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Selling By Owner

April 25, 2013 in Personal Finance with 0 Comments

Since my last post about renting vs. selling we’ve sold our home. Only two weeks after we put the sign in the yard we accepted an offer, without using a realtor. Here is why and how we did it…

sold

Why sell by owner instead of using a realtor?
Realtors are paid a percentage of the sale price of the home. Thus selling by owner can save you up to 7% off the sale price. In our case it will save us 3% because our buyer has an agent. Normally the seller pays both realtor fees. Three percent might not sound like much, but for us it’s about $5,000 saved.

What are the keys to selling by owner?
Selling a home is about getting to as many potential buyers as possible. Realtors have an advantage because they know buyers, buyers agents, have a good network, and can list on the Multiple List Service. Selling by owner is not for everyone and most realtors provide a good and needed service. In our case we felt like we had a good network and the ability to reach a broad audience.

Here is how we reached out to potential buyers:

We had lived in the same area for 11 years. That meant we had thousands of Facebook friends in the area and the ability to list on the alumni classifieds of our nearby alma mater.
My wife is a photographer and we used our blog to send information out about our home.
I am the Home Owner Association president and have to approve every home sale in the neighborhood. So I knew about some companies and other entities interested in homes in our neighborhood.

We used all of these channels, along with Zillow, to get the word out about our house.

Another key to success is defining how long you plan to try and sell on your own. In our case we set a deadline of three weeks. If we didn’t have any hot leads in three weeks we were turning it over to an agent.

In the first week we had multiple showings. Ultimately our buyer was someone who wanted to use our home as a rental. I knew about this company because of my work as HOA president. I called them up and said we had a great house, priced to sell. They came and looked at it and made a good offer. And the rest they say…is history.

A few things we learned along the way:

1. Take good photos. Here is the site we used to advertise. Now that we are on the buying side, we are amazed at the terrible photos people take of their homes.
2. Make sure the price is right. Your house is not made of gold nails, sorry, so price accordingly. An exact model of our same home was on the market down the street, so we knew our competition and price range.
3. Follow up on every lead multiple times. You are now a “salesman.” That means getting on the phone and calling people. Yes, it can be terrifying. It will also sell your home.
4. If you don’t feel comfortable selling yourself, then don’t. Realtors provide a good service.

I enjoyed the process of learning to sell a home. We made some mistakes along the way. We are thankful the right buyer came at the right time.

Now to buying a home…

To Rent Or Sell Our House? That Is The Question.

March 5, 2013 in Personal Finance with 0 Comments

To sell or rent our house? I’ve been debating this question for a month. I recently accepted a new job and will be moving. Amidst the many decisions we have to make during this transition, this one seems the largest. Here are the questions I asked and how I reached my final decision.

rentVsell

Will rental income cover my expenses?
In our case the answer is yes, barely. Monthly rental income would cover the mortgage, taxes, insurance, and we would have a little leftover for future repairs/expenses. According to this Forbes calculator it is economically viable for us to rent. But, if anything drastic happened the margins are razor-thin. Wash

Will we be able to sell our home for more than we bought it?
Probably not. Even though we have put some upgrades into our house (new roof, new deck), we will likely have to sell for less than we purchased the home. Let’s hope it won’t be more than a few thousand dollars. Pro Rent

Will the house go up in value if we rent it for few years?
Without a crystal ball my best guess is yes, home values will rise in the next few years. According to recent housing news we are moving from a buyers market to a sellers market. Pro Rent.

Will I be able to afford to buy a home where I moving?
I have not been pre-approved for a second mortgage. But from what I gather we would be able to buy a home, just not one I would want to live in very long. Pro Sell

Do I want to be a landlord?
Long-term I would like to own real estate as a part of a diversified investment portfolio. However, I’ve talked to many landlords and they HIGHLY recommended not being a landlord from long-distance. There will be late night phone calls I can’t do anything about and it’s more difficult to keep watch on the property. Pro Sell

Conclusion:
Our first choice is to sell, unless we cannot get a fair price, then we will rent.

Now on to the next list of questions to answer: do we list it with a real estate agent or sell ourselves first? How do we choose a price point? When is the best time to put it on the market?

Side-note: Our home is 3-bedrooms, 2-baths, over 1,5000 sq. feet, has a full, unfinished basement, and overlooks a sod farm. It’s a little over 5-years old and located on the outskirts of Xenia, OH. We were the first owners. If your interested in learning more contact me at drewrflamm@gmail.com.

Planning To Die Broke

February 25, 2013 in Giving, Personal Finance with 0 Comments

Planning to die broke might be against all conventional wisdom but I think it follows Biblical wisdom. Matthew 6: 19-21, “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.”

Financially speaking, here are three things to do to ensure you die well… and die broke:

1. Take care of all your debts
Psalm 37:21, “The wicked borrows and does not pay back, but the righteous is gracious and gives.” Be prepared to take care of all your debts. Have sufficient insurance or assets to cover outstanding loans. Owe nothing to anyone. Doing this alone will be a blessing to your heirs.

2. Have a clear will
Even famous people fail to put together Estate Plans. Doing so can create rifts in families and even end in ugly court battles. Plan, plan, and plan. Plan your funeral. Plan how to distribute any assets you will have left. Make your intentions clear. You can find many resources online for creating a will, or visit a local attorney. It doesn’t take that much work, and it will save your family many headaches.

3. Give it away now, not when you die
Why wait to give to your kids, your church, or your favorite charities till you die? The temptation is to hang onto your money as a security blanket. Trust God and start giving. If you have responsible adult children, and you have the resources to do so, start giving them their inheritance now. They likely need it more now than they will later.

Again, if you have the resources, start giving generously to your church and/or favorite charities. Have the blessing of seeing your gifts at work now. This doesn’t mean you can’t give out of your estate, but why wait? Don’t store up treasures on earth. Store up treasures in heaven by blessing people NOW.

An added benefit of giving in this manner is your children will not view you as a dollar sign. I’ve heard older folks say they feel their kids can’t wait for them die because that’s when the inheritance will come. Don’t let them wonder what might be, start giving it away now!

Story Time

This whole idea of dying broke was recently exemplified to me by my wife’s Grandpa Hueni. Grandpa passed away last month. He was a very successful business man, started 2 churches, and raised 8 kids. When it came to money, he lived frugally and gave generously. All his children and grandchildren will tell you about his generosity toward them. He believed anything he had was because of God’s goodness, so he wanted to give it all away before he left this earth. By all estimations, last year he gave away more to churches and missions than he took in through investment and pension income.

He planned meticulously for his passing. He ensured his affairs were settled. He gave all of himself and his possessions to God and others. He has a long legacy because he was humble and generous. Like Grandpa Hueni, I want to give it all away.

How Much Should Christians Tip?

February 5, 2013 in Giving, Personal Finance with 7 Comments

By now most have heard about the pastor who scratched out the automatic 18% gratuity on her bill and wrote “I give God 10%, why do you get 18%.” I’ve often heard Christians tip terribly, though I have no empirical evidence to confirm that claim. However, the terrible tipping of this “pastor” begs the question, how much should a Christian tip?

Here is my simple answer: tip enough to ensure your testimony and the gospel are advanced. This likely means you will tip at least 15%. Often it should mean you tip more. Many probably wonder, like me, what happened to the 10% tipping rule? I don’t know, but it’s gone. Expectations are now different and as Christians we should be leading the pack in generosity.

What are some other things you can do to have a positive testimony with your waiter/waitress?

1. Speak to them by name.
2. Thank them.
3. If food service is slow or food is poor. Be nice. Likely it’s not there fault.
4. If they do a good job, tell their manager.

If you are like me and didn’t grow up doing things and going places that involved much tipping, here is a guide.

Psalm 112: 5: It is well with the man who deals generously and lends; who conducts his affairs with justice.

What is your tipping rule? How else can we deal generously with those in serving us in there jobs?

Could you save money by packing a lunch? Maybe.

January 22, 2013 in Personal Finance with 6 Comments

Do you carry or buy a lunch? Could you save by packing a lunch? I take a lunch about 3 times a week and my wife 4 times. She is a teacher and could buy a lunch at school for $3 dollars. It costs me $3.50 at my work cafeteria. I started wondering if the cost of packing a lunch was even worth it. The answer…BARELY. But the time savings and health benefits will mean we keep packing instead of buying.

Sandwich:

Bread- $0.13 (2 slices)
Turkey/Chicken Lunch Meat- $0.77 ($6.15 per pound)
Dabble of Mustard- $0.01
Roma Tomato- $0.12 (1 slices)
Spinach- $0.08 ($1.50 per bag)
Muenster Cheese- $0.10 (1/2 slice)

Sides:

Yogurt- $0.47
Organic Apples- $0.44
Carrots- $0.25 ($1.00 per package)
Pepper- $0.10 ($0.70/per pepper)
Cheese stick- $0.21

We reuse our sandwich and veggie packs for few days, which saves a few pennies. So it costs us another $.02/per day to carry our food to work.

Total: $2.70 per lunch

Could you save buying a lunch? Do you pack or buy? Why?

Saving $150/yr With Just A Few Clicks

January 8, 2013 in Personal Finance with 8 Comments

Last week I had a salesman come to my door offering to sign me up for lower Kilowatts Per Hour (KWH) rate on my electric bill. I said no nicely, internally assuming it was a scam. I did take his brochure. I read the brochure, did some research online, ran some numbers and to my horror realized I paid $13 more LAST MONTH than I needed to for electricity. That’s almost 2 super grande mochachinos at Starbucks! Why was I wasting my money on electric when I could be wasting it elsewhere? Rewind. Why was I wasting money on electric when I could be putting it in a Roth(IRA) or giving it away? That’s better.

Here is how I switched and will likely save between $150-200 this next year:

1. Check your current bill for what you pay per KWH. Mine was 9.5 cents per KWH.

2. Ensure you do not have an early termination fee. If you have never done anything about your energy delivery, then likely you are not under contract.

3. Google Public Utilities Commission of ____________ (enter state name). Here is the Ohio PUCO site.

4. Find your Public Utilities Commission Apples to Apples comparison tool.

5. From there you can find the available rates and contract term lengths and sign up. Your bill will still come from your utility company, now you have a different electricity provider. The rate I chose was 6.25 cents per KWH for a contract that runs 2 years through First Energy Solutions.

Let me know how it works!

Receipt Reflections

January 2, 2013 in Personal Finance with 2 Comments

Around this time of year I sit down and comb through all of our receipts from the previous year. Those that are insignificant I shred; receipts for larger purchases or those that might be important for filing taxes I keep. I find going through receipts all at once identifies spending trends and brings back memories from the past year.

Here are some of my receipt reflections for 2012…

1. The store we frequent the most: Kroger
We buy groceries once a week, so it makes sense for Kroger to be the place we most frequent. Not surprisingly Wal-mart and Aldi were 2nd and 3rd respectively.

2. Restaurant we visited the most in 2012: Chipotle
The first half of the year Qdoba was in the mix. Then a Chipotle was built just a mile from our house. We haven’t been to Qdoba since. I’ve never gone wrong in suggesting Chipotle to my wife so I expect this trend to continue in 2013. We usually split a burrito. Saves $8 and still fills me up.

3. The category (besides our mortgage) that we spent the most money: medical expenses
Between 2 MRI’s for my wife and a major surgery for me we overspent this category by a couple THOUSAND dollars. While certainly not in our plans we are thankful we had the emergency funds available to cover the costs. Hopefully this next year we will stick to colds and headaches instead of neck injuries and ear surgeries.

4. The category we were most under our projected budget: clothes
Last year we had one big shopping trip to the outlets. We had written down all the essentials we needed and had some amazing coupons. Besides that one trip we spent very little on clothes.

5. We had some neat experiences in 2012
We had a stay-cation in Indiana, a wedding in West Virginia, a few weekend trips to Cincinnati, and many friends came to visit. I also went on business trips to Arizona, Washington DC, Baltimore, New Jersey, Tennessee, and North/South Carolina. Looking through the receipts you see where you went and what you did. Good memories.

6. Golf and coffee are my spending weaknesses
The receipts don’t lie. When it comes to golf and coffee my pocketbook loosens up a bit.

7. We had some neat opportunities to give
As I went through the receipts I reflected on the causes and people we gave to in 2012. The birthday challenge my wife put on for me is a giving experience from this past year I will never forget.

What did your receipts say about your 2012? What will your receipts say about 2013?

Prepare to Give in 2013

December 27, 2012 in Giving, Personal Finance with 1 Comment

“By failing to prepare, you are preparing to fail.” Benjamin Franklin

Over the past few weeks I have talked with a few different people whom I consider to be generous givers. I asked them about there decision process when it comes to giving. One common theme emerged, they made a plan to give. It’s at the end of year that my wife and I put together our giving plan for the following year. Here is the process we go through:

Step 1: Figure Out How Much We Have To Give
As a part of my budgeting process each year I approximate how much we will have to give. I figure up both the percentage of income we plan to give as well as an approximate dollar amount. Life change can always bring income change, so I find it best to have both percentage goal as well as a dollar goal.

Step 2: Write Down the Charities We Want to Give To
We write down where we plan to give and then put it order according to which charities we think we want to give the most to down to the least. Here is a rough sketch of what that looks like for us:
1. Church
2. Alma Mater (college)
3. Local Charity #1
4. Local Charity #2
5. Alma Mater (high school)
6. Missionaries

Step 3: Create A Spontaneous Giving Category
We like to create a spontaneous category foropportunities that just come along. It’s a joy to be able to meet a need on the spot and know you have the funds available.

Step 4: Write A Dollar Figure Next to Each Charity
Let’s just say you have $1,000 dollars to give.You may spread your giving out like this:
1. Church- $400
2. Alma Mater (college)- $200
3. Local Charity #1-$100
4. Local Charity #2- $100
5. Alma Mater (high school)- $50
6. Missionaries- $50
7. Spontaneous Giving- $100
Total= $1,000

Step 5: Pray Over Your Giving Goals
Ask God to bless your plan and the organizations you are giving to. Ask Him to give you opportunities to spontaneously give. And ask Him to point out if there are any changes that need to be made to your plan.

Step 6: Work The Plan
Be sure not to wait until next December to do all your giving. It will be HARD to write all those checks at one time. Instead spread your giving out. We give to our church every week. Others we mainly give to on a quarterly basis.

What does your plan look like? Anything you do different?

Redeeming “Your” Treasure (pt.2)

June 12, 2012 in Personal Finance with 0 Comments

Point #2: Get Real Treasure

In a few weeks I am giving a talk on the topic of Redeeming “Your” Treasure. Over the next three posts I am going to lay out the main points. Please give feedback so I can make it better.

On June 7, 1958, The Air National Guard’s minute men was performing in Dayton, Ohio. The team had just completed a rollout when the plane flown by Capt. John Ferrier began to free fall toward the small town of Fairborn, Ohio. The aircraft crashed in a small clearing in the midst of 4 houses. A woman and several children were knocked to the ground but no one was injured, with the exception of Capt. Ferrier. He was killed upon impact. It was determined that a flight control malfunction caused the crash. Based on eye witness accounts, Capt. Ferrier stayed with the aircraft, using his limited control to guide it into the open area, even though he had ample altitude to eject himself to safety. A few days after this tragic accident, Johnny’s wife, Tulle, found a worn card in his billfold. On it the words “I’m Third.” That simple phrase exemplified the life and death of this courageous man. For him God came first, others second, and himself third.

I heard the Johnny Ferrier story every summer at Kanakuk Kamps in Branson, Missouri. The ultimate award at the end of the week was the “I’m Third” award, named because of the above story. It was given to the boy and girl who put…

Jesus first

Others second

Yourself third

Why did Johnny Ferrier do all he could to direct that plane away from the crowd and houses? He could have easily justified hitting the eject button. He probably would have received fame and fortune for doing so. I think Capt. Ferrier knew “the secret.” Putting yourself last in this life will bring long-lasting and satisfying JOY.

Let me put that in the opposite. Putting yourself first in this life will steal your JOY and bring no lasting impact.

Solomon, the wisest man who ever lived, put it this way in Ecclesiastes 2: 10-11:
I denied myself nothing my eyes desired; I refused my heart no pleasure.
My heart took delight in all my labor, and this was the reward for all my toil.
Yet when I surveyed all that my hands had done and what I had toiled to achieve,
everything was meaningless, a chasing after the wind; nothing was gained under the sun.

Every time I read those verses I’m convicted, because I tend to live a lot like Solomon described. Infinite joy and treasures are offered to us, yet we pursue more money, a nice house, 2.5 kids, and a comfortable retirement.

C.S. Lewis said,“We are half-hearted creatures, fooling about with drink and sex and ambition when infinite joy is offered us, like an ignorant child who wants to go on making mud pies in a slum because he cannot imagine what is meant by the offer of a holiday at the sea. We are far too easily pleased.”

Doing the Birthday Challenge opened my eyes even more to the joy of serving others. From a worldly view, it makes no sense why giving stuff away brings joy. We have to remember God’s economy is different from this world’s.

Redeeming “Your” Treasure (pt.1)

June 5, 2012 in Personal Finance with 4 Comments

In a few weeks I am giving a talk on the topic of Redeeming “Your” Treasure. Over the next three posts I am going to lay out the main points. Please give feedback so I can make it better.

Point #1: The heart is where it starts

For where your treasure is, there your heart will be also- Luke 21:34

Everything starts with the heart: our relationships with our spouse, kids, and co-workers, how hard we work at our jobs, and the way we view and use money.

When you shake a water bottle, why does water come out? Your first inclination is probably to say water came out of the bottle because it was shaken. That would be wrong. The reason WATER came out of the WATER bottle is because the bottle had WATER IN it.

Let me take this a step further…

Why do we express frustration toward our wives when they want to “talk” after we are half-a-sleep?

Why do we complain about bosses who make us work harder than they work themselves (by the way, not true with my boss)?

Why do we NEED new golf clubs but we don’t feel the need to give to those less fortunate?

Why do we HAVE TO watch a football game but don’t HAVE TO give our time to volunteer?

Other people don’t cause our actions. Circumstances don’t force us to make bad decisions. What’s IN your heart determines your every thought, word, and deed. Paul Tripp puts it well, “Whatever commands your hope will control your heart and what controls your heart will direct your words and behavior.”

Is your hope in a secure retirement?
Is your hope in a new _______ (car, house, job)?
or
Is your hope in things that last an eternity?

For me, issues of money and the heart are subtle. For instance, when we bought our house I set the goal of paying off my mortgage by the time I am 40. Was that a bad goal? Not at all; I still have it! But when I set that goal it was because I wanted MY freedom to use MY money the way I wanted. The goal is commendable, the motive of my heart was not.

Keep your heart with all vigilance, for from it flow the springs of life- Proverbs 4:32

Here are some good questions to ask yourself to check your Heart Account:

1. Next time you make a purchase, big or small, ask yourself: Why am I making this purchase? Is it to satisfy my own wants and desires? Or will the purchase allow you to serve God and others better?

2. Do you give to get recognition or out of sense of obligation? Or do you give out of humility and thankfulness for all you have been given?

3. When someone breaks, ruins, or loses one of your possessions, do you react with an understanding that in eternity that item won’t matter?

4. Do you check your checking and investment accounts obsessively? Even daily? Could it be you are finding security and significance in the balance of those accounts?

Question: What other questions would be good to add to the Heart Account list?

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