“Woah! What are you saying?” you must be saying to yourself. Do I really think that the $31 fee per overdraft charged by PNC Bank is a good thing? What about the advice I gave about asking for a fee or charge by waived by a banking institution? I don’t think it’s a good thing and I still do think you should ask to have fees nixed, but if you give me a chance to explain what the title means I promise it’ll be worth it.

If you read the story about “poor” Chris Keeley, you’ll learn something your parents tried to teach you when you were really young. I want to make the analogy of a horrible fee ($31/overdraft is excessive, so is allowing him to overdraft seven times) to a hot stove. When your mother says “Don’t touch that stove John/Jane, it’s hot and you’ll burn yourself,” you may or may not have listened. But if you touched it, you were burned, and you never touched the stove again. I think the same can be said for these ridiculous fees.

It’s been shown that Americans, in general, don’t save enough money, are up to their eyeballs in debt, and are generally financially irresponsible. I feel that these high fees and penalty charges is nature’s way of teaching you that you shouldn’t touch the hot stove and that you shouldn’t eat so many Big Macs.

Here are a few examples of what I mean:
Overdraft Charges: Listen… Keeley should have known how much was left in his account and he shouldn’t have used the debit card in the first place! Why not use a credit card and at least get a piddly 1% reward for it? You get no advantage from a debit card. But let’s extend Overdraft Charges to include Over-The-Limit Charges too. You should know roughly how much credit card debt is on each card – or you have too many cards or have overspent. It’s as simple as that.
High Finance Charges for Cash Advances: Every credit I know of charges you for taking out cash with your credit card. The answer? Don’t use your credit card for cash advances!
ATM Charges: Are you telling me you can’t plan far enough ahead to hit up an ATM with your bank’s name on it? If you have a major bank, you have ZERO excuses. If you have a smaller bank, you at least can lean on the fact that there are fewer ATMs but you still can probably plan your finances enough in advance to visit your ATMs!
Late Payment: Now, some banks are insidious and they change the date due each month. But for those of you without that excuse, how could you not pay your bill on time???

Of course, as I mentioned in the Late Payment example, some banks are evil cheats who are trying to scam you. When it comes to those banks, just cancel your card and get another one… let your business do the talking. I think people need to show some financial responsibility and instead of the media babying folks like Keeley, they should educate their readership and explain that he brought it upon himself. Quit using kid gloves on adults when it comes to finances and maybe they’ll grow up!

Agree? Disagree? Think I’m a lunatic? Let me know!

There’s an unspoken rule in homebuying that you should look at six homes, minimum, before ever thinking about submitting an offer. When I submitted my offer, it was probably the sixth home… possibly the fifth or earlier, I can’t remember. They say that you can’t really know what you want until after the sixth home and you won’t get a feel for the market until that point. I wholeheartedly agree. If you buy before six (I think the rule should be extended to least ten homes), you will probably overpay for a home or possibly buy a home that you really only find mediocre. To avoid this, don’t put in an offer even if it looks like your dream home because it might not be.

Check out what I sent my real estate agent about the important aspects of a house the first time she asked:

…
I’m interested in a townhome in the 230-310k range with ideally 3br, 2+ baths and built after 1985ish in Howard County, though not limited to that county. I was thinking of like Columbia, Elkridge, Laurel in Howard County…
Parking – Garage is not important, though it’d be nice. Two spaces is all we’ll need.
Basement – No preference on finish/unfinished; walk-in living room, etc; are no preferences for me.
I prefer brick over siding; end unit over middle, cathedral over attic.

That was before looking at a single house. It does look quite informative and many of the things did carry over, but look at what I recently sent her in an email:

I want a master bedroom greater than 130 sq ft. 10×10 sucks.
A basement is nice, finished.
3bedroom, 2bath minimum

if the house is greater than 280k, one of the bedrooms has to be at least 10×10
0.04 acres minimum, greater than 1600 sq. ft
1980 or newer home
A decent backyard and deck.
Basement doesn’t need to be walkout – though it’s a plus

Which do you think is more informative for her and a huge timesaver for the both of us? That’s right…

Also, when looking at homes, look at those that are under your price window and over your price window. That way you know what you can get with that amount of money and adjust your strategy accordingly. I saw a lot of homes I’d love to live in outside my price range. Conversely, I saw a $245k built in 1969 that hadn’t been updated and looked ahead of its time (the walls had technicolor wallpaper).

Visiting lots of places also gives you a sense of the market. I know that in Columbia, under $300k means I’ll have to go to the older area west of the mall for a good deal. It’s this constant learning that helps you make an informed decision you simply cannot make before visiting six homes. If nothing else, you can get ideas for renovations (I saw this sick deck setup) when you do get a home.

This is part three of five on alleged “25 rules of investing” that Jim Cramer has listed on his site, TheStreet.com, plus my own commentary. The first five were basically cute little catch phrases on some common-sense rules. Rules six through ten were a little more insightful, speaking to more subtle ideas such as not buying a crappy stock because you think it’ll be acquired (because it probably won’t). Well, let’s take a look at the next five…

(Click to continue reading…)

I don’t know why, I’m not complaining, but Ex24 sent me two iPod Shuffles. But you know what? The CEO left a comment the other day about how he couldn’t understand why I wasn’t investing the money during the six months. But, because they accidentally sent two I’m going to actually start playing the market a little bit as an inadvertant “gift.” Check out this picture of my two iPods becoming fast friends.

On an unrelated note, here’s a funny picture of the iPod Shuffle design back in the day. This picture made me laugh.

[ Related Ex24 Posts]

I’m sure a lot of you folks read Fatwallet Finance, the finance focused board on the Fatwallet site, and have considered doing the 0% balance transfer “deal.” The strategy even hit mainstream on CNNMoney in an article about some “millionaires” in the making. (CNNMoney Story, 2/7/05) If you have a mailing address, I’m sure you’ve received an offer of some kind from credit card XYZ to take some money for 6 to 12 months interest free. Then, you take the cash and put it into a very safe ING or Emigrant Direct account where it earns 3%. On paper, this plan looks incredible. You can get some free money for doing very very little… but there are pitfalls that I believe many are overlooking and those pitfalls are where credit card companies will fleece you without any hint of remorse.

(Click to continue reading…)

One of the easiest ways to earn a little extra spending money is to answer short surveys. But have you seen the ridiculous ads where you pay $20-$50 to join a “network” and then get surveys where you make money? They’re BS. Over the years, I’ve found several survey groups that give you interesting surveys and actually pay you.

Pinecone Research is a great survey network constantly looking to grow. Pinecone will send you a $5 check in the mail every so often with the details of a survey. They also send you an email message telling you the deadline of the survey. They also send unpaid Household related questions to figure out what products you buy or use in order to send you applicable surveys. They pay you before you do the survey! If you ever have the chance, sign up quickly because the signup usually closes up quickly.

Opinion Outpost is the second of the two networks I am a member of and they’re a little more erratic, the surveys don’t come consistently and sometimes you won’t qualify for a survey they send to you. They pay after (4-6 weeks) you do the survey, so the pickings aren’t as good as Pinecone. But it’s free to sign up, you don’t get spammed, and free money is free money.

Vindale Research is a very well known product research company that pays out $5 and $75 per survey you complete, which can include trying a new product or visiting a website. It’s 100% free (which is key, a lot of places will have you pay to apply or be a member) and they have a zero-tolerance SPAM policy. They are not some fly by night operation, having been in business since 2004 and a good reputation in the focus group and product evaluation industry.

Here are some other survey networks that I’ve heard good things about:

• Global Survey Group
• Ipsos
• YourFreeSurveys

If you have experiences with other networks (or with these two), please do share!

Yep. First contract offering was a bust. The original offering of $290k with an escalation up to $300k was rejected but the details of the winner won’t be available until things are settled and posted to MRIS. The total contract value had to have been over $300k, which I anticipated considering there were three other offers all of which knew there were three other offers. At over $300k, my psychological barrier, it would’ve been too much. $299,999.99 would’ve been juuuust fine though. Go figure. But here are the gory details of the property…

This was the house I put a bid on:
List Price $290,000 – 8566 BLACK STAR CIR, COLUMBIA MD 21045
Nice little three bedroom, two full and a half bath joint with a nice basement. In looking back at it, and this may just be sour grapes, I’m kind of glad I didn’t win it… one problem I had was that it sat very close to Snowden River Parkway (map), which is a relatively busy two/three lane road. The noise was still audible from the master bedroom, a downer when you are trying to sleep, so like I said, losing it wasn’t a big deal.

I also wasn’t too keen on paying the Columbia Parks and Recreation Assessment “tax” (CPRA) of around $500 a year (plus the $30/month Home Owner’s Association), a fee that’s tied to the value of the house. Though, what the CPRA pays for is great — parks, pools, and nice libraries.

So, the search continues…

Update: According to public record, the house was purchased for $312,000, or 7.6% over the listing price.

I mentioned yesterday I put in an offer and then upped the escalation clause after learning of three other offers. Well, the hammer will come tonight when the seller’s agent and the seller get together and ratify one of the contracts. My agent’s excited because it’s my friend and I’ll be her first sale. One of my other friends said I should be owed a couple steak dinners or a phatty house-warming gift, so I’ll be looking in the mail for some soggy envelopes filled with steaks.

Anyway, in the waiting, I’ve come to discover the various free services showing home listings just aren’t real-time enough for me (or anyone really). My girlfriend looked up some homes via Washingtonpost.com and by the time I emailed my agent-friend, all but one (of perhaps 8 or 9) were already sold. That means I was looking at stale data. Does that mean the real estate market is sizzling hot here or are all of these Realtor sites or Homesdatabase.com sites just slow?

It then occurred to me… if these sites were super-real-time, what advantages would there be for a realtor? They still need to keep a chip in their back pocket in terms of information otherwise I could just go the route of “For Sale By Owners” once I knew the pitfalls to look for (i.e. how to structure the contract, how now to get hosed in terms of inspections, etc).

Also, I suppose a realtor would be necessary to actually look at the home if the owners weren’t there. They have this neat little add-on to a PDA (mine had a ancient looking Zire) that transferred a code to the key-box. After a few seconds, some technology mumbo-jumbo, there’d be a click and a key case would drop out. Whoever came up with that system is probably ridiculously filthy rich.

Finally, one thing I think my agent didn’t really do totally correct so far was point out bad things in a house. My other friend who just bought one mentioned something about how homes in the early nineties used a certain type of piping (not PVC, something burethane [sp?]) that would need to be replaced after ten years because of leakage. A home inspection would find that out but by then you’ve made an offer and now you’re just backing out of it, so you’re in pretty deep at that point. The replacement cost is $5,000 – $10,000. (holy crap!) Pointing out what’s bad about a house is something I need to know because I’m pretty functional – four walls, a roof, and I’m happy. That place to the left looks pretty sweet to me.

I received an email notification from DHL two days ago that my iPod Shuffle was on its way and today, I saw a package eagerly waiting me to rip open when I returned home from work. My shiny new iPod in it’s shiny new green packaging was ready for me to tear apart and enjoy. My account was approved for trading on 4/5/05, when I executed my first trade, and thirteen days later, a new iPod Shuffle sits in my hands. On 10/5/05, I’ll be giving them a call to get my $500 back. All told, it’s a $99 return on a $500 investment for 6 months.

On Sunday, after coming back from my school’s Spring Carnival (which was a weekend of drinking, revelry, and catching up with old friends) four hours away, I went on my second house-hunting trip. This time though, we saw two (three, but one of them was identical to the other one) places that we liked out of five total. One (and it’s twin) was $312k ($315k) and one was $290k. The $290 was in Columbia near a Safeway, nice area, very convenient access to major roads and the home’s layout was great. It had three bedrooms, two full and two half baths, a partially finished basement (finished except for the storage room where the boiler was), and a nice deck and lawn outside.

In writing out the contract, I began to get a little taste of the “other” fees I could expect if these things go through. There are a whole bunch of fees but only one specific to Century 21, who my agent works for, so far. A $195 administrative fee surprised me but with respect to the overall price of the house, it’s just a minor footnote. But still… unexpected is still unexpected. I don’t know if that fee is considered part of “closing costs,” the nebulous “everything else fees” no one really knows how to quantify for me, but I suppose we’ll soon find out.

“Closing Costs”:
One part of closing costs that is quantifiable is a Maryland transfer tax, which is about 1.5% of the value of the home. In the contract, we stated that the buyer and seller would split the costs and I, as a first time Maryland home buyer, would get a credit in the range of $725ish. As a first time buyer, I would be exempt from half of the State Transfer Tax (0.25%, or $725 on a $290k). With the home in Howard County, the Recordation Tax is calculated at 0.5%, the County Transfer tax is 0.5%, and I’d be subject to a lien certificate, which has a fee of $25-$55. So let’s ring of the cash register and we’ll come up with total Transfer and Recordation taxes of $2,955. And that’s not even all the closing costs… just the transfer and recording costs. Nothing dealing with the loan and its fees has been considered yet.

It doesn’t appear that any of those fees are related to the mortgage itself. All the mortgage products LendingTree have listed the following fees:

In talking with Diane, my “Home Buying Specialist,” those charges are all the ones the lender will charge me. Everything else is out of their hands and some of the fees they do list (so you know about them) are title insurance and recording fees (detailed above).

I gave Diane a call to ask her about setting up an 80/10/10. That would be 80% first mortgage, 10% second mortgage, and 10% down. The reason for this would be for me to avoid paying private mortgage insurance (PMI) which would cost $67/month ($804 yearly) and because originally I hadn’t considered closing costs when asking for the loan.

Going on Friday’s rate (4/15) and with a lock-in of under 30 days, we’re talking rates of 5.875% on the 1st mortgage and 7.25% on the 2nd mortgage. A 5/1 ARM rates would be around 5.25% on the 1st, so we’re talking 0.6% difference to take the risk of living there only 5 years (or bracing for judgment day). Bankrate’s homepage rate was listed at 5.56%, a couple ticks lower than LendingTree’s rates, which means a visit to my credit union today around lunch is probably in order.