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Why We Are So Bad at Buying Happiness

Why We Are So Bad at Buying Happiness

"Those who say that money can't buy happiness aren't doing it right."  Have you heard that joke before?  Well, it turns out that there is more than a kernel of truth in there. People are generally bad at buying happiness because: 1. We buy to keep up with the Joneses / ...

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Hair, Hair, Everywhere – the Recession Edition

Hair, Hair, Everywhere – the Recession Edition

I wrote a hair post in both 2007 and 2008, so I suppose it's only appropriate to continue the tradition in 2009! This post is dedicated to recession's impact on hair budgets. The recession is a major reason why I've been neglecting my hair a bit during these past several months: ...

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Experience, Not Stuff

Experience, Not Stuff

Experience, not stuff: I've decided to make this my mantra to live by. It'll be hard, because I like nice things (ex: shoes), but guess which of the following I remember the most? (a) A $100 leather jacket purchased in Buenos Aires, that I've worn ONCE in 3 years. (b) A $45 hour-long horse ride on ...

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What Sex And The City Taught Me About Love, Life, and Money

What Sex And The City Taught Me About Love, Life, and Money

Sex And The City: The Movie is coming out in May! I am so, so excited, and I'm betting that many Sex And The City feel the same way. Carrie, Samantha, Charlotte, and Miranda - you ladies have been missed! (By the way, I love the photo below - head-to-toe ...

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5 Year Travel Plan: Making Your Travel Dreams a Reality

5 Year Travel Plan: Making Your Travel Dreams a Reality

I've been struck by a bad case of the travel bug lately... I haven't been out of the country since 2007, which seems like a long time. CB and I are saving for Galapgos, but we also want to travel quite extensively in the intervening months before our Big Galapagos ...

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Graduate School: (When) Should I Go?

Graduate School: (When) Should I Go?

Graduate school is a significant undertaking both in terms of time and money. During the last few months, I've felt some pressure from concerned family members about going to graduate school. I know they only want the best for me, but I'm glad I followed my gut instinct and ...

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Should Parents Pay For College Education

Should Parents Pay For College Education

A college education has, for a large percentage of society, become the de rigueur entry-level degree. "Should parents pay for college education" is a question where the answer is always, "it depends." In today's economic climate, I imagine that many parents are having the difficult talk with their kids ...

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Free GMAT Study Resources

Free GMAT Study Resources

Taking and prepping for standardized tests isn't cheap, fortunately, there are many free study resources available online. I've taken advantage of most of these resources when I was preparing for my test last year. Hopefully you will find them helpful as well. Free Online Study Materials The GMAT Uncovered by ManhattanGMAT: A ...

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7 Steps In Overcoming Rejections In Job Search

7 Steps In Overcoming Rejections In Job Search

Rejections during job search are disappointing, to be sure. Nobody likes to be told that they were qualified candidates, but the management has decided to go in another direction. In this environment, however, rejections are common-place through out the job search and interview process. After the initial disappointment wears off ...

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How to Host a Dinner Party On a Budget

How to Host a Dinner Party On a Budget

Hosting a dinner party is always fun, but right now I need my get-togethers to be budget-friendly as well. Remember when I made crab cakes? That was for a group of 5 or 6 friends. The crab cakes were delicious and everyone loved them, but, crabs are expensive! Two pounds ...

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Pure Altruism - Does it Exist?

Pure Altruism - Does it Exist?

Every time the holidays come around, feel-good human-interest stories surface. This is a time to give to others, help those in need, and realize that the world is not as cutthroat or as competitive as we may believe. But is it true? Can people be purely altruistic? The authors of Superfreakonomics (the ...

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The Price of Addiction To Argentine Tango

The Price of Addiction To Argentine Tango

It's happened. I fell for the sultry dance, hard. (I even made its own category!) I leave class with a big smile on my face. I read Argentine tango forums and blogs. I fall asleep thinking of boleos and molinetes. I'm not sure how my wallet feels about the possible financial ...

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Old Cars: Unsung Heroes of Personal Finance

Old Cars: Unsung Heroes of Personal Finance

New Cars are shiny, gleaming, loaded with the latest technology and features. New cars get the big commercials on TV, where they swerve confidently in snow storms, zoom down idyllic country lanes, and maybe even dance a little to the sound of a state-of-the-art in-car sound system near a trendy ...

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Disney World Recap

Disney World Recap

I realized that I haven't really talked about my Disney World adventure (aside from the Dining Plan review) on this blog yet... and well, that oversight must be rectified! If you have any specific questions about Disney World, please ask away and I'll do my best to answer. We Got To ...

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Job Fairs: How to Prepare So You Stand Out

Job Fairs: How to Prepare So You Stand Out

Job fairs can be a great opportunity for applicants to interact with many different companies. But if you don't prepare adequately, job fairs can be a disaster. Last week, I attended a job fair - prior to the event I debated whether I should go. I had heard the horror ...

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How To Practice Safe and Responsible Credit Card Use

How To Practice Safe and Responsible Credit Card Use

Wait, you mean you never had a credit card education class in school? Okay, me neither. The quality of education these days! But there's no reason that high schools or colleges shouldn't offer a class like this. After all, credit card education isn't an awkward topic like the other type of ...

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Lessons From Real Estate Intervention’s Tough Love for Homeowners

by WellHeeled on February 1, 2010

real estate intervention 300x116 Lessons From Real Estate Interventions Tough Love for Homeowners

Ever since I discovered that I can watch HGTV shows for free on hulu.com, I’ve been a big fan of Real Estate Intervention. On this show, real estate agent Mike Aubrey has the unenviable job of telling homeowners that their house is not worth what they thought it was worth.

But a tough market calls for tough love. Real Estate Intervention gives prospective buyers very good information on what to do and what not to do when it comes to buying, renovating, and selling a home. Here are some lessons I’ll be taking from Mike‘s advice on the show when I purchase my first home (not for a while!):

  • Beware of unconventional financing structures. So many homeowners have taken out 100% financing, so that when the real estate downturn occurred they have no equity to ride out the storm. One lady took out a negative amortization loan in which her monthly payments don’t cover her interest, so that every month a little bit of principal is added to the loan. Instead of paying down the loan, or only paying interest, she is actually INCREASING her loan amount as time goes on. *blinks*
  • The market doesn’t care how much you paid for the house or how much you need to sell it for to break even. Buyers can’t price their homes based on what they need; worth is a measure of what the market will bear. Sellers aren’t stupid – they won’t buy a home for $300K if the place next door is selling for $240K and the size and features are comparable.
  • What a majority of buyers want are very formulaic: neutral walls, hardwood floors, updated kitchens with stainless steel appliances, double vanities in master baths, adequate closet space. If you are renovating and you want to make back part of your renovation dollars when you sell the house, invest in kitchens and bathrooms, and remember not to personalize too much! Bright blue tile walls in the shower might be an attractive look to you, but most buyers want neutral colors.
  • Appropriate pricing is important. In a declining real estate market, sellers need to set the market by listing the house at the correct price from the get-go, not chase the market by setting the price too high, then let the home languish on the market for months, then do periodic price cuts.

I’d suggest current and future home buyers to watch Real Estate Intervention for a good dose of perspective. Most of the homes they profile are concentrated in the D.C., Virginia, Maryland area. I’d love it if the show broadened it’s geographic reach and came to California!

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Personal finance blogs roundup with contests and giveaways
February 26, 2010 at 2:57 pm

{ 13 comments… read them below or add one }

Red February 2, 2010 at 2:47 am

Very good! I love Mike's tough love attitude. He tells home owners everything they need – but don't necessarily want – to hear. And I totally agree. The biggest lesson I take from watching that show is that, just because you FEEL your home is worth something, doesn't mean it is. A lot of sellers are just so emotionally invested in their homes, or just desperately want to come out of the deal with a handful of money, that they're not thinking clearly when pricing their homes.

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Dave (twoyoung.com) February 2, 2010 at 3:48 am

I love HGTV, but because I'm a guy and my girlfriend doesn't find any of that stuff interesting, I have to keep my fascination on the downlow. =[

I will for sure look up HGTV shows on hulu. woot!

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WellHeeled February 2, 2010 at 8:58 pm

HGTV also has a show called Man Caves. In one episode they transformed an ugly basement into a pool hall / guy's lounge.

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MoneyHoneySF February 2, 2010 at 5:47 pm

I love HGTV and it's the channel I tune into the most. Mike is fantastic with his blunt assessment of the current market and riding in his hot white BMW 5 series. It amazes me at time of how stubborn homeowners can be especially thinking their house is worth more than they paid for given the housing glut we're facing. They should just heed Mike's advice instead of thinking their own is the right price. I recall this one episode where this couple did not want to give out the price to which they want to list the house for. The show had to pause and convince them to give out the listing price to which they ungrudgingly did. Then the host told them that price was still too high to list it for and not in conjunction with Mike's price. They didn't listen and went ahead with the listing and low and behold, they weren't able to sell the house. I think the price difference was around $20K-$30K. I mean, if they want their house to sell fast, they should listen to the expert and the fundamental of the market.

http://moneyhoneysf.blogspot.com/

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WellHeeled February 2, 2010 at 8:57 pm

Mike does have a very sweet ride. ;) Bad advice must pay. I think I know which episode you were talking about.. the husband was VERY resistant to anything Mike had to say, right? Makes you wonder why they go on the show in the first place.

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Kate Ashford February 2, 2010 at 6:41 pm

I once walked through a woman's home with a stager (for an article I was writing), who was there to tell her why her home wasn't selling. To her credit, the homeowner had staged most of the home beautifully, but she'd left the master bedroom painted TEAL. As in, bright Caribbean teal. It was actually nice with her all-white decor, but there's not a buyer on the market who wouldn't have cringed. It's amazing how blind homeowners are about their own homes.

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WellHeeled February 2, 2010 at 8:56 pm

Exactly. What I've learned is that you can't stage your home as if you're living in it. You have to maximize the appeal to the largest number of people as possible, which means neutral, neutral, neutral! I've also seen some homes on HGTV where they vastly over-renovated for their area & price range – a family spent tens of thousands of dollars installing an in-home theater (with stadium seating) in their basement and was astonished when the real estate agent told them no buyer would be willing to pay over a certain amount for that.

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Little House February 2, 2010 at 7:31 pm

This looks like great stuff! Those unconventional loans were running rampant here in SoCal. I'm sure that a lot of people right now that didn't realize they ended up paying more for the house because of increased interest payments. Yikes!

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SeeJaneGetRich.com February 2, 2010 at 9:05 pm

I don't follow HGTV but I really want to check this out especially since they are featuring houses in the DMV area. So many of the houses here are ridiculously overpriced and isn't even worth half. I would love to see the look on the homeowner's face when they hear the real value of their house. Not in a mean way, of course.

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Investing Newbie February 2, 2010 at 3:38 pm

You should also watch, "My House is Worth What?" on HGTV. It doesn't focus on just underwater mortgages, but anyone that wants to value their house before they sell. It focuses also on both the interior and exterior factors that affect a houses' worth and sellability.

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WellHeeled February 2, 2010 at 8:53 pm

I'll check to see if that show is on Hulu.

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MIke Aubrey February 26, 2010 at 11:53 am

Thanks for watching the show. The format is changing a little for season three (which we are shooting right now). I'll still give pricing advice, but this time Sabrina will help fix the staging issues that I identify as well.

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J @ MyMoneyMinute February 26, 2010 at 5:31 pm

I love this show. Look forward to the next season!

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