May 21, 2008
Lots of articles have appeared recently about the booming real estate market in the United States. Home prices, especially on the East and West coasts, are not only at record levels, but are increasing at record rates. In some areas around Washington, D.C. and San Francisco, home prices have tripled in the last five years. While many homeowners have been enjoying huge increases in their equity, realized when they either sell their home or borrow against it, the market has become increasingly difficult for those trying to buy homes. It may get worse, as there are now some strong signs that the market may be near its peak:
The prices of homes in many markets are so high that few buyers can purchase them using traditional mortgages. In Washington, D.C., for instance, 48% of new mortgages are of the interest-only variety, where the buyer pays only the interest on the loan for the first few years. This keeps the payments low enough that the buyer can qualify for the loan. The problem is that the buyer is only paying interest and not actually contributing to the purchase price of the home. The fact that so many buyers are obtaining interest-only loans suggests that prices in those markets may be too high to be sustained.
Many home appraisers have complained that lenders are constantly pressuring them to “make the numbers” when appraising homes. Appraisers in some modestly-appreciating markets, such as Buffalo, NY, say that they are often given a value when assigned an appraisal, with the unspoken understanding that their appraisal is expected to come in at or above that figure. The lending industry is competitive, and lenders want to issue as many loans as possible. It would appear that quite a few of them are even willing to lend money when the home doesn’t appraise for the asking price. Appraisers point out that if they don’t provide the “requested” figures, then the lenders will simply hire other appraisers.
The foreclosure rate is increasing. The rate increased in March and April over the same months last year, suggesting that more buyers may have discovered that they have mortgages on which they cannot make the payments. The foreclosure rates are the highest in Florida and Texas, which have foreclosure rates that are nearly triple the national average. With interest rates near historic lows, mortgages are more likely to become even less affordable as interest rates increase.
What this means for prospective buyers is that they must do even more research before buying a home. Buyers should genuinely consider whether or not they could actually afford to make home payments that include a reduction in principal. If a buyer can’t afford a home without taking out an interest-only loan, the buyer probably can’t afford the home. Buyers should be suspicious of home appraisals and should, if possible, ask the appraiser if they are being pressured to provide a predetermined figure. Every buyer wants his or her home to appraise for at least the amount of the loan. But the current market is one where buyers are straining to make payments on prices that are at record levels. The last thing any buyer wants is to strain to make payments on a mortgage that exceeds the value of the home. The real estate market is in a precarious state at the moment, and prospective buyers should do as much research as possible to make sure that they can both pay for, and keep, their new home.
©Copyright 2005 by Retro Marketing.
Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.
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You are about to mount a major product introduction at the industry’s premiere trade show. The company wants to make a dramatic statement, and you want to own the exhibit hall floor with a creative, custom-built exhibit.
Truly the status trade show exhibit, the custom booth can be virtually anything you want it to be. As the term implies, the exhibit is custom-built to the trade show exhibitor’s exact specifications. You have a clean slate to capture the drama of your firm’s breakthrough product offering and you get to dazzle the visitor and out-perform the competition. With a custom-built trade show booth, there are virtually no limits to design, graphics, materials, size, elevation or AV components. The traditional custom trade show exhibit is the “piece de resistance” of the trade show display product field, where an exhibitor is willing to create high drama and powerful imagery for the sake of a truly powerful impact. Allow enough time to start from scratch to deliver the exhibit that will have award-winning potential. Understand the trade show schedule and allow four to six months for a large custom build and six weeks to 12 weeks for a mid-size island or smaller. One thing you will have to prepare for with the custom display is the cost. It is the most expensive to produce and has the highest operating costs due to size and number of packing crates.
If cost is the dominate concern, consider a custom modular exhibit that offers high quality exhibit imaging without the higher operating costs of custom displays. Modular construction takes advantage of a large inventory of interchangeable pre-designed and engineered components such as back walls, counters, display pedestals and exterior panels. Lightweight structural materials such as aluminum, Plexiglas and high-grade tension fabrics provide simplified assembly, space-saving packing and often 400% lower shipment and handling costs. The flexible design trend display components allow you to reconfigure the design or size of your trade show booth from tradeshow to tradeshow. Custom modular tradeshow exhibits offer design and image quality with substantial savings in operating costs due to less weight and size and number of shipping containers.
Another option is the portable system that offers trade show display versatility. Lightweight portable exhibits are ideal for trade show exhibitors who require ease of use and a variety of display configurations while presenting a distinctive creative image. Easily set-up, the portable system has a skeletal frame with attachable laminate panels, which simply clip together in virtually unlimited structural styles. Accessories such as bridges, counters, alcoves and backlighting enhance versatility of the interchangeable portable systems. The trade show portable systems can convert from tabletop to island exhibits in minutes and adapt to almost any trade show display situation with minimal effort. Usually your own booth staffers can transport and assemble the exhibit themselves saving time and the added costs of drayage and contract workers. Portable displays are an especially suitable option for the first-time trade show exhibitor and for appearances at smaller, regional trade shows.
Dick Wheeler, is President of Professional Exhibits & Graphics, headquartered in Sunnyvale, California. The firm is a full-service premiere trade show exhibit, graphics and management services company. Go to http://www.proexhibits.com
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Q: I’ve never really done much advertising for my business; I’ve always relied on networking and word-of-mouth. Now I’d like to launch a small campaign, but I’m frightened it will cost a lot of money. How can I figure out where to start?
A: The first thing you must do is calculate your minimum and maximum allowable ad budgets:
Step 1: Take 10 percent and 12 percent of your projected annual, gross sales and multiply each by the markup made on your average transaction. In this first step, it’s important to remember that we’re talking about gross markup here, not margin. Markup is gross profit above cost, expressed as a percentage of cost. Margin is gross profit expressed as a percentage of the selling price. Sell an item for $150 when it only costs you $100, and your markup is 50 percent. Your margin, however, is only 33.3 percent. This is because the same $50 gross profit represents 50 percent of your cost (markup,) but only 33.3 percent of the selling price (margin.) Most retail stores in America (carpet, jewelry and so on) operate on an average markup of approximately 100 percent, some operate on as little as 50 percent markup and others add as much as 200. More expensive items, such as cars, recreational vehicles and houses, typically carry a markup of only 10 to 15 percent.
Step 2: Deduct your annual cost of occupancy (rent) from the adjusted 10 percent of sales number and the adjusted 12 percent number.
Step 3: The remaining balances represent your minimum and maximum allowable ad budgets for the year. At this point in the calculation, you may learn that you’ve already spent your ad budget on expensive rent, or you might also learn that you should be doing a lot more advertising than you had previously suspected.
Now let’s calculate an ad budget. Assume that my business is projected to do $1 million in sales this year, I have a profit margin of 48 percent, and my rent is $36,000 per year. The first thing to do is calculate 10 percent of sales and 12 percent of sales ($100,000 and $120,000, respectively).
Second, we must convert my 48 percent profit margin into markup, because markup is what we’ve got to have to make this formula work. Most business owners know their margin by heart, but never their markup. To make the conversion from margin to markup, simply divide gross profits by cost. Dividing $480,000 (gross profits) by $520,000 (hard cost) shows us that a 48 percent margin represents a markup of 92.3 percent. Bingo.
Now we multiply $100,000 times 92.3 percent to see that our adjusted low budget for total cost of exposure is $92,300. Likewise, we multiply $120,000 times 92.3 percent to get an adjusted high budget for total cost of exposure of $110,760. From each of these two budgets, we must now deduct our $36,000 rent. This leaves us with a correctly calculated ad budget that ranges from $56,300 on the low side to a maximum of $74,760 on the high side.
Most advertising salespeople will tell you that “5 to 7 percent of gross sales” is the correct amount to budget for advertising, but don’t you believe it. It simply isn’t possible to designate a percentage of gross sales for advertising without taking into consideration the markup on your average sale and your rent. Yes, expensive rent for a high-visibility location is often the best advertising your money can buy, since a business with a good sign in a high-visibility location will need to advertise significantly less than a similar business in an affordable location.
To prove this, just look at the example above and change the rent to $75,000 per year. In this case, the ad budget would range from $17,300 to $35,760, representing just 1.7 to 3.5 percent of sales. The formula I’ve given you is the only one that reconciles your ad budget with your rent as well as the profitability of your average sale. Good luck!
Steve Moundzouris, 423-653-2201
BigWater Media Group, Bigwater Media Group is a full service advertising and marketing agency.
http://www.bigwatermg.com
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Audio conference calling is a dream come true for those professionals who want to communicate with their associates quickly and cheaply without actually ensuring their physical presence. You can communicate with multiple individuals at the same time through audio conference calling and it can be used by just about anybody, seriously, anybody. Moreover, audio conference calling is already available in many major developed countries of the world, so accessibility shouldn’t be a problem either. It basically provides for connecting multiple individuals across an audio stream just like a telephone conference. So you can hold any sort of important and urgent business meeting through conferencing rather than having yourself fired by the boss when things are not falling in place!
It would be surprising to know that schemes exist even for free audio conference calling. Now that is surely icing on the cake. It couldn’t get better, could it? Next time whenever you are in a hurry and your wife is on your head for not inviting guests to your anniversary, you can just call a conference and invite all the folks in one go. That will keep everybody happy! Audio conference calling certainly has several benefits to the society and just might go further in the near future…
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Here is a melt in your mouth Greek Turkey Burger. This recipe is a low fat version of they typical beef burger. The combination of flavors will pop in your mouth.
Happy Cooking!
Ingredients:
* Crusty Hard Rolls
* 1 pound of ground Turkey
* 1/2 cup Feta Cheese, crumbled
* 3 T. Olive Oil
* 2 T. Garlic, minced
* 3 T. Oregano, chopped
* Juice of 1/2 real lemon
* Salt and Pepper, to taste
* Red Onion, sliced (garnish)
* Lettuce, shredded (garnish)
* Tomato, sliced (garnish)
Directions:
1. Preheat oven to 400*
2. Crumble your feta into small pieces
3. Chop your garlic and oregano
4. Mix ground beef with feta cheese, garlic, oregano, and salt & pepper. Be sure not to overmix, or your patties will become tough like a sponge. Form into patties.
5. Place olive oil into medium high heated skillet. Add turkey patties. Cook until they reach an internal temperature of 180*. Be sure to flip so both sides brown. Once complete, squirt the juice of 1/2 lemon all of them. Turn off heat & cover.
6. Toast your rolls in preheated oven. Remove when done.
7. Slice your lettuce, onions, and tomatoes.
8. Assemble as you would a burger. (see condiment suggestions below)
Condiment Suggestions:
1. Kalamata Olive Spread - chopped kalamata olives mixed with cream cheese
2. Garlic aioli - mayonnaise, chopped garlic, and lemon juice
Happy Eating!
Bek Davis (Chef Bek) is a trained chef and a work at home mom. You can find more recipes, cooking tips, and mom resources on her highly recommended websites:
http://www.home-garden-product.com, and
http://iFreeRecipes.com.
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