MONEY Housing Market

This Is the Best State for First-Time Homebuyers

West Virginia capitol building
Thorney Lieberman—Getty Images West Virginia capitol building

According to GoBankingRates.com, the state where first-time home buyers have seen their lot improve most dramatically is...

When it comes to the nation’s hottest real estate markets, West Virginia usually doesn’t come to mind.

But for first-time home buyers it beats out bigger markets like California and Florida, at least according to banking Web site GoBankingRates.com—and it’s not just because of the majesty of its rolling mountains. The site chose New Hampshire number two and Rhode Island number three.

What makes these states stand out? Over the past decade, they’ve seen biggest growth in the number of first-time home buyers—without facing high foreclosure rates. A decade ago, just 33% of West Virginia home sales were to first-time buyers. In 2013, the latest date for which data are available, the rate had climbed to 57%. Meanwhile foreclosures have remained at 0.01%.

One factor in West Virginia’s favor: Median home prices are a very affordable $115,850. The state also boasts a program that provides up to 100% financing for first-time buyers who meet certain income requirements, GoBankingRates notes.

New Hampshire and Rhode Island saw even bigger jumps in first-time buyers—with the rate nearly doubling in both states—but both also had higher foreclosure rates of 0.05%.

Many Millennials and Gen Xers—demographics now in prime home-buying age—have been struggling to make their first purchase after seeing careers interrupted and savings decimated by the 2008-2009 recession. That dynamic has contributed to a lower homeownership rates than any time since the early 1990s, a recent Harvard study found.

West Virginia isn’t the state with the highest overall first-time homebuyer rate. That honor goes not to a state at all but to Washington, D.C., where 68% of buyers were first-timers, according to the Federal Housing Finance Agency data that GoBankingRates used.

Why not choose Washington as the best market for first time buyers? The FHFA study found that first-time home buyer rates typically fell when real estate prices rose. Washington’s real estate prices have been on a tear and median home prices now stand at more than half a million dollars. In other words, while the city may be full of aspiring first-time homebuyers, their task is getting harder, not easier.

MONEY Housing Market

Watch: This $40,000 Film Was Made Solely to Sell a House

film director and movie camera on cherry picker
Phil Hunt—Getty Images

Realtor video has bigger budget than some hit indie films.

Have you seen “9133 Oriole Way” yet? It’s a new independent film that was made in L.A. While only 4 minutes and 39 seconds long, it was put together with an impressive budget of more than $40,000, which surpasses how much it cost to make legendary full-length feature films like “Paranormal Activity” and “The Blair Witch Project.”

What really makes “9133 Oriole Way” stand out, however, is the reason it was created—not to entertain the masses, but to sell a home.

The address of the home in question is, of course 9133 Oriole Way, in West Hollywood, and the “lifestyle film” showing off the property was paid for by Williams & Williams, the real estate agency that specializes in “the most high-end properties from the Hollywood Hills to Malibu,” and works with “the cities [sic] biggest A-level actors, athletes, entertainment professionals and Fortune 100 executives.” (Apparently, they don’t work with a copy editor.)

“Regular marketing doesn’t work anymore. We’re appealing to a more sophisticated and savvy group of buyers,” Rayni Williams, of William & Williams, said to the Los Angeles Times, in explanation for why the agency made the film. “We’re taking it to a whole other level.”

According to the LA Times, Williams & Williams spent months finding a director, cast, and crew to make the promotional video. The result is something far beyond a lame slideshow or some kind of video version of the standard still photos showing off a home on a realtor website. While the entire video is set to music (“My House” by Flo Rida) and there is no dialogue, there is something of a plot, in which a handsome hotshot tears out of the home in a Corvette, leaving behind a gorgeous woman who decides to invite over four more gorgeous women to enjoy the property to its fullest. They’re seen lounging by the pool in skimpy bikinis and clinking glasses in the wine cellar in between slow crawling shots showing off the home’s massage room, fitness center, views of downtown, and other selling features.

Why would Williams & Williams fork over $40,000 to show the property off in such extravagant fashion? Well, the agency stands to take in over $1 million if and when it sells the 12,530-square-foot home, which is located in the hills near homes owned by Leonardo DiCaprio and Keanu Reeves and is listed at a cool $33 million. Watch on, and let the realtors know if you’re inspired enough to put in a bid.

MONEY Housing Market

How to Find the Perfect First Apartment

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Tom Merton—Getty Images

Everything you need to know, from credit checks to pet fees.

You know what makes for a great “my first apartment” story? Grim memories of late-night arguments with your landlord, lost security deposits, the heat that never worked and countless other grisly memories of that hole-in-the-wall you lived in at 23.

What’s not so great? Actually living in that first apartment.

If you’re a recent college grad and looking for your first place, you might not be clear on all the steps you need to take to line up an awesome apartment. This guide will walk you through what you need to do to snag your dream space and avoid those nightmare apartment scenarios.

Decide what apartment features really matter

Before you dive headfirst into apartment hunting, create a list of everything you want. This may include particular neighborhoods, number of bedrooms, size of square footage and certain amenities. Lee Williams, a New York City real estate agent, suggests organizing and prioritizing your list into three key areas:

  • Must-haves
  • Nice to have, but can do without
  • Dream apartment features

“Have a list. That way you’ll know when you’re ready to compromise and how your budget translates when you go out to experience a new space,” Williams says.

Pro tip: Depending on what city you’re looking in, consider neighborhoods that are slightly off the beaten path, or just outside of trendier areas. You might get more square footage for your money. Use a site like WalkScore to explore communities and find out what amenities are in walking distance.

Timing is everything in real estate

Start looking according to when you want to move in. Most move-in dates are on the first of the month, but some landlords may prefer or be willing to swing a midmonth start date.

“Anywhere from May through the end of August is the busiest season for rentals,” says Tanya Mahmood, chief operating officer and executive vice president of RLTY NYC. “It’s crucial to start looking a month in advance because you could run into the problem of showing up and not having an apartment in time to start a new job.” She adds not to look too far ahead because there will be fewer apartments available more than a month before your planned move-in date.

Pro tip: Don’t automatically assume you can move in a few days before your lease start date without incurring costs. Talk to your landlord before you book a moving truck or recruit friends to help. Also, since moving companies tend to be busiest on the first of the month, make your reservations as soon as possible to secure a spot if you’re moving at that time.

Make sure you can afford your rent … and everything else

You might have your first salary, but you don’t want to be working just to pay rent. Typically, landlords are looking for an annual income ratio to be 40 or 50 times the monthly rent (40 times monthly rent should equal 30% of your income). To make apartment living more affordable, consider bringing roommates into the equation. Some landlords will let roommates combine salaries to meet the income ratio, but not always.

When you’re looking for a place, don’t forget to factor additional living expenses into your budget. This could include monthly expenses for:

  • Utilities (gas, heat, electric)
  • Parking
  • Storage
  • Internet and/or cable
  • Pet fees
  • Building fees (water, trash, maintenance)

When you apply for the apartment, you may have to pay a processing or credit check fee. And don’t forget the security deposit, which is typically one month’s rent or less. You might also have to pay your first and last month’s rent upfront.

Your landlord might require renters insurance. This insurance protects your possessions in case of an emergency or catastrophe and provides liability coverage for personal injury or property loss. Even if your landlord doesn’t require renters insurance, it’s a good thing to have.

Pro tip: Your landlord will want a complete picture of your financial health when you apply. “Get one of the free credit reports you’re entitled to each year so you’re not surprised when a landlord runs your credit,” suggests Ravi Dehar, growth lead at Cozy.co, a service for landlords and tenants to screen applicants and pay rent. You can check your credit report through each of the three major credit bureaus: TransUnion, Equifax and Experian.

When you might need a guarantor

If you have no credit history, apartment history or have just started working, a landlord might require a guarantor, also called a co-signer, on your lease. A guarantor’s role is to take on your financial obligations if for some reason you can’t. Most guarantors for recent grads are parents. Landlords will require guarantors’ income to be 80 times the monthly rent, to ensure they can pay for their own bills as well as yours if you can’t afford your rent.

Pro tip: Make sure you have your guarantor in tow or at least have his or her documentation ready when you’re applying.

Start your search and watch out for these red flags

If you’re strapped for cash, then going online is the way to go. For most, that means an apartment hunting site such as PadMapper and the ubiquitous source for the online search, your local Craigslist. Melanie Siben, a New York City real estate agent, suggests maintaining a healthy level of suspicion throughout your online search. “Not all apartments are what they seem and not all are real,” she adds. These are all red flags:

  • Too good to be true usually is. If an apartment is listed in a great neighborhood, with large square footage, lots of amenities and all at a cheap price, it’s probably a fake. Compare similar apartments in the area.
  • Extremely high fees paid upfront. “Sometimes you’ll be asked to pay everything including the security deposit and finders fee upfront before you have any lease or even seen the apartment,” Siben says.
  • Landlord doesn’t ask for your credit score and other necessary background materials. “Every landlord wants to verify you’re gainfully employed and that you don’t have a criminal history,” Siben says.
  • When you’re getting too much pressure to hurry up, sign and pay. “You can tell when someone wants a quick buck,” Siben says.
  • A listing says, “I’m out of the country, but…” The landlord or his agent isn’t available to show you the apartment until after you send the money. “You need to see the apartment before you give any money,” Siben says. “If that’s not an option, make sure you’re dealing with a reputable agent or company.”

If you hire a real estate agent, you can find places that are unlisted and you’ll have someone to do the negotiating for you. The downside is you’ll pay a fee or commission, often up to a full month’s rent or 15% of an entire year’s rent.

Pro tip: To verify a landlord owns the property, you can look up an apartment’s tax records at your local assessor’s office to make sure names match up.

Be prepared to jump on an apartment

Even if you find your dream apartment, it may be someone else’s two-bedroom utopia too.

“It’s extremely competitive for young people. They’re looking for the cheapest, safe place possible and they’ve got tons of competitors. You have to act fast,” Siben says.

Before you visit a place, have everything you might need to lock it down quickly on hand, including:

  • Recent paystubs or a note of employment validating your salary. Your letter must be officially signed and on company letterhead.
    • Recent bank statements and/or a recent tax return
    • Your Social Security number for a credit check
    • Photo identification
    • Vehicle information, including a license plate number, make and model number
    • Your checkbook to pay for application fees and security deposit
    • Contact information for references

If the application asks for a reference from a previous landlord, don’t think you’re out of the running if you’ve never lived on your own. “Landlords have seen everything — they know if you just graduated and just got your first job that you either lived at home or in dorms,” Williams says.

Pro tip: If you’re certain you want an apartment, apply on the spot. If you wait too long, you may miss out.

Comb through fine print

Most landlords will give you a standard lease agreement to sign. But the lease riders, or clauses, are the fine print you should examine the closest.

“It’s like anything else: You need to read the small print,” says Carol Stuckey, account manager at Apartment Locator in Oklahoma City. “You need to know the length of the lease and if you don’t fulfill the lease what the consequences are. In the state of Oklahoma they can charge you the full amount of the lease if you move out early.”

Certain add-ons such as a cleaning fee after you move out are becoming more common, Williams says. He adds, “Some landlords may have had a bad experience with frat guys who moved into a beautiful four-bedroom. They want to make sure the property is returned to a state that it was originally in and so future renters will have a clean environment.”

Before signing the lease, point out any concerns you might have. If you make any verbal agreements at this time, get them in writing.

Pro tip: When you move in, submit a report and take photos of any prior damage. You don’t want to be held responsible for a literal hole in the wall that was already there when you moved in.

Final takeaway

Knowing how to approach finding your first apartment gives you the power to make the best possible decision. You’re going to have pitfalls and plenty of memories to collect along the way — this is still renting, after all. Just remember: The great thing about your first apartment is that it will always be your first.

More from NerdWallet:

MONEY selling a home

5 Ways to Deal With the Eyesore Next Door

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Stephan Zabel—Getty Images

Don’t let the neighborhood eyesore put your home sale at risk — take action with these 5 tips.

You’re almost ready to put your house on the market when you realize it: The neighborhood eyesore is going to pose a problem.

Sure, we know some people might view any attempts to hide an eyesore from view as being underhanded, sneaky, and designed to fool unsuspecting buyers. They might envision unscrupulous sellers and agents who keep their fingers crossed, just hoping no one spots the eyesore next door.

If you feel that way, by all means, point out the junkyard behind you that’s worthy of American Pickers, the yard next door that looks more like a prairie than a lawn, or the bail bonds sign spray-painted on the wall across the street.

For the rest of us, here are five ways to resolve these eyesore neighbor homes so that would-be buyers won’t be scared off. And who knows? Maybe if you tackle these unsavory sights, you’ll decide not to sell your home after all.

1. Ask your neighbor to fix the problem

This solution can be tricky. There’s really no easy way to tell someone that his or her house is the neighborhood eyesore. But there are some methods that might help.

“Just writing a friendly note (dropped off with a bottle of wine or another small gift) can sometimes do the trick,” says Ross Anthony, a San Diego real estate agent.

It also can’t hurt to mention to your neighbor that the more your home sells for, the more his or her home will be worth.

2. Be neighborly

You know how people can become desensitized to certain smells? (“How did you know I had a cat?”) Well, people can become so accustomed to the condition of their house that they don’t notice when it looks run-down.

This sometimes happens with elderly homeowners: either they haven’t realized the condition of their home or they simply can’t manage the upkeep. You might think a condo or townhouse situation might better suit your overwhelmed neighbor, but steer clear of that suggestion.

Instead, offer to spruce up the house yourself. “If it is an elderly person, I offer to help,” says Sarah Bentley Pearson, an Atlanta real estate agent.

But it’s not just elderly neighbors with houses that could benefit from a little TLC — just think of all the work you did to get your house in selling shape!

Alexander Ruggie of 911 Restoration in Los Angeles says that if the next-door neighbor has a poor paint job, a wobbly fence, or a caved-in garage, there’s no reason you can’t offer to help fix the problem. “Most people would be surprised how much they can convince people to do when they offer to help do it.”

3. Notify your HOA

If you live in a community with a homeowners’ association (HOA), let it know about the unkempt house near you. One of the main reasons HOAs exist is to prevent homes in the neighborhood from becoming eyesores that could drive down the value of your home.

Your HOA might send a letter to the offending neighbor warning him or her to fix the problem or face fines. Or the HOA might take care of the problem and then bill the homeowner.

4. Call the city

If your neighbor won’t mow his or her lawn, get rid of the junk outside, or let you help tidy up, you can always call your local government.

“If there is a really bad problem, like the grass is a foot tall and there are junk cars on the front lawn, your neighbors are probably in violation of local codes and can be forced to clean up,” says John Z. Wetmore, producer of the TV show Perils for Pedestrians.

Do this well in advance of putting your house on the market. The city could give your neighbor up to 90 days to meet housing codes.

Wetmore also suggests that you “walk around the block and pick up any litter along the public streets and sidewalks.”

If the house is a bank-owned foreclosure, find out which bank owns the property by checking county title records. Insist the bank maintain the property.

5. Plant view-blocking trees or install a fence

It might be worth the investment to block an unsavory view. If you plant trees, choose ones that are at least 6 feet tall to give you an immediate sense of privacy. Privacy fences should also be 6 feet high.

If your neighbors are noisy, putting in a small waterfall can drown out the racket.

“You only have one first impression,” says Ross Anthony. “You want potential buyers to fall in love with your home before writing it off due to an unkempt neighboring property.”

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MONEY Housing Market

New Home Sales Hit 7-Year High

A worker walks on the roof of a new home under construction in Carlsbad
Mike Blake—Reuters A worker walks on the roof of a new home under construction in Carlsbad, California September 22, 2014.

In May, sales of new homes surged 87.5% in the Northeast alone.

New U.S. single-family home sales increased in May to a more than seven-year high, further brightening the outlook for the housing market and the broader economy.

The Commerce Department said on Tuesday sales rose 2.2% to a seasonally adjusted annual rate of 546,000 units, the highest level since February 2008. April’s sales pace was revised up to 534,000 units from the previously reported 517,000 units.

Economists polled by Reuters had forecast new home sales, which account for 9.3% of the market, rising to a 525,000-unit pace last month.

The report came on the heels of a report on Monday showing home resales in May surged to a 5-1/2-year high. Data last week also showed building permits at near an eight-year peak in May and homebuilders were the most optimistic in nine months in June.

The new home sales report added to strong retail sales, consumer sentiment and employment data in suggesting the economy was gaining speed in the second quarter after output slumped at the start of the year.

Housing is being buoyed by a strengthening jobs market and steps by the government to ease lending conditions for first-time buyers through Fannie Mae and Freddie Mac, the mortgage finance companies it controls. Young adults who are setting up their own households also are lending support.

New homes sales surged 87.5% in the Northeast, the largest increase since July 2012. Sales increased 13.1 percent in the West, the biggest gain in nine months. Sales fell 4.3% in the South and were down 5.7% in the Midwest.

The stock of new houses for sale was unchanged at 206,000 last month. Supply remains less than half of what it was at the height of the housing boom, good news for home builders who will need to ramp up construction.

At May’s sales pace it would take 4.5 months to clear the supply of houses on the market, down from 4.6 months in April.

MONEY Housing Market

Renting a Home Could Become the New Normal

Residential Real Estate As City Becomes The Least Affordable U.S. Housing Market
Bloomberg—Bloomberg via Getty Images Pedestrians walk past a "For Rent" sign that is displayed outside of an apartment building in the Mission district of San Francisco, California, U.S., on Thursday, May 7, 2015.

Homeownership rates have been falling for the last decade.

Is renting a home the new American dream? A report by the Urban Institute projects that even after the housing crash and the Great Recession are a distant memory, homeownership rates in America will continue to decline.

The report estimates that between 2010 and 2030, the majority (59%) of the 22 million new households that will form will rent, while just 41% will buy their homes.

The homeownership rate has been falling since 2006, when the housing bubble began pricing out many would-be homeowners — and the recession furthered that trend. In 2006, the homeownership rate was 67.3%; it now sits at 63.6%, even lower than it was in 1990, according the U.S. Census’ most recent American Community Survey.

But even the economic recovery won’t reverse that trend, according to the Urban Institute. It offers six reasons:

  1. Wages. Real wages have declined among adults ages 25 to 34 since 1996. “Even for young adults with good jobs, low vacancy rates and high rents make it more difficult to save,” the report says.
  2. Student loan debt. Total outstanding debt was about $300 billion in 2003; now it is over $1.3 trillion. Long-term debt makes additional long-term debt less appealing.
  3. Delayed household formation. Both women and men are waiting four years longer before marriage than in 1980. “Because of the delayed marriage and childbearing, homeownership is apt to occur later. At a result, people will spend less of their lives as homeowners, placing a drag on the homeownership rate,” according to the Urban Institute.
  4. Lingering effects of the recession. Roughly 7.5 million Americans lost their homes during the recession; most will have a hard time buying a new one, dragging down the homeownership rate.
  5. They’re not that into homebuying. More Americans are consciously choosing to rent over buy. One study looked at “prime candidates” — married couples earning at least $95,000 annually who have at least one child. “Even for this group, after controlling for race and ethnicity, the homeownership rate declined from 87.3% in 2000 to 80.6% in 2012,” the report says.
  6. Higher borrowing standards. The report says that lenders are still “historically tight,” particularly among borrowers with lower credit scores.

The report also considered changing demographics — a majority of new households formed in the U.S. during the next two decades will be non-white — and while those groups traditionally have lower homeownership rates, the Urban Institute found that will not contribute significantly to overall homeownership rates in the future. That story is a mixed bag, however.

“For at least the next 15 years, whether the economy grows slowly or quickly, the homeownership rate for African Americans will decrease while the rate for Hispanics will increase,” the report found. “More than 50 percent of the 9 million new owners between 2010 and 2030 will be Hispanic, nearly one-third will be other races or ethnicities, 11 percent will be African American, and only 7 percent will be white.”

The shift from owning to renting means that many more rental units should be built, the Urban Institute says.

“This change will create a surge in rental demand from now until 2030 that we are unprepared to meet,” it says.

It also suggests that mortgage lending standards be relaxed to nudge more would-be renters to buy their homes.

That conclusion doesn’t sit well with everyone, however.

Logan Mohtashami, a California-based loan officer, says the notion that lending standards are tight is a myth.

“There remain a number of highly respected housing ‘gurus’ who continue to profess that it is unfairly tight lending standards, not the lack of qualified buyers that are suppressing a housing recovery. The difference is not academic,” he says. “A quick review of the requirements for some of mortgage loans available may surprise you.”

VA loans require no down payment, for example, he notes. And buyers can get other mortgages with credit scores as low as 560, with 50% debt-to-income ratios, or down payments as low as 3%.

“At this point all you can do is bring back 0% down loans and stated income loans for wage earners,” said. “Look who is really pushing the tight lending thesis. People in New York, D.C., San Francisco. What I call economic bubble cities. Main Street America gets this thesis I am saying.”

Read next: Should You DIY These 5 Home Improvements?

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TIME Millennials

Millennials Can’t Afford to Buy a Home in These Cities

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Chris Windsor—Getty Images

California has the three least affordable cities for millennials looking to buy homes

Millennials are often the most sought-after demographic, whether by retailers or news organizations. But when it comes to real estate, the young generation is getting squeezed out of some cities.

The nasty combination of rising residential real estate prices and slow wage growth is making it difficult for a lot of millennials to afford buying a home in some areas — especially in California.

According to Bloomberg, the five U.S. cities with the highest “home affordability gaps” can all be found in the Golden State, led by San Jose, where the median annual salary for millennials falls more than $80,000 short of the minimum required to purchase a home in the city. San Jose is followed by San Francisco, where the home affordability gaps is roughly $60,000.

Los Angeles, San Diego, and Sacramento round out Bloomberg’s top five of the least affordable cities for millennials looking to buy a home, while Riverside comes in at eighth on the list to give California six cities in the top 13.

Somewhat surprisingly, New York places only sixth on the list, with a home affordability gap of $6,550, although Bloomberg notes that the statistics used to come up with that figure incorporate housing prices from areas far outside of pricey Manhattan:

Almost 80 percent of New York’s millennials reside in three counties: New York County, Queens County and Kings County, where Manhattan, Queens and Brooklyn respectively are located. Using the average median home value for those three boroughs ($749,596) and the 2015 estimated earnings for millennials living there ($49,193), the affordability gap comes out to a whopping $52,262.

MONEY Housing Market

4 Ways to Break Your Lease

house handcuffs laying open with key
Ryan Etter—Getty Images

One attractive aspect of renting vs. owning a home is the lack of a long-term commitment. While it may seem that renters can pick up and go at the drop of the hat, there are still usually agreements in place. You may not be able to sneak away from a lease in the middle of the night without consequences, but there are steps you can take to minimize the penalty of leaving your rental agreement early. You’ll also want to be aware of any potential impact on your credit.

1. Know Your Rights & Your Lease

Before you get started on the process, it’s a good idea to look over your lease and see what exactly you have legal responsibility for if you leave the rental earlier than planned. You also might want to get familiar with the tenant laws in your state and city. If your landlord hasn’t kept up his or her end of the bargain, you might be able to leave without incurring any issues. In fact, there may be clauses in the contract for your specific situation. Once you know exactly where you stand on paper, you are equipped to talk with your landlord and (hopefully) negotiate a deal.

An eviction and any subsequent judgments a landlord can get against you for unpaid rent can have serious credit consequences. If you’ve broken a lease and were sued by your landlord, it will appear on your credit reports. You can get free annual credit reports from each of the major credit reporting agencies to see if your credit has been affected by breaking a lease.

2. Communicate With Your Landlord

Usually it’s a good idea not to treat this like a secret — keeping your landlord in the loop can benefit both of you. They may not be happy you are packing up early, but you can explain your situation and work together to make the best of it. The more notice you give, the more time they have to try to replace you and the longer you have to persuade them not to charge you any fees.

3. Look for a Replacement Tenant

Landlords charge penalties for breaking rental agreements because it interrupts their income and means more work for them. Advertising properties, checking credit scores and completing paperwork all take time and money. Instead of paying the rent yourself while the apartment stays vacant, it can be a good idea to scope out a replacement tenant on your own —whether this person will take over the remainder of your lease or sign a new one.

4. Be Flexible & Proactive

Since you are the one breaking an agreement, it can be a good idea to take responsibility and be active in resolving the situation. By offering up solutions or just making it easy for your landlord to rent out the place again (like being accommodating with showings) you can put yourself in a stronger position.

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