Hurricane Florence: Nearly $30 Billion in Estimated Losses

By Susanne Dwyer

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Earlier this month, Hurricane Florence blasted through the Carolinas and Virginia, leaving a path of flood and wind damage in its wake.

According to an analysis by real estate data provider CoreLogic, residential properties in the Carolinas and Virginia sustained between $19-$28.5 billion in damage, which includes impact from both inland flooding and storm surge. Of that amount, an estimated $13-$18.5 billion is in uninsured losses. Flood losses insured by the National Flood Insurance Program (NFIP) are estimated to be $2-$5 billion, and wind losses are estimated to be an additional $1-$1.5 billion.

In total, CoreLogic estimates that flooding and wind damaged 487,000 residential homes in North Carolina, 109,000 in South Carolina and 28,000 in Virginia.

The House recently passed a five-year FAA reauthorization with a bill—the Aviation, Transportation Safety, and Disaster Recovery Reforms and Reauthorization—that includes relief funding designed to expedite recovery efforts for Florence-impacted areas. The FAA’s current authorization was set to expire on September 30; however, the House approved a one-week extension and the Senate is expected to vote shortly (at press time), according to Aviation International News.

“…Even today, over a week after the storm made landfall, flooding remains a significant concern for families in both North and South Carolina,” said NAR President Elizabeth Mendenhall in a statement. “In these times, we are reminded of the importance of peace of mind for property owners with access to quality and affordable flood insurance, and maintain our call for Congress to pass responsible, long-term NFIP reauthorization. We commend the House for passing H.R. 302, and urge the Senate to take up this important legislation quickly.”

Dominguez_Liz_60x60_4cLiz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

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Nancy Wey
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5 Secrets for Getting the Best Last-Minute Travel Deals

By Susanne Dwyer

Summer is slipping away, and if you’re feeling the heat but think you’ve missed the boat on vacationing, the consumer editors at Reader’s Digest say it’s not too late to find a bargain.

Granted, the best deals on air travel and some vacation packages are offered months in advance. But Digest editors wrested a few cool tips from Toronto-based travel agent Brian Simpson on getting the best deals on last-minute travel:

Don’t confuse “last-minute” with “short notice.” Last-minute travel is generally accepted to mean short-notice travel, taking place within about 14 days from when you booked. However, short-notice travel means you show up at the airport and buy your ticket, as in many a rom-com movie. This method will cost you an arm and a leg, but savings of 30 to 50 percent are fairly easy to find if you can book two weeks before you pack.

Airfare deals need the most sleuthing. The best last-minute deals are often found in package deals, which include the airfare. Last-minute deals on airfare alone are rare, although tour operators needing to fill a charter flight will sometimes offer really low prices, so that’s the place to start looking if you’re looking for late-date airfare.

Mid-week travel is best. Traveling on Tuesday, Wednesday or Thursday can save you big bucks no matter how far ahead you book. For last-minute travel, it’s crucial, so plan a Wednesday to Wednesday vacation if you can.

Be savvy about last-minute hotel deals. The best path for late-date hotel deals may be with Priceline, where you can name your price. Hotels like it because it helps them to fill empty rooms. But you won’t know which hotel has “won” your business until you’ve accepted the deal, so it may not be the best choice if you are really choosy.

Last-minute travel is best for adventurers. You’ll find the best deals if you are willing to take a bit of potluck about destination. The search may be less successful if you’re stuck on one place and have no flexibility on vacation dates.

For the latest real estate news and trends, bookmark RISMedia.com.

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From: Home Spun Wisdom

    

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Beware Location Remorse: Over a Third Have ‘Neighborhood Regret’

By Susanne Dwyer

You can change a house—location is tougher.

According to new research by Trulia, 36 percent of Americans have “neighborhood regret,” or would have moved to another neighborhood than the one they reside in today. The feeling is heightened in metros, where 46 percent are dissatisfied with their pick, but less pronounced in rural areas (31 percent) and the suburbs (30 percent) The portal surveyed 1,000 Americans in Austin, Chicago and San Francisco who moved in the past three years.

What makes a neighborhood suitable? Forty-eight percent of those surveyed were motivated by the “vibe,” 37 percent were affected by crime rates, and another 37 percent were attracted to easier travel to work. Attributes that led to regret? Lack of public transit, noise and traffic.

Is your neighborhood a problem? For future moves, prepare through research. Look up neighborhood photos—something just 38 percent of those surveyed did—and plan a time to visit. Only 37 percent explored the neighborhood’s popular spots, and 47 percent did not go at night. Remember, as well, that your agent is an expert on the local market. Contact them for help with your move.

For more information, please visit www.trulia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

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Nancy Wey
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Housing in 2020: Construction Costs Grow, Mortgage Rates Slow

By Susanne Dwyer

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Where will housing be in 2020? According to the latest Metrostudy predictions, if all continues on its current track, construction costs could continue to increase, and mortgage rates could reel in.

While rates have increased in the last six months, impacting affordability, the rise is not significant according to historical trends, says Mark Bound, chief economist and senior vice president at Metrostudy, a provider of primary and secondary market information to the housing and residential construction industries. In the long term, Boud predicts mortgage interest rates will top out at 5.8 percent in 2020 and 2021, eventually being pulled down by slower economic growth—and because of tighter lending practices, the market environment will not become as dire as the last housing bubble.

As for inventory, it is significantly under-supplied, while homes are increasingly overvalued; however, the risk of a price collapse is small due to the tight market, and Boud expects the cycle of under-supply to plateau in 2020. The lack of new inventory is, in part, in response to trade increases, as many of the imposed tariffs—specifically the 20-plus percent tariff on lumber imports, and 10 and 25 percent tariffs on aluminum and steel imports, respectively—directly impact construction efforts.

These factors could lead to an increase in overall construction timelines, as well as an increase in construction costs by at least $2,000 per house, according to Boud. More homes in the upper price ranges are being built, while inventory under $400,000 is lower, in some cases. Overall, the national market is becoming top-heavy, which typically only occurs where land is more expensive, such as in California, Boud says.

Remodeling activity continues to rise in response to homeowners staying in their homes for longer, as well as the continuing trend toward purchasing existing homes, which triggers renovations. According to Boud, this is most common in coastal markets, or markets that have high appreciation rates, such as Texas.

Something to watch? Inflation. Boud says inflationary pressures are slowly building—inflation rose from 2.4 percent in March to 2.9 percent in August—but in a few years, the national debt could slow economic growth, which, in turn, could slow down rising interest rates.

Another concern? The current downward trend of the 2-10 Treasury yield spread, which could see negative figures in about a year, may be a sign that a recession is in the cards.

However, the current economy is healthy, Boud says. In the past 12 months, 2.4 million jobs have been generated, increasing demand for housing and pushing the unemployment rate down. Additionally, housing starts are fairly stable, forecasted to be 1.28 million in 2018, and increasing to 1.33 million in 2019 and 1.345 million in 2020, before plateauing.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
281-455-2893

401(k) Auto-Enrollment Connected to Early Withdrawals, With Housing Implications

By Susanne Dwyer

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With Social Security trust fund reserves waning—predicted to be depleted by 2034, leaving Social Security unable to maintain full scheduled benefits—and the number of retirees expecting to receive benefits increasing, more and more Americans are relying on 401(k) savings to support their retirement living. In fact, Statista estimates there are 41.2 million households who presently own a 401(k) plan in the U.S.

How does auto-enrollment fit in with these tax-advantaged savings accounts? There’s a clear benefit, as recently determined by 401(k) record-keeper Alight Solutions LLC in its 2017 Trends & Experience in Defined Contributions Plans report. Far more individuals contribute to a 401(k) with an auto-enrollment feature (85 percent) than to plans without it (63 percent).

While that should lead to higher savings rates and stronger financial health for future retirees, there is a glaring concern: Increases in auto-enrollment are leading to more early withdrawals. According to Retirement Clearinghouse LLC, over 60 percent of 401(k) participants with balances below $10,000 liquidate their accounts after leaving a company, reports the Wall Street Journal.

What’s causing this increase in withdrawals (also known as leakage)? Job changes lead to low 401(k) balances, which are largely cashed out due to company payout checks that can easily be deposited. The alternative? Having to fill out burdensome paperwork to transfer the funds into a tax-advantaged account. Others use their funds as a type of loan regardless of penalties incurred.

Although small loans or early withdrawals may not seem like much in the grand scheme of funds necessary to support retirement living, these can add up to a costly dip in long-term savings. While statistics by the University of Pennsylvania’s Wharton School show that most 401(k) borrowers pay themselves back (with interest), 10 percent default on nearly $5 billion per year.

How will this impact retirement-incentivized real estate? A survey conducted last year by The Hartford Advance 50 Team and MIT AgeLab found that 73 percent of surveyed adults over 45 strongly agreed with the statement “What I’d really like to do is stay in my current residence for as long as possible.”

That may not be achievable for a majority of retirees. Less funds to support retirement living may lead to more move-down buyers, as retirees struggle to pay off remaining mortgage debt on bigger homes while also maintaining their current costs of living. Additionally, aging in place no longer means simply staying in their current home, as improvements are necessary to ensure their safety and comfort, and these modifications can be costly.

Independent living in a safe format is merely one consideration. According to a Merrill Lynch Finances in Retirement Survey last year, the average cost to retire has increased to $738,400. The average balance in a 401(k) account is $102,900, according to Fidelity.

How much does auto-enrollment and early withdrawals impact retirement moving trends? Participating employees are more likely to reduce their potential auto-enrollment gains by as much as 42 percent, withdrawing an average of $850 more than employees who voluntarily enroll. This could lead to massive losses in retirement savings down the road.

When taking overall auto-enrollment savings into consideration, however, those who participated saved, on average, $1,200 more in eight years (in 2004 dollars) compared to employees hired only a year earlier but who were required to sign up on their own, according to the Alight report. Additionally, companies offering auto-enrollment are largely converting more employees, who would not typically contribute, into retirement savers.

Younger workers should start seeking employment with companies that offer 401(k) auto-enrollment now, and should refrain from pocketing low balances should they transfer jobs or withdrawing until they have reached retirement age. Additionally, in order to truly benefit from auto-enrollment and build up savings, Congress may have to impose added restrictions on low-balance payouts in response to job transitions, as well as make it easier for auto-enrolled contributors to transfer funds without the hassle of complex paperwork.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
281-455-2893

Challenged by a Down Payment? The Easiest Markets to Save For

By Susanne Dwyer

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One of the biggest challenges for first-time homebuyers is saving.

Coming up with a down payment is a hurdle for the majority of millennials, shows study after study—but, there are areas where the average earnings are enough to save sufficiently, according to an analysis recently released by RealEstate.com. The easiest market? Chicago, where the average first-timer can save 20 percent for a starter in just over three years.

1. Chicago, Ill.
Annual Household Income for Millennials: $50,500
Annual Millennial Savings: $10,821
Median Starter Value: $177,300
Down Payment (20%): $35,460
Savings Timeline: 3 years, 3 months

2. Dallas-Fort Worth, Texas
Annual Household Income for Millennials: $50,600
Annual Millennial Savings: $10,843
Median Starter Value: $185,400
Down Payment (20%): $37,080
Savings Timeline: 3 years, 5 months

3. Detroit, Mich.
Annual Household Income for Millennials: $43,100
Annual Millennial Savings: $5,388
Median Starter Value: $96,700
Down Payment (20%): $19,340
Savings Timeline: 3 years, 7 months

4. Baltimore, Md.
Annual Household Income for Millennials: $54,300
Annual Millennial Savings: $11,636
Median Starter Value: $214,000
Down Payment (20%): $42,800
Savings Timeline: 3 years, 8 months

5. Indianapolis, Ind.
Annual Household Income for Millennials: $39,400
Annual Millennial Savings: $6,567
Median Starter Value: $122,500
Down Payment (20%): $24,500
Savings Timeline: 3 years, 9 months

6. Pittsburgh, Pa.
Annual Household Income for Millennials: $41,700
Annual Millennial Savings: $5,212
Median Starter Value: $103,600
Down Payment (20%): $20,720
Savings Timeline: 4 years

7. Cleveland, Ohio
Annual Household Income for Millennials: $42,900
Annual Millennial Savings: $5,362
Median Starter Value: $109,600
Down Payment (20%): $21,920
Savings Timeline: 4 years, 1 month

8. St. Louis, Mo.
Annual Household Income for Millennials: $43,200
Annual Millennial Savings: $5,400
Median Starter Value: $119,900
Down Payment (20%): $23,980
Savings Timeline: 4 years, 5 months

9. Austin, Texas
Annual Household Income for Millennials: $50,700
Annual Millennial Savings: $10,864
Median Starter Value: $249,700
Down Payment (20%): $49,940
Savings Timeline: 4 years, 7 months

10. Washington, D.C.
Annual Household Income for Millennials: $67,900
Annual Millennial Savings: $14,550
Median Starter Value: $343,000
Down Payment (20%): $68,600
Savings Timeline: 4 years, 9 months

The analysis factored in first-time homebuyers’ household income (median), plus the cost of a down payment on a median starter. (Twenty percent is ideal, but not a requirement.)

“Contrary to popular belief, millennials want to buy homes, but high home prices, low inventory and stagnant wage growth are some of the many factors that may be driving would-be buyers into delaying homeownership,” says Justin LaJoie, general manager of RealEstate.com. “However, in certain U.S. housing markets first-time buyers can find some relief; they just need to know where to look.”

RealEstate.com is part of Zillow Group.

For more information, please visit RealEstate.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
281-455-2893

Disruptor Roundup: Divvy Takes on Rent-to-Own

By Susanne Dwyer

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Editor’s Note: The Disruptor Roundup analyzes companies implementing unconventional models.

Divvy
This tech-powered, rent-to-own platform was launched at the end of 2017, and provides consumers with the ability to transition from renting to homeownership with a three-year program that amasses a down payment within its required monthly payments. Currently available in Atlanta, Cleveland and Memphis, Divvy is looking to expand to other markets.

Divvy purchases homes on behalf of consumers. There are, however, restrictions. Divvy cannot purchase and lease condos, non-bank approved short sales, auction properties, manufactured or mobile homes, undeveloped lots, homes in pre- or mid-construction or properties with problematic conditions that require extensive maintenance.

How does the program work? Applicants must first be preapproved and undergo a thorough underwriting process that requires photo identification, tax returns, recent bank statements and a credit check. This process typically takes between 24 hours and three business days, according to the Divvy website.

In addition to rent, Divvy also charges “equity credits,” which make up about 25 percent of the monthly payment and are used as down payment funds at the end of the leasing period. Additionally, 5 percent of the monthly payments go toward maintenance funds, to be used for any home repairs, which applicants must address themselves, as Divvy does not function as a traditional landlord.

The qualifications? Candidates must:

  1. Have been employed for the last 12 months
  2. Have an average monthly income of at least $2,300 per month
  3. Be able to comfortably afford a Divvy monthly payment (rent, equity credits, maintenance funds)
  4. Have a credit score of at least 550
  5. Have had any bankruptcies discharged at least 12 months prior to applying
  6. Have at least $1,300 saved for a down payment

The cons? First, Divvy customers may only use partnered agents, which highly limits buyers. How are these agents chosen? Divvy does not provide guidelines on its website, and was not available for comment.

Additionally, while this incentivizes homeownership for prospective buyers who have trouble building up a down payment, the leasing program is more of a forced savings program in which they risk losing out on funds if they break the lease and choose not to purchase the home. Divvy will only refund 50 percent of the total dollars of equity credit if the three-year lease is broken, and, at closing, deducts 1.5 percent of the applicant’s equity credits in order to cover its own selling costs.

Buyers might also be wary of Divvy’s static home value projection, which estimates how much the property will be worth in three years. It can be difficult to ascertain whether buyers are truly leasing to buy at fair market value three years prior to the actual time of purchase.

As Divvy does not provide mortgage services, buyers will still need to be approved for a loan at the end of the lease period, which brings up additional questions regarding the home’s value and appraisal conditions. Divvy can report on-time rental payments to the credit bureaus during the three-year lease in order to help applicants who wish to increase their credit score before purchasing, improving their chances of being able to qualify for a home loan.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
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What Are the Worst Invasive Plants—and How Can You Stop Them?

By Susanne Dwyer

Invasive plants can ruin a perfectly functioning ecosystem, creating issues for years and potentially changing landscapes forever.

The key to controlling invasives is to be sure they don’t get where they don’t belong, according to The Nature Conservancy (nature.org).

The environmental nonprofit says that the best way to fight invasive species is to prevent them from occurring in the first place. Every consumer can play a role in stopping the introduction and spread of invasive species.

The Conservancy says everyone can help protect native plants and animals by following these six easy guidelines:

  • Verify that the plants you’re buying for your yard or garden are not invasive. Replace invasive plants in your garden with non-invasive alternatives. Ask your local nursery staff for help in identifying invasive plants.
  • When boating, clean your boat thoroughly before transporting it to a different body of water.
  • Clean your boots before you hike in a new area to get rid of hitchhiking weed seeds and pathogens.
  • Don’t “pack a pest” when traveling. Fruits and vegetables, plants, insects and animals can carry pests or become invasive themselves. Don’t move firewood (it can harbor forest pests), clean your bags and boots after each hike, and throw out food before you travel from place to place.
  • Don’t release aquarium fish and plants, live bait or other exotic animals into the wild. If you plan to own an exotic pet, do your research and plan ahead to make sure you can commit to looking after it.
  • Volunteer at your local park, refuge or other wildlife area to help remove invasive species. Help educate others about the threat.

So what are some of the most invasive species? The Smithsonian says purple loosestrife is one of America’s most pervasive invasives. Purple loosestrife can become dominant in wetlands, producing as many as two million wind-dispersed seeds annually with underground stems growing at a rate of one foot per year.

Japanese honeysuckle is another aggressive vine prolific throughout much of the East Coast that smothers, shades and girdles other competing vegetation, the Smithsonian says.

In the Southeast, kudzu grows at a rate of up to one foot a day and 60 feet annually, smothering plants and killing trees by adding immense weight, girdling or toppling them.

For the latest real estate news and trends, bookmark RISMedia.com.

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From: Home Spun Wisdom

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
281-455-2893

Partnering IRA Funds: An Alternative Way to Fund Your Real Estate Investment

By Susanne Dwyer

Did you know you can partner with other funding sources to increase your investment potential? Self-directed IRAs are the only retirement arrangements that allow individual investors the freedom to pursue alternative investments, such as real estate. Investing in real estate with a self-directed IRA offers many benefits to those who are looking for creative ways to save for the future. Investors have complete control over their investment choices. Unlike other IRAs, you’re not limited to stock, bonds or mutual funds. Self-directed IRAs provide the opportunity to save money for the future on a tax-deferred or tax-free basis. In addition, an IRA is considered a separate entity that can conduct business with others. This is a common strategy used in real estate investments. The process is fairly simple, but be sure to adhere to IRA regulations to avoid engaging in any prohibited transactions.

How do I partner with others to purchase real estate using a self-directed IRA?

  1. Identify the partner you would like to invest with.
  2. Perform your due diligence and confirm that the investment fits your strategy.
  3. Combine your self-directed IRA fund with other funds to purchase the property.
  4. Your IRA will own a percentage of the property and must be stated on the title when the transaction is recorded.
  5. All income and expenses (on a proportionate basis) from the property flow in and out of your IRA and not your personal finances.
  6. If the property is sold, your IRA receives the portion of the proceeds proportionate to the percentage of ownership.

A self-directed IRA can partner with anyone at the time of initial purchase, but after the transaction is complete, the IRA cannot conduct any business with a disqualified person. Doing this could lead to significant tax penalties.

The following people are considered disqualified persons:

  • You
  • Your spouse
  • Your lineal ascendants and descendants, and their spouses
  • Any person providing plan-related services (custodians, advisors, fiduciaries, administrators)
  • Any entity (business, corporation, partnership) of which you own at least 50 percent, whether directly or indirectly

What are the ways in which I can take advantage of the partnering strategy to help me save for retirement?

  1. Partner With Another Investor
    Investors are on the lookout for new opportunities, and networking with like-minded individuals can be a great way to find an investment partner. Partnering with a fellow investor offers the potential to learn from each other, as well as disperse risk between two people.
  1. Partner With a Relative
    While you are not allowed to buy from/sell to relatives, as they are considered disqualified persons for these purposes, you do have the option of partnering with them to purchase a new investment. This can be a great way to save for retirement together with a loved one.
  1. Partner With Yourself
    It is possible to partner your self-directed IRA funds with your personal savings for the purchase of a new asset, such as a real estate property.
  1. Partner With Another Self-Directed IRA
    Partner your account funds with the funds in another IRA to maximize your purchasing power. Find another motivated retirement investor to explore your possibilities.
  1. Partner With a Group
    Sometimes partnering with one account, one investor or only yourself will not provide enough funding for the investment you are interested in. In this case, you can partner with a group! Partnering can be a great tool for retirement investing, but it is important that you understand how to utilize this strategy for success.

It’s Easy to Get Started
All you have to do to get started is open an account and fund it. There are three ways to fund your self-directed IRA: transfer or rollover an existing retirement account, such as an employer’s 401(k), into a self-directed IRA; or make regular, annual contributions to your account. Once your account has cash in it, you can start investing immediately! As you read in this article, you can partner with other investors until you have enough cash to invest in real estate on your own. Download our free report about partnering your self-directed IRA with real estate here to learn more.

Disclaimer: Before you invest in this business sector using your IRA, it is best to consult with your investment, legal and tax advisor. Entrust does not endorse or recommend any of these investments. Proper due diligence by you, the IRA holder, is recommended before entering into any transaction.

For the latest real estate news and trends, bookmark RISMedia.com.

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From: Home Spun Wisdom

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
281-455-2893