News Tidbits

A growing number of routine municipal fines and fees -- including unpaid parking tickets, library fines, and trash-collection charges -- are starting to damage consumer-credit scores.

In the face of budget crunches, major cities, including New York, Chicago and Miami, are hiring private collection agencies to chase down small debts that are frequently shrugged off by consumers. Since an outstanding account handled by a private collection company can wind up in a credit file, more consumers are discovering that niggling government fees -- like unpaid speeding tickets or dog-catcher fines -- are marring their credit. It's up to each city to decide whether such information will end up in a consumer's credit file.

Claude DaCorsi, a management consultant in Portland, Ore., used to pride himself on his near-perfect credit rating. But during a recent routine credit check, he discovered his credit scores had plunged to "below average."

The reason: Two late library books, including a picture book taken out for his two-year-old son. The library had turned over the $40 late fee to a private collection agency.

Mr. DaCorsi, who says the black mark affected his interest rate on a home loan, has since barred his children from visiting the library. "We go to Barnes & Noble now," he says. "We can get books there without fear of retribution."

A handful of cities, including San Diego and Chicago, have worked with collection agencies since the late 1990s. But the trend is spreading rapidly around the country as strapped local governments look for creative ways to boost revenue without raising taxes and fees. Over the past few years, local governments in places including Seattle; Anchorage, Alaska; Austin, Texas; and Florida's Miami-Dade County have contracted with private agencies to collect late parking tickets and court fees. In New York City, Baltimore and Dallas, libraries use private collection firms to recover fines. New York state recently hired a collection company to pursue overdue E-ZPass toll bills.

While shaking down citizens over small debts might sound petty, hundreds of cities around the country are owed millions of dollars in unpaid fines. Since 1997, when Chicago began using a collection agency to track down unpaid parking fines, ticket revenue has more than doubled, rising from $68 million to $154 million last year. (The total number of parking tickets issued has dropped slightly over the period.) Since the Omaha, Neb., public-library system hired a private collection company in March, it has collected more than $40,000 in fines and recovered about $75,000 worth of overdue books and materials.

Local governments are also using collection agencies to track down some more-unusual fees. In Florida, some municipalities have used a private agency to track down swimmers who fail to pay "beach rescue" fees after they are rescued by lifeguards. San Diego courts have used collection agencies to collect fines issued to people caught riding the trolley system without tickets, according to AllianceOne, a Pennsylvania-based collection firm that works with court systems around the country.

As local governments increasingly outsource collections, more companies are focusing on collecting for public agencies. Unique Management Services in Indiana works exclusively with libraries, and currently handles collections for about 750 of them in North America. The company says it has annual revenue in the millions of dollars, and the business has been growing at about 15% a year.

Since its clients usually want to maintain good relations with patrons, Unique Management says it tries to avoid the hardball tactics normally associated with collection agencies. "We use a gentle tone of voice," says Kenes Bowling, manager of customer development at Unique. "We let patrons know that the library isn't angry with them, and wants them to return the books." (About half of the company's call-center employees are students from a local Baptist seminary.) Still, patrons who don't pay up are sometimes reported to credit bureaus.

City officials say the revenue from aggressive collections efforts can help keep taxes low. They're also an issue of fairness. "We have a responsibility to apply the law equitably," says Bea Reyna-Hickey, director of revenue for Chicago. "It's not fair to have some people paying parking tickets, and other people just ignoring them." Typically, a collection agency takes between 15% and 35% of whatever it successfully collects, according to Kaulkin Ginsberg Co., a collections-industry research firm.

Some cities are using collection agencies to chase down debts that are over a decade old, which can lead to surprises for consumers. Last July, Phillip Remstein of King of Prussia, Pa., received a notice in the mail from a collections company requesting $53 for a Philadelphia parking ticket issued in 1993. "It was ridiculous," says Mr. Remstein. "I didn't hear from them for 12 years and suddenly they want to collect?"

Mr. Remstein says he is sure he resolved the ticket at the time, but he has no record since it was so long ago. The Philadelphia Parking Authority had contracted with a collections agency to pursue about $8 million in unpaid tickets that were more than seven years old. But after numerous complaints from consumers like Mr. Remstein as well as media coverage, the city called off the collections program in November. However, the city still uses a private collection agency to go after unpaid fines on current parking violations.

Technically, any bill more than 30 days old can be reported to a credit bureau, though many local governments opt to give citizens more time before deploying hardball tactics. Both TransUnion LLC and Experian, two of the country's three major credit bureaus that compile information about consumers' credit history, include information about overdue municipal fines and fees on credit reports. Equifax Inc., the third credit bureau, makes an effort to weed out small charges like library books and parking violations from credit files. The company says it is not fair to include them in credit reports since municipal fines are reported unevenly around the country.

Even when the dollar amounts involved in the fines are small, any collections activity in a credit file can do serious damage to a credit score. "It's a very serious negative item on your report, on par with a tax lien or a bankruptcy," says Maxine Sweet, vice president of public education at Experian. "You will definitely pay more for your credit, in higher interest rates and higher down payments."

A library fine reported to a credit bureau, for example, can knock as much as 100 points off a credit score, making it difficult for someone with previously good credit to get the best rate on a loan, consumers and industry experts say. (Credit scores calculated by Fair Isaac Corp., the leading provider of such scores, typically range from 300 to 850; any score above 700 will generally get you the best rate on a loan.) Collections activity can stay on a report for seven years.

Consumers hoping to get municipal fines wiped off their credit records do have some options. Since collections activity can stay on a credit file even after the bill is paid, consumers should try to come to an arrangement before they pay. They should call the government agency or collection company and try to strike a deal that if they pay the fine, it will be removed from their file. The Web site creditboards.com offers sample letters to collection agencies and other advice to help consumers get items removed from their credit files.

Battling a collection agency can be an ordeal. Kevin Howard, a Houston attorney, estimates he spent about 25 hours last year trying to get a $30 library fine removed from his credit file. He says he has spoken up about his experience at two city council meetings, told his story on the local news and contacted the Federal Trade Commission, which enforces the Fair Credit Reporting Act, but he's yet to get the item removed.

Simmering in the cultures of the American Southwest, Native America and Mexico, Yuma, AZ is often considered Arizona's best kept secret as a nice place to call home.

Bordering both California and Mexico, the small town of some 100,000 residents may also be the nation's best-kept secret as a booming housing market.

For the second quarter in a row, Yuma's home prices grew faster than any other city in the nation among the hundreds -- "ranked" and unranked" -- tracked by Office of Federal Housing Enterprise Oversight's (OFHEO) Home Price Index (HPI).

Fueled, in part, by emigrating agricultural workers and often by speculative investors fleeing higher priced housing costs in California and elsewhere in Arizona, Yuma's prices soared 35.71 percent in the third quarter this year, compared to the third quarter of 2004. In the second quarter this year, the increase was 35.98 percent, according to OFHEO.

Nationwide, home prices increased 12 percent during the third quarter this year, according to the latest HPI released Dec. 1.

"We've had some subdivisions with prices that have grown by 80 percent and 100 percent," said Shelley Ostrowski, president of the Yuma Association of Realtors.

Yet, even with home price growth as hot as a mid-summer day in Yuma, home prices remain in the low $200,000s for a 1,500- to 1,700-square-foot, three- to four-bedroom home that's only a few years old. In most cases, newer homes cost more, older homes cost less, but not a lot more or less.

Third quarter statistics released now, near the end of the fourth quarter, however, can be misleading because they don't indicate what is happening now.

"Our area within the last year has undergone tremendous growth. We have seen a large interest from out of area homeowners and investors looking to secure property in our city. Our local property values have nearly double within this period, Carl Nevels an agent with Nevels & Nevels - Keller Williams reported to RealtyTimes Market Conditions for Yuma.

Sandra Nevels added, "Recently we have experienced a slight cooling down in what we feel has been a very market. Homes that were on the market hardly one day are two- to three-week turnovers."

That's due, in part, to Yuma's inventory which is up to 500 single-family homes for sale. That's near normal levels. Three months ago, there were less than 200 homes for sale, according to Ostrowski.

"What happened? We don't have the investors here any more. They can't turn them as fast, but now we are able to offer more to those who live here on a full-time basis. We aren't going to continue to see huge increase in prices, but it's still a good market," Ostrowski said.

Like any housing market that flames Super Nova, Yuma can't sustain the out-of-this world heat and a more down-to-earth correction has begun to follow.

"It's a correction because it was going so fast and so furious it finally got to a point where all the sellers jumped in and now it's like a teeter-totter," said Ostrowski, also an associate broker with Century-21 Action Group in Yuma.

Yuma's boom had its roots in the California housing market which became unaffordable to Yuma's population of agricultural workers. For years, farm workers made their summer homes in the Golden State's crop growing regions, but took up temporary residence in the Yuma area during its winter growing season.

The migratory-level commute to work continues, but to a lesser degree. Many farm workers now call Yuma home and the new trend takes, well, a lot of lettuce -- in more ways than one.

"We are the worlds No. 1 supplier of lettuce. We've always had agriculture here. So they come here for the winter-growing season. Agricultural people are finding they can't afford to buy in California. So instead of Salinas (CA), they buy here because it's more affordable. We are now seeing some people who bought here are not leaving and going back," Ostrowski said.

The area is also populated by military families who count on military and civilian work at the U.S. Army's Yuma Proving Grounds and the U.S. Marines' Air Corp Station for their bread and butter.

Retail growth has followed the growing number of home-buying farm workers and others moving to the region.

"There's also the border patrol. I think we aren't going to see a huge increase in prices now, but prices are not going down. You just have to be more competitive when you sell. It can't go for top dollar any more because you are not the only house on the block for sale," Ostrowski said.

Yuma's boom helped catapult Arizona, to the top of the home price-growth list. Arizona's prices soared 30.33 percent in the third quarter 2005 compared to the same period in 2004, according to OFHEO.

Following Arizona were Florida (25.18 percent), the boom market anchor in the South; Hawaii (21.33 percent), the nation's tropical resort and a second home mecca; Washington, D.C. (20.53 percent), the nation's capital and headquarters for political shmoozing; Maryland (19.29 percent), thanks to D.C.'s market influence; California (19.26 percent), the home price stronghold in the West; Virginia (18.66 percent), thanks again to the D.C. influence; Nevada (17.59 percent); Oregon (16.92 percent) and Washington (15.64 percent). The last three, like Arizona, also enjoy the same Golden State housing market glow that shines on Arizona.

Yuma, was tops in the nation in home price growth among all cities and tops among so-called "unranked" Metropolitan Statistical Areas (MSAs) which have smaller statistical samples of homes sold.

Among "ranked" MSAs, with larger, and therefore more statistically sound samples, another Arizona area, the Phoenix-Mesa-Scottdale MSA, was tops in the third quarter with a 34.37 percent increase in home-price growth.

Following the Phoenix-area MSA were Cape Coral-Fort Myers, FL (33.16 percent); Naples-Marco Island, FL (32.35 percent); St. George, UT (31.57 percent); Sarasota-Bradenton-Venice, FL (30.35 percent); Merced, CA (30.27 percent); Coeur d'Alene, ID (29.88 percent); Pensacola-Ferry Pass-Brent, FL (29.80 percent); Visalia-Porterville, CA (28.46 percent) and Palm Bay-Melbourne-Titusville, FL (28.36 percent), OFHEO reported.

Copyright © 2005 Realty Times. All Rights Reserved.

When Peggy Koski and her husband, Rudy, moved back to his hometown of Moss Point, Miss., in 1993, the risk of hurricanes was high on their minds. The year before, Hurricane Andrew had flattened houses across large swaths of southern Florida and they wanted their new home to stand up to such a storm.

"When we built our house we told the designer and the builder that we wanted every safety [feature] we could for protection," Ms. Koski says. They poured an extra-strong foundation, used "hurricane clips" to secure the roof to the wall frames and the frames to the foundation, and had storm shutters installed on the extra-strength windows.

When Hurricane Katrina hit, "our house stayed intact," Ms. Koski says. "We were real thankful that we had put those extra things in to help it stand. My neighbors did not fare as well as we did. The backs of their houses were breached."

Houses like the Koskis', which stands about 57 miles from where the eye of Katrina made landfall, will likely be studied closely as the Gulf Coast begins its massive reconstruction effort. But in some ways the answers are already known.

"If you build to the latest standard of codes, they are going to resist something like a hurricane or earthquake," says Tim Ryan, who heads the disaster-response committee of the International Code Council, a nonprofit group that develops the building codes used by many governments. "Where you see a lot of damage is homes that don't meet that criteria." [Windproof photo 1] Fay Faron in Algiers, La.

The problem is, many areas don't have or don't enforce building codes. That's true even after building codes were strengthened to prevent a repeat of the damage done by Hurricane Andrew to south Florida in 1992.

After Hurricane Andrew, Florida adopted the toughest building codes in the nation for its coastal areas, mandating storm shutters or impact-resistant window glass, and reinforced garage doors, among other measures. The standards were set according to wind maps that showed the high winds likely in the area.

But under heavy lobbying by homeowners and builders in the Florida Panhandle -- who contended that history didn't show a need for the added protection -- the toughest standards extend just a mile in from the coast there, even though wind maps show potentially devastating winds well inland, according to building and insurance officials. The state legislature is re-evaluating the Panhandle exemption, says Rick Dixon, executive director of the Florida Building Commission.

Louisiana and Mississippi have voluntary statewide building codes that leave it up to local governments to decide whether to use or enforce them. In both states, "some places had no building code and had no building department," says Jeff Burton, building code manager for the Institute for Business & Home Safety, a Tampa, Fla., research group funded by the insurance industry.

The problem is typically worse in smaller communities with low-income populations that lack the money to build as sturdily as possible and whose governments don't have the resources or the political will to properly inspect construction and enforce codes.

Hurricane Andrew exposed corner-cutting by builders and lax enforcement by code officials, says David Collins, manager of codes and standards for the American Institute of Architects. "We found a lot of problems that were built into those buildings that shouldn't have been even by the standards of that time," he said. "We saw roof sheathing that wasn't appropriately attached at all. That was a dead giveaway that codes weren't being applied." [Windproof photo 2] Rescuers search a home in Bay St. Louis, Miss.

Of course, even the best building code won't help much if a house is under water. James Schwab, a senior research associate at the American Planning Association, says the only way to survive that is to raise the building off the ground and let the flood waters or storm surge pass underneath. "Basically you're on stilts," he said.

But in typical storms where wind does most of the damage, builders and "catastrophe modelers" -- companies that try to predict and then estimate the damage from major storms for insurers -- say that well-built newer houses usually do best.

Some older houses, such as from the early 20th century and before, fare reasonably well, too, in large part because they were "overbuilt" -- often constructed with heavier beams or more nails than later engineering deemed necessary. In Louisiana, locals extol the virtue of decades-old houses built with local cypress wood, which they say is better able to withstand a soaking by flood waters.

By contrast, homes built in the 1970s and 1980s can fare poorly due to a boom in lighter-weight, cheaper materials and construction techniques at a time of few hurricanes, when concerns over storm damage had ebbed, catastrophe modelers say.

Builders and insurance officials say code enforcement is often stricter for newly built homes than it is for renovations to older houses. When owners modify an older building, laws often require them to meet new codes, but contractors often skirt or ignore those rules by not getting building permits.

"They will simply go in and do work without pulling permits, keeping it kind of hush-hush," says Wade Scott Morrison, a Tampa, Fla., contractor who owns Wisdom Structural Inc. "It's going to be very difficult to change someone's ethics just because you change the building codes."

Homeowners are sometimes complicit, too, especially because of the expense of bringing a house up to code. "A lot of people have this idea that it's my money, what do I need the city telling me what to do?" says Mr. Morrison, who has been hired in the past to fix substandard work.

For wind resistance, a house's survival may depend on seemingly small things, such as if the windows and garage door are strong enough and if the shingles each have a couple of extra nails in them. If a garage door fails, for instance, the storm's winds can pump up the house "like a balloon and blow it off its foundation," says the International Code Council's Mr. Ryan.

Some people fear that in the rush to rebuild, the same mistakes will be made. "That seems to be something that happens in the wake of natural disasters; the rebuilding is done in haste," says Scott Frank, a spokesman for the American Institute of Architects. "They do cut corners, they do go below code -- in hurricane areas that's just a disaster."

A recent morning began with a rhythmic pounding echoing in my sleepy head. I thought it was the beginning of a headache. And it was – but a headache of a different kind. The thumping was my real estate agent hammering a FOR SALE sign into the dirt at the end of my driveway.

Two minutes after the thudding stopped, my doorbell rang, the first of approximately 800 times I would be caught in my PJs in pre-shower scuzziness. This time, it was my agent, asking me for a house key for the lockbox. I taped the key to the end of a yardstick and snaked it through a quarter-inch slice of opened door.

But thereafter, the unexpected knock would bring agents with house shoppers right into my house, looking with shock and horror at my rumpled plaid sleep pants and backwards T-shirt, my sleep-crusted eyes and rooster hair, with me turning scarlet in embarrassment.

I warned my agent that I must have a phone call before anyone arrives to show my house. Nevertheless, agents with clients suddenly materialize at the front door, fumbling with the key while I race for the bathroom to look frantically in the mirror. With 30 seconds, where do I start? A comb – washcloth – toothbrush – trowel and spackle – grocery sack? I should keep a Halloween princess mask in a bathroom drawer.

But before I can do nothing more than run wet fingers through my tousled hair, they’re inside, calling “HELLO?!” My instinct is to hide, but since people checking out a house tend to peer everywhere, hiding is likely to prove even more embarrassing. Nothing like being discovered crouching in the shower, combing your hair with the toilet brush. Or hunched inside a linen closet, applying makeup by flashlight.

I don’t understand why calling is so difficult for real estate agents to do before escorting strangers into my house. Even a call from a few blocks away would give me enough time to slip on clothes or hide on the roof.

I’ve mentioned a gazillion times that I have a flexible schedule that confuses even my stuffed animals. Still, I’ll be sitting at my computer in a wrinkly faded Star Trek T-shirt with a grape juice stain spread like a knife wound across the front, my hair looking like Medea with a mohawk. And the knob suddenly rattles and a cheery voice announces, “HELLLOO!”

Don’t think I’m a slob who hangs around the house in pajamas and curlers all day. My hair’s too short for curlers. But I often get my best spurts of thinking first thing in the morning. And since my short-term memory is … uh, what was I going to say? Well, anyway, this is why I’m often still in my pajamas long after folks with better memories have dressed and gone about their business. I think I should start sleeping in nylons and a skirt while my house is on the market and I keep attracting agents who are allergic or philosophically opposed to phones.

A warning call also would allow me to leave the premises, which I’ve decided would be a good idea. For both parties in the process. I’m sure people feel reluctant to open closets, peek into cupboards, or snort derisively at my taste in décor with me lurking within earshot. And I hate to hear what devastation is being planned for my little castle.

Mr. Prospective Buyer will say, “We’ll just carpet over this atrocious floor tile, tear out this wall, and put in a big screen plasma TV with a vending machine.”

“Yes, and we can rip out this nasty fireplace and replace it with a hutch for my 4,000 pioneer Jell-O molds,” Mrs. PB will add.

At this point, I’m running down the driveway to kick down the For Sale sign.

A simple phone call would eliminate all this awkwardness and distress. I’m beginning to think a ring of real estate agents is conspiring to embarrass me. They probably want to see my entire abhorrent collection of ratty, stained sleep shirts. And it could be that the first agent who ushers people into my house when I’m actually in the shower wins a trip to Vegas or a Mexican cruise.

Meanwhile, I’m afraid to wear my pajamas, pig out on junk food, or use the bathroom. I wish someone would hurry and buy my house before I need a case of laxatives. Which reminds me, those pioneer Jell-O molds might be a good idea, after all.

The typical working American household has saved just $18,750 for retirement, and expects to cover the majority of retirement expenses with Social Security and pension benefits, according to an index Fidelity Investments introduced Tuesday.

Fidelity, the biggest U.S. mutual-fund company, said its Fidelity Retirement Index also showed that the typical working American household -- whose primary decision makers are age 43, on average -- is on track to replace an estimated 59% of his or her projected income when they retire.

Boston-based Fidelity recommends replacing 85% or more of so-called preretirement income. But the index revealed that just 15% of typical American households are on track to achieve that goal.

"What this means, in effect, is that many Americans will take a significant pay cut in their retirement years, making it difficult for them to adequately prepare financially for rising medical costs and longer anticipated life spans," Jeffrey Carney, president of Fidelity Personal Investments, said in a statement.

The index showed that younger working American households -- those whose primary decision makers are ages 25 to 40 -- are typically on pace to replace an estimated 55% of projected preretirement income when they retire. That compares with 63% for households with midlife decision makers ages 41 to 54, and 62% for preretiree households with decision makers age 55 and older.

Overall, the index found that 16% of working Americans haven't started saving for retirement.

The younger adult households have typically saved $9,000 toward retirement, and contribute $92 each month toward that goal, the index showed. Twenty-one percent of working younger adults have yet to start saving for retirement.

The midlife households typically have saved $30,000 toward retirement and contribute $187 a month. Fourteen percent of working midlife adults have yet to start saving. Preretiree households typically have saved $60,000 and contribute $229 each month. Eleven percent of working preretiree adults have yet to start saving.

The index, which Fidelity said is the first of its kind, measures retirement readiness based on a survey of more than 1,900 American households. Fidelity expects to report its index findings twice a year.

Before you accept an offer on your home, it’s not a bad idea to talk with your REALTOR® under what terms you will accept an offer, aside from the price and timeframe for move out. How many safeguards can you or your real estate agent write into your acceptance verbiage when countering on an offer to purchase your home? As many as you want to or need to. Oftentimes, homeowners who list their homes for sale are so overwhelmed by the response to their home, that several offers being thrown at them at once makes them accept one with not a lot of thought to protecting themselves beyond the usual lengths of time given for inspections and a designated close of escrow date.

• If your buyer is not pre-approved (not just pre-qualified) for a loan, you may write into your acceptance a contingency stating that your buyer obtain a full loan approval (pending the appraisal) within a week or two after acceptance. A pre-approval is a formal loan approval, stemming from a completed and submitted loan package, with its terms stating that the buyer is approved to buy a home up to a certain price, considering the funds at hand and the loan amount acceptable to the lender. All that need to be filled in is the property address. If an extra day or two is needed for the approval, it shouldn’t be a problem to extend that part of your agreement. If your buyer is nowhere close to an approval by that date, however, it’s wise to continue marketing your home for back-up interest.

• You may inform your agent that you will not consider any contingent offers hinging on the successful sale of a buyer’s current home, unless their home is already in escrow (this would be "contingent upon the successful close of escrow"). Even then, you can write in that their buyer must be non-contingent and must obtain formal loan approval within the same time frame, avoiding a "domino effect" with all escrows falling out in rapid succession.

• If you anticipate a disorganized move-out (and who doesn’t?), hoping to leave time for a slow transfer of furniture and belongings, have your agent counter the escrow time as "close of escrow plus two days," or something similar, so that you can pay a daily rental fee to the new owners, allowing extra time for the move. If you are purchasing a new home, leaving a cushion of time is a very wise move, since completion times are often estimates only.

• If yours is a divorce situation and nothing is yet finalized on that count, make sure that your Realtor arranges for the buyers’ funding check be written to both you and your spouse (if you have owned the house jointly) and placed in a trust account, for disbursement according to the final divorce agreement. This is a time when you don’t need even more conflict added to the equation.

• Make a list of all of the items that are not considered a part of the purchase price before offering your house for sale and give them to your agent. Most items affixed to your property remain there and are considered part of the real estate, so it is best to remove any you plan to take with you before any potential buyers even see your home. If you are currently undecided as to which you’ll take or leave, these items can become bargaining tools later on, when an acceptable offer comes through. Items like custom-made mirrors, heirloom light fixtures, pool equipment, workshop benches, garage storage units, and area rugs cut specifically for a certain room, are some of the more commonly asked-for goodies.

Preparing yourself for the unexpected is probably one of the more important favors you can do for yourself when selling your home. Going over your ground rules for acceptance can save time, emotions, and hassling over the details when all you really would like to concentrate on is what household stuff you want to get rid of before packing. Sit down with your Realtor before your listing hits the multiple listing service displays, and discuss your parameters, so that you are ultimately the one in the driver’s seat when an acceptable offer presents itself.

Vital Components in the Contingency Purchase -- If you're like a lot of Americans, you've got to sell your current home before you consummate the purchase of the new one. But how important is it to "convince and keep convincing" the seller that you're the best buyer for him? And what if your home doesn't sell within the prescribed timeframe, would the contract be void? And if so, what level of cajoling would be required to renegotiate with the seller at that point?

Yes, the contingency purchase is fraught with questions. That's why the buyer must be aware of two vital components --- the importance of timely contract negotiations as well as the "woo factor." The former means that the buyer must be aware of contract expiration dates and renegotiate with the seller prior to time running out. Less concrete, but just as vital, the "woo factor" means that to the degree the buyer inconveniences the seller in a contingency sale, a corresponding amount of placating and possible concessions will be required from the buyer. Much like the role wooing serves in the process of courtship and marriage, applying the "woo factor" in a contingency purchase should create a higher success rate in the relationship between buyer and seller and help soften the rough edges should things not go as planned.

Let's use the following scenario as an example.

You made an offer several months ago. The offer was not only contingent upon selling your current home, but was also contingent upon receiving a certain amount of equity to do so. (This, by the way, is advisable, especially if you're concerned that the net proceeds you'll receive from the sale might be on the short side. It helps protect you should the sale encounter unexpected expenses in the form of work repairs, closing costs, making you short on funds available to close the second purchase.)

It's now three months later. The closing date specified on the purchase agreement for your new house has come and gone; and you're a bit leery about communicating the bad news to the seller---that your house STILL hasn't sold. Here's the first $64,000 question: Is it necessary to extend for you to sign another purchase agreement with the seller? The winning answer is "yes, it is," because when you were unable to perform on the contract, remove the contingency, and close on the sale on or before the date specified, the contract became void. The seller doesn't have to sell to you, you don't have to buy the house. In essence, all bets are off!

Here's the second important question: When should the contract-savvy buyer approach the seller? Obviously, before the specified closing date occurs. The good news is that prior to the contract's expiration, all you'd have to do is amend (in writing and with both party's approval) the closing date on the purchase agreement. No new contract to re-write; no other negotiations required.

Here's why. Once the existing contract of sale is void, you will need to negotiate an entirely new agreement with the seller. That means that the sales price could change, and, in a heated seller's market, the terms could become more restrictive for the buyer. In fact, the seller might decide not to sell the house to you at all! (Now THERE'S a motivating factor to keep the lines of communication open and your contract knowledge razor sharp!)

But don't forget the "woo factor." Your focus should be on creating a win/win situation---one with full disclosure to the seller about your situation, in a friendly, confident manner that reinforces the seller's decision to stick with you as his buyer.