The Everyday Magic of Small Steps

By Dr. Philip Humbert, Ph.D.

One of the great tragedies is to spend life nurturing a great dream, a "magnificent obsession" and never see it come true. To die with your dreams still inside you, waiting for another time, another day, or a "big break" is the greatest of failures. We cannot wait!

Literally every thing you see and every tool you use, even the chair you're sitting on, began as nothing but thought. Someone had an idea for a chair. Henry Ford had an idea that cars could be in every garage. Your computer began as an idea and a series of huge, crude devices in the 1940's. The computer you are looking at right now began as someone's idea that they could manufacture and sell computers better, faster and cheaper than anyone else.

Everything starts with an idea. It always has, and always will.

Many people have observed that "ideas are things." Thoughts and words have the power to move us, to change us, and to become living, breathing, tangible things! In a sense, our world is made up of nothing but thoughts and words!

But there is a gulf between an idea and its fulfillment.

Most "things" are actually still-born and never come to fruition because we fail to span the gulf between potential and reality. That gap can only be bridged with daily action.

How many times have you thought of an invention or process that could be worth a fortune and later found that same (or a similar) product for sale a few months later? We've all had that experience. Someone got rich off "your" idea and the difference is that they took specific, concrete, focused ACTION. Their product is in the store, for sale, making them money, and your idea is still...a dream.

Here are some basics, some essentials to make your dreams come true:

1. Keep a list of big things. On your desk, or on your bathroom mirror, keep a list of your most important projects, goals and commitments. Keep it where you see it, and read it, every day. Keep it current. What we think about, gets done.

2. Keep a list of small things. Keep a list of 5-minute tasks, phone calls or notes that you can do any place, any time. When you have a moment, make that call. Every day, send a note or read a few pages. Always know "what's next" and take action, every single day.

3. Plan your days. Every evening, plan the following day. First thing in the morning, plot your strategy. Leaders have always done this! This is not new! But only about 4% of the population does it. Write down your priorities and choose your daily actions.
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4. Take magnificent care of yourself! Healthy, happy, energetic people get the most done. It takes time and energy to achieve greatness. If you "don't have time," or are too tired or too distracted, you will not achieve your dreams. Take care of yourself.We've all heard the phrase, "Rome wasn't built in a day." We know that "a journey of a thousand miles starts with a single step," and we've heard the Serenity Prayer that ends, "Give me the courage to change the things I can."

Most of us will not achieve great things over-night because in general, human beings do not do "big" things. We do little things. We get up, we go to work. We hug our loved ones, we make phone calls. We balance the checkbook, exercise and fix dinner. We do little things! Highly successful people simply do the right little things, at the right time, in the right way, and they do lots of them.

If you would achieve great things, do little things and pile them one on top of another, until you reach the stars. Start today.

How Much Can You Afford

As you think about applying for a home loan, you need to consider your personal finances. How much you earn versus how much you owe will likely determine how much a lender will allow you to borrow.

First, determine your gross monthly income. This will include any regular and recurring income that you can document. Unfortunately, if you can't document the income or it doesn't show up on your tax return, then you can't use it to qualify for a loan. However, you can use unearned sources of income such as alimony or lottery payoffs. And if you own income-producing assets such as real estate or stocks, the income from those can be estimated and used in this calculation. If you have questions about your specific situation, any good loan officer can review the rules.

Next, calculate your monthly debt load. This includes all monthly debt obligations like credit cards, installment loans, car loans, personal debts or any other ongoing monthly obligation like alimony or child support. If it is revolving debt like a credit card, use the minimum monthly payment for this calculation. If it is installment debt, use the current monthly payment to calculate your debt load. And you don't have to consider a debt at all if it is scheduled to be paid off in less than six months. Add all this up and it is a figure we'll call your monthly debt service.

In a nutshell, most lenders don't want you to take out a loan that will overload your ability to repay everybody you owe. Although every lender has slightly different formulas, here is a rough idea of how they look at the numbers.

Typically, your monthly housing expense, including monthly payments for taxes and insurance, should not exceed about 28 percent of your gross monthly income. If you don't know what your tax and insurance expense will be, you can estimate that about 15 percent of your payment will go toward this expense. The remainder can be used for principal and interest repayment.

In addition, your proposed monthly housing expense and your total monthly debt service combined cannot exceed about 36 percent of your gross monthly income. If it does, your application may exceed the lender's underwriting guidelines and your loan may not be approved.

Depending on your individual situation, there may be more or less flexibility in the 28 percent and 36 percent guidelines. For example, if you are able to buy the home while borrowing less than 80 percent of the home's value by making a large cash down payment, the qualifying ratios become less critical. Likewise, if Bill Gates or a rich uncle is willing to cosign on the loan with you, lenders will be much less focused on the guidelines discussed here. Remember that there are hundreds of loan programs available in today's lending market and every one of them has different guidelines. So don't be discouraged if your dream home seems out of reach.

In addition, there are a number of factors within your control which affect your monthly payment. For example, you might choose to apply for an adjustable rate loan which has a lower initial payment than a fixed rate program. Likewise, a larger down payment has the effect of lowering your projected monthly payment.

Benefits of Title Insurance

A Word About Real Estate
Real estate has traditionally been a family's most valuable asset. It is a form of wealth that is protected by many laws. These laws have been enacted to protect one's ownership of real estate and the improvements located on the land. The owner, the owner's family, and the owner's heirs have extremely b rights or claims in and to the property that you are buying. Those who may have an interest in or lien upon the property could be governmental bodies, contractors, lenders, judgment creditors, the Internal Revenue Service, or various other individuals or corporations. The real estate may be sold to you without the knowledge of the party having a right or claim in and to the property. In addition, you may purchase the real estate without having any knowledge of these rights or claims. In either event, these rights or claims remain attached to the title to the property that you are buying until they are extinguished.

The Past Can Determine Your Future
Generally, a person thinks of insurance in terms of the payment of future loss due to the occurrence of some future event. For instance, a party obtains automobile insurance in order to pay for future loss occasioned by a future "fender bender" or for the future theft of the car. Title insurance is a unique form of insurance. It provides coverage for future claims or future losses due to title defects which are created by some past event (i.e., event prior to the acquisition of the property.) These risks are far less obvious than those protected against by automobile insurance, but can be just as devastating. The following information will answer some commonly asked questions about title insurance.

Will You Get Clear Title?
It is of utmost importance that you receive clear title to the property when you purchase real estate. In order to do so, you must first be informed of any existing rights or claims that may, in the future, threaten your title and possession to the property. Title insurance provides you with this twofold protection.

How Do You Find Out What Claims Exist?

In order to determine the status of title, Chicago Title conducts a diligent search of the public records for those documents associated with the property. Chicago Title then examines those recorded documents in order to determine if there are any rights or claims that may have an impact upon the title to the property. The title search may reveal the existence of recorded defects, liens or encumbrances upon the title such as unpaid taxes, unsatisfied mortgages, judgments and tax liens against the current or past owners, easements, restrictions and court actions. These recorded defects, liens and encumbrances are reported to you prior to your purchase of the property. Once reported, these matters can be accepted, resolved or extinguished prior to the closing of the transaction. In addition, you are protected against any recorded defects, liens or encumbrances upon the title that are unreported to you and which are within the coverage of the particular policy issued in the transaction. This is the first benefit you receive from title insurance.

What About Undiscovered Claims?
The title to the property that you have purchased could be seriously threatened or lost completely by hazards which are considered "hidden risks." "Hidden Risks" are those matters, rights or claims that are not shown by the public records and, therefore, are not discoverable by a search and examination of those public records. Matters such as forgery, incompetency or incapacity of the parties, fraudulent impersonation, and unknown errors in the records are examples of "hidden risks" which could provide a basis for a claim after you have purchased the property. In order to protect you against this possibility, Chicago Title provides insurance coverage for such claims. This is the second benefit you receive from title insurance.

How Does a Title Insurance Policy Protect Against All These Claims?
If a claim is made against your insured title, Chicago Title Insurance Company protects you by: (1) Defending your title, in court if necessary, at no cost to you, and (2) Bearing the cost of settling the case, if it proves valid, in order to protect your title and maintain your possession of your property.

Title Insurance Protects Your Asset
Title insurance gives you the assurance that possible clouds on title to the property you are purchasing - which can be discovered from the public records - have been called to your attention that such defects can be corrected before you buy. Additionally, it is insurance that if any undiscovered claims covered by your policy arises out of the past to threaten your ownership of real estate, it will be disposed of, or you will be reimbursed exactly as your title insurance policy provides.

Only One Premium
Unlike other forms of insurance, the original premium is your only cost as long as you or your heirs own the property. There are no annual payments to keep your Owner's Title Insurance Policy in force.

STEPS IN THE TITLE PROCESS

Initial Request for Title Insurance

An order for title insurance is opened with a title officer who produces the initial response promptly within 24 to 48 hours. A preliminary report can be issued with the minimum of information; without even identifying the buyer or the terms of the sale. It shows the record title as it presently exists and is only an offer to provide insurance.

On-Site Searching and Examining

Your title officer performs three searches: Property, Name, and Tax searches. From that information, a preliminary report is created. Our on-site customer service center expedites the process of obtaining hard copies of recorded documents. Imaging helps to expedite searches with the ability to obtain documents on-line.

Technical Review

The skill and expertise of our title officer is the key to providing you with a useful, accurate title report. Once the report is issued the review begins by making a technical analysis of the documents of record. An interpretive view of all recorded matters is made to evaluate their impact on the title to the property. Among the questions the examiner asks are: Would any of the recorded matters prevent the buyer from using the property for its intended purpose? Can antiquated leases be eliminated from the policy per a review of the current leases?

Inspection Analysis

In anticipation of ALTA coverage, a site inspection is ordered. From the inspection report, the initial title product is supplemented to show any encroachments or other off-record matters which would ultimately impact the title.

Co-Insurance, Re-Insurance, Other Details

If co-insurance or re-insurance is needed for a transaction, we expedite the confirmation of approval. You, the customer, are never bogged down or delayed by the action on the part of our title unit. To the contrary, as a resource and as a facilitator of the transaction, we assume the responsibility for as many details as possible and are able to direct you to other resources where necessary (such as for a lost instrument bond).

We Earn Your Respect with our Skills, Service and Solutions

We try not to point out impediments to the close of a transaction without also offering assistance and solutions. By understanding the sometimes delicate balance of the interests of the parties to a transaction, and by professionally and courteously handling issues as they arise, we can capably guide a transaction to a successful conclusion.

Documents in the Title Process
Preliminary Report
Commitment - Shows the condition of title in the way we are willing to issue it.
Pro Forma - Specimen of what the requested policy, as requested, will look like. Underwriting issues not completed. Not binding upon the company.
Policy - Final product. Contract of indemnity between named insureds and the company

California Statewide MLS

The Boards of Directors of the Contra Costa and Bay East Associations of REALTORS® have signed Statements of Intent to participate in a statewide Multiple Listing Service (MLS) being created by the California Association of REALTORS®. Both organizations have been working with neighboring MLSs for over three years to expand access to property information for their members and believe this approach is the best long term solution.

A solution to the problem of having several MLSs serving a local region has been long sought by larger real estate brokerage companies. They typically must join several MLSs if their business serves more than just a small, local area. The real winner with this initiative, however, is the general public, who would have the ability to access statewide information through their real estate agent.

"This action is consistent with our commitment to giving our MLS users access to the widest geographic range of quality MLS data," said CCAR President Moses Guillory.

"A statewide MLS would not only give real estate agents and brokers access to comprehensive property information, it would also give them a standard MLS database with a single set of rules, policies and data display requirements" according to Melrose Forde, the Bay East Association of REALTORS® president. "This is something the real estate community has been seeking for many years, and we encourage our neighboring REALTOR® associations and MLSs to participate in the statewide MLS initiative" .

It is anticipated that under the statewide MLS, the local Associations will be the point of contact for members to subscribe to and participate in the California MLS, and, in turn, enhance the level of MLS services to agents and brokers.

Bernanke Warns of More Foreclosures, Despite Aid

More home foreclosures are coming, Federal Reserve Chairman Ben Bernanke warned on Tuesday. A “vigorous response” is needed.

MAKING SENSE OF THE STORY FOR CONSUMERS

• Although high concentrations of foreclosures can be found in certain communities, these neighborhoods are not representative of the state as a whole. Foreclosure rates vary widely between neighborhoods, cities and counties.

• The declining home prices that have resulted from the large numbers of foreclosures in some areas have put entry-level homes within reach of many would-be home buyers who couldn’t afford homes in previous markets.

• There are several private and public initiatives already underway or in the works to help distressed home buyers.

Information from CAR Market Matters