This Tukwila store is also the first LEED-certified structure in town. It uses fully reclaimed material for the exterior. Rainwater collected from the roof reduces water consumption and nourishes surrounding “xeriscaping” — landscapes and plants that naturally require less water. Even the signage promotes environmental consciousness. While this is not Starbucks’ only drive-thru/walk-up store, it is rare among the company’s 17,000 stores worldwide in that it offers no inside seating. Hilowitz said the prototype is easy to break down and transport, and may usher in more container stores. “We can put a store like this on a lot that will be developed someday but is free for two or three years, and then we can move it.” Architect Tony Gale III says fast-moving baristas are Starbucks’ solution to limit customers idling their cars as they await their “cup of morning joe.” Already, between one-third to one-half of Starbucks stores have a drive-thru window. The company’s next goal in sustainable thinking: By 2015, it intends to make 100 percent of its cups reusable or recyclable.

Read at: http://lowes.inman.com/newsletter/2012/01/24/news/173576

Cover of The Spitfire Grill

Disposing of property sparks legal, tax issues

You’ve reduced your home’s price — twice — yet still no takers. You’ve painted the exterior, purged all unnecessary items in the kids’ rooms, and prodded your agent to bring you more potential buyers. But if you’re thinking about trying to unload your home by selling raffle tickets or starting an essay contest, think again. While two recent nationally syndicated stories have raised hopes about the possibilities of alternative selling methods, home raffles and essay contests remain problematic. According to many states’ gambling guidelines, any activity that includes “prize, chance and consideration” is gambling and must be properly licensed and regulated. Typically, raffling off a house would be prohibited because it is based on chance. A lottery is similar. Some skill may be involved in choosing the numbers, but it’s mostly chance or luck. The essay contest has been an alternative road to raffling off a home. For example, “For an entry fee of $250, state in 300 words or less why you want to live in beautiful Maple Glen.” The controversial step behind the essay contest is proving the contest was totally based on skill, not chance. Who are the judges? How were they chosen? Another critical piece to the puzzle is the tax question. Would the Internal Revenue Service consider the house a “gift” and thereby taxable to the winner? A real estate tax attorney said the “gift” question was definitely a gray area that would probably be up to a court to decide. If it were not a gift (if there was no gratuitous intent), then it would be taxable to the person receiving the home. It would be taxed as ordinary income. The raffle concept usually is more acceptable to some states’ officials when a nonprofit is involved. A website, www.rafflehouse.com, lists 11 states where home raffles are illegal, but, as mentioned above, working with the guidelines is challenging. The essay contest concept seems to surface every few years. The idea was the focus of a motion picture several years ago and the film immediately generated a new wave of home-essay contests. “The Spitfire Grill” starred Ellen Burstyn as the owner of a café in a small Maine town. The character Burstyn portrayed was getting on in years and was tired of the early preparation that came with daily breakfast. She also was concerned that the grill would never sell. Alison Elliott, the woman with the secret past who became a huge help to Burstyn, suggested to Burstyn that she hold an essay contest with the grill as the one and only prize. Entrants would pay a fee to enter their essays. I once was sent a flier inviting me to explain in 250 words or less “Why You Should Own a Beautiful View Home Free and Clear.” The entry fee was $500. It carried a variety of messages for the key players:

• “Free and clear” to the winner meant without a mortgage or debt of any kind.
• “Free and clear” meant disposing of a piece of property he’d been unable to sell for about 18 months.
• “Free and clear” to the Washington State Gambling Commission and the Washington State Attorney General’s Office meant take a long look before you leap.

The goal was to get 1,000 contest entries at $500 a copy ($500,000) and then let the house go to the winner. The owner heard from about 75 interested people in the first eight weeks of his contest. The deal was, if fewer than 1,000 entries were received, the contest was off. If there were more than 1,000 entrants, the owner said he would give a significant donation to two area churches. The contest never really picked up significant momentum, mainly because the owner did not do enough to describe the qualifications of his judges.

While it’s extremely frustrating to sit in a home that simply won’t sell in today’s market, be realistic when thinking outside of the box. First and foremost, make sure the box legally exists.

Read at: http://lowes.inman.com/newsletter/2012/01/20/news/173276

Nearly every mother will attest that at some point in her parenting career, often while still pregnant, every worst-case scenario that could ever possibly happen to her progeny (or progeny-to-be) has run through her mind.

Laid-back moms take a deep breath and dismiss such fears as fanciful.

But many others take the Scout-inspired “be prepared” approach, taking serious measures against kidnapping by tagging their kids with GPS-enabled trackers; against school admission drama by sticking their toddlers in enrichment classes ranging from Kinder Kung Fu to Mandarin; and against the ills of being whatever the opposite of well-rounded is (ill-rounded? squared?) by enrolling them in hip-hop dance, golf, Latin and Hebrew school — all at the same time, all before they reach grade school.

This is yet one more way in which buying a home has parallels to birthing — and raising — children. Years before they ever buy, when they’ve barely begun padding their down-payment nest eggs, buyers-to-be report tossing and turning, waking up with night sweats, concerned about all the calamities that might befall their home.

What if a hurricane hits? An earthquake? What if they’ve been completely spoiled by apartment living, neglect to spend 10 hours every weekend working on their house and let the place fall into ruin?

What about all the more mundane, and more-likely-to-arise events that go along with homeownership: Will their effort to unstick a window send them to the hospital, or their do-it-yourself efforts to replace a single roof shingle spiral into a bigger leak than they had before?

These nightmarish concerns of homebuyers everywhere are precisely the issues addressed in the meaty little tome, “What’s a Homeowner to Do?” by DIY Network star/contractor Stephen Fanuka and co-author Edward Lewine.

If you’ve ever bought one of those little gift books that has a year’s worth of daily inspirational messages, this book will remind you of one of those — on steroids. It’s a small-format book filled with 442 tips, diagrams, and easy-to-use, bite-sized tutorials for do-it-yourself home improvement, maintenance and safety projects.

Fanuka, the star of the show “Million Dollar Contractor,” teams up with Edward Lewine (who writes a couple of home improvement columns for The New York Times Magazine) to comprehensively catalog and address precisely the sorts of items that keep buyers and homeowners awake at night, offering their insomnia-soothing home improvement knowledge in a highly digestible format.

Throughout, they flag items that homeowners need to maintain on a regular basis to avoid disasters, parse out which items owners can do themselves (and which they should refer to the pros), empower them to ask the right questions and have the right conversations with those pros, and walk them through simple instructions for doing it themselves, where applicable.

The book starts out with a “green manifesto” that briefs readers on all the ways in which their homes impact the environment by offering them a long bullet point list of choices they can make to green their homes. It then moves on to cover the down-and-dirty, do-it-yourself tutorials with a chapter on how to assemble and use a basic toolkit, including what not to do (e.g., get “mesmerized by fasteners”).

Then, the book proceeds to offer hundreds of mini-lessons categorized by area of a home, from the exterior, to windows, plumbing, electrical, HVAC, and such subjects as carpentry, doors and locks, walls, basements, garages, yards, and safety and security issues.

Many of these lessons, which run from how to locate a roof leak to how a door lock works, come complete with the authors’ “Tricks of the Trade,” pithy one-liners with uber-handy suggestions, workarounds, troubleshooting, insider secrets for handling common issues and even warnings for avoiding common complications.

And the range of topics the authors cover maps directly to the range of concerns real homeowners have, from maintaining their roofs to installing baseboards, cabinet doors, landscape lighting and supports for adjustable shelves.

Often, these sorts of tips books can be tough to use for readers who have a high need for information — those who want to know why they should do things a particular way, or why they should trust the proffered advice.

But interspersed throughout the book’s tips on what to do to your home are highly interesting briefings on “how” things in your home work. In short-and-sweet plain English, Fanuka and Lewine answer questions like “What’s so important about rain gutters?” and “How are wooden stairs constructed?”

If you own a home and feel at loose ends when it comes to knowing what you should be doing to keep it in tip-top shape, “What’s a Homeowner to Do” is an accessible, yet smart, primer and reference guide you’ll turn to time and time again. If you’re still in house hunt mode, definitely put it on your housewarming registry — it’ll save you some sleepless nights, and maybe even some money!

Read at: http://lowes.inman.com/newsletter/2012/01/19/news/173160

Lowest rate used to solicit naive borrowers

Naive borrowers know that mortgages carry an interest rate, but they don’t know that the rate varies with the amount of total upfront fees. They are thus vulnerable to solicitation from lenders and lead generation Internet sites promising the lowest rate. While the lowest rate carries the highest fees, the fees are not disclosed. The annual percentage rate (APR) must be disclosed, and will be much higher than the lowest rate, but because these borrowers usually don’t know what the APR is, they often ignore it. Borrowers who respond to the solicitation and start the process will soon be confronted with the bad news about the fees required. At that point they may flee, or they may allow themselves to be sold another rate/fee combination by the loan originator (LO) — a loan officer or mortgage broker.

Loan originators look for an acceptable combination

Most LOs try to guide the borrower toward a rate/fee combination that is responsive to the borrower’s major weakness. If the borrower is cash-short, the LO will steer the deal toward a higher rate which may carry a cash rebate from the lender, for example. If the borrower’s problem is income adequacy, the LO will propose a lower rate that carries a lower monthly payment. The combination selected must meet underwriting requirements and be acceptable to the borrower. What LOs seldom consider are the implications for the borrower’s future wealth, which depend on the total cost of the combination selected over the period the borrower has the mortgage. Information on future costs has never been available before.

Interest Rate/Fee Combinations on 5/1 ARM of $270,000
Dec. 8, 2011

*Denotes the two lowest-cost combinations. The components of total cost are shown in last week’s article.

Using the calculator

The best way to use the integrated calculator depends on the borrower’s major concern. Borrowers who can deal with the highest monthly payment and the largest upfront fees shown in the table should select the rate/fee combination with the lowest total cost over the period they expect to have the mortgage. As that period lengthens, the advantage shifts toward lower rates and larger fees, because the benefit of the lower rate extends over a longer period. I have flagged that tendency by placing asterisks next to the two lowest-cost combinations for each period. If the borrower’s major concern is cash, he excludes the top part of the table and looks for the lowest cost from the rate/fee combinations that remain. If the borrower’s major concern is the initial payment, he excludes the bottom part of the table, selecting from the combinations that remain. Some borrowers may want to impose both a cash and a payment limit. For example, the borrower represented in the table might want to cap cash outlays at $9,000 and monthly payment at $1,100. In that case, there are only five rate/fee combinations from which to choose. But that is four more options than he is likely to have without the calculator.

Read at: http://lowes.inman.com/newsletter/2012/01/11/news/171739

Image via Wikipedia

What seemed like a housing market downturn is now nearly universally seen as the new normal. Accordingly, many homeowners are taking a tough look at their mortgage situations in this stark light. This New Year’s season, I’ve received a massive influx of reader questions — quasi-challenges, really — asking me why they shouldn’t just walk away from their underwater homes and upside-down mortgages. The decision whether to walk away from your home is too big and too personal, and there are simply too many variables — legal, financial, credit, tax, personal, lifestyle, family, etc. — at play for me to give a glib black-and-white answer. If you’re trying to make this decision now, it absolutely behooves you to consult with a reputable real estate broker, mortgage broker, local attorney and local tax professional — at minimum. However, I’ve also noticed that most upside-down homeowners don’t really want to default on their mortgages. If you count yourself in that number, I thought I’d take the opportunity this New Year’s week to encourage you to harness the renewed energy and commitment that comes along this time of year and provide you with some direction for it, in the vein of avoiding foreclosure if you decide that is the right path for you. Here are six alternatives to walking away, some more obvious, some less, but all underutilized, from my vantage point.

1. Get rid of your credit card debt. Again, this might seem obvious, but I’ve encountered a number of people who say they can’t afford their mortgage payments who actually could afford them if they dealt with their credit card and other debt. Call your creditors and make an effort to settle your debt; many will take a lump sum payment much lower than your balance. While this might have tax and credit score implications, it might also help you keep your house. Or work through steps No. 2 and No. 3, below, to just eliminate those balances, by any means necessary.

2. Get a second job. This seems obvious, too, but I believe it’s simply not done nearly as often as it should be, mostly out of pride and emotional defeatism. You already work 40 hours a week. You’re already tired. But you know what? I know MBAs who got into a bad debt situation and are climbing their way out with high-end, table-waiting tips. It won’t last forever and, again, could be very much worth it. If you’re not up for this sort of hustle, and you’re a white-collar professional, there are tons of consulting or contract gigs out there to be had, which can help you catch up on missed mortgage payments or bring down your debt.

3. Start a side business. Sites like Etsy, TaskRabbit and elance allow people to monetize their spare time, quirky hobbies and special skills. I know a journalist who nearly matches her day-job income dog-sitting while she writes.

4. Rent a room — or two — out. Put your man cave on Trulia or Craigslist for rent. If you can’t stomach the idea of a permanent roommate, check out Airbnb and see if you can generate some extra cash renting out your rooms to those visiting for short periods of time.

5. Apply for everything. Decide right now to simply refuse to be deterred by the first roadblock that comes up in your pursuit of a loan modification — and there might be many. Commit, instead, to applying for everything for which you might possibly qualify, and don’t make assumptions about what programs might work for you (many loan mod programs have loosened their guidelines or gotten more efficient over time). Apply through your lender to the federal HARP program, and also to the lender’s own loan mod program.  Apply to the wildly successful (as these things go) Home Save program run by NACA.

It ain’t over till it’s over.

6. Short-sell it. Banks are now taking a couple of years, on average, after the first missed payment to foreclose on and repossess a home. If you list your home for sale with a local agent who has experience closing these transactions right this moment, your chances of selling it and having the short sale complete in time to qualify for the income tax exemption that expires Dec. 31, 2012, are actually better than your chances of qualifying for the exemption if you stop making your mortgage payments right now. Again, it’s ubercritical that you work with professionals, from the folks at NACA to a local agent and attorney and certified public accountant (CPA) if you’re seeking a loan mod or a short sale. Beyond advising you about implications to be wary of, the pros can help educate you about the full scope of options available to you. Your best bet is to even getting a second job past your trusted advisers before you do it, as it might impact your prospects of getting relief from your lender. Fortunately, your options for avoiding a foreclosure are not so limited as they might seem at first glance.

Read at: http://lowes.inman.com/newsletter/2012/01/05/news/170448