I have received a nasty-gram from USAA about this post.  They aren’t very happy about my disclosures.  They have pointed out that some of my information is inaccurate, in their eyes, while admitting to most of it, or choosing to read my words in a way that suites their purpose.  The purpose of this post is to explain to consumers why I will not participate in their program, nor will I work for a company that does.  If a consumer chooses to be a part of their incentive program, that is their right.  It is my right and duty as a licensed REALTOR(R) to offer the best services to my buyer clients without the intervention of a bank.  If you would like more information about their incentive programs, go to their websites and look it up.

It seems that as the market begins to show real signs of stabilization, more and more buyers are looking at purchasing a home.  In recent weeks I’ve received several calls from perspective buyers asking about my services and wanting to hire me.  For the first time in 2 years, many of these buyers are bringing up the USAA and NAVYFED Incentive Programs.  For those readers who are not familiar with these incentive programs here’s a recap.  If a buyer or seller uses a USAA or NAVYFED Preferred REALTOR(R) and obtains a USAA or NAVYFED loan product, the buyer will enjoy a cash incentive at closing.  The cash incentive is based on the purchase price of the home and changes depending on how the market is doing.  Most cash incentives are around $1000.  Seems like an awesome deal, doesn’t it.  However, cash isn’t free and banks aren’t in the business of giving money away.  USAA and NAVYFED are not required to make many disclosures about this program to the consumer.  So, I will make the disclosures for them.

The buyers calling me are a little shocked to find out that I am not a USAA or NAVYFED Preferred REALTOR(R) and if they choose to be in that program they have to choose a buyer’s agent from specific brokerages in the area.  So, if they want to be in the program, USAA or NAVYFED will require them to use a brokerage and agent they may not have chosen on their own?  Yes.  To top it off, not all agents in a preferred brokerage are certified or qualify to be in the program.  How does an agent qualify for the program?  The agent has to take classes to be certified for the program.  Some agents are told they must pay a few hundred dollars for the privalege of taking the class.  This fee can be charged yearly.  Is the training good?  If you are not a disciplined agent, yes, the classes can be beneficial.  They teach you how to make yourself accountable to your clients.  But more important to USAA and NAVYFED, they teach the agent to be more accountable to them.  It’s the agent’s job to make sure the buyer doesn’t stray from the USAA or NAVYFED loan product… even if another lender has better options.  An agent can lose their certification by not closing enough business with USAA and NAVYFED.  So, who does the agent work for?  The buyer or the bank?  As a buyer’s agent I have a legal obligation to look out for my client’s best interest.  How can I do that with a big bank breathing down my neck every other week?

Let’s move on to another issue.  Where does the incentive money come from?  As I stated earlier, banks don’t just give money away.  It has to come from somewhere.  If it’s not coming from them and it’s not coming from the consumer, then it must be coming from the agent.  Yes, in order to be a Preferred REALTOR(R), the agent must agree to pay USAA and NAVYFED a portion of their commission to cover the incentive program.  Some consumers may say, “$1000 isn’t alot for an agent to give up if the bank is funneling clients to them.”  It’s not $1000.  The agent actually gives up upwards of 47% of their commission to participate.  If a house costs $250,000 and a 3% buyer’s commission is being offered by the seller, the commission is $7500.  If an agent is paying the highest referral fee they would be giving the bank $3525.  The consumer is only getting $1000.  Who gets the rest of the money?  USAA and NAVYFED.  They are getting the equivalent of a loan origination fee out of the real estate agent.  By the way, I’ve just made 2 disclosures for these banks.  1.  The money doesn’t come from the bank, it comes from the agent.  And 2.  The bank is not required to tell you what they do with the overages.

Here’s my last disclosure about this program; and this only has to do with USAA.  If your loan is not a jumbo loan, roughly $625,000 and over, you aren’t getting your mortgage from USAA.  This can account for the crappy service you receive.  The mortgage is actually coming from PHH.  PHH Mortgage is a “mortgage outsourcing solution.”  Yeah, otherwise known as a third party originating loans under someone else’s brand.  This is NOT disclosed  to USAA mortgage clients.  When most consumers are getting a USAA loan, they aren’t actually getting a USAA loan.  They are calling into a large call center and becoming a number on a file.  I can’t tell you how special I feel when I become a number at a call center.  You won’t meet your loan officer which limits the accountability needed in today’s real estate transaction.  I’ve actually been told by a PHH loan officer, working under the USAA name, that my client’s file had been placed on the back burner while she dealt with larger loan amounts for others.  Okay, I’m paying a company thousands of dollars to treat my buyer like crap?  How does this make sense?

In case you missed it, I don’t like the USAA and NAVYFED Preferred REALTOR(R) programs.  It’s not because I’m jealous that other agents are getting the clients.  I’ve actually had many clients opt out of the program in order to work with me.  I don’t like the program because it is dishonest.  If the bank thought the program was on the up and up, they should have no problem disclosing all aspects of the program.  They actually forbid Preferred Agents from disclosing these things to consumers.  I also believe that once an agent starts losing money on a transaction, even the most ethical and fantastic agents, customer service begins to slip.  It’s the difference between a server at McDonald’s and a server at Old Town Steak and Seafood.  You do your job better when you know you will be rewarded for your work.  The policies of the program also don’t allow me to carry out my fiduciary duties.  I can’t be loyal to a bank and be loyal to my client.  One of them has to lose out.  In my world, it will always be the bank.

** It would only be prudent for me to disclose that I was banned from being a USAA Preferred Agent 4 years ago for expressing my dislike for how my client was being treated by USAA on the internet.   I took to Twitter and tweeted that I hated USAA.  USAA contacted my broker and demanded I be sensored.  I chose to work for another broker. **

Holiday lights can make a beautiful addition to any home.
1.  Be sure to use only lights approved by UL (Underwriter Laboratories) which will have a tag indicating as such on the cord near the ends.
2.  No more than 3 strings of lights should be strung together.  This prevents the wires from overheating.
3.  Check all the wires before using the strand to ensure the insulation is in tact and all bulbs are seated properly.

Candles bring a touch of ambiance and often times a pleasant scent to any room.
1.  Never leave burning candles unattended!
2.  When a candle is starting to burn low, discard it.  The heat build up can cause glass candle holders to fracture and break.
3.  Be mindful of where the hot wax will be dripping as the candles burn.
4.  NEVER place candles near trees, curtains, blankets, or other flammables.

Trees are often times the highlight of the season, but can be the most dangerous as well!
1.  If you are using a real tree, keep it properly watered and use a stand that won’t tip over.
2.  Choose a tree that has fresh, green needles that are not already falling from the tree.
3.  Never block an exit with a tree.
4.  Always turn lights out before leaving home, or going to bed.

This video, provided by NIST (National Institute of Standards and Technology) shows the importance of a properly watered tree.

• City of Buffalo Taxes are billed in two halves.  The city taxes also include your school taxes.  A bill is sent out at the beginning of July which contains stubs for both halves of your city taxes as well as your sewer rent (addressed below).  The first half of the taxes are due August 1, and the second half is due January 3.
• City of Buffalo Sewer Rent is billed once every year, and is due September 30.
• City of Buffalo User Fee is billed quarterly.  A bill is sent out at the beginning of July which contains 4 stubs, one for each quarter.  This bill covers refuse & recycling collection inside the city of Buffalo, and is based on the number of refuse & recycling totes you have assigned to your property.  These bills are due August 15, November 15, February 15, and May 15.
• City of Buffalo Water is billed quarterly, based on usage.  The cycles vary depending on the area of the city.  Water billing is outsourced to Veolia.
• Erie County Taxes are billed once yearly.  This bill is due February 15.

Here are a couple other things you should be considering, as we enter the winter season here in Buffalo:

1.  Have your furnace serviced.  Don’t just change the filter!  Have the unit cleaned, the thermocouple checked, be sure the pilot is lit, be sure the unit is operational, and have your heat exchanger checked for cracks.  A cracked heat exchanger can expel deadly carbon monoxide gas!
2.  Turn off the interior gate to any exterior faucets, and drain them.  Wrap the outside faucet with foam or insulation to protect it.
3.  Wrap hot water tanks with an insulated blanket specifically designed for hot water tanks to conserve energy.
4.  Wrap your pipes that may be prone to freezing.

Remember, being proactive now can save you hundreds to thousands of dollars in costly repairs, or even your life!

To build the kit, you’ll need a small plank of wood (4″ x 4″ or so), 10 nails of the same length, and 3 nails that are longer than the other 10, but the same size as each other.  One LONG nail should be driven in to the center of the board, and the group should be handed the remainder of the nails. This works best in groups of 3-5.  Any more than that, and space becomes too crowded, which forces people out of the group.  Give the group 10-15 minutes to pin down the solution.  Some will get it instantly, and some may not get it at all, but you’ll see leaders and followers develop almost immediately.  You’ll also start to see the introverts and extroverts of the group.

I won’t post the how to here (though it isn’t hard to find online), but here’s the final result:

Don't bump the table!

I’ve had a project that I have been “picking” at for probably a year.  And another that I’ve been working on since before I graduated college.  Neither of these projects get the attention they deserve.  I can claim that it’s because I don’t have the time, but I’d find the time if I REALLY wanted it.  I let projects sit idle because I don’t know how they will turn out.  They could be tremendous successes.  Or they could be ABSOLUTE FAILURES.  And that fear of failure is what keeps me paralyzed.

Time to reframe my mindset, and finally start pushing forward on some of the “maybe someday” projects.

I’m not sure where I got this from.  It was something I found interested and saved in a notepad file on my computer, and found today as I was looking for another document.  I don’t know the source, or who to cite, but here it is!

Conversation soon turned into complaints about stress in work and life.

Offering his guests coffee, the Prof. went to the kitchen and returned with a large pot of coffee and an assortment of cups:
porcelain, plastic, glass, some plain-looking and some expensive and exquisite, telling them
to help themselves to hot coffee.

When all the students had a cup of coffee in hand, the Prof. said “If you noticed, all the nice-looking, expensive cups were taken up, leaving behind the plain and cheap ones. While it is but normal for you to want only the best for yourselves, that is the source of your problems and stress. That all of you really wanted was coffee, not the cup, but you consciously went for the better cups and are eyeing each other’s cups.”

“Now, if Life is coffee, then the jobs, money and position in society are the cups. They are just tools to hold and contain Life, but the quality of Life doesn’t change. Sometimes, by concentrating only on the cup, we fail to enjoy the coffee in it.”

Please note:  The guidelines discussed in this article apply to the properties I handle leasing for, in the Buffalo, NY, Amherst, NY, Williamsville, NY, and Grand Island, NY areas.  There is even some flexibility on a complex to complex basis, so please keep these in mind as GENERAL guide lines.

So, what is a credit report?  A credit report is an organized list of all of a person’s credit related activities, broken down by account.  It is updated monthly with balances, late payment notices, collection accounts, hard inquiries, contact information, and much more.  Credit reports can be obtained from all 3 bureaus (Equifax, Trans Union, and Experian) at www.annualcreditreport.com once a year for free.  By pulling one bureau’s report every 4 months, credit can be checked up to 3 times per year for free.  A credit score is a number value assigned to a credit report, based on repayment history, debt to available credit ratios, length of time accounts have been open, and much more.  The process of exactly how the number is calculated is kept fairly secret, but the most recent information provided at MyFICO.com states that it is based 35% on payment history, 30% on amounts owed, 15% on the length of time credit has been established, 10% on new credit, and 10% on types of credit used.

What are the credit red flags that will impact rental ability?

Every landlord or property manager looks at things a little bit differently.  Several factors are taken in to account, some of which have nothing to do with credit!

First and foremost, having a secure job and a solid rental reference will help significantly when hunting for an apartment.  Landlords want to know that a tenant can pay not only the security deposit and first month’s rent, but also the rent EVERY month!

The overall credit score is a good place to start.  The higher a credit score, the better.  Scores range from 300-850, with about 60% of the country falling between 650 and 799.  The median score in the United States is a 723.  Improving other factors on your credit report is a great way to improve an overall score.

The number of positive and negative accounts open is an important factor to consider as well.  Generally the number of positive accounts isn’t as important as the number of negative accounts.  Positive accounts show the ability to have and manage credit appropriately, but negative accounts impact more deeply by showing the inability to handle credit.  An account would show negative if it is overdue, over limit, or has gone to collections.

The debt to available credit ratio factors in as well.  Someone with plenty of available credit will generally rank higher than someone who is near the credit limits on their accounts.  Being OVER the credit limit on an account is automatically a red flag.

When a credit report is pulled, it shows the name of the creditor, when the account was opened, the limit, the balance, the high balance, any past due amount owed, and the status of the account (current, over due, closed, etc).  These accounts will all be looked at to determine an applicant’s credit worthiness.

Seeing collection accounts on a credit report can sometimes be a red flag.  Many landlords tend to be more lenient toward medical collections, but look more strongly on utility collections, phone bill collections, cable/satellite collections, and other types of collection accounts.  A utility collection is a major red flag because a utility can’t be established in that persons name until the collection account is cleared.  Most rental applications are turned down on that basis alone.

Be proactive when discussing credit with a landlord.  Having perfect credit is nearly impossible in this economy.  However, showing that steps have been taken to improve a credit score will help significantly.  Some landlords will also be willing to overlook credit issues if the applicant is willing to pay additional rent or security deposits up front.

If an application for an apartment is denied because of credit, the landlord or property manager is required by law to mail a letter with the reason why, as well as provide contact information for the bureau which provided the credit report.  This letter can then be used to obtain a free copy of the credit report from that bureau.

Knowing what your credit looks like before you go hunting for an apartment can save you a lot of headaches in the long run.  Be ever mindful of your actions, and how they can impact you.  Doing so will help ensure you have good credit, and the ability to grab that great apartment!

The In-Rem auction is a great way to purchase property, often times for less than market value.  These properties are being sold due to unpaid water bills, or unpaid city tax bills.  Properties are sold AS IS, so being sure to complete due diligence prior to bidding is important.

Pre Auction - First of all, you can preregister for the auction to save a ton of time on auction day.  This can be done at the City of Buffalo website.  In addition, you can pull a full list of all properties being auctioned off on their website as well.  Properties may be pulled right up until the time the bidding starts, so you’ll want to go through the list and choose several properties you have interest in.  Narrow your search to specific areas of the city.  Tackling the In-Rem list as a whole is too difficult.  Once you have your “short list”, drive by each property.

Look for properties that appear to have a solid structure – both roof and walls, and as much of the foundation as you can see.  Structural issues can be incredibly expensive to repair, so take time to examine them thoroughly.  If it looks as though there is someone living in the property, you may have to have them removed once you own the property.  Speaking to neighbors can be helpful, since they will know the history of the property.

Once you have narrowed your “short list” down a little further, can the city inspectors (716-854-4949) and see if there are any outstanding violations that will need to be dealt with once you take ownership on a property.  You may be buying a LOT of headaches, so preparing yourself before hand is important!

Know what is owed! You can contact the city water department (716-847-1065) for information on unpaid water bills, and the city assessor’s office (716-854-5734) for information on unpaid city taxes.  This will give you a good approximation of what the starting bid on a property will be.

At The Auction - Once you arrive at the auction, you’ll either need to register or pick up your bid badge. (You DID preregister, right??)  Be sure to have your photo ID with you.  Remember that if you win a property, you’ll be required to put down a 20% deposit (or $500, whichever is greater).  The deposit must be made in CERTIFIED FUNDS – cash or certified check only.  NO PERSONAL CHECKS are accepted.  Keep in mind that business is business, and that other people will more than likely be bidding for the same property as you.  Try to sit up front, and away from the entrance.  The auction is fast paced and noisy, so you’ll need to focus your attention.

Pay attention, bid when your property comes up, and keep emotion out of it as much as possible. Auctions are designed around using emotion to drive the prices higher.  Keep yourself in check, and know your limits.

Post Auction - Congratulations on winning your property at auction!  Be sure to proceed quickly to pay your deposit, or your property could go back up on the block!  Keep in mind that the property isn’t officially yours at this point.  Once you have paid in full, a deed will be drawn up and recorded, and then mailed to you.  This can take several weeks once you are paid in full.  During that time, you can start working on other details such as insuring the property.  Once you get your deed, the property is yours!

Post Deed - Once you own the property, you’ll want to do a few things.  Take photos of all meter readings (gas, electric, and water) as soon as possible to protect yourself from discrepancies.  If there are squatters in the property, you’ll be forced to use the courts to remove them.  If you don’t plan to start work on the property right away, keeping it secured is important as well.  If there are violations against the property, they will need to be cleared up.

Buying property at auction can be risky, but it can also be incredibly lucrative and rewarding.  Be sure to do your due diligence to help mitigate risks before hand, and good luck!