Investing 
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How a debt ceiling crisis and U.S. default would annihilate your 401(k)

If you own stocks and the U.S. breaches the debt ceiling, you're gonna have a bad timeIf you’ve been tuning out the dire warnings coming from economists and politicians about a possible debt ceiling crisis, I can’t really blame you. Politicians in particular spend a lot of time stirring up public fear about supposedly imminent but ultimately nonexistent crises in order to push their policy agenda (“the domino theory,” “death panels,” etc.).

But I believe a failure to raise the debt ceiling, and the default of Treasury debt it would trigger, would have real and seriously crappy consequences, particularly for all the people invested in the stock market through their retirement plans.


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 The Home 
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How to get the most out of your HOA fees

What are you getting for your HOA fees?In my neighborhood, which is still being developed, HOA fees aren’t much of an issue. They are small — just $25 a year — and only cover road maintenance.

But other neighborhoods with HOA fees offer a lot more amenities, and charge a lot higher price for them. If you live in such a community, it makes sense to know what you’re paying for, and how to get the most out of those hefty monthly dues.

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 The Home 
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FHA loans drop off as housing market recovers

FHA LoanWhile the housing market is far from a complete recovery, it is making progress. The S&P Case-Shiller 20-City Composite Home Price Index rose 12 percent between July 2012 and July 2013, according to the most recent numbers, and just about every facet of the housing market is showing improvement. With the economic situation improving (albeit slowly), more buyers feel comfortable with their options and lenders are more open to extending credit.

With these changes, FHA loans, which had gained in popularity during the Great Recession, are dropping off. More homebuyers seem to be looking to conventional loans.


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 The Home 
6
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Six Ideas for Holding a Kick Ass Open House

Open HouseMy wife and I have been playing around on Redfin and visiting a few open houses each week. We aren’t really actively looking for a new home but we find the exercise to be valuable. By visiting open houses, we get a better idea for how much house we can buy, what we like and dislike about various houses, and a look at how life might be in a larger home. Most of the homes we look at are within 15 minutes of where we live now, since we love the area, and we only go to the homes that have open houses.

When it comes to open houses, there is definitely a right way and a wrong way to go about it. Since I’ve never had an open house, I don’t know what or how much advice real estate agents give but there is tremendous variance in the quality of an open house. Having gone to at least a dozen, here are a few ideas for those of you looking to hold an open house.

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 Taxes 
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How to Challenge a Property Tax Assessment

If you were only looking at some property tax assessments, you might not get the idea that the housing market recently crashed. Many counties continue to value homes at what they used to be, before we saw a drastic drop in home values. While this isn’t true for all localities, you might find that your property tax assessment is higher than you feel it should be. Especially if “market value” has changed in your neighborhood.

Obviously, because you pay property taxes based on what the county (or city or state) says your home is worth, the higher your assessment, the more you owe. If you feel that your property tax assessment is too high, you can challenge it, saving yourself some money if the assessment is adjusted downward.

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 Personal Finance 
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Buying a House with Redfin Experience

Redfin LogoFor the last few months, my wife and I have batted around the idea of buying a new home. There’s nothing wrong with our current home but we’d really like a place that had some character to it. A place that was slightly bigger and one that wasn’t quite cookie-cutter (we’re in a townhome now, so we’re identical to everything around us). We love our current house, so we don’t have a big reason to leave, and with her focus on school and mine on work, it’s one of those passive searches.

We use Redfin to do the searching because their technology is by far the best of any I’ve seen. The integration with Google maps, the search capabilities (you can search on the type of home, type of listing, whether it has a view, garage, etc.), regional sales data ($ per square foot, charted by date in a particular city), ability to save listings, and it’s ease of use make it perfect for house searching. My wife and I share the same account and save listings we like to show one another. You can search within some of the most convenient geographic restraints too – city, county, university, etc.

Their claim to fame though, is the fact that they refund half of the buyer’s agent’s commission (more on their commission refund). They pay their agents a salary, not a commission, so you pocket those savings at 1.5% the purchase price of the house, with a minimum commission of $5,500.

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 Investing 
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comments

Why I Dislike Real Estate as an Investment

6233 House of Seven Gables - Salem, MAThere are two parts to any investment – cash flow and equity appreciation. Cash flow refers to how much money the investment generates and equity appreciation is how much the investment itself grows in value. When you look at real estate, cash flow refers to any rents you can earn and equity appreciation refers to any increase, or decrease, in the property’s value.

In the last few years, real estate has taken a huge hit because prices simply grew too quickly, financially incapable people were given loans they couldn’t afford, and the myth that “buying a home is the best investment ever” was finally revealed to be the result of incredible anecdotes and not a statistical look at historical home values.

I’ve never liked the idea of real estate as purely an investment for a variety of reasons.

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 The Home 
9
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2008-2009 Best Home Value Remodeling Projects

Kivitokki MansionEvery year, Remodeling Magazine publishes a list of home projects, their estimated costs, their resale values, and how much you can expect to recoup whenever you sell your home. I wouldn’t use the list to decide which home remodeling projects to start but if you have two you like equally, their information might present the tipping point.

I looked at Remodeling’s Best Home Renovations list in 2007 (and in 2006) when the housing boom was still happening. Now that we’re in a recession and the value of homes falling, how does the list compare?

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