Lenders want to give you a mortgage, but they also want to minimize their own risk. The easiest way to retard risk is by using your credit scores to make lending decisions.
Credit scores are compiled separately by three consumer reporting agencies -- Equifax, Experian, and Trans Union. These credit reporting bureaus calculate scores differently, and base their scores on information that may differ from other bureaus.
Equifax Beacon 5.0 Facta: scores range from 334 to 818.
Experian Fair Isaac V2: scores range from 320 to 844.
Trans Union FICO Risk score Classic 04: scores range from 309 to 839.
Your credit score is a number that reflects the information in your credit report, whether you pay your bills on time, how much you owe creditors, payoffs, and derogatory information such as liens. It also includes inquiries into your accounts from lenders, landlords, and employers.
When you apply for a home loan, your application includes giving your lender permission to "pull your credit" and base the decision to lend to you and the rate of interest on the information contained in your credit scores. The higher the score, the better terms you'll receive from the lender.
Once your credit scores are reviewed by your mortgage lender, you'll receive a computer-generated report of the findings in the mail, but it won't have a copy of your entire credit report. It may include key factors that adversely affected your scores. Some examples might include:
- Too many inquiries in the last 12 months
- Time since most recent account opening is too short
- Proportion of loan balances to loan amounts is too high
- Too many accounts with balances
- Amount owed on revolving accounts is too high
What if you're declined for the loan, or your lender wants to charge higher interest than you were expecting? Is there anything you can do?
Yes, talk to your lender and ask for help repairing or correcting your scores. For example, you may have innocently done something that resulted in a negative score, such as closing a line of credit. Or, you may not have realized that a late payment would bring your score down as much as it has. The lender will tell you exactly what you need to do.
Under federal law, you have the right to obtain a free copy of your credit report from each of the national consumer credit reporting agencies once a year. There are several sites where you can go to get your free reports includingAnnualCreditReport.com or FreeCreditReport.com.
If you find an error such as derogatory data that doesn't belong to you, or an account that shows the wrong balance, simply show the lender your canceled check, release of lien or other proof that the credit report is wrong.
You'll also have to correct the information yourself separately with each agency, and it may take a few weeks for the agencies to record the updated information.
In the meantime, work with your lender and do what he/she tells you to do to get the best rate, including paying more than the minimums, paying on time, and making sure that your debt to income is well within your ability to repay all your loans.
Many people complain about small kitchens but tiny spaces aren't always to be dreaded. If you're selling your home and your kitchen is, well, compact, know that you can find ways to achieve big appeal with a little creativity.
- Bring in the light.Sometimes small kitchens can be dark, making them feel even smaller. But if you remove the curtains from any windows in your small kitchen, it'll let light in and open up the area. Instead of curtains, you can use small blinds that are recessed inside the frame of the window. These are easy to clean and still provide some privacy even when the blinds are open.
- De-Clutter the counter tops and the walls.Most people have a tendency to let kitchen clutter build up on the counter tops and walls. Removing items from the counters, kitchen table, and even off the walls will make the space feel bigger. Yes, I know these items on the counters are useful but when you're selling your home, a little inconvenience may help you receive a higher offer and you'll probably agree, that's worth it! Take the appliances and either store them in the kitchen cabinets or, if there isn't enough room, pack them up. You're moving soon, anyway.
Clearing off photos and miscellaneous papers that are stuck on your refrigerator door or kitchen walls will also help make your kitchen look bigger. If you're tight for space, mounted storage units can be added to your kitchen walls to free up limited counter-top space. But again, too many storage units, even the decorative kind, will give people a feeling like the walls are closing in on them. The same goes for hanging pot racks from the ceiling. Be sure to leave some open wall space and to use storage units that aren't completely solid. The open units, if the shelves aren't stuffed, will give a less closed-in feeling.
- Opt for lighter and brighter wall color.Going with lighter colors tends to open up a room. Light and bright colors are also very inviting and friendly, making them a perfect choice for the kitchen. You can use a darker accent trim to create some contrast. You can also use decorations including floral arrangements or even some colorful kitchen appliances to add spice to the kitchen.
- Wall-mounted appliances and reduced counter-top depth.Wall-mounted or under-the-cabinets-mounted appliances can save valuable kitchen counter-top space. You might even have a way to wall-mount your kitchen faucet. In one small home design, the faucet was mounted to the wall, creating a very distinctive look. The counter-top was a standard 24 inches deep but elsewhere the counter-top was reduced just slightly down to 21 inches–very subtle and hardly noticeable but it allowed more floor space in a tiny kitchen.
Small kitchens don't have to be an eyesore. Some even prefer less space because there's less to clean. If you know the audience you're marketing your home to, you can play up the home's best features–including, perhaps, a small, quaint, and simple kitchen.
Moving house is a stressful time, and the last thing you need is for that process to drag along unnecessarily. The actual process of moving your stuff is relatively quick, but also one of the most stressful parts of the house selling process. To reduce this stress, it is essential that you sell your home in an expedient manner, and there are a few ways which you can help to make sure that things run smoothly.
We have spoken about a few ways in which to help you sell your home before, but this guide will concentrate on how improving the look of your home can reap rewards.
One of the first things a potential buyer will see is the outside of your home, and this can easily be a deal breaker for many people out there. It is hard to change someone’s initial judgement, so ensuring your house makes an excellent first impression is essential.
There are many ways in which you can achieve this, so we have noted some of the most effective ways below:
● Gutters – A tired looking gutter system will no doubt create a weak impression on buyers. A new gutter and siding system which uses some of the latest materials will be easier on the eye, and also simpler to maintain for potential buyers. The choice we have today in this field is more than ever before, with modern, durable, and sturdy plastics becoming increasingly popular as well as traditional metals like copper. You will want to match the gutters to suit the look of your house, so brushed metals and sleek plastics will look well with a house which has a modern look, whereas a traditional looking house would look great with copper gutters.
● Soffit and Fascia – If your gutters need replacing then it is likely that these need replacing too. Most of the above is just as relevant here, so remember to match styles where appropriate.
● Windows – Old windows can lose a bit of sparkle over the years, especially wooden frames which aren’t designed to last forever. Many people like the look and feel of wood, and it is an excellent choice, but there are modern alternatives, such as vinyl, that will last alot longer with less maintenance and still have a great look about them.
● Roofing – This one can be twice as important because you still have the appearance factor, but also longevity issues to take into account. Many buyers will look at the overall state of the roof to assess whether it is likely to need work doing to it soon after they move in. If it does, you may have trouble selling the house, may have to accept a reduced offer or may be looking at having your house on the market for a long time. None of these scenarios are ideal, so it is in your best interest to make sure your roof is up to scratch.
When a potential buyer walks into your home, they will be making notes in their head with regards to what needs doing. If you make sure that your home is well appointed and decorated it will reduce the amount of work a buyer would have to do and also create a strong first impression.
● Décor – Tired looking walls and ceilings can let a room down, and it is relatively straightforward to paint a room. No special tools are needed, just a brush, roller, some ladders and the paint (make sure to cover the floor as well). Redecorating can be a quick and easy way to give your home a new feel which will help it to sell.
● Windows – This works for the interior too, but not in the same way as the exterior. Larger windows let in more light, which makes rooms appear bigger than they are. Although it might be expensive, it would be worth it in the long run.
● Furniture – Furniture to match the new décor can give an extra lift to any room. You don’t have to completely refit your house, some new side tables and drawers here and there can work wonders.
These pieces of advice are just the tip of the iceberg and are intended to give you some inspiration if you are struggling to sell your home. They also work great as general home improvement advice, and it might be more affordable to spread the cost over the course of a few years so that you can get some of their benefits too!
This summer, my husband and I decided to put our 1,200-square-foot Spanish-style bungalow in San Diego up for sale. Naturally, this involved meeting with a host of real estate professionals—all of whom agreed that in order to sell our charming little home for the price we wanted, we needed to stage it.
But it wasn’t as simple as hiring a staging company and calling it a day. No. We’d need to move 75% of our belongings into storage and, ideally, find alternate accommodations for the duration of the listing period.
That’s how I—along with my husband, dogs, and children—came to live with my in-laws for 62 days. After entering escrow, we moved back into our partly staged pad for an even more excruciating 39 days (and counting).
It’s been an exhausting and sometimes demoralizing experience. But I survived to offer you some hard-won tips and best practices for how to live in your house (and maintain your sanity) when you can’t really live in your house.
1. Build in time and money before staging
Typically, agents work with a network of staging companies. You can pick two or three, conduct brief walk-through meetings with them at your place, and solicit bids. This process can take upward of two weeks, so it pays to get a jump on the consults well before you intend to list.
If you’re going to use a staging company, make sure you have the cash on hand. In San Diego, partly staging our two-bedroom home ran us a cool $3,000, which was due immediately upon signing the contract. On the plus side, staging usually pays for itself (and then some) once the house sells, experts say.
2. Clear your closets and bedrooms by at least 50%
Whitney Parrott, lead designer at Everything Creative Designs, suggests this declutteringrule for her clients who choose to stay (at least part of the time) in a staged or listed home. You want your place to look inviting, but not necessarily lived-in.
“Take you out of the home,” she says. “Remove your emotional attachment and look at the home as a product you’re selling, which I realize is easier said than done.”
This means reducing the stuff in closets and bedrooms by half. This is a good time to get rid of things you don’t use; you can put the rest into storage.
3. Secure storage space
Even if you aren’t going to have your home professionally staged, you’ll likely need a storage unit for your excess belongings. Get a slightly larger unit than you think you’ll need. In an attempt to save a buck, we chose a smallish unit that ended up barely fitting our stuff. Now, as we approach close of escrow with no new home in sight, we’ll need to rent a second unit for the remainder of our day-to-day items.
4. Hire movers to put your stuff in storage
Trust me on this one—you do not want to be moving your stuff into a storage unit yourself or with your partner or spouse. Save the headache, and hire professionals to maximize your storage space with their professional packing hacks.
5. Find a place to crash…
I was adamant that we minimize the time spent in our staged house, mostly because I was afraid of the havoc my toddler, infant, and highly inconsiderate pooches would wreak on the rented furniture.
So with our tails tucked and pride wounded, we turned to my husband’s parents—who fortunately live a mere 10 minutes from us.
Clearly, living (rent-free) with family is the best choice if you can swing it. But if you don’t have that option, consider some others. For example, my neighbor lived at a Hampton Inn for five weeks while between houses. (I was both horrified and intrigued.)
This can obviously become expensive rather quickly, so consider extended-stay hotels, which offer longer-term suites at a lower weekly price than their average daily rate. Some apartment communities also allow short-term or month-to-month rentals of furnished “executive” units. And there’s always the VRBO/Airbnb option.
At the end of the day, the key is to either get out or make it look like you did.
“Although it seems counterintuitive, especially for sellers that are living in a staged home, the more you can make your home appear as if no one is actually living there, the better,” says Katie Griswold, our very patient agent, who’s with Pacific Sotheby’s International Realty.
6. … or get insanely organized—and stay that way
If you must stay in your home while it’s up for sale, heed these expert-approved tips that will help you (and your Realtor®) stay sane.
- Create a cleaning schedule, and stick to it. If you can afford it, invest in a weekly cleaning service. Before each showing, vacuum the floors, dust all furniture, and wipe down all kitchen and bath surfaces.
- In the kitchen, keep countertops clear. Stash paper towels, sponges, and dish soap under the sink when they’re not in use. Make a habit of placing dirty dishes immediately in the dishwasher, and keep most appliances off the countertops.
- Buyers will open cabinets. Be sure your glasses, plates, pots, and pans are well-organized and stacked neatly.
- If you do a lot of cooking, use natural air freshening methods like boiling lemon slices or cinnamon on the stove to neutralize odors.
- Use totes or bins to keep daily bathroom items like toothbrushes, toothpaste, and soap out of sight.
- Immediately sort mail when it arrives at your house, and dispose of anything that isn’t vitally necessary.
- Stash a few of your kids’ favorite toys in a large decorative bin or tote in a corner of the room or hall closet, and clear the rest away.
- Put your iPhone cords and enormous charging block in a drawer out of view.
- Avoid the lockbox, especially if you have pets or children. Ask your agent to schedule showings in large blocks of time a few afternoons a week to ensure you can get everyone out of the house.
- If you have a 9-to-5 office job and pets, consider boarding the pets on weekdays when showings might occur.
“It’s certainly not easy living in a staged home,” Griswold says. “It can be exhausting living in a home you have to keep spick-and-span, especially those of us juggling children, pets, careers, and more. But it’s most definitely worth the time and investment.”
No matter how amazing your home looks, an icky bathroom can annihilate any good impression you’ve made on a buyer. After all, people want a bathroom that’s practically a personal spa—not a dank, dirty closet you want to escape as soon as possible.
Even if your bathrooms are perfectly clean, if you’re selling your home, you may need to up your game in terms of decor. Here’s where home staging ideas can really turn a utilitarian space into an attractive selling point. Consider these ways to pull it off:
Hide your unmentionables
No one wants to gaze down at a plunger. Ditto for that jug of Clorox, box of tampons, or dog-eared pile of golf magazines. To stage your home, stash ugly or just pedestrian items under the sink, advises Katie McCann, an organizing coach with Maeve’s Method.
Clear the counter of makeup and toothpaste and set out a small vase of flowers and a hand towel. And don’t use those disposable clear soap dispensers with colored liquid, urges Lisa Gulliver from Showhomes, a nationwide staging company. Instead, invest in a dispenser with a brushed-nickel pump to match the finish of your faucet.
You can’t go wrong with a simple, mostly white or neutral look. “A clean spa feel has broad appeal,” notes Amy Bell, owner of Red Chair Home Interiors in Cary, NC. Put your money toward new, fluffy, white towels and then either fold them neatly in a stack or roll them up and place them in an attractive basket. Adding a white orchid can also up the spa feel.
Fix the drip
Call in a plumber pronto if you can’t stop the constant dripping from the bathroom sink and shower.
“You also want to be sure the toilet isn’t running constantly,” says McCann. This gives the impression that your equipment is old or faulty, or both. And be ready for buyers to turn the faucets on and off to see what kind of water pressure you have. To increase the gush, enlarge the hole in the washer inside the shower head.
Consider the curtain
If you have a curtain rod, hang it high to give more height to the space and then install a new white shower curtain to brighten the space, says Gale Sitomer of G Sitomer Design in New York City.
Gulliver agrees. “It’s a good idea to update your shower curtain with a lighter, neutral color and buy coordinated towels in shades of white, cream, gray, or taupe,” she says.
Replace the vanity
Installing a new cabinet for the bathroom sink is money well spent. Ditch the one you’ve had for years, and seek out a solid cabinet rather than one made from less-than-attractive cheap materials like pressed particle board.
“A new vanity with clean lines can make a bathroom look 10 years newer,” Sitomer says. And if you have the space and budget, update the hamper (choose a good-quality basket) and add a small stool to hold pretty jars of bath salts.
If you’re selling your house, staging—the mysterious practice by which you prep and prettify your home before its debut—can make a huge difference in catching the attention of buyers and ultimately reeling in an offer. And the room you’ll really want to focus on here is the kitchen: After all, it’s the crown jewel that buyers ooh and ahh over—except when the counters are packed with stacks of mail, near-empty boxes of Froot Loops, and a hulking Cuisinart you rarely use.
To make sure this critical area is perfectly poised to woo buyers, try these home staging ideas for your kitchen and get some offers cooking.
Clear off counters
Put it away—put it all away. We’re looking at you, coffee maker, blender, knife block, standing mixer, and toaster oven. “And don’t forget the top of the refrigerator,” says Amy Bell, a home staging expert at Red Chair Home Interiors in Cary, NC. Home staging in this room is all about making your kitchen look bigger, cleaner, and more streamlined. “Homeowners are so accustomed to their own clutter that it almost becomes invisible to them,” she warns.
And while you’re in purge mode, remove every bit of paper and those souvenir magnets from the refrigerator and cabinets. The only thing you should keep on the counter is a pop of color, such as a pretty bowl of bright green apples or lemons, says Katie McCann, an organizing coach at Maeve’s Method.
Scour for hours
Well, no one’s actually logging the time spent, but cleanliness is critical here, says D. Sam Halpin, a real estate broker with My Home Group in Scottsdale, AZ. “Not only must you clean the countertops, but the grout, faucet, and grimy drain rim, too,” she says.
Try CLR (calcium, lime, and rust remover) on the faucet to make sure water flows through it smoothly. Clean cabinet fronts to remove dust and grime, and scrub greasy spatters on the stove and backsplash with a vinegar-water solution.
“And if you have a stovetop with burns or food rings, remove them with a soft soap product and a razor blade—it’ll look almost like new,” she adds.
Light it right
Let as much natural light into the space as you can, by either opening heavy drapes or replacing them with sheer panels. Have a kitchen that looks out to a patio or deck through glass doors? These must sparkle in order to illuminate the space. “And if you don’t have under-cabinet lights—get them,” recommends Halpin. You can purchase battery-powered puck-shaped lights for very little money and stick them under the cabinets (it adds that extra glow that every cook covets).
Jack Menashe, a designer and home stager at Menashe Design in New York City, likes minimal window treatments (like just a valance along the top) when showcasing a kitchen as natural light makes the space feel bigger. “A patterned valance invites the buyer to see the window and allows me a chance to add color,” he says.
Organize the insides
Potential buyers are going to open the fridge and pantry, so don’t neglect these spots when you’re staging the kitchen. “People who are looking for a new home will imagine how their pots, pans, and food items might fit into your cabinets,” explains McCann.
“Sometimes I stack cookbooks and display clear storage containers because these elements speak to the kitchen’s function, and clear containers take up less space visually,” says Menashe.
Set the scene
Some experts recommend setting the table with colorful plates and napkins to give the kitchen a homey feel.
“I may present a picture of daily life by having a unique planter on the countertop with blooming flowers alongside a carafe of orange juice for color and a rolled-up newspaper,” says Menashe. Or, place a simple runner down the middle of the table for a bit of coverage and texture.
Want more kitchen staging ideas? We’re discussing some on House Talk.
How to Ease the Stress of Moving
It’s generally agreed that moving is one of the most stressful experiences you’ll ever undergo. It ranks right up there with job loss, divorce, and major illness, none of which are much fun.
Even if your new home will be a major lifestyle upgrade, moving is bound to cause a few headaches. After all, you’re taking apart your entire life and reassembling it at a new location. While there’s no way to completely eliminate the stress of moving, following this checklist will go a long way toward creating a relatively painless move.
Step One: Eliminate Unnecessary Burdens
When you’re moving, the less you have to pack, the better. As soon as you know you’ll be relocating, start eliminating the clutter from your life by asking yourself these simple questions: Have you used it in the past year? Does it bring you genuine joy? If not, get rid of it.
The method of disposal is up to you – for items that would be worth your time to sell, you might want to consider having a yard sale or posting them for sale online. Who knows? You might be able to cover some of your moving costs by getting rid of unused gadgets and household items.
If you’d rather not make a foray into the world of second-hand wheeling and dealing, just drop all the useful stuff at your local thrift store. Don’t forget the receipt; it’s good for a tax write-off at the end of the year.
Step Two: Make Moving Arrangements
You’re going to need a way to get your worldly possessions from A to B, so you might as well get your reservation out of the way. One less thing to think about on moving day!
If you’re planning on renting a moving van, it’s a good idea do some research first. Estimates may vary widely from one company to the next, and you may even get different estimates from different pick-up locations within the same rental company. Van rental companies base their prices on supply and demand, but other factors such as a shortage of moving trucks at your destination can also influence prices. The bottom line: check around for the best deal – you could save hundreds of dollars.
Of course, a truck rental isn’t the only option these days. If you like the idea of packing at your own pace and the thought of driving a gigantic box truck down a windy highway gives you cold sweats, then you may want to consider a moving and storage solution likePODS or UPack. All you have to do is pack, and they’ll transport your stuff across the country, allowing you to make the trip in the family car.
Don’t Forget the Boxes
Before you start packing, you’re going to need something to put your stuff in. If you have enough advance notice, purchase your moving supplies such as dollies, boxes, dish barrels, wardrobe boxes, moving blankets, and packing tape online. You’ll probably get a better price and they’ll be delivered to your door.
Use It Up
Consumable goods like food and cleaning supplies cost money. You don’t want to throw them away when you move, but you don’t necessarily want to pack them, either. Do your best to use them up in the weeks leading up to your move.
Get creative with your recipes to include the items you have on hand, and make sure you give your house a thorough cleaning so it’s ready for the next set of occupants, or the real estate staging team.
Once you’ve pared your possessions down to those things you can’t do without, you can start packing everything up. But don’t pack frequently used items too far in advance, or you’ll end up searching through your boxes, potentially for hours.
Start with the stuff that you only use once in a blue moon – useful enough to keep, but not so crucial that you’ll need it between now and moving day. Pack heavier items such as books and kitchen appliances in smaller boxes, and save the big boxes for linens and clothing.
As you get closer to moving day, gradually pack more and more frequently used items. Ideally, you’ll only have minimal work to do in the days before the actual move.
Label everything! The few moments it takes to slap a label on each box might save you hours later. Just do it. You’ll be glad you did.
Dot Your I’s and Cross Your T’s
It’s a smart idea to create a binder with all of your important documents inside. Keep your estimates, receipts, and your inventory inside, along with any other important documents you may need along the way or upon arrival.
You’ll also need to notify certain parties of your move. Your checklist may vary, but you should probably include the post office, your bank, your employer’s HR department, your creditors, your subscription service providers, and your insurance and utility companies.
And don’t forget to have your records forwarded to your new home. Ask your health care providers to send your medical records to providers they recommend in your new hometown. If you have children, or are a student yourself, get in touch with your school administrators and have them transfer your school records.
Take the Car for a Checkup
If you’ll be driving your own vehicle during the move, then you’d be wise to take it to your local mechanic for a checkup. The last thing you want is to have mechanical issues throw a wrench into your moving plans.
Hit the Road!
Whew! It’ll all be over soon, and you’ll have a brand new outlook on life. Best of luck! May your journey be swift, your new neighbors friendly, and your new home, perfect.
Oh, and if you’d like to move but don’t have a new home to move into, please allow us to offer our services. We’re Homes.com, and new homes are what we’re all about.
The Harsh Truth
One of the harshest truths that sellers ignore is hearing from an agent that their home is “overpriced.” Overpriced homes tend to attract fewer buyers, are more unlikely to sell, and when they do sell, they tend to sell for far less than the asking price. If you want the most money for your property, it’s critical to hit the best, most accurate price before you list. Don’t think, “Oh, we can come down.” It doesn’t work that way. Once a home is on the market you have less than a month to get what you’re asking for. Buyers and agents are most likely to show interest in the first to the fourth week a home is listed. Interest begins to wane in the fifth and sixth weeks, and from the fifth week on, both buyers and sellers will think of your home as undesirable, stale, or worse, overpriced.
Six things you should do before pricing your home:
- Ask yourself why you’re selling. Do you want to sell, or need to sell? You may need to sell your existing home to be able to afford the next home you’re looking for. Or, maybe you found your dream home, and now your current home has become a drain on your finances. Either way, your reason for selling will impact your price.
- Try to be impartial about the price. We get it. It’s your first house. Your kids were born and grew up in that house. You remodeled half of it with your own two hands. There are a thousand and one emotional reasons and values you will confuse with the physical reasons and value of your home. Try to step back and see your house as another house, not as a “home.” There’s a difference. People buy houses and make them their homes. No one cares what you paid for it, or how much work you put into it. They care about what they’ll have to pay to buy it.
- Do your research in person, and online. Studying what has and hasn’t worked in your area or “market” will give an excellent baseline to let you strategically price, position, and even stage your property, so you get top dollar for it. Once you have a good baseline for what the property is worth, do anything you can that will help you boost your asking price. Sometimes $5,000 to $10,000 worth of remodels can add $15,000 to $30,000 to the asking price. You can find out a lot about the market by using Homes.com to do your online research. Going to open houses in your neighborhood to see homes like yours is also a fun way to do research. Make a list of all the features and things you want to check out, so each house is evaluated on the same criteria.
- Get a Comparative Market Analysis (CMA) report from a Realtor. A CMA is simply a report compiled from a Multiple Listings Service (MLS) database that gives you the details, photos, prices and information (number of bedrooms and bathrooms, etc.) of the homes similar to yours that are on the market in your area. CMA’s list properties that recently sold, or failed to sell. Realtors will typically give you a CMA because they want to represent you when you do decide to sell.
- Ask for an evaluation of your home. A home evaluation is free and is typically a “mini-CMA” a Realtor does to get a sense of your property. Most Realtors you invite to evaluate your home will examine its layout, quality, and maintenance. Will the carpets need cleaning or replacing? Does it need to be painted? How is the workmanship in it? Is it cheap construction or quality? They’ll look at anything related to its condition, including structure, layout, and roof. Some Realtors will do a more extensive inspection; others will do a quick look around to get an estimate of what the home may be worth. Either way, their experienced eye, and assessment will be very close to what you might consider listing the home for. They’ll tell you what you might want to consider upgrading or fixing to get the best price.
- Timing is everything. Don’t rush to market. Try to price your home when its market value and buyer interest are at their highest, which studies show is in May. Homes put on the market between May 15 and May 30 tend to sell 18 days sooner than at any other time of the year. It may be because of the flowers, the weather, the sunny days, or because people get married in the spring. But it’s something to consider.
Unless you have a great location and property that’s really in demand year-round, it’s also important to understand that a house is most likely to sell for what you’re asking (or more) within the first six weeks it is on the market. The top activity among potential buyers and their agents traditionally happens during the second to fourth weeks they’re on the market. Knowing that, take your time placing your home up for sale if you can. Do your research, schedule your upgrades and any repair or remodeling work, price it appropriately and accurately. Then shoot for a May market date. You’ll be glad you did.
Happy house hunting!
Taking Action – Home Budgeting & Planning
One of the biggest traps new home-buyers fall into is using the maximum amount a mortgage professional qualifies them for instead of making sure they buy within their actual comfort zone.
In other words, buying within their budget.
You can’t buy within your budget unless you have one, so let’s get at it.
Step 1 – Making a Household Budget
We give you a guide & checklist that will go a long way in getting you started and on the right track. Be sure and download it, trust me.
The first and most important step is to create a household budget, which allows you to see how much money is coming in and how much is going out.
Your budget will help you determine how much mortgage payment you can really afford. However, the guidelines for loan approval may actually let you borrow more money than you can afford.
The guidelines look at your debt to income ratio by comparing your gross income to your new housing expense and only the bills you have that are listed on your credit report.
A budget will look at all your bills and use your income that you actually take home, not your gross income. This will help you answer the most important question of all: Can you afford the mortgage payment?
How to Create a Budget
- Write down all your income on a monthly basis
- List all your expenses as monthly amounts
- Add up all your expenses
- Compare your expenses to the benchmarks.
- Housing – 35%
- Transportation – 20%
- Debt Budget – 15%
- All other expenses – 20%
- Savings – 10%
- Maintain Records & Track your budget
Steps 1 – 4 are an irrelevant waste of time if you do not put effort into accurately tracking what you’ve spent, where you spent it and was it inside you budget.
Using pen and paper is fine for short to-do lists and scratching notes down, but it is not suitable to track your budget and spending.
There are several full-on budgeting software products and plenty of smaller and more accessible online / cloud based tools that will serve the same purpose at a fraction of the cost.
Mint, Freshbooks, Quicken; there are plenty of tools and zero excuses not to use one.
Step 2 – Get a Credit Check
The next step is to get a credit check. It is extremely important that you check your credit immediately because repairing bad credit takes time to fix. If you have insufficient credit, it takes time to establish it.
You need to get a tri-merge credit report that provides your three FICO scores in one report from the three major credit bureaus: Transunion, Experian, and Equifax.
If you find errors on your credit report, it usually takes at least 30-45 days to fix anything with the credit bureaus because request must be done in writing.
If you find you don’t have sufficient credit, it will take time to build it.
Step 3 – Set up an Emergency Fund
The next step is to set-up an emergency fund. An emergency fund is money you save in a short term savings account to be used in emergencies only.
If you have nothing saved right now in the bank, your first goal is to save one month’s worth of bills in a savings account.
How do you know what one month’s worth of bills are? You should have done a budget in step one that would tell you your monthly bills.
You should make your savings automatic. You should setup an automatic deposit with your paycheck into a savings account that is not linked to your normal checking account.
If it is linked to your checking account, you will be tempted to spend it. I recommend setting up a separate savings account.
Step 4- Write Your Financial Plan
“If you fail to plan, you are planning to fail!” ― Benjamin Franklin
The first step is accomplished by taking out a piece of paper and brainstorming what you would like to accomplish financially in the next 1-5 years.
Better yet, wad that tired old paper into a ball and fire it toward the nearest trash can. You should really – and this is one of the strongest suggestions I will give throughout the entirety of this book – use a cloud based tool.
Evernote tends to be one of the more popular FREE choices, but there are thousands more. There are some very slick speciality budgeting tools – MINT being my favorite – that you can also use.
Don’t get me wrong, I always scratch my to-do list by hand at first.
Once or twice a month I grab the high points from my notebook and scan them into the cloud.
Then organize this list into time frames of when you want to accomplish them.
Break it down into goals you would like to accomplish in the next year, next 1-3 years, and next 3-5 years. This gives you your short-term, medium-term, and long-term financial goals.
Once they are penciled in old-school paper style, head over to Evernote and/or your email account and stick a few calendar reminders with the pop-up enabled so that you have ample reminders and no excuses.
Once you have organized your goals you will need to put an action plan in place to help you follow them.
This first-time homebuyer manifesto is specifically designed as an action plan that will work for the bulk of the first-time homebuyer set.
Follow the plan. Do it.
If you still have doubt that you are ready, keep reading to see if you meet the criteria that indicates you are “not ready to buy” right now.
You Do Not Need 20% Down to Buy Your First Home
The 20% down myth, purveyed by uneducated media, scares far too many would-be homebuyers out of purchasing. Here are 5 very legitimate ways to avoid the 20% down myth.
- an initial payment made when something is bought on credit
- is typically indicated as a percentage of the sales price
Your down payment can come from your bank accounts, investments, stocks or mutual funds, inheritance awards, your retirement portfolio, a gift from a family member and even a bridal registry.
Requirements vary based on loan type and home buyers purchasing a primary residence will always have lower down payment requirements than an investor or second home buyer.
Conventional 97% LTV Program
The once dormant Fannie Mae 97% loan-to-value program has arisen from the ashes as of December 2014. Thankfully, the Federal Housing Finance Authority (FHFA) who controls Fannie and Freddie, realized that many Millennials were staying on the home-buying bench due to lack of assets.
They also found FHA financing pricier than they preferred, and lacked a reasonable conventional mortgage alternative.
As it happens young people in the millennial demographic have had a hard time saving during the Great Recession. Working a job that you are overqualified for typically means you are not making the wages you had hoped. That makes it difficult to save the funds needed for a robust 20% down payment.
It does not, however, indicate that savings-challenged millennials are a greater credit risk. In fact, many have impeccable credit that often works in combination with upward job mobility potential to make them a very low credit risk.
The conventional 3% down mortgage is a solid option to FHA financing. The 3% down payment program is limited to loan sizes of $417,000 or less. Loans in high-cost areas are permitted, but loan sizes remain capped at local conforming loan limits.
FHA – Federal Housing Administration
In 1934 the Federal Housing Administration was launched to provide an alternative to private market mortgage options. The period, although more severe, was not unlike the one from which we just emerged. Bankrupt banks, foreclosed homes, general housing despair… these were the commonalities of the day.
Since they launched more than 80 years ago, FHA loans have consistently provided access to mortgage funding with private capital would not. HUD currently requires 3.5% down payment for most borrowers. They also provide flexibility in how and where you obtain that 3.5%.
Gift funds from parents or close relatives are common. FHA even allows for “Bridal Registry” down payments which allow the bride and groom to request and document funds to purchase their first home instead of garden variety small appliances or china that is deployed once every 5 years.
With the recent changes bringing FHA mortgage insurance back to more reasonable levels, FHA loans continue to be a great option for first-time buyers.
VA – Veterans Administration Loans
A well-deserved reward for serving in our Armed Forces; VA mortgage loans have consistently provided the preferred financing option for borrowers with that option.
To be eligible for a VA loan, you must have served in the U.S. Armed Forces, or have been a member of the National Guard or Reserves. In some cases, spouses of deceased veterans are eligible as well.
VA loans typically offer 100% financing for qualifying veterans. Speaking of qualifying. VA underwriting understands the challenges that families with deployed members often face. VA underwriting guidelines provide enough wiggle room to work through those issues as long as they can be documented and explained.
USDA – US Department of Agriculture
The “Farmer’s Loan” has served America’s rural communities for decades. Funded by the he United States Department of Agriculture (USDA), this rural housing incentive is a very solid mortgage product for those that qualify.
USDA loans generally come at rates at or near the going market interest rate. Offering a low interest, low down payment mortgage option for low to middle income families, USDA mortgage loans are one of the last 100% financing mortgage products available on the market.
With mortgage insurance rates that are 1/3rd of what FHA charges and significantly less than the private mortgage insurance (PMI) fees required for conventional financing – a USDA rural mortgage generally smokes that of FHA loans at 3.5% down. There are geographic requirements for the property itself, and a lender can definitely help you figure out if your dream home qualifies for this program. The USDA program is commonly used in towns with a population of 25,000 or less.
State and Local Assistance Programs
The federal government is not really in the “assistance” game directly, although they do provide funding. They defer housing incentives and down payment assistance programs down the ladder to state and local governments.
It is the right call too. Real estate is local, and not an area that can be micro-managed from Washington. The local nature of home-buyer assistance and down payment programs means that every state varies a little bit differently from each other on the quantity, quality and variety of down payment assistance programs.
In other words, check your local, state, city, and county websites to get up-to-date and accurate information for where you live.
The majority of the programs available from state housing and finance agencies are geared to low and middle income buyers. However, there are also programs designed to stimulate neighborhoods and revitalize areas of your city that have potential for growth and home value appreciation.
If you serve the community as a firefighter, policeman, social worker or teacher then you’ll want to look at FHA’s “Good Neighbor Next Door Program”.
Good Neighbor Next Door allows for 50% off the purchase price for qualifying buyers. Yep, you read that right. Your $150,000 house will cost you a mere $75,000 if you qualify.
Don’t celebrate just yet though, there are a couple gotchas. Number one is that the home must be a HUD foreclosure and located in a HUD designated “revitalization” area. You can check what you have available on HUD’s website.
Individual communities and even neighborhoods allocate funding toward housing assistance and neighborhood revitalization too.
Your Pre-Approval Matters. Seriously.
You do not have to search hard to find mortgage horror stories. Lost earnest money, broken moving arrangements and countless hours of wasted time; all because one piece of the home-buying process was half-heartedly completed – the pre-approval.
Sometimes the loan officer is at fault and other times the borrower fails to disclose deal denying information.
Set aside and focus on how to avoid costly issues that can often pop-up on a weak pre-approval.
Start Early & Have a Plan
The first and most important step is to create a household budget, which allows you to see how much money is coming in and how much is going out.
Your budget will help you determine how much mortgage payment you can really afford. However, the guidelines for loan approval may actually let you borrow more money than you can afford.
Having a good idea of what you are comfortable paying every month is important. Don’t be tempted to exceed your comfort zone amount just because you can.
No matter how minute you think a financial detail may be; disclose it regardless.
It is much easier for a savvy mortgage professional to fix a potential issue rather than fixing an actual in-process issue.
Proactively addressing a potential landmine upfront, whether it be with additional or alternate documentation or simply a thoughtful explanation letter, will save time and possibly even your deal.
Only Use a Loan Officer Who Asks for Full Documentation
While intentionally taking the more difficult and time consuming path may seem counterintuitive, I can assure you it is not. The documentation is the documentation and you will need to provide it at some point. Smart mortgage originators know that and will convey it.
You are not working harder to provide the additional documentation; you are front loading the inevitable. It’s better to document something 45 days before closing then to try and document it 4.5 hours before closing.
If you are issued a pre-approval without providing any documentation then you are working with a lazy loan officer. The 1/8th you saved on interest rate doesn’t mean much when you don’t have a loan. Be smart.
Start Planning 6+ Months in Advance
Start by pulling your tri-merge credit report. Checking your scores, but most importantly check for errors, especially collections and liens. Upwards 65% of all credit reports have at least 1 error.
By checking this early you can address any errors and address legitimate derogatory credit too.
Home Warranties: An Extra Layer of Protection, or a Waste of Money?
When you buy your first house the offers will descend on you like a plague of locusts: yard services, cleaning services. home security and, of course, home warranty offers.
Chances are you might have even received a home warranty paid for by the seller or real estate agent when you purchased.
It will eventually expire and you’ll have a decision to make just like those that are considering one of the offers received in the mail.
Home Warranty 101
Warranties vary from company to company in both what they cover and how much they cost. In general they cover:
- Kitchen appliances such as your range or oven, dishwasher and built-in microwave
- Garbage disposals
- Plumbing including a whirlpool tub
- Water heater
- Ceiling fans and exhaust fans
- Heating and electrical system components
If you want additional items in your home covered – air conditioning system, refrigerator, washer and dryer, and a garage door – then expect to buy an “enhanced warranty.”
The upsell lives even with home warranties. Of course, you can also pay for optional coverage of items such as a swimming pool or septic system. $350 to $700 for a one year warranty is the expected price range, although longer and more extensive warranties will run more.
Are they worth it?
My suggestion is to take a longer look at the fine print for the warranty being offered. What is excluded? What are the special stipulations? Exemptions? Loopholes? The fine print is important because, in my personal experiences, they will be deployed by the warranty company more often than not. Twice I tried to use a home warranty benefit personally, both times I was denied on semantics. Many of my clients have had similar experiences.
Do your homework and don’t assume that what a builder or real estate agent provides you at closing is immune from issues.
Selecting Your Target & Making Your Offer
At this point we will work under the assumption that you have followed – to the letter – our other fantastic guidance.
You have used our formula to narrow your search to the homes and neighborhoods you can afford, you have used the tools provided to check out the neighborhood variables and potential and you have an awesome loan officer with a rock solid pre-approval.
You did do all of that right? Good.
Making the Offer
With the fact that you are generally prepared in mind, it’s time to dig deeper on the individual home you want to make the offer on.
Check Neighborhood Comparables
- What are the average sales prices for homes in the area with similar features and characteristics?
- What condition is the home in, and what repairs or improvements are needed?
- Are similar homes available at a more desirable price?
- How long has the home been on the market?
- Has the sales price already been reduced?
- Is the seller considering other offers at this time?
Your real estate agent will be able to provide you with answers to all these questions via a Comparable Market Analysis (CMA).
Lean on their data. Despite the public availability of real estate data, agents still get the best quality with the most frequent updates. Put them to work.
You will generally have to negotiate the offer. Another thing your real estate agent will handle and, assuming you did your homework when choosing them, be darn good at. The seller’s agent will counter your agent’s offer.
We will jump to the part where all parties are in agreeance and you are officially under contract. Escrow is opened and earnest money is deposited.
The CLOCK IS NOW TICKING and you now have a finite amount of time to wrap your mortgage financing, homeowner’s insurance and other details up into a nice little package that gets fully approved by your lender. If you have listened and prepared in advance then you will be just fine.
If not… then I wish you the best of luck. You’ll be starting parts of the process that should have been completed long before the purchase offer was made. You are in for one helluva ride over the next few weeks trying to make up for lost time.
It’s better to be prepared.
Ask any home buyer or seller which part of the process they dislike most, and you can expect just about all of them to respond with “the closing.” In most cases, dislike for the closing process tends to revolve around one common element: delays. But delays are inevitable in home purchases because even though the terms and conditions included in a real estate contract are important, they are not always concrete.
The truth is, a real estate deal involves several different parties and with so many moving parts, delays should be expected. Here are some of the most common reasons why closings get delayed and what you can do to keep your deal moving forward.
#1: Unrealistic Contract Dates
Using an experienced real estate agent is important because one of the biggest mistakes an agent can make is setting unrealistic contract dates for the sale. In most cases, it takes anywhere from 45 to 60 days for a closing to occur after an offer on a home is accepted by the buyer. This provides the buyer with enough time to secure financing, and the seller to take care of any contingencies agreed to in the negotiations. To schedule a closing for any time shorter than that will almost always result in delays.
#2: Problems With the Bank Appraisal
The bank appraisal process is one of the most important parts of the home buying process, but it is also one of the most common causes for closing delays to occur. And, there are several reasons why this can happen. For instance, the bank appraisal may determine that the home was under-appraised at the time the agreement was made between the seller and the buyer. As such, a new agreement would have to be struck, the negotiations of which could delay the closing date.
#3: Problems With the Title
This happens all too frequently. A home sale is agreed upon, and then during the title search, it is discovered that the home has previous liens on it, essentially making the home un-sellable. The only way you can avoid this problem and ensure that the title on the home is clean is to hire a real estate attorney.
#4: Different Closing Figures
Before closing, both the buyer and the seller receive their closing figures. The closing statement, which has been traditionally known as the “HUD-1 Settlement Statement,” is not always considered accurate by one or both parties. The industry is making strides to change the document so as to eliminate this popular cause of closing delays. As of October 2015, the HUD-1 Settlement Statement, as well as the Good Faith Estimate, have been replaced by the closing disclosure and loan estimate document.
#5: Problems With the Land Survey
An instrument survey is the drawing of the land on which the property being sold sits, and it is designed to show the legal borders of the property being purchased. In some cases, the closing can become delayed due to a discrepancy with the land survey.
For instance, the property border shown on the document might be encroaching over a neighbor’s property line. This is another issue where having a real estate attorney on your side could help you avoid a potential problem that could result in a closing delay.
#6: The Lender Needs Additional Documents to Approve Financing
Many buyers misunderstand what it means to be pre-approved for their mortgages. Most think that the pre-approval means that the loan is guaranteed and everything will be ready to go at closing. But the reality is that even with a mortgage pre-approval, the lender will always review the case again right before closing to see if anything significant has changed in the buyer’s credit report or bank statements.
If the lender sees something that worries them, they will ask for additional documents, and this will almost always cause a delay in closing. To avoid this, try to keep everything as it was when you were pre-approved for your mortgage. This means: don’t open up any new lines of credit, don’t change jobs, don’t make any questionable deposits or withdrawals from your bank account, etc.
#7: The Seller Didn’t Complete Agreed-Upon Repairs
Sometimes in order to sell a house at the agreed-upon price, a homeowner might need to agree to repair certain problems in the home. By the time of closing, all of these repairs need to be completed or the buyer may choose to delay the proceedings until all of the agreed-upon repairs are complete or they could back out completely.
If you’re buying a home and the seller has agreed to make repairs, then your real estate agent should be ensuring that the repairs are being made so the closing date remains true.
#8: Problems Discovered During the Final Walk Through
The final walk through is the last chance the buyer is going to have to see the home before the closing date. Therefore, the buyer needs to go over everything with a fine toothed comb. Sometimes, a buyer finds a problem that was missed earlier, like the HVAC isn’t working or one of the appliances is broken. When this happens, the closing process stalls until the appropriate action can be completed.
#9: One or More of the Real Estate Professionals Causes the Delay
As stated earlier, there are a lot of people involved in a real estate sale, and sometimes, one or more of these professionals could cause a closing delay. For instance, the real estate agent might not have returned the signed documents to the lender in time. Or, the bank appraiser doesn’t schedule a re-inspection to confirm that the bank-required repairs were made.
#10: The Mortgage Application Is Denied By the Lender
In the worst case scenario for both the buyer and the seller, the buyer’s mortgage application gets denied by the lender. This forces the seller to try and find another buyer, and the entire process starts all over again.
Next to the kitchen, a bathroom renovation is right up there on just about every homeowner’s wish list. Yes, a total overhaul is pricey, costing an average of $9,315. But if you don’t have that kind of cash lying around, that doesn’t mean you have to settle for a petrifying powder room.
Here’s the deal: A few strategic bathroom makeovers can have big impact for far fewer greenbacks, so if you’re dying for a new look (or to make renovations that will pay off at resale), try these budget-friendly ideas.
–– ADVERTISEMENT ––
Paint, meet brush
Paint is always your friend in the budget department, says NKBA K+B Insider and Master Builder Karl Champley. Bathrooms tend to be small and dark.
“The solution is lighter colors,” Champley says, “like ultra-bright white for the ceiling.” You’ll create a dazzling space while visually stretching the height of the room.
Meanwhile, be sure to paint the walls and door an interesting color. And “purchase the shade in two different sheens such as flat and semigloss,” says Gordon Boardway, a painting expert with Five Star Painting.
Boardway notes that different paint sheens create cool effects on bathroom walls, as “flat paint absorbs light while semigloss paint reflects light. Use painter’s tape to make straight lines for fun stripes, diamond patterns, chevron stripes, and more.”
Target the tile
Emile L’Eplattenier, a real estate marketing and sales analyst at Fit Small Business, has just one word when it comes to penny-wise bathroom renovation: tile! She suggests pairing earthy, natural materials such as slate with sleek marble or stainless steel. The best part? “Natural slate tile is actually incredibly cheap,” says L’Eplattenier. “You can get 12-by-12-inch tiles for about $2 a square foot.”
If you can’t redo all the tile, an even cheaper route is to regrout—but change the grout color to shake things up. Go ahead, take a chance!
There’s no need to rip out big pieces like a dingy bathtub (which will cost you an average of $2,849 to replace) or a stained countertop, says Ciara Devitt, interior design expert for Cymax Group.
“These can cause damage to drywall or surfaces underneath, which will then need to be replaced,” she says.
Instead, refinish them with products like the Rust-Oleum Tub & Tile Refinishing Kit for $26. You can also try Miracle Method, a bath and kitchen refinishing product. Refinishing a 5-foot bathtub starts at $475, while countertops can often look brand-new for around $200 to $400.
Yanking out a whole sink can be pricey, so consider keeping the original sink and faucet and swapping out just the vanity beneath for a new one that fits your sink, which will run you just $499. Champley also suggests installing a wall-mounted model (also known as a floating vanity) or pedestal vanity to keep the floor clear.
Replacing faucets, door handles, and various other ironmongery can impart “an instant face-lift to the bathroom,” says Devitt. To save even more, make sure the shower and tub faucet has a WaterSense label, which will lower your water bills without sacrificing performance. Devitt’s favorite WaterSense two-handle faucets for under $300 come innickel and bronze.
CoCo Peterson, director of merchandise at DEQOR, says “a killer mirror” can make a bathroom appear larger while also providing more light to the room.
“Mirrors do wonders to open up a space and are inexpensive,” says Peterson. “I’ve installed many full-length mirrors in small bathrooms, which can make you feel like you have doubled the size of the room.”
Peterson suggests affordable mirrors for every decorating taste: vintage and shabby chic ($130), functional ($160), bold and eclectic ($398), and minimalist and trendsetting ($170).
One of the biggest bathroom mistakes you can make is to use only one source of light, says Sean Juneja, co-founder of Decor Aid. Adding a sconce ($189) will create different atmospheres throughout the day.
“In the middle of the night or early evening, you can use just the sconces for a soft light while strong overhead lighting can be used for showering and grooming,” Juneja says.
To keep your bathroom from looking “soulless and generic,” Juneja suggests carefully choosing items like the shower curtain, wastebasket, and bath mat to pull the room together.
“Try pieces that are simple and tailored,” he says. “Don’t just run out and get everything in white.”
A gray shower curtain is fun and purse-friendly at $45. Luxe Turkish towels add pattern and texture for a $50 investment, and a Nate Berkus for Target bathmat is just $18.99. Another fun source for bath accessories is pigeon and poodle.
“Vanity accessories will help you organize things like cotton balls and tissues and add interest to your sanctuary,” Juneja adds.
Yes, artwork in the bathroom is “a thing,” says Juneja. It’s a great way to not only add visual impact but also to express your personality, “which people often forget to do when decorating their bathrooms.” He recommends looking for affordable art on sites such as ArtStar, Society6, and Minted. You can also check out these other ways to find great artwork for your home.