User's Guide to Buying a Beach House

by Gerri Willis

Owning a home on the water is a dream for many of us. Whether your vision is to buy a family destination or an oasis that you occasionally rent out, the good news is that prices in many coastal markets have never recovered from the 2007-2008 crash. When you add into the mix that interest rates are still cheap on a relative basis, well, it’s clear the stars may have aligned to help you accomplish your goal.

The devil, though, is always in the details. Tom Kraeutler, host of the nationally syndicated radio show, The Money Pit, advises buyers to understand the requirements for insurance before signing on the dotted line. Federal flood maps have been redrawn and more properties are required to have federal flood coverage. Add in the fact that insurers have been besieged with claims over the last few years, and you may well be shocked at the amount of coverage you may be required to have.  Average flood insurance claims run tens of thousands of dollars, so it is smart to make sure you have a safety net. Plus, in flood zones the law will require you to have coverage if you have a mortgage.

Other factors to consider: Know whether your beachfront dream has mold or water damage. If major remediation was done to a home, the owners may have filed a building permit. You can check local records to see if that is the case. Otherwise, a good home inspector can help you check for telltale signs of damage. Kraeutler also advises making sure you  know whether local codes require that homes meet wind resistance or flood elevation rules.

And, there are other kinds of issues to consider as you search. If you’re new to the market, you may be surprised at the number of beds packed into houses. Antonia van der Meer, editor-in-chief of Coastal Living magazine, says that it’s not unusual to find even small homes that sleep 20, “Bunk beds are a huge trend and four beds to a room is not uncommon,” she says.

That’s great for big families who want to vacation together, but even if you don’t have a large entourage, you may also appreciate it when it comes time to resell. Beach houses with direct water access and large, bright open spaces typically command the highest premiums.

Getting the best deal means acting decisively and knowing what you want from the start.

 

College Towns, Cities Are Retirement Hot Spots

by Gerri Willis

Like everything else they’ve touched, baby boomers promise to reinvent retirement. And, with 8,000 boomers retiring every day over the next 15 years, they are bound to reshape the second home market. Forget the armchair and the rockers, more and more boomers are opting to retire in cities and college towns where they can have access to museums, free classes, restaurants and a faster pace of living. Plus, many want to downsize and trade in their home and yard for a condo or townhouse.

Pied-a-terre which literally means “foot on the ground” in French is typically a small or undersized apartment capable of doubling as a retirement location. As cities have become safer, boomers have been lured back to metropolitan areas largely because of their entertainment attractions, but also because dwellers can walk their neighborhood and enjoy public transportation. Plus, many parents find they may be closer to the children. Because retirees don’t care about school districts buying in town can be affordable. Buyers should keep in mind that most co-ops try to restrict pied-a-terre purchases.

Another popular option for boomers is buying in a college town because prices are typically low and benefits are high.  Home prices are typically near the median national average price of $212,400 or below and real estate taxes tend to be low. What’s more, many colleges allow seniors to audit courses at no or low cost and attend college sporting events at bargain prices, too. Some developers build retirement communities affiliated with universities in college towns. Kendal Corp., for example, is building such communities in Ithaca, N.Y., home of Cornell University and Hanover, N.H., home of Dartmouth University.

Florida and Arizona may have been traditional retiree havens, but boomers are changing all that, opening up new locations that fit their wallets.    

User's Guide To Buying a Second Home: What To Know Before You Buy

by Gerri Willis

If you've always dreamed of owning a second home, there are two good reasons to think the time may be right to buy now: Interest rates are still relatively low and property prices, while they have climbed, aren't in the stratosphere. In other words, the stars may be aligned for a purchase, but you'll want to do some considerable analysis before taking the plunge.

First, the facts. According to the National Association of Realtors, the market was on fire this year, with purchases up 29.7 percent as buyers benefitted from a rising stock market. The median vacation home price was $168,700 in 2013, up 12.5 percent from the year before. Buyers who considered their purchases an investment paid $130,000, up 13 percent from the previous year. 

So, if it's a roaring market, why should you consider buying now? Well, for one thing, the vacation home market is still well below its peak of 2006. And, the market is a tiny slice of the overall housing market. Even so, it makes sense to do the math before you shop. 

Many second homeowners complain they didn't foresee the costs of having a second home. Sure, there's the monthly mortgage, but ongoing expenses can add up, like, upkeep, insurance and possibly hiring a management company or just a trusted caretaker to look in on the property since you won't be there every day. Flood insurance costs need to be taken into consideration for beach and lakefront buyers, and a redrawing of flood maps by the Government may mean higher costs for some.

Also, consider this: If you aren't paying all cash, financial requirements are higher for second homes than first homes. Typically, you'll need to put down a considerable down payment to buy. Some lenders require borrowers put down 25 percent of the purchase price before writing a mortgage for the balance and the median down payment in 2013 was 26 percent. Keep in mind that, 38 percent of second-home buyers will pay all cash. Among investors, that proportion paying all cash was 46 percent.

I also think it makes sense to decide why you are buying the property in the first place. Is this a vacation only getaway for friends and family? An eventual retirement location? Or, do you plan to rent it out, or even buy it, upgrade and sell? Determining your own motivation in buying will help you pick the right location, and ultimately, the right property.

Every day this week, The Willis Report will be covering some aspect of second home ownership, helping you make the right calculations about where and when to buy and how much to pay. 

How To Make Money Dumping Your Old iPhone

by Gerri Willis

If you are eagerly awaiting Apple’s announcement of the new iPhone 6 tomorrow but are still have an older iPhone model, you’re not alone. Plenty of folks are in the same boat and many will trade up. According to a survey by comScore, nearly a quarter of iPhone 5s owners plan to upgrade.

Fortunately, there are websites that can help you do that. Gazelle, Next Worth and Glyde offer cash to people interested in trading in. Even Apple has a trade-in program. Plenty of people will also sell on sites like eBay and Craigslist.

As long as your phone is in good working order with no broken parts, Gazelle, for example, will offer your hundreds for your old phone. In fact, Alyssa Voorhis, Senior Tech Analyst for Gazelle, says her company has launched its most aggressive price-lock promotion ever: up to $350 for an old iPhone if you lock in a price quote before tomorrow’s announcement. You have until Oct. 10 to send your phone in.

When it comes to trading in, earlier is better than later. Trade-in values typically drop 20 percent in the 60 days surrounding the introduction of a new model.

My advice? Just don’t forget to tell your carrier what you’re doing. The last thing you want to do is continue to pay for service you aren’t using.

The Dirty Little Secret Of The Drug Industry

by Gerri Willis

It’s the dirty little secret of the drug industry: That expiration date on your prescription or over the counter medications may be virtually meaningless.

An expiration date is required by the Federal Government and some states but drug experts say there is very little science to prove that these drugs are dangerous or even less effective if used beyond their expiration date. In fact, most drugs aren’t even tested for shelf life. One of the rare studies conducted found that 88 percent of drugs tested could be used past the expiration date for a period of 66 months or five and a half years! Some drugs can last even longer. According to the FDA, users of Amoxicillin, Ciprofloxacin, Diphenhydramine, and Morphine Sulfate injection can extend the life of their drugs anywhere from one year to 15 years.

The one exception experts told us about was Tetracycline. According to Lisa Gill of Consumer Reports, the antibiotic can become toxic if used after its expiration date. But even Gill says that for virtually every other drug it’s okay to keep them past their expiration date by as much as a year.

To extend the life of your drug, move it out of the medicine cabinet where humidity can hurt effectiveness. If you’re still nervous, stick to sell by dates on drugs you must absolutely have, like an Epi-pen, or heart medications and keep the Aspirin on the shelf longer than the label advises.

The Whopper Takes On Canada

by Gerri Willis

Burger King’s acquisition of Canadian coffee and donut chain, Tim Horton’s, has drawn criticism from many corners including our friends to the north, who are concerned that the classic chain will get an apple pie makeover, but the most succinct critique I heard today came from a Burger King customer on the streets of New York who had just finished lunch. “It’s the American Whopper,” she said.

Not anymore. BK says the deal is virtually complete with only Canadian regulators needed to sign on. Analysts and pundits continue to describe the acquisition as fueled by a desire to lower costs, especially tax costs. Corporate tax rates in the US are 35 percent versus 15 for Canada.  Yet Burger King CEO Daniel Schwartz told reporters today in a conference call that lower taxes weren’t the “driver for the deal” and described the rate differential as not meaningful.

Instead, the company says it needs a strategy to more effectively compete in the fast food niche of the restaurant business which is sorely lacking respect from millennials, who prefer fast casual restaurant chains like Chipotle. No doubt BK needs to fix its image and improve its offerings but the tax backlash the company is receiving isn’t helping it burnish its appeal. Usually milquetoast senators are telling reporters that they are boycotting the burger chain.

Adding to the revelations, the White House’s poster boy for tax fairness, Warren Buffett, who famously proclaimed he has been under taxed for years, is financing the $10 billion Burger King deal and stands to make a tidy profit. As my mom said, things are getting curiouser and curiouser.

Here’s what I think: If tax policies don’t change, BK is the beginning of the wave of U.S. companies which will move offshore to become more competitive. And yet, the administration is adamant in refusing to even consider a more competitive rate for corporate profits. In fact, the Treasury department is engaging in backdoor efforts to stop these moves offshore. And, that will be a waste of time because the more that companies believe regulators are closing the door to these so-called inversion deals, the more likely they are to pursue them. So, in effect, the White House’s policy may speed the result they are hoping to prevent.  Hey, White House, if even your tax fairness guru isn’t with you, it might be time to change sides.

GM Compensation Fund Officially Open For Business

by Gerri Willis

Today is the first day that victims of the GM ignition switch disaster can file claims for compensation. Those claim forms can be found at:

http://www.gmignitioncompensation.com/pocdocuments.php prepared – there’s some pretty complicated paperwork to be filled out. A total of 12 forms await filers.

Ken Feinberg, who is running the victim’s compensation fund, says he expects claimants to accompany their applications with relevant data such as police reports, black box data, photos of the car, any warranty and medical records. Even the car itself may become an important part of his evaluation of claims.

Navigating those forms, he says, may be easier than you first think, because many are specific to the situation of each victim. For example, families filing on behalf of family members who have died will file different forms than survivors. Even so, some claimants may find the process daunting. Feinberg says there is help available for anyone in that category.

“We will assist any family member, anybody filing a claim if you are having trouble getting through the documentation or locating documentation, “he says. “We will work with you. We are not adversarial. We are trying to get money out the door to eligible claimants.”

Feinberg invited people to contact the office directly. That number is 1-855-382-6463.

Plaintiffs’ lawyers say they expect hundreds of claims to be made today, but Feinberg said such estimates are “sheer speculation,” adding that the typical trend in such cases is a spike in applications in the first month and the last month of the program, which in this case is December. Feinberg has also run high-profile compensation funds in the wake of 9-11, the Boston bombing and the BP oil spill.

GM has set aside $400 million to compensate victims, raising questions about how the number was derived. Feinberg said he couldn’t speak for GM, and in the past he has said there is no cap on the fund. Initially, the company said 13 people died due to loss of control of their vehicle when their ignition switch slipped into the off position and power brakes and steering went out. Airbags also would not deploy under those conditions. Recently, the company raised that estimate to 19, but as least one plaintiff attorney says the number could be far higher.                 

Save Big Money on Clothes

by Gerri Willis

I hate spending a lot of money on clothes. Smart shoppers know they don’t have to pay an arm and a leg to dress well. Mitt Romney, who can afford any label he wants, talked on the campaign trail about how he bought Kirkland brand dress shirts at Costco. Seeing an item you bought at full price marked down is always a downer. So, to get some great tips on buying clothes at a discount, I  went to Andrea Woroch, a personal finance expert.

First off, Woroch says store markdowns typically start on Thursdays, contrary to conventional wisdom. Yes, you normally see sales advertised for the weekends, but sales associates have to get out ahead and change prices on individual items beforehand, and that means better selection and prices for people in the know.  Second, you always want to shop out of season and that means buying summer items at the end of the summer when they go on sale. Hold off buying for fall and winter until after Christmas to score deep, deep discounts. Retailers mark down seasonal merchandise dramatically to clear out store shelves and make room for spring clothing.

To track prices, consider using apps like Hukkster, which tracks price drops and will alert you when coupons become available. Also, many of the big chain retailers, like Abercrombie & Fitch, have aggressive social media platforms and alert loyal customers to the best deals. The downside of signing up for the apps is that you may get more info than you want about merchandise.

Discounters are a great way to go – with chains like TJMaxx and Marshalls offering steep discounts on brands you already know. Local consignment shops stock quality clothing at a steep discount. Choose a consignment store in a wealthy neighborhood for the best finds. Another great place to go for slightly used brand name clothes are online consignment shops like www.thredup.com and www.recycleyourfashions.com.

My girlfriends and I make scoring big discounts a game. It’s hip to be cheap!

         

Don’t miss The Willis Report 5pmET on FOX Business

Ways to Save Money at Lunchtime

by Gerri Willis

Not too long ago, I started adding up all the money I was spending on lunch at work and I was shocked out how much money was slipping through my fingers. About the time I ate a wilted spinach salad speckled with green eggs that I bought at a nearby deli, I started thinking there’s got to be a better way. Given that the average American spends nearly $1,000 a year for lunch just two days a week, chances are you may be as frustrated as I was. But here’s the thing, how do you pack a meal that will be appealing by the time the lunch hour rolls around?

Today on the Willis Report, we will be examining this topic, but in this blog I’ll give you my solutions. First off, I stay away from the routine – no PBJ, forget the turkey sandwich (it gets soggy!), and, as much as I love tuna fish, I avoid it so that my office mates don’t turn up their nose at the smell.

A typical lunch I like to make starts with greens dressed in a simple dressing. On Sunday, I sometimes make a grain or rice based salad I can mix in with the greens to give it heft. This weekend, I made a quinoa salad (a good source of protein!) with raisins and chopped walnut mixed with a little olive oil, salt and pepper. I added in corn I had cut off the cob that my husband and I had grilled outside. There’s always an avocado floating around, so I bring one and cut it up at work, so it doesn’t get brown in the salad bowl in the office frig.

Like anything, planning is essential, so that you can keep your prep time to a minimum. I try to play off whatever I cook over the weekend so that I don’t have to do so much work. Not only am I saving money, but I like the idea that I know exactly what is in my lunch!

 

Don’t miss The Willis Report tonight 5pmET on FOX Business

Cutting Your Commuting Costs

by Gerri Willis

Saving money is no big sweat when you’re talking about saving on items like clothing or travel. After all, those purchases are discretionary. You can buy them, or you can stay away – it’s all up to you. But when it comes to commuting – well, that’s a must-have. You’ve got to make it to work, so we spoke with John Nielsen, AAA’s automotive engineering and repair managing director, about what you can do to cut back your commuting costs.

With 10.8 million of us traveling an hour each way on our commute, it’s no surprise that spending on commuting is high. The average household spends $3,000 a year on all gas purchases, but it could be less if you took these simple tips from Nielsen:

 

  • Stop driving so aggressively. According to the Energy Department, tailgating and swerving in out of traffic costs you big time. Aggressive driving lowers your gas mileage by a third! For more savings, keep it under the speed limit. You spend about a quarter more per gallon for every five miles per hour you drive over 60 MPH.

 

  • Don’t get stuck in traffic tieups. True sometimes there is only one way to get where you’re going. But more often than not, you can find a way around traffic snarls. Idling just 10 minutes is the same as driving five miles when it comes to gas consumption. Check out traffic apps like Waze to get traffic alerts and to find the lowest gas prices. Google maps’ “faster route” navigation can help you avoid backups.

 

  • Use pre-tax dollars to save. Some employers have commuting programs that allow workers to save on their commute by using pre-tax dollars to buy train tickets or parking.

 

Don’t miss The Willis Report tonight 5pmET on FOX Business

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