Victor Varma | Blog

Selling tech door to door

Posted on December 29, 2017November 5, 2017 by Victor Varma

Selling tech door to door Best Buy and Amazon plan to find business that is percolating just under the surface by doing what brush salesmen used to do: Go house to house.

With thousands of gadgets and add-ons available for communication and tasks inside the home, consumers may not even know what they need or what’s available.

But suppose you could get a high tech person to come to your house, and review your needs?

Best Buy’s in-home salespeople hope to do just that. The new program is aimed at ‘unlocking latent demand,’ Best Buy CEO Hubert Joly told The Wall Street Journal.

It’s different than showing up to a store with an item in mind. In that case, the salespeople sell that item. They might have an upsell, too. But it’s probably not what the consumer needs.

The house-to-house program will let consumers know what they could have and how it would help them. Plus, salespeople can schedule installation.

Amazon’s program sends employees to homes to provide free ‘smart home consultations’ that let people test out voice controlled devices and other gadgets like smart switches.

Unlike the traveling salespeople of yore, these consultants aren’t paid on commission and don’t press for an immediate sale. They just tell you what you could have.

The two-year-old Amazon program is currently offered in six cities.

In 2018, you can contribute more to your 401(k)

Posted on December 22, 2017November 5, 2017 by Victor Varma

There’s good news for 401(k) savers in 2018: They can put $500 more into their plan.

The IRS has announced that the 401(k)contribution limit has been raised to $18,500. That is the first increase since 2015.

The new limit also applies to 403(b), Thrift Savings Plan and 457 plans.

The limit on catch-up contributions for employees age 50 and over remains the same at $6,000.

The deduction phase out limit was also increased. This means that if your Modified Adjusted Gross Income exceeds certain ranges, the amount you can deduct is reduced (or phased out).

Single taxpayers: The phase out is $63,000 to $73,000, up from $62,000 to $72,000.

Married filing jointly: Phase out rises to $101,000 to $121,000, up from $99,000 to $119,000.

Individual contributors: The phase out range rises to $189,000 to $199,000, up from $186,000 to $196,000.

Roth IRA and traditional IRAs

There was no change in contribution limits for IRA and Roth IRA plans. The maximum you can contribute to a Roth IRA is $5,500 per year (or $6,500 if you are age 50 or older).

There was a change to deduction phaseouts, though. If your Modified Adjusted Gross Income exceeds certain ranges, the amount you can deduct is reduced (or phased out).

In 2018, the phase-out levels are higher. For singles or heads of households, the Modified Adjusted Gross Income range is $120,000 to $135,000.

For married couples filing jointly, the range is $189,000 to $199,000. The phase-out ranges for married filing separately have not changed.

Tips for preventing pipes from freezing; thawing frozen pipes

Posted on December 15, 2017November 5, 2017 by Victor Varma

Frozen pipes not only mean the inconvenient lack of water, they also can burst, causing an expensive repair problem.

Homeowners are often understandably frantic to get water pipes running again. But thawing the pipes improperly can lead to more problems.

Never use a device with a flame to thaw out pipes.

A little heat on the right pipe could get that water flowing. But a flame on the pipe is a very bad idea.

According to fire experts, flames under the house, even when directed at pipes, are a common cause of fire.

The open flame from a heater, especially a propane salamander, can instantly ignite insulation or flooring materials under a house.

Worse, pipes can heat up dramatically from flaming devices, with heat traveling along the piping systems inside walls. This heat can ignite wall materials, which can smolder for hours before being discovered, or bursting into flame. Alternatively, excessive heat on metal piping can cause water to boil, causing the pipe to burst, according to the Red Cross.
If you know where the pipes are frozen, first open the faucets and then apply heat with a hair dryer or electric heating pad.

Prepare ahead of very cold temperatures.

If you know your pipes are prone to freezing, take some simple steps ahead of cold weather.

First, give yourself a supply of water. Partially fill a bathtub with water when very cold temperatures are predicted. This can provide water for pets, cleaning, or bathing. It will also give you some breathing room so you can take your time unfreezing pipes.

Next, keep the faucets open to a drip. This will help prevent pipes from freezing. Although this can put a strain on water pump systems, it is usually better than broken pipe disasters.
Close garage doors, especially if there are pipes along the garage walls.

Open your cabinet doors in the kitchen and bathroom to allow warm room air to circulate.

Don’t turn down the house temperature during very cold nights.

Never set the thermostat to less than 55 degrees when the weather will be below zero.

Long-term prevention for frozen pipes

One of the best ways to prevent frozen pipes is with heat tape or heat cable. These low-heat products usually can be plugged in at the beginning of the season and left until Spring. This is especially good for pipes that are run along the outside of walls.

Be sure to unhook outdoor hoses and close valves supplying outdoor faucets.

If the problem with frozen pipes is persistent every winter season, consider moving exposed piping. Although this is a major project, it should prevent future problems.
Insulation in attics, basements and crawl spaces will help prevent frozen pipes, too.

Selling in December can be merry after all

Posted on December 8, 2017November 5, 2017 by Victor Varma

When the weather outside is frightful, selling your house is not so delightful.

That’s what folks say, anyway. But is it always true?

Real estate agents say not necessarily. As with most things in life, it all depends.

Weather is, in fact, a factor and when frightful weather means a lot of snow, showings could slow down. But, on the other hand, a warm winter can be a boon for sellers as home buyers get an early start on the season.

The strength of the local real estate market also comes into play. A strong market can be good even in December. There are always buyers who, for many personal and business reasons, must find a home during the holidays. Those kinds of buyers are motivated.

Here are some considerations for selling during the fall/winter holidays:

– You don’t have to keep your house dark during the season of lights. Decorate, but do so modestly. A Christmas tree can make a home look warm during the cold winter season. Display just a few gifts under the tree. Too many begin to resemble clutter and buyers need to be able to look past decorations.

– Avoid flashing lights inside and out. Stick to simple, classic decorations.

– Limit decorations to the main living area. Although some families go all out decorating every room, as a seller you want to keep decorations of all kinds to a minimum.

– Most agents say that sellers should avoid religious displays, but in some areas of the country this would be acceptable, especially if done modestly. The key is not to overwhelm the house. Make it easy for the buyer to see the rooms.

– Make the most of the season by enhancing curb appeal. Although the trees might not have leaves, the garden won’t have weeds either. Some decorations are seen as welcoming, no matter what the season: A wreath on the door or outdoor lights that emphasize the walkway or special parts of the property.

– If your property looks especially glorious in Spring and Summer, consider leaving out a photo album.

– Play muted classical music to add to the overall ambience, according to HGTV.

– Use light holiday fragrance. Avoid heavy floral scents that make some people cough or sneeze. Don’t overdo it. One scented candle is probably enough.

– Light the fire. Winter is also a great time to show off your fireplace. So spread the warmth!

Wishing you joy and peace!

Posted on December 1, 2017November 5, 2017 by Victor Varma

It’s common these days to complain during the holidays about how commercialized the season has become. In fact, complaining about the holidays has become as much of a tradition as the holidays themselves.

Well let’s break tradition for a moment.

Call it commercial if you want, but when your family members gather around the Christmas tree, each one hopes the gift he gives delights the receiver. Call it commercial, but when you light the last candle of the menorah and give the last gift, you hope you have given light and joy.

We are hoping this year you’ll enjoy the fruits of all your good work for the year. You are appreciated by your family, your employers and your nation.

So this year, maybe we should complain less, delight in the giving more, and then open up our hearts and be thankful for the season — maybe a little commercial but also a lot of fun. Here’s hoping you’ll be joyous!

What is a conforming loan?

Posted on November 17, 2017October 5, 2017 by Victor Varma

A conforming loan is one that conforms to Fannie Mae and Freddie Mac guidelines. Fannie Mae and Freddie Mac are giant government-chartered mortgage companies that buy loans from lenders, allowing lenders to have more flexibility to make new housing loans.

Most everyone who gets a mortgage has a conforming loan.

How much you can borrow to conform:
Conforming loans are generally limited to $424,100, although there are higher limits in areas where housing is very expensive. The conforming loan limit can go up to $636,150 in specific housing markets, such as certain counties in California and New York, among others.

Loan-to-value ratio:
Your down payment has to be equal to 20 percent or more of the home’s value, but buyers can qualify for an FHA loan with as little as 3 percent down. With a down payment of less than 20 percent, buyers have to pay Private Mortgage Insurance, which can be expensive.

Credit score:
A conforming loan requires a FICO credit score of 620-640. However, an FHA loan requires a credit score of 580. A lower credit score than that requires a higher down payment.

Debt-to-income ratio:
Your debt-to-income ratio can be no more than 41 percent (although there may be exceptions that raise this percentage) of your gross income.

A non-conforming loan, by contrast, goes over the loan limit and the requirements are stricter. Credit scores must be 680 or higher. The down payment must be 15 percent or higher. Debt-to-income ratio must be 43 percent or less. Generally, the borrower shows high cash reserves, according to the Lenders Network.

Negotiation: Tips for buyers and sellers

Posted on November 3, 2017October 5, 2017 by Victor Varma

At the most basic level, home sellers and buyers want the same thing: A good price and a smooth deal.

But between price and smooth, there is a lot of wiggle room and emotion.

The key points for a seller, according to Zillow.com:
– A full price or higher
– A pre-approved buyer
– Smooth timing for a move
– Sellers may also want buyers to either waive an inspection or be responsible for any repairs.

Before negotiations, the best idea for sellers is to carefully calculate what they need from a buyer.
– Minimum amount of money you’ll need, considering outstanding mortgage, any debt you want to clear up, or money for a down payment on another house.
– Decide what personal property you want to go with the house and what you don’t want to include in the deal.
– Know how much it will cost to stay in the home during any transition time. This can help in negotiations since a buyer who wants to quickly take possession might save you money. Or, on the other hand, a buyer who will work with you on timing might be preferable. These considerations can help you choose between offers.
Key idea: Know exactly what you need and don’t rush into a deal if you don’t have to.

Negotiation tips for buyers:
One key idea to remember: Don’t start negotiations too low.
Case in point: Heirs are selling a 40-year-old home on wooded acreage. The home will need treatment for mold, new carpets, deep cleaning, and some new fixtures, but the bones are good. The sellers have priced it on the low-end for comparable homes. The listing agent quickly gets two offers. One for $5,000 less than the list price, and one for the list price. It’s October and the heirs want to sell quickly. They don’t want to take the chance of maintaining the home through the winter when home sales are slow. The buyer offering full price is ready to move in immediately and agrees to do so. The sellers accept the full price, rejecting the lower one without negotiation. The unsuccessful buyers lost the home they wanted over a mere $5,000, which on a 30-year loan amounts to just a few dollars a month.

According to credit.com, going in with a too-low offer accomplishes nothing. While a potential buyer can’t always know how their offer will be accepted, it’s probably not a good idea to offer a lower price if the property is already priced reasonably. The exception may be a foreclosure or a slow market, when sellers might be highly motivated to sell.

Small business risk: Fire ranks high

Posted on October 24, 2017September 17, 2017 by Victor Varma

Going into business is heavy with financial risk but, once in business, natural disasters or unforeseen problems can create catastrophe.
Fire ranks high as a potentially devastating risk for business.
More than 75 percent of companies that experience a serious fire go out of business within three years of reopening, according to Phoenix Fire Protection.
Proper insurance can cushion destruction of assets and business interruption costs, but it won’t stem loss of customers, employees and data.
Of these three risks, data loss may be the easiest to mitigate.

* Daily off-site backups are key. On-site backups may seem sufficient unless a fire begins on the weekend or a holiday.

* Check backups regularly.

* Make sure at least two people know how to retrieve backups.

Make a pre-fire or disaster plan: Some of the questions you can ask:

* How can you protect IT equipment from fire or other disasters? If you can’t protect equipment, how will you replace it after the emergency?

* How will you retrieve data? Who will do it?

* Where will you operate? Will you need a generator for electricity? If so, where will you get the fuel to power the generator?

* What are the steps you will take to replace inventory? Is it necessary or possible to insure inventory? What is the worst-case scenario if it isn’t insured?

Michelin’s 3-D printed tire could be the future

Posted on October 20, 2017September 17, 2017 by Victor Varma

Flat tires, blowouts, and even putting air into tires could one day be obsolete if Michelin’s concept for a new tire makes it to the mainstream. According to Engadget, the company has designed a prototype of a tire that can be printed in a machine, retreaded without replacement after it gets worn down, and is made using sustainable materials. All of these factors would lead to a tire that is cheaper, safer and more versatile for the consumer than the products currently on the market.

With the new design, there is not a separate wheel and tire but rather one object constructed with a web-like pattern of rubbery material that supports the exterior tread. Because of this feature, the tire does not require any air and will be impervious to nails and other objects that can easily cause a flat with today’s vehicles. Although it is a long way off, this concept paints a bright future for the auto industry’s lessened impact on the environment.

Is it better to buy or rent a home in retirement?

Posted on October 13, 2017September 17, 2017 by Victor Varma

The kids are gone, the house is paid for, and you are ready for retirement. The question is whether keeping the house is the best idea.

According to USA Today, as many as 46 percent of seniors aged 65 or older are deciding to rent a home rather than buy a new house or keep their previous one.

There are pros and cons to each option.

For someone who already owns their own home with no monthly mortgage payment to worry about, it might seem an obvious choice to keep the house. According to the Motley Fool, this house can be used as a source of income in retirement through a line of credit or a reverse mortgage if there is a sudden need for extra money. On the other hand, annual upkeep eats up as much as 1 percent to 4 percent of the value of the house each year. These expenses can add up quickly on an older home. Then there are property taxes and homeowner’s insurance. Meanwhile, it is entirely possible that a housing market crash could erode the value of the home right when it is needed the most.

On the flip side, selling a home near or during retirement when the market is priced right could add a lot of cash flow and savings to draw from in the event of an emergency. The idea here is that cash can be invested and might be worth more over time than the house’s appreciation.

Kiplinger’s took a look at several scenarios involving home ownership, selling, and renting to decide which option made the most financial sense. They determined that in the short run renting was the better choice while buying a new home was more profitable after ten years or more. They also noted that it could be possible to pay yearly rent with interest gained from investing profits from the sale of a home.

Remember too that retirement is also about freedom. Separate from the financial aspects, renting a home could allow retirees to move around to different parts of the country more easily rather than worrying about having to sell or maintain a house from a distance.