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A divestiture, also known as a divestment, involves the liquidation of a company’s assets, such as building or intellectual property, or a part of its business, such as a subsidiary. This can occur through several different means, including bankruptcy, exchange, sale, or foreclosure.

Divestitures can be partial or total, meaning some or all of the company could be spun off or otherwise divested, depending on the reason for the company getting rid of its assets. Corporate mergers and acquisitions are a common example of one type of divestiture.

What Are Reasons a Company Would Divest Itself?

Often a divestiture reflects a decision by management that one part of the business no longer helps it meet its operational goals. A divestiture can be an intelligent financial decision for a business in certain situations.

If one aspect of a business (e.g., a product line or a subsidiary) isn’t working, has become unprofitable, or is likely to soon consume more capital than it can create, then instead of letting that be a continued drain on resources, a company can divest.

This not only does away with the troublesome aspect of the company, but also frees up some money the company can put toward more productive endeavors, such as new research and development, marketing, or new product lines.

There are many other potential reasons for a company to divest itself of a particular aspect of its business as well. The growth of a rival may prove overwhelming and insurmountable, in which case divesting might make more sense than continuing to compete.

A company may choose to undergo a divestment of some sort, such as closing some store locations, in order to avoid bankruptcy, to take advantage of new opportunities, or because new market developments might make it difficult for part of the company to survive.

Companies also sometimes must divest some of their business because of a court order aimed at breaking up monopolies. This can happen when a court determines that a company has completely cornered the marketplace for its goods or services, preventing fair competition.

💡 Quick Tip: All investments come with some degree of risk — and some are riskier than others. Before investing online, decide on your investment goals and how much risk you want to take.

What Happens in a Divestiture?

When a divestiture involves the sale of part or all of a company, the process has four parts. The first two parts involve planning for the actual divestment transaction itself. Once management decides which part of the company to divest and who will be buying it, the divestment can begin.

1. Monitoring the Portfolio

When pursuing an active divestiture strategy, the company’s management team will review each business unit and try to evaluate its importance to the company’s overall business strategy. They’ll want to understand the performance of each part of the business, which part needs improvement, and if it might make sense to eliminate one part.

2. Identifying a Buyer

Once the business identifies some or all of the company as a potential divestment target, the team moves on to the next problem that logically follows: Who will buy it?

The goal is to find a buyer that will pay enough for the business to cover the estimated opportunity cost of not selling the business unit in question. If the buyer does not have the liquidity to make the purchase with cash, they might offer an equity deal or borrow money to cover the cost.

3. Executing the Divestiture

The divestiture involves many aspects of the business, including a change of management, company valuation, legal ownership, and deciding which employees will remain with the company and which ones will have to leave.

4. Managing the Financials

Once the sale closes, attention turns to managing the transition. The transaction appears on the company’s profit-and-loss statement. If the amount that the company receives for the asset it sells is higher than the book value, that difference appears as a gain. If it’s less the company will record it as a loss.

The company will typically share the net impact of the divestiture in its earnings report, following the transaction.

What Are The Different Types of Divestitures?

There are several different ways companies can define divest for themselves. A few of these options include:

•   An equity carve-out, when a company can choose to sell a portion of its subsidiaries through initial public offerings but still retain full control of them.

•   A split-up demerger, when a company splits in two, and the original parent company ceases to be.

•   A partial sell-off, where a business sells one of its subsidiaries to another company. The funds from the sale then go toward newer, more productive activities.

•   A spin-off demerger, in which a company’s division becomes a separate business entity.

What Causes a Company to Divest?

A divestiture strategy can be part of an overall retrenchment strategy, when a company tries to reinvent itself by slimming down its activities and streamline its capital expenditures. When that happens, the company will divest those parts of the business that are not profitable, consuming too much time or energy, or no longer fit into the company’s big-picture goals.

Factors that could influence a company to adopt a divestiture strategy can be lumped into two broad groups:

External Developments

External developments include things outside the company, such as changing customer behavior, new competition, government policies and regulations, or the emergence of new disruptive technologies.

Internal Developments

Internal developments include situations arising from within the company, such as management problems, strategic errors, production inefficiencies, poor customer service, etc.

Divestiture Strategy Example

Imagine a fictitious company called ABC was the parent of a pharmaceutical company, a cosmetic company, and a clothing company. After some time and analysis, ABC’s management determines that the company’s financials have begun deteriorating and they need to make a change in the business.

Following the four-step process above, they begin by finding the weakest points of business. Eventually, they decide that the pharmaceutical branch of the company is under-performing and would also be the easiest for the company to divest. It makes more sense to stick to clothing and cosmetics.

After identifying a buyer (perhaps a larger pharmaceutical company or a promising startup looking to expand), the divestment transaction occurs. The employees who work in the pharmaceutical branch either lose their jobs, or they get roles working for the new owner of that part of the business. The cash infusion that ABC gets as a result of the sale of its pharmaceutical branch will go toward new marketing efforts and creating new product lines.

💡 Quick Tip: It’s smart to invest in a range of assets so that you’re not overly reliant on any one company or market to do well. For example, by investing in different sectors you can add diversification to your portfolio, which may help mitigate some risk factors over time.

The Takeaway

Divesting is essentially the opposite of investing. It involves a company selling off parts of its business. A divestiture can have some positive outcomes on the value of a company, and there are several business reasons that a company would choose to divest. Depending on the circumstances, this process could theoretically be either a positive or a negative for shareholders.

Investors could see news of a divestment as a sign that a company is struggling, leading them to sell the stock. While this initial reaction could be one likely outcome, the company could eventually wind up doing even better than before if it manages itself better as a leaner company. In either case, the divestiture is one factor that investors can use in their analysis of that company’s stock.

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Source: sofi.com

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As the world navigates the COVID-19 crisis together, there have been far-reaching economic impacts. With unprecedented unemployment rates and a shaky stock market, some are questioning whether or not the FIRE movement will continue to exist. 

In case you didn’t know, the FIRE (Financial Independence/Retire Early) movement is a collection of avid savers that are aggressively investing in pursuit of early retirement decades before hitting 65. With the most recent economic downturn, some critics are skeptical of the community’s ability to continue moving forward amidst continued economic uncertainty.  

What’s Ahead:

Is it still possible to retire early with the financial impact of COVID-19?

The major question that critics, and those in the FIRE community, have is whether or not is it still possible to retire early with the current economic crisis. Has COVID-19 crushed the early retirement dreams of everyone in the community?

The economic impacts of COVID-19 have been pronounced. But there is hope. There have been several examples of early retirees that are successfully navigating the financial impacts of the pandemic. Some have even taken the leap into early retirement in the midst of the COVID crisis. Even with the significant impacts of COVID-19, success stories show that it is still completely possible to retire early.

The quickly changing economic landscape can be a hurdle. But as an early retiree, you should expect several big market dips throughout early retirement. If you plan to retire for decades, it is only a matter of time before you experience a major market disruption. In fact, six major market collapses have been recorded throughout U.S. history. In those crashes, the stock market has lost over 10% of its value. These crashes remind us that investing in the stock market is fraught with risk. 

In 2008, the stock market took a scary nose dive that signaled the start of the Great Recession. At the time, the nerve-wracking sight didn’t kill early retirement dreams. With a more realistic grasp on the downside of being dependent on a paycheck during a financial crisis, many joined the FIRE movement as the economy began to recover. Since the crash in 2008, many people have been able to build their net worth and retire early successfully. 

As we live through another major economic downturn, the importance of achieving financial independence is more pronounced than ever. Although it was never easy, it is still possible to retire early. The market will likely recover at some point, just as it has throughout the rest of history. With that, retiring early should remain a possibility in your life if you want to pursue it. 

How to make sure you can still retire early

Of course, you will need to make some adjustments to compensate for the impact of this crisis. But if you are pursuing early retirement, it is still a possibility. 

If you are struggling to stay on track to your FI goal, here are some strategies that can help you create more realistic FIRE goals. 

Evaluate your investment strategy

An essential component of a successful early retirement is a carefully executed investment strategy. Since you will be relying on your investments for an income in early retirement, you must create a portfolio that accounts for your risk tolerance. Otherwise, every market dip will leave you in a panic. 

With the importance of a strong investment strategy in mind, you may want to consider using an app like Public. Public has outstanding educational tools built into the experience to help you learn more.

Many FIRE enthusiasts rely on the traditional 4% rule, which states that you can withdraw 4% of your principal balance every year. In theory, you’ll be able to safely withdraw 4% every year. But the amount that equates to can change quickly. As we saw in the dramatic market drops earlier this year, it is easy for a portfolio to lose a substantial amount of value overnight. You can lower your risk of running out of money by lowering your withdrawal rate. But if you still aren’t comfortable with that potential risk, then rebalancing your portfolio to account for your risk tolerance is a good move. 

Rebalancing to suit your priorities can be easy when using a DIY investment platform like Robinhood. With Robinhood, you can set up an investment portfolio and make trades as you wish. This can provide some peace of mind as you move forward. 

A final piece of your investment strategy that you need to evaluate is the fees. Although you may have done your research to find a low-cost taxable account, some employer-sponsored options could be riddled with fees.

Luckily, blooom can help you figure out how much you are losing to fees and how to make adjustments to minimize these fees. If you are looking for guidance surrounding your employer-sponsored plan, then check out blooom as an optimization option.

Advertiser Disclosure – This advertisement contains information and materials provided by Robinhood Financial LLC and its affiliates (“Robinhood”) and MoneyUnder30, a third party not affiliated with Robinhood. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. MoneyUnder30 is not a member of FINRA or SIPC.”

Beef up your emergency fund

Although a safe investment strategy is important, cash on hand will help you weather any financial storms that come your way. That is why you need to have an emergency fund on hand to cover expenses when the market is in the midst of a major downturn. 

While you are working, an emergency fund with a few months of expenses is likely sufficient. But if you are planning to leave the workforce, then a stockpile of cash to sustain you for several years might be in order. 

The exact amount of cash you keep on hand will vary based on your goals and risk tolerance. However, you should plan to keep your savings in a high yield emergency fund such as the CIT Savings Builder. The account offers a competitive interest rate to help your savings keep up with potential inflation risks. 

Look for expenses to cut

If you are a part of the FIRE community, then you likely have a somewhat frugal nature. Although you may enjoy the finer things in life, you know the difference between needs and wants. With that, you may need to take the opportunity to cut some wants out of your life. 

You may need to get creative when looking for expenses to cut. A few ideas to consider include running your errands on the way home from work to avoid additional transportation costs on the weekends, tackling your yard work without the help of a handyman, and tapping into your DIY side when you need to replace household items.

As you explore your options to cut expenses, consider enlisting the help of a service like Trim. The ‘personal finance assistant’ can help you cancel unwanted subscriptions and negotiate with bill providers to lower your monthly costs.  

Taking the opportunity to lower your expenses can help you stretch your savings farther.

Consider other income opportunities

Keeping your expenses low is one side of the FIRE equation. On the other side, a higher income can help you meet your savings goals more quickly. 

With the spike in unemployment, it may be a good time to consider broadening your income horizons. That means looking beyond your nine-five for income streams. Usually, this means investing in a cash flow positive rental property or building a new skill set to boost your income. But you should consider any side hustle opportunities that strike your fancy. You might try delivering groceries, selling home decor on Etsy, or becoming a juror in a mock online trial.

Get creative as you seek out other income ideas. You never know what life will throw your way!

Adjust your retirement timeline

Even if you slash expenses and boost your income, you may not meet your savings goals due to circumstances beyond your control. If you’ve lost your income as a result of the pandemic, then you will likely need to adjust your retirement timeline. 

Take a look at your net worth and the current amount you are able to tuck away into your investments each year. Once you have a better idea of your trajectory, you can line this up with your FI number. This should help you understand when you will be able to retire. 

However, the changing math can get tricky. With that, I would recommend using MU30’s FIRE calculator to play with your changing scenario. With your real numbers, the calculator can help you determine what you’ll need to do in order to retire early.

It is okay to make adjustments! Even if you aren’t able to retire as early as you would like to, you will likely be able to retire at some point if you work towards your goals. 

Consider flexible retirement plans

When you think about retirement, also consider the idea of scaling back on work. Flexible work arrangements can be the perfect gateway into early retirement. 

Instead of retiring completely when you reach FI, consider working part-time or switching to a passion project. You may not earn as much with these options, but you can continue beefing up your retirement savings before you make the jump into retirement. 

Plus, you can always return to the workforce if you need to. In many cases, you’ll be able to find a job if you want to start working again. But you’ll need to keep your skills sharp and resume updated if you are considering this option. 

In addition to considering different work arrangements, you may need to consider different living arrangements in early retirement. As the pandemic has illuminated, global travel can grind to a halt. With that, many early retirement dreams of globetrotting to exotic places have been put on hold. Consider where you would be happy to spend your newfound free time if you weren’t able to travel in early retirement.

Prepare for future economic downturns

Achieving financial independence will not happen overnight, it will take many years to reach that pinnacle. You will likely run into many bumps in the road on your way to retiring early. 

But the speed bumps don’t stop there! Once you’ve committed to early retirement, you will likely encounter more trying economic downturns. It is especially likely that you’ll encounter multiple downturns in your retirement since you’ll be retired for several decades!

As with this economic crisis, the solution is to remain flexible in your retirement. Depending on the extent of the economic damage, you may need to cut back on expenses or consider picking up a part-time job. That may mean that your retirement looks different than you originally envisioned. But a flexible attitude will keep your FIRE dreams alive and well in this downturn and the ones that will follow. 

Summary

The FIRE movement is based on the idea of living below your means and achieving a permanent level of financial stability. If you are currently on the path to FI, then you are likely in a better financial position than most. Hopefully, you have enough cash in your emergency fund to weather the storm and a flexible attitude that can keep your expenses in check. 

Although members of the FIRE community will need to stay agile in the coming months, the movement is not extinguished. In fact, it may burn even brighter in the future as more people crave the financial stability that many on the path to FI have attained. 

Read more:

Source: moneyunder30.com

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  • Moody’s strategists say high mortgage rates will weigh on the housing market for years to come.
  • They see central banks keeping monetary policy tight this year, and think mortgage rates will stay stubbornly high even after easing begins.
  • They says prospective homebuyers and homeowners looking to refinance will feel the most pressure.

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If Green Tree serviced your mortgage from 2010 to 2014, you might be due some compensation for alleged wrongdoings.

Today, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) ordered Green Tree Servicing to pay $48 million in borrower restitution along with a $15 million fine to the CFPB’s Civil Penalty Fund.

CFPB Director Richard Cordray said in a release that the company “failed consumers who were struggling by prioritizing collecting payments over helping homeowners.”

This meant borrowers who could have kept their homes instead lost them to foreclosure, despite being on payment plans to get back on track.

Pay Your Mortgage or We’ll Arrest You

  • Green Tree has been accused of some pretty bad stuff
  • Including warning delinquent homeowners of imprisonment
  • And doing little to help borrowers keep their homes
  • Along with harassing phone calls and unresponsive customer service

Green Tree has been accused of a number of abuses, including not honoring loan modification programs, delaying short sale decisions, and charging customers “convenience fees” when paying their mortgages.

Apparently homeowners with prior foreclosure relief plans had their mortgages transferred to the company where they were not maintained, and instead asked that borrowers make their original, higher monthly payments.

Additionally, the company supposedly charged customers $12 for its pay-by-phone service and pressured borrowers into using it to ensure their payments were received on time.

Even worse, delinquent borrowers who called Green Tree were automatically routed to debt collectors rather than a loss mitigation specialist.

The company’s short sale department was also “frequently unreachable and unresponsive,” and it often took two to six months to receive a response to short sale requests.

If that’s not enough, Green Tree also allegedly called delinquent borrowers seven to 20 times a day if they were two weeks or more past due, sometimes as early as 5 A.M. or as late as 11 P.M.

Some reps told borrowers they were “deadbeats” and warned them that nonpayment of their mortgage could result in arrest or even imprisonment.

It’s unclear how much compensation each borrower will receive, but victims who receive money from this enforcement action can also pursue their own individual claims against the company.

Must Convert Temporary Loan Mods into Permanent Ones

  • Assuming you managed to keep your home
  • Any temporary loan modifications must be made permanent
  • And all active foreclosures must be halted
  • While the company evaluates loss mitigation alternatives

For those who still have their homes, Green Tree must convert temporary loan mods into permanent ones.

And for mortgages already in a loan modification program, Green Tree must honor loss mitigation agreements entered into by the prior loan servicer.

If a borrower is in the process of foreclosure, it must be halted while the company reaches out to borrowers and evaluates other potential loss mitigation options.

The company has also been ordered to halt all mortgage servicing violations, including how much consumers owe Green Tree. And acknowledge the receipt of short sale requests and/or missing documents within five days.

Green Tree is also barred from transferring loans in loss mitigation in or out of the company without all the proper paperwork and records in place.

Lastly, the company has been ordered to provide access to quality customer service so borrowers can actually save their homes from foreclosure instead of being pushed toward an arrangement that compensates Green Tree.

Walter Investment Management Corp. acquired Green Tree in 2011, and in August 2015, Green Tree Servicing and Ditech Mortgage Corp. linked up to create Ditech Financial LLC, also owned by Walter.

Tip: In October 2019, New Residential (now known as Rithm Capital) purchased Ditech’s forward Fannie Mae, Ginnie Mae, and non-agency mortgage servicing rights.

In mid-2022, Ditech posted a notice regarding distribution of any unclaimed borrower funds remaining in the Ditech estate.

Source: thetruthaboutmortgage.com

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Around 19 per cent of renters say high mortgage rates are crushing their ability to buy now or have put their buying plans on hold completely, research has found.

According to a survey from The Mortgage Lender (TML), which collated views of 2,000 adults, around 12 per cent said they would continue renting until prices fell.

Around 10 per cent said that they would wait for mortgage rates to fall and nine per cent agreed that there was no point in looking to buy until mortgage rates decrease.

Nearly six per cent said they were waiting until the Bank of England’s next base rate decision before making a decision.

Predictions from analysts currently estimate that the base rate could rise to 6.5 per cent.

Around six per cent said they were progressing with their home buying plans and were making “significant compromises” to do so.

A quarter of those planning to buy said they were buying away from traditional commuter towns and nearly a third had to move further from the city centre.

Around 16 per cent were buying in cheaper locations to combat affordability constraints.

Approximately one in five said they are buying a cheaper property with more renovation needed and 12 per cent have chosen smaller properties.

Steve Griffiths, chief commercial officer at TML, said: “The journey to buying a property can be a long one, and it can easily be complicated by the ebbs and flows of the housing market, particularly when we consider the current landscape.

“Although being adaptable and regularly checking in on the base rate will serve renters well in the long term, it’s understandable that so many are feeling frustrated by their options.”

He continued: “This really highlights just how vital it is to speak to a broker early about your property ambitions. They can help breakdown how much you can afford, as well as any other available options. If it’s not the right time to buy now but you still plan to in the future, buyers need to work toward becoming ‘mortgage ready’.

“This will ensure when the time is right you are prepared to take that next step. Even in challenging times, potential buyers should remember that there are lenders that can support them, and a broker will be key in being able to help find the best deals.”

Source: mortgagesolutions.co.uk

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As the banking crisis stabilized last week, mortgage rates increased, reducing borrower demand for home loans. However, with limited for-sale housing inventory, these higher rates are primarily challenging for potential first-time homebuyers.

Overall, mortgage applications fell last week by 8.8% from one week earlier on a seasonally adjusted basis, per the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. 

This was a reversal of the previous week’s trend, when homebuyers’ loan demand increased by 5.3%. The MBA survey, which has been conducted weekly since 1990, covers over 75% of all U.S. retail residential mortgage applications. 

“Last week’s increase in mortgage rates prompted a pullback in application activity. With more first-time homebuyers in the market, we continue to see increased sensitivity to rate changes,” Joel Kan, MBA’s vice president and chief economist, said in a statement.

The MBA survey shows the average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.43% from 6.3% last week. Rates on jumbo loans (greater than $726,200) rose to 6.28% from 6.26% on a weekly basis.

Regarding the jumbo space, the spread between the jumbo and conforming 30-year fixed rates widened slightly last week to 15 basis points, tighter when compared to the past year, according to the MBA data.

“As banks reduce their willingness to hold jumbo loans, we expect this narrowing trend to continue,” Kan said. 

At HousingWire’s Mortgage Rates Center, the Optimal Blue data shows rates at 6.50% on Tuesday for conforming loans, up from 6.39% the previous Tuesday. Rates for jumbo loans increased to 6.62% from 6.48% in the same period. 

“Banking stress in the markets have gone away, so the bond market just bounced higher from a key technical point,” Logan Mohtashami, HousingWire’s lead analyst, said. “As long as the economy stays firm, we will bounce back and forth on rates.” 

Loan types 

The MBA data shows that purchase apps declined by 10% from one week earlier on a seasonally adjusted basis, and refinancings were down 5.8% in the same period. Refis comprised 27.6% of the total applications last week, up from 27% the previous week.

Meanwhile, mortgage apps declined by 6.9% in the conventional market, but decreased by 14% in the government space. 

The Federal Housing Administration (FHA) share of total applications increased to 12.7% last week from 12.3% the week prior. The U.S. Department of Veterans Affairs (VA) share fell to 11.7% from 12.8% in the same period. The U.S. Department of Agriculture (USDA) share remained unchanged at 0.5%. 

“Affordability challenges persist and there is limited for-sale inventory in many markets across the country, so buyers remain selective on when they act,” Kan said. “The 10% drop in FHA purchase applications, and the increase in the average purchase loan size to its highest level in a month, are other indications that first-time buyers have pulled back.”

Source: housingwire.com

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Hiring movers and using a moving company to help with your move has all sorts of benefits, like saving time and logistics coordination. Using these types of services is as basic as just having someone help carry boxes or entrusting the entire moving process to your movers. But how much do movers cost? How much will you need to pay for specific types of services and what’s included?

This guide on how much movers cost and the overall cost of moving will help you know what to expect so you can budget and prepare accordingly and not be caught off-guard.

How much does it cost to hire a moving company?

How much do movers cost? Unfortunately, there’s no one-size-fits-all answer to this key question. The cost of hiring movers and getting a company to help with your move depends on a variety of factors, from how far you’re moving to how much stuff you’re transporting.

To give you a ballpark figure, hiring a moving company ranges in price from $800 to $2,500. The national average cost of using movers is $1,400. But, moving company costs go up significantly if you’re moving cross country, ranging between $2,200 and $5,700.

Different companies, from local operators to major outfitters like United Van Lines, will also have different pricing structures and rates.

What does the cost of hiring movers include?

At its most basic, the cost covers labor (the movers) and the means of transport (the truck). You don’t need to go to an outside truck rental company, and you have at least one mover helping out. But, hiring movers can have all sorts of add-ons like packing materials.

What impacts the cost of hiring movers?

There are several factors that impact the cost of hiring a moving company and movers.

Time of year

The season and time of year that you move have a definite effect on how expensive your move will be. Peak moving season generally extends from Memorial Day to Labor Day weekend, meaning that the majority of people move during the summer months. In fact, roughly 70 percent of all local or long-distance moves happen during this timeframe. There are several reasons for this. For one, school is out and it’s easier to coordinate a move, especially long-distance moves when the kids aren’t in school. For another, the weather is nicer and the days are longer.

This also means that summer is a busy season for movers and costs are higher. If you plan your move in the off-seasons of fall, winter or spring, moving company prices are lower and you’ll save money.

Distance

The price to hire movers and use moving services also depends on distance and how far the movers have to travel, like moving to a different state. For a local move that’s within 100 miles of the original apartment, costs are generally lower. This is because there are fewer logistics and travel costs involved. A moving company can typically give you a quote over the phone instead of an in-person visit, and a short-distance move uses less gas and takes less time.

But, you can expect to pay much more for a long-distance move. Long-distance moving companies naturally charge more and have higher rates than local moving companies because of the travel fees associated with a long-distance move versus local moves.

For one thing, longer moves require more planning and are more complicated. The movers will typically have to come to your home and give you an in-person estimate. The more belongings you have, the bigger the truck required for the move. On a long-distance move, costs need to cover more necessities like gas, mileage, tolls and potential lodgings or essentials for the drivers and movers. You’re also paying for time. If the company charges an hourly rate, you’ll pay for all the hours the movers spend getting to the destination. For flat rates, they’ll be higher, as well, to account for the hours, miles and time invested.

Amount of goods

If you’re packing up a studio apartment and are mainly moving personal belongings, moving services cost less because they’re transporting fewer goods. But, if you’re packing up an entire three-bedroom apartment with furniture, appliances and more, it’ll take much more manpower and therefore cost more.

Number of movers

On top of paying by the hour, you’ll also pay per mover. For easy, local moves where you only need one or two movers, you’ll pay less. But, if you’re moving cross country with a three-bedroom apartment’s worth of stuff, it’ll likely require a bigger team and more experienced movers. In that case, you’re paying for the extra movers and their advanced expertise.

Size of truck

The larger the truck, the higher the cost. The size of the truck needed for your move also impacts the average cost. Smaller vehicles have better fuel efficiency and cost less due to their reduced capacity. But, bigger moves typically require larger box trucks or even semis to fit everything. Carrying bigger, heavier loads and being larger reduces the trucks’ fuel efficiency, requiring more frequent fill-ups at the gas station.

Specialty services and items

Moving fragile, unique items like grand pianos, extra vehicles or antique furniture drives the cost more since these objects require special care and attention.

Full-service moves

Full-service movers take care of pretty much everything for you during your move, from packing up your apartment to assembling furniture at your new place. But, that kind of personalized service comes at a much higher cost because it requires more hours, skills and personnel.

If you pay for labor-only movers and no additional services, you’ll keep costs down.

Packing supplies

Moving services that take care of everything for you also typically provide packing materials, but you rarely have control of the price. You can avoid these costs altogether by buying or using your own packing materials.

Accessibility or difficult locations

Movers charge a premium for more complicated moves. For example, if your new apartment is on the top floor of an older apartment building with no elevator, the movers will have to carry all the boxes and furniture up multiple flights or stairs. Typically, that can add a couple of hundred dollars to your bill.

Additional moving costs

On top of all these, you may have to pay for additional services like closing costs, using a storage unit or having the movers assemble furniture or unpack things for you.

How can I save money and reduce costs when hiring moving companies?

If you have a tight budget and need to keep costs down during the moving process, there are plenty of ways you can reduce your moving expenses.

Move on a weekday

Because of work, the majority of people plan their moves to happen on the weekend. Not only does this mean that movers have less availability, but also movers cost more on the weekends due to the increased demand.

You can usually find a better deal and more availability by moving during the week between Mondays and Thursdays.

Pack everything yourself

For an extra cost, a full-service moving company will pack all your belongings for you. But, the cost of having movers pack up your household for you can cost up to $1,000.

Avoid this charge by packing up your personal belongings ahead of the move. That way, you’re only paying for the labor of having movers load and unload boxes.

Find free packing supplies

Unless you have a ton of moving boxes and bubble wrap lying around, you’ll have to buy packing materials. Depending on how much stuff you need to pack, you may have to spend a decent amount of money on all the supplies you need.

Luckily, there are ways to find free packing materials. If you know you have a move coming up, you can start saving boxes you get in the mail in advance. People frequently get rid of unwanted packing materials on online marketplaces like Craigslist and Freecycle. Check with friends, family and acquaintances to see if they have boxes and other materials to spare. You can even request free boxes from USPS.

Don’t move at the beginning or end of the month

Since most apartment leases start or end at the beginning or end of the month, those are the busiest times for movers. By planning your move for the middle of the month, movers cost less and have more availability.

Is it cheaper to move by myself and not hire movers?

Generally speaking, yes, it’s cheaper to do a DIY move and not hire professional movers. For one thing, you don’t have to pay an entire crew of people to help you with the move. You’ll still need to pay for a moving truck, gas money, packing supplies and maybe some pizza and beer as a thank you to any friends or family members who helped out.

In some cases, you may not even need to rent a moving truck. If you don’t have a ton of stuff to move, you can usually make do with your own car and borrow a friend’s truck. But,as you get older and accumulate more belongings, you’ll likely need to get a bigger truck rental.

However, since you don’t have someone helping you with the planning and logistics of a move, you may encounter unexpected costs or expenses that you didn’t plan for or anticipate. You’ll also have the entire burden and stress of moving solely on you.

How much should I tip?

On top of the overall moving costs, it’s customary to tip the movers assigned to your move. It’s not required, but it’s good practice and generally expected as a final thank you for a job well done. It’s especially recommended to tip your movers more if the job was especially big or they had to handle fragile items. Fast, efficient service and your movers going above and beyond are also reasons to tip more. Cash is also best.

There’s no set amount since moving costs are different for each person and company. In general, you should tip between 5 and 10 percent of the total cost of the move. Another option is to tip by the hour. Anywhere from $6 to $12 per hour and per mover is a good current rate. The more movers you have and the more hours they work, the higher the tips are.

Your tip should also be big enough so all the movers, including the driver, are equally compensated. To make sure that everyone gets their share, you can pass out the tips to everyone while thanking them. Another way to thank your movers is by providing easy food like pizza and sandwiches and drinks.

The tip should also reflect the quality of the service. If lots of boxes arrived damaged, the movers got the moving date wrong or the moving truck arrived late, those are all causes for a reduced tip.

What are the benefits of hiring a moving company?

Even though using a moving company is expensive, there are many benefits to hiring movers to assist you with a big move.

Prevents injuries

From heavy boxes to giant pieces of furniture, the process of moving apartments is rife with opportunities to accidentally injure yourself or others. You could pick up a heavy box of books and hurt your back. Maneuvering heavy furniture opens the door to everything from accidentally dropping it on someone’s foot to hurting yourself rather than risking damaging the furniture. While there are certainly some items you can easily move by yourself, others it’s best to leave the pros.

Since movers do this for a living, they have more than enough experience handling heavy boxes or unwieldy furniture. Not only do they have the strength and dexterity, but they also operate as a team, working together as a well-coordinated, experienced unit to safely move items without injury or damage to themselves or the objects.

Finally, they also have the proper tools for the job. From moving dollies to hand trucks, having the right equipment reduces the risk of injury. So, why put yourself at risk of lifting that too-heavy box of books when you can call in the pros?

Saves time

Saving time is one of the biggest advantages of hiring a moving company.

Maybe you’re starting a new job on the other side of the country and need to get settled in by a certain date. Or, you’re trying to juggle a job, family and other responsibilities while planning a move at the same time. Whatever the reason, most of us already have significant other demands on our time aside from moving. Most people don’t have the benefit of hitting pause on all their other responsibilities while moving house. Moving takes a lot of time and can take anywhere from a few days to several months from start to finish. That’s where movers come in.

If you don’t have the time of day to plan and coordinate everything yourself, a moving company takes the stress of planning off your plate. Even if you do have the time, it’s nice to leave the process in the hands of professionals. By shifting the logistics of moving to your movers, you can focus on other things and not get overwhelmed.

Professional service and expertise

When your car breaks down, you take it to the mechanic. If your sink gets clogged, you call a plumber. We turn to professionals to solve all kinds of problems, so why wouldn’t you do the same for moving?

Professional moving companies are here to make the process of moving easy for you. They take care of all the heavy lifting (literally), offer quality customer service and take the burden off your shoulders. If something goes wrong or there’s an issue, they problem-solve and offer solutions. As moving experts, they know exactly how to get your belongings from Point A to Point B safely and efficiently. Everything from loading and unloading to planning out the logistics of the move, they can do for you, and you know you can trust them because they do this every day. You also know that your personal belongings are safe and are in good hands.

Hiring a moving company ensures you have an expert beside you to hold your hand, answer your questions and take care of everything for you during the move.

Reduces stress

No matter which way you slice it, moving is a stressful process. Maybe you have a short timeline and don’t have a ton of time to pack and plan. Even if you have months to plan a move, unexpected problems like delays can come up. When you hire movers, you don’t have to face and solve these problems alone, which cuts down on stress.

How much will my move cost?

Now that you know what factors impact the cost of hiring professional movers, you may wonder how much your move will cost you.

To calculate the cost of your move, you can use our moving cost calculator to get a free estimate and start creating your moving budget. As you’ve seen above, there are plenty of ways you can keep moving costs down, from packing your belongings yourself to being flexible with the season or time of the month that you move.

How much movers cost depends on the needs of your move

While some moving costs are in stone, you can take steps to reduce costs or find a moving operator that fits your budget.

Source: rent.com

Apache is functioning normally

Elliot Hoyte hosts our first 30 Under 30 Honoree interview of 2023 with Kelly Carlson. Kelly has seen massive success in Chicago’s competitive real estate markets since starting her career. On today’s podcast, she discusses her strategy for focusing on first-time home buyers and shares how she gets deals to the finish line. Kelly and Elliot also offer tips for new real estate agents and talk about the value of mentorship early in an agent’s career.

Listen to today’s show and learn:

  • Chicago’s 30 Under 30 honorees [2:17]
  • NAR’s 30 Under 30 [3:25]
  • Kelly Carlson’s application to NAR’s 30 Under 30 [4:01]
  • Giving back to the community [5:46]
  • From engineering to a career in real estate [7:47]
  • Chicago real estate markets [11:56]
  • Where Kelly got her first few deals [16:22]
  • Adding value to potential clients [20:10]
  • Working with first-time home buyers [22:52]
  • Setting expectations with buyer clients [26:10]
  • The Danish concept of hygge and how it applies to real estate [27:14]
  • The differences between neighborhoods in Chicago [29:30]
  • Covering different neighborhoods in a diverse market [31:45]
  • Kelly’s sales as a new real estate agent [32:33]
  • The value of a quality brokerage and mentorship [35:50]
  • Kelly’s advice for new real estate agents [42:00]
  • Where to find and follow Kelly Carlson [44:04]

Kelly Carlson

Creating a home is such an important aspect of life. Kelly thinks back to some of her favorite memories, and they all tie back to where she was living at the time – her childhood home on Prospect Avenue, her studio apartment in the Gold Coast, or moving in with her husband to their condo. Kelly’s passion for helping others to find their perfect home is what drives her to advocate for them during every step of the home buying and selling process.

Kelly brings a unique background to her residential clients. After graduating from the University of Illinois with an engineering degree, Kelly worked for a Big Four firm as an associate in a real estate and construction tax consulting group. She loved client services but realized she wanted to work more directly on the development side. In 2018, Kelly left to join a boutique consulting firm where she was a project manager responsible for design and construction projects for healthcare and large not-for-profit institutions. There, Kelly developed a strong understanding of the design and construction process. Her experience has taught her the importance of working hard, putting clients first, and always remembering the bigger picture.

Kelly is passionate about cultivating meaningful relationships and helping others, and it is something she strives for in her everyday encounters. Kelly joined Engel & Völkers Chicago because it is a community of professional advisors who share a similar mindset. The company culture is genuine and collaborative, not competitive or “salesy.” Moreover, she was offered an opportunity to be mentored by a top broker, an experience that has helped her jumpstart her career in residential sales.

Kelly loves that Engel & Völkers is a global brand. She studied abroad in Stockholm, Sweden, and Copenhagen, Denmark. It was there that she became enamored with the Scandinavian concept of Hygge, which embodies a feeling of contentment that comes from being around good company in a cozy setting, such as home! Kelly’s favorite place in the world (besides home) is South Africa – specifically, Babylonstoren. She even had the opportunity to visit their Engel & Völkers Shop in Cape Town during that trip!

From a young age, Kelly was drawn to the hustle and bustle of downtown, as well as the city’s beautiful architecture. She grew up in Clarendon Hills, a short train ride from the city. The time Kelly spent downtown as a child sparked her love for the built world, and real estate in particular. Since graduating from college, Kelly has lived in Lincoln Park, the Gold Coast, and now River North, a perfect location to take advantage of all that city living has to offer – art, music, dining, and world-class architecture. One of her favorite things to do is to turn on a podcast and explore the city on foot, marveling at the historic buildings.

When Kelly is not working, she is a member of the Associate’s Board for Sarah’s Circle, a local nonprofit with a mission of serving women who are experiencing homelessness or in need of a safe space. She also enjoys a good sweat, whether that’s running, cycling, or yoga. In fact, most of her client events take place at boutique fitness studios. On most weekends, Kelly can be found walking the Riverwalk at Montgomery Ward Park with her husband, Brian, their dog Pax, and a good cup of coffee.

Related Links and Resources:

It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.

-Aaron Amuchastegui

Source: realestaterockstarsnetwork.com

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Washington, DC
CNN
 — 

US mortgage rates jumped up this week as recent economic data showed inflation remains sticky and the job market is still red hot.

The 30-year fixed-rate mortgage averaged 6.81% in the week ending July 6, up from 6.71% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 5.30%.

“Mortgage rates continued their upward trajectory again this week, rising to the highest rate this year so far,” said Sam Khater, Freddie Mac’s chief economist. “This upward trend is being driven by a resilient economy, persistent inflation and a more hawkish tone from the Federal Reserve. These high rates combined with low inventory continue to price many potential homebuyers out of the market.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

Rates ticked up last week, mirroring the trend of the yield on 10-year Treasuries, which are reacting to economic data that suggests stubborn inflation may be stuck at an elevated level.

The latest Personal Consumption Expenditures price index, a crucial indicator monitored by the Federal Reserve for monetary policy decisions, suggests that inflation isn’t retreating as quickly as hoped, said Jiayi Xu, economist at Realtor.com.

“Although the headline PCE decreased from 4.3% in April to 3.8% in May, the core PCE, which excludes volatile food and energy prices, only retreated slightly on a year-over-year basis, down from 4.7% in April to 4.6% in May,” she said. “Meanwhile, the newly released Fed minutes reaffirms officials’ determination to bring inflation back to the target 2% range.”

While this may put near-term upward pressure on interest rates, she said, including mortgage rates, she anticipates a gradual decrease that could bring rates close to 6% by the year’s end.

Housing market headwinds

With the average rate for a 30-year fixed-rate mortgage above 6.6% every week in June, the summer market has been challenging, both for home sellers and buyers.

“For sellers, these high mortgage rates have been compelling existing homeowners to delay their selling and moving plans, despite the fact that home prices are still high and consumers generally agree that it’s a good time to sell,” said Xu.

Nearly 82% of home shoppers reported feeling “locked in” by their existing low-rate mortgage, according to Realtor.com, while around 1 in 7 homeowners without a selling plan cited their current low rate as their reason for remaining on the sidelines.

“As a result, the number of homes for sale remained lower than last year’s levels, with year-to-date new listings lagging 20% behind last year’s pace,” said Xu.

“In addition to the limited inventory for buyers, the rising interest rates also pose a significant concern for those intending to purchase a home within the next year,” she said, citing Realtor.com data. “About 78% of home shoppers planning to buy in the near future anticipate being priced out of the market if home prices and mortgage rates both continue to rise.”

Mortgage applications fell to their lowest level in a month last week as rates for most loan types increased, according to the Mortgage Bankers Association.

“Purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes,” said Joel Kan, MBA’s vice president and deputy chief economist. “Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country.”

He added, however, that the average loan size for a purchase application declined to $423,500 — its lowest level since January 2023.

“This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers searched for more affordable options.”

Source: cnn.com

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Rithm Capital Corp., the real estate investment trust that operates NewRez, Caliber and several other businesses, entered into a definitive agreement to acquire Sculptor Capital Management Inc. for $639 million, the company announced on Monday. 

The deal, if approved by regulators, will bring to Rithm Sculptor’s $34 billion of assets under management, including real estate, credit and multi-strategy investing spectrum. To Sculptor, Rithm will provide capital to accelerate growth across sectors and seed new funds and strategies. 

Rithm is paying $11.15 per Class A share of Sculptor – a premium of 18% over the closing price on July 21 – with cash on hand and available liquidity. The transaction is expected to be neutral to Rithm earnings in 2024 and accretive in 2025. 

In the first quarter of 2023, Rithm had a GAAP net income of $68.9 million, compared to $81.8 million in the previous quarter. The company had $1.4 billion in cash. Rithm is scheduled to release second-quarter earnings on August 2. 

Michael Nierenberg, chairman, CEO and president of Rithm Capital, said in a statement that the transaction is “transformational.”

“Sculptor’s $34 billion of AUM coupled with Rithm’s $7bn of permanent equity capital and $30+ billion balance sheet creates a world-class asset management business,” Nierenberg said. 

Sculptor will operate as a subsidiary of Rithm, led by Jimmy Levin as CIO and executive managing partner, who will report to Nierenberg. Sculptors’ investment and leadership teams will continue in their roles. 

“We have long sought a partner with the stable capital structure, culture and vision to help unlock the potential for our platform to deliver more and greater value to our fund investors,” Levin said in a statement. 

Sculptor formed on November 17 a special committee of independent directors to explore potential transactions. Sculptor’s leadership has agreed to vote their shares, representing about 26% of the outstanding voting shares, in favor of the transaction. The board of directors of Rithm and Sculptor have approved the deal.

The transaction, subject to customary closing conditions, is expected to close in the fourth quarter of 2023.

The deal with Sculptor comes four days after Rithm’s acquisition of $1.4 billion worth of unsecured personal loans from Goldman Sachs‘ Marcus business unit. Rithm bought the portfolio at a discount, Nierenberg told Bloomberg. 

“This purchase is extremely attractive to us building off our past and current expertise in consumer finance,” Nierenberg said in a statement.

In another potential transaction, Rithm said in May that it was considering spinning off the mortgage division to aid its flagging stock, which company executives described as “extremely undervalued.”

Source: housingwire.com