in a growing body of work investigating how our social connections-neighbors, friends, family, co-workers, fellow congregants at church and other associates-affect us. The premise is that we live in a social environment that shapes what we do and how we think and feel.

“We've known for some time that social relationships are the best predictor of human happiness, and this paper shows that the effect is much more powerful than anyone realized,” said Daniel Gilbert, author of “Stumbling on Happiness” and a professor of psychology at Harvard University.

Previous research by the authors, James Fowler of the University of California-San Diego, and Dr. Nicholas Christakis at Harvard, has concluded that social networks influence obesity and tobacco use by altering perceptions of acceptable weight and desirable behavior.

Now they've turned their attention to the emotional realm, exploring how social ties influence our moods and our sense of well-being. Their primary finding: People who are surrounded by happy people are more likely to be happy themselves. And it's not only people in our immediate circles who make a difference-it's the people surrounding the people we know.

Imagine several pebbles thrown into a pool of water that send ripples outward, said Fowler, an associate professor of political science. Each pebble represents a happy person and the waves the impact of that person's mood on others. This impact, his study found, extends through several degrees of separation, to the friends of a person's friends.

Some experts question whether the researchers' statistical methodology can support that conclusion. It's difficult to sort out cause and effect in this kind of research and the authors may not have done so with enough rigor, said Charles Manski, a Northwestern University economics professor who studies how inferences can be drawn from social interactions.

He asks, is it that one person's happiness makes another person happy, or could it be that another factor experienced by both people is affecting both?

Say two friends are watching a TV show together, and one laughs after the other does, Manski said. It may look like the first person's chuckle is the cause of the second, but the jokes on the TV show might inspire both reactions.

Christakis said his research factored out such mutual influences. The study asked the subjects-4,739 participants in the famous Framingham Heart Study in Massachusetts-to complete a survey including four questions relating to happiness three times between 1983 and 2003. They also provided information about social contacts, which allow researchers to map their connections.

The study found that happy people form clusters and the happiest people are those most centrally located in the clusters.

“If you imagine the fabric of humanity as a patchwork quilt, it turns out if you're happy or not depends on if you're in a happy or unhappy patch,” Christakis said.

“We postulate that people who are in closer, more frequent contact with each other are more susceptible to catching each other's moods,” Fowler said.

The researchers stress that personal factors such as jobs or marriages also affect happiness and that although happiness may fluctuate, people tend to return to a personal happiness “set point” over time. It is this relatively stable emotional condition they examined in the paper, not the fleeting moods people experience day to day.

Richard Suzman, director of the division of behavior and social research at the National Institute on Aging, said the line of research holds “enormous promise in helping us improve interventions aimed at helping people change behaviors and improving public health.”

Such interventions may involve targeted programs designed to alter social networks that influence behavior. The institute on aging has provided funding for Fowler and Christakis' work.

An editorial accompanying the report in BMJ called its conclusions “intriguing” but advised caution. Framingham, a relatively small community, may prove unique in ways not yet understood, wrote Peter Sainsbury, director of population health in Sydney South West Area Health Service in Australia.

As for whether unhappiness is also spreadable, Fowler and Christakis plan to look at that topic in upcoming papers on loneliness, depression and social networks.

© 2008, Chicago Tribune.
Distributed by McClatchy-Tribune Information Services.

Please join me Thursday November 13

for an

OPEN HOUSE LUNCH

from 11am - 1pm

We are welcoming Marilyn Cline, formerly of Peoples Company, to our office.  Marilyn is a great real estate agent with 3 years experience who will also be our front desk coordinator.  We are so excited to have you, Marilyn!

Congratulations to Brooke Gray, who just received her license last week and is starting her real estate career.  Brooke is an Indianola native with lots of enthusiasm and knowledge on the process of buying and selling. Visit Brooke's webstite at www.brookegray.net.

Ken and Kim Hass closed on their home in Prairie View on Monday, a new Van Dam Construction home that was my favorite plan I have seen in that neighborhood.  Ken and Kim and their two daughters have been stationed with the Air Force in Germany for the last 4 years, and it has been 6 years since they lived in the US.  They were an absolute pleasure to work with - welcome to Indianola and the US, Ken, Kim and girls!

Last of all, I cannot believe that it has been over a year since our office opened at the Wells Fargo building.  We are holding an anniversary open house luncheon from 11-1pm Thursday, November 13.  Stop by and grab a quick lunch with us and we can catch up! 

1. Peak-to-trough home price declines to date have been about 20%. Wrong. Measurements of home price declines can be skewed depending on which homes in which markets are being measured. For instance, the Case-Shiller Index, which indicates that home prices are down 20%, is heavily skewed towards homes with subprime loans and other distressed home sales. These troubled homes have experienced a steeper decline than home prices in general, says Yun, adding that both government data based on loans backed by Fannie Mae and Freddie Mac and data from the National Association of Realtors suggest much more modest price declines. TIP: If you're selling your home, the best thing to do is price your home right.

2. The much smaller number of new homes now under construction indicates the dismal outlook for the housing market. Wrong. The inventory of homes on the market is very high, so the last thing we need now is more new homes being built. Home builders have cut back sharply on production, which will help lower inventories and stabilize prices. The builders have done exactly what market forces are dictating under current conditions, Yun says. TIP: With many new homes completed but not sold, you can find great opportunities.

3. Even when the housing market recovers, home price growth will be only 4 to 6% per year — much less than historical average returns for the stock market. Most buyers put less than 20% of their own money into a home purchase; this borrowing power can translate to a greater rate of return. This is how Yun explains it: Home price appreciation historically has been about 1 to 2 percentage points higher than consumer price inflation, which translates into about 4 to 6% per year. But this growth rate cannot be viewed as a rate of return like the stock market. The reason is that most people do not buy a home for all cash, instead making a cash down payment and borrowing the rest. The leverage this borrowing creates can magnify returns — and losses. If price growth returns to historic norm, the price growth of 4% can easily turn into 20 to 30% rate of return if the home buyer makes a down payment of 10 or 20%. TIP: Get the fundamentals right when investing in real estate.

4. Impending baby boomer retirements and moves to small homes will cause a glut of homes on the market. Wrong. The first edge of the baby boomers has reached 60 years of age and the massive bulk of that generation will soon go into retirement, but far from trading down, many of these older homeowners are keeping their homes or moving to ones of comparable size. And even if more boomers do sell their larger homes in the years ahead, Yun points out, the rapidly growing U.S. population should absorb the inventory of existing homes on the market. TIP: Active seniors can find a retirement community that caters to their needs and interests.

5. The federal government takeover of secondary mortgage companies Fannie Mae and Freddie Mac is a bailout that will cost taxpayers bundles. Too soon to tell, says Yun. It's conceivable that taxpayers may have to cover some losses. It's also possible that the government takeover will result in no loss of taxpayer dollars. Even if taxpayer funds are used, the bailout would be preferable to the global economic problems that would have occurred if Fannie and Freddie had gone belly up. TIP: Uncle Sam is “bailing out” homeowners facing foreclosure. Find out more about the Hope for Homeowners plan.

6. The Federal Reserve controls mortgage rates. Wrong. Yun explains: The Fed's activities influence mortgage rates but don't directly control them. What the Fed sets is a very short-term interest rate called the Federal Funds Rate. Mortgage rates are determined by global savings as well as credit spreads and inflationary pressures. Over the past two years, the Fed has raised the Fed Funds Rate to 5.5%, and then cut it deeply to around 2%. All the while, the 30-year mortgage rate has averaged in the 6 to 6.5% range. TIP: Today's rates don't look bad compared to the 10% we saw in the early '90s and 17% in the '80s.

7. It's the wrong time to buy. Wrong. All real estate is local. For those who are financially and mentally ready to buy, there has never been a better time to be a buyer in many markets. An abundant selection of homes and historically low interest rates give buyers an edge over sellers. The recently passed $7,500 federal tax credit for first-time home buyers creates an added incentive. For someone with a long-time horizon, Yun says, there is very little worry about home values since homes have historically provided a solid foundation for wealth accumulation. TIP: Compare the pros and cons of renting vs. buying to see what makes sense for you.

8. It's the right time for everyone to buy. No. All real estate is local, and everyone is unique. Someone who is not emotionally or financially ready should not be forced or induced to join the rank of homeowners, even when a market presents good buying opportunities. Potential homeowners clearly need to understand that the decision to move up to ownership requires sacrifices, like saving up for down payment and elevating their credit scores. Homeowners who lose their home to foreclosure serve no one's interest, Yun adds. TIP: Take a good hard look at your financial status and create a homeowner's budget to see if you're ready to buy a home.

9. It's a terrible time to sell. Wrong. In markets where home sales are picking up strongly, a seller can easily get an offer if the property is priced correctly. Also, Yun says, for those looking to trade-up, selling low on an existing home is more than offset by buying the new move-up home at a lower price. When the market recovers, home price appreciation on the traded-up home will bring bigger bang for the buck. TIP: Homebuyers want bargains in this market. If you price your home much lower than your competition, you might end up with a bidding war.

10. With the advent of the Internet, more and more homes are being sold by owners (FSBOs), and real estate practitioners are becoming obsolete. Nope. According to Yun, the share of home sellers who choose to go it alone when selling their home has actually decreased from about 20% in the late 1980s to about 12% today. Even after these sellers successfully complete a transaction, only 4 in 10 say they would sell their next home without the assistance of a real estate professional. TIP: You don't have to sign a listing contract to talk to a Realtor. Ask family and friends for referrals and interview a few. You might even get some free advice.

Changes in Attitudes, says it all in this market we are in currently!  As we have literally changed underwriting guidelines almost 180 degrees from approximately 1 year ago.  We have went from underwriting files with minimal documentation for income and assets to 2 year full tax returns, 2 months bank statements, 401K statements and proof of any and all assets we have available.

We have flip flopped from underwriting 80% conventional guidelines (easy files) and 20% Government files to 80% Government files and 20% FHA files.  This is why we are experiencing a little longer turn times in Underwriting. Extra underwriters have been added to staff in order to keep the flow at an acceptable pace. 

In lieu of the market conditions and the trouble some of our buyers have to move their current homes, I wanted to get some information out to you as I consider you all to be my real estate partners.  Here are the most recent changes to departure residences: 

• If the property the customer is selling will be closed prior to our closing on the new home, all things are standard.
• If the property is to be retained as a second home –
• OPTION 1 - If the customer has 30% equity in the home (may need to be documented by a separate appraisal) Both the current and new mortgage PITI payments must be used in the qualification ratios AND have at least 2 months PITI reserves for both properties. 
• OPTION 2 - If the customer does not have at least 30% equity in the property, They must qualify with both PITI payments AND have at a minimum of 6 months PITI payment reserves on both properties.
• If the property is to be retained as an investment property.
• OPTION 1 –  The property has at least a 30% equity in the home.  75% of the rental income may be used to offset the mortgage payment for qualifying for the new home.  We will need to document the lease agreement and obtain proof that a security deposit was received from the tenant and deposited into the borrower's account.
• OPTION 2 – The property does not have 30% equity.  No rental income may be used to offset the payments of the both the existing and new PITI payments.  We will need to document 6 months reserves for both properties PITI payments.

Utility bills – You may have noticed that utility bills, such as phone, gas and water are not listed on your credit report. Since they are not listed on your credit report, they are not factored into your FICO score, right?  Maybe, as long as they are paid as agreed, they won't have any impact on your score.  However, if you skip utility payments, the utility companies may submit these unpaid accounts to collection agencies, which can report them to the credit bureaus where they will be considered negatively by your FICO score. The take-away here – do not neglect these bills just because they are not listed on your credit report…….they may still damage your FICO score if not paid as agreed.

Credit cards – There are many different strategies for managing your credit cards when you cannot afford to pay off your balances each month.  Here are two things you should do to prevent your FICO score from tumbling:

1.     Pay at least the minimums on all of your cards.

2.     Don't let any account go so delinquent that the account gets turned over to a collection agency or the lender takes you to small claims court.  The lender could obtain a "judgment" against you, which can happen when an account is "charged-off" as a loss after becoming more than four payments late.  Paying the minimums will keep your accounts in good standing even if you are not devoting much towards your balances.  Hopefully, when you are more financially stable, you can pay more than the minimums and work down the balances.  Making sure a debt doesn't become a judgment or get submitted to a collection agency is very important.  Keep this in mind – you can always get a delinquent account back in good standing by getting caught up with your payments, but once it is charged-off as a loss you probably cannot salvage that account.  A charge-off, judgment or collection on your credit report is something you definitely want to avoid.

Non-credit obligations – Like utility bills, you may have other obligations that don't show up on your credit report in which you need to stay current.  For example, if you owe your mechanic payment for work he did on your car, do not ignore his invoices just because he might not report delinquent customers to the credit bureaus.  If he decides to take you to small claims court and the judge rules in his favor, a judgment for this debt can be added to your credit report.  Just the presence of this judgment can hurt your FICO score and continue to do so even after it is paid. The take-away here – don't ignore your non-credit obligations. Instead, call your mechanic or person you owe money to and try to work something out. You'll probably feel better that you're not ignoring your mechanic and he'll feel that you're trying to make good – even if it may take longer to get his full payment.

While there are many considerations when managing your credit when money is tight, keeping these things in mind can help maintain a healthy FICO score.  A good FICO score may help preserve your credit options when you're in a better position to take advantage of them. 

                        Information provided by:             DEBRA PATTERSON, 554-7322

                                                                        Bankers Trust

RISMEDIA, Oct. 13, 2008-(Bankrate.com)-When the Federal Reserve meets, we all have questions: What does it mean to me? Will my mortgage rate go up or down? Is this a good time to refinance? Bankrate offers help. We've looked at five categories-mortgages, home equity loans, auto loans, credit cards and certificates of deposit-to determine if the Fed's moves made you a winner or a loser. Here's a look at mortgages:

Winner: Homeowners with adjustable-rate mortgages

The Federal Reserve's half-point emergency rate cut may not have any affect on mortgage holders. Changes in the federal funds rate do not directly influence the direction of mortgage rates.

However, Fed rate cuts may have more indirect impacts on some mortgage rates, particularly those associated with adjustable-rate mortgages.

Many ARMs are closely pegged to the London Interbank Offered Rate, more commonly known as LIBOR. When the Fed cuts the federal funds rate, LIBOR rates usually decline correspondingly.

During times of financial stress-such as we are experiencing now-this relationship often breaks down, and the spread between the federal funds rate and LIBOR actually tends to widen.

If that trend reverses-and LIBOR rates drop back closer to the federal funds rate-the Fed's latest rate cut would be a boon to many homeowners with ARMs. Homeowners with these mortgages could expect to see their monthly mortgage payment decline the next time it resets.

Loser: Consumers looking for instant discounts on fixed-rate mortgages

Cuts in the federal funds rate do not directly impact fixed-rate mortgages. So if you're shopping for a fixed-rate mortgage, don't expect the Federal Reserve's surprise rate cut to send mortgage rates lower.

They may fall. Then again, they may rise.

Take action

The Federal Reserve's emergency rate cut will not directly impact mortgage rates. Fed actions change the federal funds rate, which is not directly correlated to mortgage rates.

As a result, consumers should not make decisions about their mortgages based on the hope that the Fed's latest emergency rate cut will send mortgage costs plummeting. Mortgage rates often rise after a Fed rate cut. But they could fall just as easily.

For more information, visit www.bankrate.com.

Happy Birthday, Ethan!!!

My two oldest sons, Seb and Nate, are in the Year Round Education program at Irving Elementary, and this is their Fall break.  This is our last year of Fall break, as next year Seb starts Middle School, so we thought this would be a good opportunity to take a special trip.

I may be out the rest of the week after my return...I will need a vacation after this type of vacation!!!

From Consumer Reports, here are some steps to making your home radon-free:

- Measurement. The first thing to know is that radon is measured in picocuries per liter (PCi/L). The national average indoor level is 1.3. Anything above 2, the EPA suggests remediation. Above 4 is the recommended level to take action.

- Figure out your risk. While most states have areas that are higher risk than others, radon levels vary from home to home. The only way to determine radon levels in your house, for sure, is to test.

- Luckily, radon test kits are fairly accurate and not that expensive. Go with a long-term kit for better accuracy. These kits take sampling levels for 90 days or more and will give you a better reading on average radon levels than a short-term kit. A long-term kit costs about $40. If you do need faster results, one accurate short-term kit to use is the RTCA charcoal canister. It costs $20. But its results should still be confirmed with a long-term kit just to be on the safe side.

- If you discover radon, call in the pros. A radon-removal kit can cut levels to below 2 PCi/L. They run from $800 up to $2,500. For an average house, the cost is about $1,200. Check with the EPA to find a trained pro in your area at www.epa.gov/radon.

How the Housing Tax Credit Proves Good, Bad News

RISMEDIA, August 25, 2008-(MCT)-The housing recovery law enacted late last month included good news in the temporary $7,500 tax credit for first-time home buyers, but it also leveled a “double whammy” for some markets, a mortgage consultant said.

That's from the buyer's side. On the seller's side in the meantime, houses priced right still sell quickly, a Realtor said.

For current homeowners, while the new law directs almost $300 billion to a new federal program that could help troubled homeowners refinance their mortgages into more sustainable loans, that program comes with restrictions that could bar many in trouble from using it, as well as costs to both lenders and homeowners that could drive them away from it.

Mixed news for buyers

“These programs could be used not just by first-time home buyers, but by anyone who needed assistance and are very popular and useful programs. I estimate that this program helps 20 percent of all first-time home buyers in our market,” said Scott Senner of First Commercial Bank in Oklahoma City.

The bad news? Certain down-payment assistance programs will no longer be available after Oct. 1.

The double-whammy?

The law also raises the mandatory down payment on Federal Housing Administration-backed loans from 3 percent to 3.5 percent.

In most markets, Senner says. However, in “Oklahoma City home prices are averaging somewhere around $145,000, which means that a borrower will need to come up with $5,000 (plus closing costs) to buy a home. For a first-time home buyer, that is a lot of money. As a matter of fact, for most people that is a lot of money,” Senner says.

Good news for sellers

“If you price your house just a little bit below market value, it'll sell quickly,” said Mitchell, a sales associate with Real Estate 2000 in Oklahoma City.

But, she said, many sellers, perhaps remembering the heady days of multiple offers and bidding wars during the 2002-2005 housing boom, won't budge, or budge far, from their first asking price.

Even some people facing foreclosure hold onto the hope that they can get top price for their home-enough to pay off their loan, real estate agent fees and everything else-until too late and they tumble into foreclosure and lose their home, Mitchell said.

Some lose more than they realize, especially young people who were first-time buyers a few years ago and who are now seeing that what follows a housing boom isn't pretty, even if it's not a bust.

“They think, ‘Hey, I'll just get a foreclosure and be able to go and get my credit straightened out and buy another house,” she said.

Maybe, but not anytime soon.

“They don't realize,” she said, that a foreclosure is about as bad as a bankruptcy, taking seven to 10 years to clear from one's credit record.

http://indianolayouthfootball.com/index.html

Nate is participating in Indianola Soccer Tribe, and this is his first season in the U10 league, so he will play kids from other communities.  He loves to run, so can't wait to get out on the soccer field.

www.indianolasoccer.com