Here in Champaign County the real estate market is indisputably seasonal, and with the 3rd quarter of 2011 behind us, sales activity will ease into the holidays and eventually pick back up after the 1st of a brand-new year. It’s a perfect time for evaluating the year to-date, so let’s take a look at how our local market is doing…

There’s no doubt we’re still facing many of the same challenges that we’ve been up against for a few years now. Our inventory of homes on the market has been hovering around 2,000 since the beginning of 2010 and for 2011 thus far we’ve averaged 2,029 homes on the market. With this much competition, sellers are forced to engage their homes in both a beauty contest and a price war. Meanwhile buyers have an abundance of homes to choose from and, for now, are still enjoying record-low interest rates.

While we ended 2010 with an average sale price of $148,082 the average sale price for the first three quarters of 2011 stands at $139,393, approximately a 6% decrease. What’s fascinating, and certainly partially to blame for the decline in average price, is that the total number of sales in the price range of $1 to $50,000 is on track to be TWICE as many in 2011 as in 2010! In other words, we’re seeing more foreclosures this year than we have in years past, and that my friends will bring prices down.

On the other hand, we’re currently on track to end the year with more residential sales total than last year, a promising outlook. Right now our absorption rate is at 9 months compared to 13 months this same time last year, and over the past three months we’ve seen a slight but nonetheless upward price trend. While anything could happen over the next quarter to finish out the year, these small victories are worth acknowledging.

Yes, we continue to face challenging times, and yet, here in our local market, we have plenty to be thankful for. Wishing you all a successful 4th quarter!

–

Shannon Lewis
Owner/Broker of Homeplace Advisors, LLC
217.552.8059
Your Champaign Home Blog
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It is important to place each of your properties into its own individual Land Trust. This insulates each property from the other and makes you less of a “target.” If you are interested in learning more about the benefits of using a Land Trust to hold title to your real estate investments, please read our Land Trust Blog. It is written by Randy Hughes who has over 30 years of experience using Land Trusts and teaching others how to set up and administer their own Land Trusts.

Check it out! Real Estate For Profit

The most lucrative dumpster diving happens on multi-family properties and prime time is move-out week. Among the materials found in local dumpsters are cashmere sweaters with the price tags still attached; cash – both coin and folding; jewelry; unopened food; fully loaded gift cards; and a plethora of electronics including microwaves, phones, Ipods and computers.

As students prepare to return home, their belongings become disposable and begin to clog your dumpsters. This is messy and costly. Rather than pay to have perfectly usable – and often new – goods hauled to the landfill, consider a more positive solution. First, you might consider diving in and harvesting some of the valuables. Or, you could set up an area where usable materials can be gathered. Perhaps you can designate an empty apartment as the Landfill Free Zone. The materials you collect can either be sold or donated. Your donations are eligible for a tax deduction at these locations:

• Habitat for Humanity’s ReStore,: Either drop off at the store Mon – Sat. 10-5 or call 355.6460 for pick up
• YMCA’s Dump & Run: Donations accepted Aug. 10-13 beginning at 9 a.m. each day at the U of I Stock Pavilion
• Goodwill: Drop off donations at 912 W Anthony Dr, Champaign or call 356-4021
• Salvation Army: Drop off donations at either Champaign location – 2212 N. Market Street or 109 West John Street. Call 373-7825 for free pick up of large items

Consider donating unopened food to a local food pantry. The number of households locally experiencing low food security or hunger has gone up substantially. The Central Illinois Foodbank reports that 14.3% of Illinois residents fall into this category. Check with your church or donate to a food pantry such as the Eastern Illinois Foodbank or Restoration Urban Ministries.

There are also several consignment companies you might consider. If you have like new clothing, they will accept it into their store and pay you a portion of the sale price. Contact:

• Karen’s Kloset at 355.9395
• Plato’s Closet at 366.8200
• Dandelion at 355.9333
• Ella’s Consignment in the Millhouse Plaza at 408 Race Street in Urbana

Furniture, knick knacks, rugs and art work in great condition is also sold at local consignment stores. Contact:

• Classic Home Consignment in Round Barn Center (239.1169)
• Copasetic Furniture Consignment in Downtown Champaign
• Ella’s Consignment in Urbana

Let’s see how much material we can keep out of the landfill and into the hands of people who can use it.

But don’t lose your cool. You can maintain control – and calm the customer at the same time – if you use these tactics:

Avoid arguing or assigning blame, but hold your ground. Let customers vent their anger. Meanwhile, concentrate on regaining your self-control.
Never interrupt angry customers. No matter how sure you are that you’re “right,” talking over someone is an aggressive act that won’t help solve the problem. Better: Wait for the customer to finish, count to three, then respond.

Refocus on the business at hand. Don’t let side issues and old grievances derail the discussion. When angry customers break off the attack to pause for breath, quickly gain their attention and repeat their main point. That shows you’ve been listening with respect to the real message.

Resist the urge to become defensive. When you know customers’ complaints are unjustified, you may be tempted to fire back at them. Don’t take the attack personally.
Remember, customers usually aren’t angry with you…at least to begin with. They’re angry about prices, services, goods or time periods. No matter how often you have to do it, bring the discussion back to those topics.

Deflect outrageous or untrue accusations. If angry customers start flinging wild accusations such as “Your equipment always breaks down,” pause for a moment. Then, instead of saying “You’re wrong,” make a dignified response.
Example: “We guarantee every sale; no exceptions.” Don’t give the complaint any more weight by dwelling on it.

Handle loaded questions with care. Don’t let customers back you into a corner with questions you can’t – or shouldn’t – answer.
Example: “Who’s the idiot responsible for this mess?” Strategy: Calmly but firmly let them know that you won’t point the finger at anyone in your organization. Come back with a neutral statement such as: “Without placing blame, let me say that…”

Be honest and straightforward about the situation that led to the complaint. If customers are wrong, you can tactfully let them know.
Example: “You said that we failed to deliver one of the items you ordered. I have both the purchase order and the packing slip in front of me, and they match. I’d be happy to fax a copy of your original order.”

Offer a solution, even if it isn’t the one the customer originally demanded.
Example: “I can’t give you that item free of charge. But I can process your order immediately, so you’ll receive it within a week.”

Please thank our guest author

This month's "From the Pros" was provided by: Jetz Laundry Systems

The message shared by vendors was that they come to the trade show to meet new people and introduce their products and services to those of you who can benefit from them. This year, over 35 vendors presented their offerings to CIRRP members. Pavlov Media, a returning vendor, appreciates the opportunity to meet existing partners who have benefited from their Internet, telephone and television services. Those existing clients in turn share with potential clients at the booth. Word of mouth advertising is a powerful vehicle. This scenario happens repeatedly for vendors at the CIRRP trade show thanks to the collegial nature of the association.

One of the new service providers, Maid to Perfection, has been planning to attend for several years. Even though Spring is an especially busy time for them, they made time for this year’s trade show. If conversations with other vendors are any indication, Maid to Perfection may be even busier next Spring.

Another new vendor, Hundman, went all out to meet their goal of enhanced exposure. They chose to be a food sponsor. Hopefully our members will sample their products along with the delicious food. In addition to the food and drink, vendors provided a number of fabulous prizes. The excited conversation certainly quieted down each time a drawing was held!

As a result of trade show business, several vendors have expanded the line of products they promote to the members. KBL Design, in particular, was excited to showcase their lighting, cabinetry, counter tops – “Everything from floor to ceiling except carpeting.”If new isn’t in your budget, you could consider the granite overlay by Granite Transformations that fit right over your existing counter top.

Speaking of budgets, the trade show continues to receive amazing support from our local bankers and insurance specialists who are ready to help you protect and grow your assets. They were joined by Act on Energy offering financial incentives for energy efficiency investments; and representatives from the cities of Champaign and Urbana offering assistance with governmental issues.

A variety of equipment and furniture leasing options were presented as well as construction and roofing services to enhance your investment. There were even vendors who would take care of those pesky pests.

Many said the relationships they build and strengthen by face to face interaction at the trade show is invaluable. Those relationships are also built among the vendors themselves. Reynolds Towing and Allied Waste both mentioned the opportunities that presented themselves by mingling with the other vendors. Making those connections with cooperative advertising was an important part of the message presented by the team from S.J. Broadcasting’s three radio stations. They were enthusiastic about sharing their advertising opportunities such as the Happily Ever After Wedding Contest, Welcoming REO Speedwagon and giving away the First Pitch at Busch Stadium.

Thank you to all the vendors for joining us for the Greatest Trade Show on Earth! The information, food, smiles and great door prizes made the trade show a wonderful experience for all.

On October 12, the Internal Revenue Service announced that reporting the cost of an employee’s coverage under an employer-sponsored group health plan on Form W-2 will not be required for Forms W-2 issued for 2011. After receiving input from the American Payroll Association and other payroll stakeholders, IRS determined that the relief is needed to provide employers with more time to make any necessary changes to their payroll systems or procedures to prepare for complying with the reporting requirement. Read IRS Notice 2010-69

At the same time, IRS issued a draft version of the 2011 Form W-2 with a note on the back of Copy B stating that employers who wish to report the cost of employer-provided health insurance for 2011 should do so in Box 12 with new Code DD. The form also shows shading in Box 9, which is being reserved because it will no longer be used to report the Advance Earned Income Credit, which is eliminated effective January 1, 2011.

2010 offers a unique opportunity for high-income individuals to convert their 401k to a Roth IRA. As you may know, Distributions from a traditionai !RA are generally taxed at ordinary income rates currently reaching as high as 35(%. (Future tax rates are currently scheduled to rise.) The taxable portion includes earnings within the tax-deferred account and amounts attributable to deductible contributions.

Conversely, “qualified distributions” from a Roth IRA are completely tax-free. A qualified distribution is one from a Roth in existence for at least five years that is made after you have reached age 59 1/2; upon death or disability; or to pay for first-time home buyer expenses (up to a lifetime limit of $10,000).

In effect, a conversion of assets from a traditionai !RA to a Roth is treated as a withdrawal for tax purposes. So,you are genera!ly required to pay the usual amount of tax when you convert. But the current tax cost may be worth it in exchange for future tax-free distributions. Furthermore, unlike a traditional !RA, you don’t have to take minimum distributions from a Roth after age 10%. Note: Prior to this year, a conversion was not allowed in a year in which your modified adjusted gross income exceeded $100,000. However, beginning in 2010, this restriction has been removed.

Therefore, high~income individuals may be eligible to convert to a Roth for the first time. Another incentive: For a conversion in 2010-and 2010 only-you can choose to have the taxable income from the conversion split evenly over the following two years-2011 and 2012. To learn more about the potential benefits of conversion, contact IJS at 217<$51-5010.

Quick ways to reduce your 2010 tax liability

Although there are precious few days left in the year, it is still not too late to cut your 2010 tax bill. But you may have to move fast. Here are ten prime tax-saving ideas to consider.

1. Capital gains and losses: If you are showing a net capital gain for the year, you may realize losses from security sales to offset the gain, plus up to $3,000 of ordinary income. Conversely, if you are showing a net loss, any gains are tax-free up to the amount of the loss. Reminder: The maximum tax rate on net long-term capital gain in 2010 is 15%.

2. Charitable donations: If you give to charity via credit card, the gift is deductible in 2010 as long as it is posted by the credit card company before the end of the year. It does not matter if you actually payoff the charge in 2011. Make sure that all charitable donations are properly substantiated.

3. State and local taxes: If you prepay next year’s state and local taxes, you can increase your current deduction. However, do not prepay if you expect to owe the alternative minimum tax (AMT) this year, because these taxes are not deductible for AMT purposes.

4. Dependency exemptions: If your child is younger than 19, or a full-time student younger than 24, you can generally claim a $3,650 dependency exemption for the child if you provide more than half of his or her support. You might give some end-of-year support-perhaps a generous holiday gift-to push you over the threshold.

5. Medical expenses: Medical expenses are deductible to the extent your annual total exceeds 7.5% of your adjusted gross income (AGI). If you have cleared this threshold in 2010, you can schedule routine medical or dental examinations for December. Otherwise, you might postpone these visits.

6. Miscellaneous expenses: Similarly, you can deduct miscellaneous expenses only to the extent the annual total exceeds 2% of your AGI. Therefore, you might pay certain expenses-like safe deposit box fees or tax advisory fees-to maximize your deduction for 2010.7. Energy credits: The tax law provides a residential energy credit for certain energy-saving installations made in 2010. If you qualify, you can claim a 30% credit up to $1,500 this year (reduced by the amount of the credit claimed in 2009).

8. 401(k) contributions: There is still time to boost your retirement nest egg by allocating part of your last paycheck to your 40 1 (k) account. If you have cleared the Social Security wage base of $106,800 for 2010, you can use the payroll tax savings without reducing your take-home pay.

9. Hybrid vehicles: If you are in the market for a hybrid vehicle, make your purchase before 2011. You may be entitled to a special tax credit. Caveat: Credits are phased out for several popular models.

10. Mutual funds: Generally, it is beneficial to sell mutual fund shares before the fund declares dividends (the ex-dividend date) to avoid tax. Similarly, you may acquire shares after the ex-dividend date has passed.

Depending on changes in the tax law, you might bypass some of these ideas. Of course, everyone’s situation is different. Obtain professional assistance in this area before you take any action.

Here are some tips to teach you to give optimal customer service to your current tenants and future prospective tenants. Be sure to check out the top 12 ways to show excelling customer service.

Another summer is whirling by and I hope you’ve all had the opportunity to enjoy it in some way, whether through vacationing, warm-weather activities, or simply relaxing!

As we’re nearing the end of July, one thing to keep in mind is that you have until September 10th to appeal your property tax assessment here in Champaign County. If you own a home here, you’ve likely noticed that those assessed values just keep going up! Your assessment may or may not be accurate, and if it’s not, you could be paying more in taxes than necessary. In other words, you could have more money in your pocket for next summer’s vacation:-)

Here’s a link to an article I put together on how to appeal your property taxes, as a starting point. If anyone needs comparable sales information to take to the Board of Appeals, let me know and I’d be happy to help out. And, of course, if you have questions, please do get in touch with me.

Wishing you a fun-filled summer!

All my best,
Shannon

–

Shannon Lewis

Prudential Landmark Real Estate
100 Trade Centre Dr., Suite 102
Champaign, IL 61820
217.552.8059
Your Champaign Home Blog
Search Homes for Sale

Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home.

Modification

Many homeowners are struggling to make their monthly mortgage payments perhaps because their interest rate has increased or they have less income.

Beware of Foreclosure Rescue Scams – Help Is Free!

• • Beware of anyone who asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan.
  • Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their homes. Recognize and avoid common scams.
  • Assistance from a HUD-approved housing counselor is FREE.
  • Beware of people who pressure you to sign papers immediately, or who try to convince you that they can “save” your home if you sign or transfer over the deed to your house.
  • Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
  • Never make a mortgage payment to anyone other than your mortgage company without their approval.

Report Lending Discrimination to HUD

If you believe you have experienced discrimination based on race, gender, national origin, or another reason, contact HUD’s Office of Fair Housing and Equal Opportunity at 1-800-669-9777.

… by Spending Time Away From It

You want to grow your business. You envision less work, more profit and more of that treasure that is uniquely yours: donating to your place of worship, helping that cause that touches you. It may appear to you the straightest path to achieving those rewards is by putting your head down and going directly toward your goal. Does it surprise you then to read a less obvious road might be the best one?

Volunteering for a committee in organizations to which you belong, such as your Central Illinois Apartment Association, adds value to your business that you cannot get elsewhere. It is sort of like those companies that match their employee’s contribution to a retirement plan; when you invest in your association, you get a matching investment in your business.

Your service on a committee broadens and deepens your connections. Working side-by-side with your industry peers allows you to encounter diverse views on issues that matter to you. These perspectives are often valid ways of seeing opportunities or pitfalls, and are effectively like seeing your profession with new eyes. When the work you do is renewed you enjoy it more, which is a gratifying return on your investment immediately. In addition, when you are freely offered different approaches that others are using to do the same thing you are, the result often is that you save time or money or both.

Committee service is a way to promote your business too. Whether you offer property for rent, have a product or service, you are going to be around others who are naturally interested in what you do and how you do it. It is often said that marketing is getting people to know, like and trust you. How much easier is it to get over those thresholds when you have rolled-up your sleeves and worked along side someone who might buy your product, service or refer prospects to you? “No amount of advertising can compare with direct interaction with current and potential clients. Working in a committee for a service organization is an ideal method to achieve positive marketing results as others will see your business abilities and dedication to the task at hand. You will build relationships and a solid reputation, which will prove to be much more powerful than simple advertising.” states Matt Carr, Vice President and Senior Commercial Lender at First Bank of Savoy. If these marketing benefits are not quite convincing enough, then remember this: Committee work can be published. Whether it is as simple as adding it to a resume, or even more widely read because it is printed in a newspaper, magazine or blog post, your name and the name of your business can be linked to producing results. And in this context, there is a credibility with which you and your business are imbued that money can’t buy. When the public reads an article that says you were part of a group that surpassed membership goals, redeveloped a web site, launched a new campaign or helped some needy cause, those readers are confident they are reading an impartial report of your work, not a paid advertisement. That’s convincing stuff.

While on the topic of credibility, let’s be sure to mention that committee members have more of it among the association members they serve. Individuals who are contributing their time and expertise are understandably perceived as leaders. With that perception comes recognition and trust. They are seen as people who get things done. As Stephanie Holderfield, Realtor with Re/Max Realty Associates, Champaign County Association of Realtors, Governmental Affairs Chair says, “Committee involvement within your organization also makes the association run more effectively, efficiently and with greater strength.” When other organization members see this, they take note. It is common for committee members to be approached as the go-to person. This is how people regularly have spontaneous opportunities gravitate their way.

You can look at this volunteer work as a learn-as-you-go program. One or two committee positions should be filled by people who are novices at the task and want to learn more. As they learn, the initiates ask questions that challenge seasoned members to rethink how they have done things in the past. Sometimes those questions are the source of improvement and enhancement. Coincidentally, the new volunteer is like an intern who gets years worth of experience handed to them by those who have served on the committee longer then they have. And since the task of a committee is usually either limited in scope or on a recurring cycle, volunteers learn in a low or no-cost way whether the work, like overseeing the financial health of the organization or planning a fund-raiser, is appealing.

A sense of camaraderie can develop among the team of fellow committee members. You might find yourself at a backyard barbecue or a holiday party you have never attended before. There might be a teammate in whom you can count to lend a hand with your work when you are overloaded. It could be as simple as being out shopping and running into a familiar smile. Holderfield adds: “Being a part of something bigger than you are and then taking a step back to appreciate, not only what you offered yourself, but more importantly how together a committed group of individuals collectively flourish the organization. The structure of the organization relies upon individuals who are willing to uphold the integrity of the past as well as grow along side of the future. Without those ideals and willingness to participate, an organization falls apart.”

These are just a few of the benefits of joining and pitching-in on a committee that reflects your interests. You start experiencing them first hand by contacting Randy Hughes, Andrew Timms, Susan Jepsen, Chandre Marino or any of your C.I.A.A. board members. Let them know what sorts of things you like to do or would like to try, and they can help you get into the mix of friendly, conscientious men and women who are eager to have your contribution.

For many years, corporations have been able to list the intangible asset “Goodwill” on their balance sheet. Why not consider service work on an association committee as a way to deepen and broaden your Goodwill assets? And don’t be surprised if you find yourself arriving at your chosen treasure sooner than you expected, even if it didn’t feel like you were running directly toward it.

_____

About the author: Andrew R. Timms has served in his community on various boards and committees for over fifteen years. He is currently actively involved in several apartment associations, learning and sharing best practices from around the State of Illinois. If you’d like to determine if his experience and network of leasing professionals can help you, contact him to arrange a free consultation.