Should I buy a new or existing home?

That letter from the bank: You know the one — it says you’re approved to buy a home for a certain amount of money. It’s burning a hole in your pocket.

Now it comes down to deciding what type of home to buy, within your budget. Condo or townhome? Existing home or a newly constructed house?

The latter is a question we hear frequently from our clients. Let’s take a look at the differences between buying a new home and an existing home.

The Basics

A brand-new house gives you a blank canvas on which to create your dream home. And, while an older home can be remodeled to suit your lifestyle and tastes, it requires time and lots of money.

If you like the idea of being part of the numerous decisions that go into building a home from the ground up, new construction may be right up your alley.

Keep in mind, however, that there are typically delays, so if you’re easily frustrated, consider an existing home.

Cost

When you buy a new home, you’ll pay more for it compared to similar existing homes. This is known as the “new home premium” or “new construction premium.”

While there is no set amount, last summer, new homes sold for 28 percent more (nationwide average) than existing homes, according to Prashant Gopal at Bloomberg.com.

In a 2018 National Association of Homebuilders (NAHB) poll, 31 percent of the homebuyers surveyed said they prefer new homes, while 46 percent said they prefer existing homes.

Yet, when a Harris poll asked those who prefer new homes if they were willing to pay a new construction premium most respondents said they were not.

You’ll need to decide if the new home premium is in your budget and you’re willing to pay it.

Ongoing costs of home ownership, however, are typically lower in a new home, at least for the first four years, according to the American Housing Survey from the U.S. Census Bureau.

For instance, the owner of a newly-constructed home most likely won’t be faced with unexpected repairs and, at least for the first few years, maintenance costs will be negligible.

“In fact, 73 percent of new homeowners spent less than $25 a month on routine maintenance costs,” suggests Peter Bennett at MyBankTracker.com.

New construction homes may have energy efficient features — another money-saving aspect of choosing new over old. Monthly savings on utility bills further decrease the new home premium.

Finally, many new home developers offer incentives when the buyer agrees to use the in-house lender. Incentives may include a significant closing cost credit or points paid on the loan, further bringing down the new home premium.

There is one significant financial drawback: new construction homeowners usually pay higher property taxes. Because new home communities are usually built in less-developed areas, property taxes subsidize development of the area’s infrastructure.

Taxes will be part of your monthly mortgage payment, so pay close attention to this detail when making your decision.

When weighing the pros and cons of buying new construction, crunch all the numbers before making your choice.

Location, Location, Location

Sure, it’s a well-worn mantra, but location usually is the most important consideration when shopping for a home.

The reality is that location determines whether a home will hold its value and appreciate over time. Homes in some school districts, for instance, hold their value better than those located in others.

With existing structures, what you see is what you get when it comes to the neighborhood. You can tour the area and get a feel for the type of neighbors you’ll have if you choose to purchase there, how well they maintain their homes, helping or hindering the area’s home values.

If you have children, you have no way of knowing if other families will be drawn to the community, providing playmates for your kids.

In new home subdivisions, especially in brand new ones where sales are few, the neighborhood is a wildcard. Only when all the homes are sold will you know what type of neighborhood you have on your hands.

In many cases, but not all, new neighborhoods are located on the outskirts, while established ones frequently are located nearer to town.

Choosing between these two locations is a lifestyle decision that requires factoring in your daily commute and determining how important proximity to town is to you.

It’s a matter of taste

If you need a home with lots of space for storage, hobbies or a home office, a customized, new construction home may be the ticket.

If your wish list includes a home with mature landscaping in an established neighborhood, older homes may work better.

The decision between old and new may just come down to whether your lifestyle includes walking to the movies and to dinner at your favorite downtown restaurant or having an extensive hiking trail right outside your door.

Should you decide to go the new construction route in your home purchase, go into the process with representation. Make no mistake – the builder’s real estate agent represents the builder’s best interests.

Although it may seem easier to use the same agent, it isn’t wise. Feel free to reach out – we’re always available to answer questions.

What credit score do I need to buy a house?

Three digits. They may be all that is standing between you and your own home or continuing to rent. Known as your “credit score,” those digits reflect how risky it will be to lend you money. The score may also impact other aspects of the homebuying process as well.

 How your credit score is calculated

The road to your credit score, also known as a FICO® Score, begins with the credit reporting agencies. Known as “the big three,” they include Equifax, TransUnion® and Experian®.

The information the agencies collect ends up in the hands of the Fair Isaac Corporation (or, the aforementioned FICO®, for short), one of the nation’s top two credit scoring companies.

Ninety percent of what FICO calls “top lenders” rely on your FICO score to determine your credit risk and how much they will charge you for the money you borrow.

FICO’s score calculation is complicated and secret. What they end up producing, however, is a three-digit score from each of the reporting agencies.

“Mortgage lenders usually take the middle score” from this subset, according to Craig Anthony at investopedia.com.

“For example,” he continues, “if your credit scores from the above agencies are 710, 690 and 610, the lender typically makes its decision based on the 690 score.”

Learn more about how FICO determines your score at myfico.com.

What is considered “good” credit for a mortgage?

FICO Scores can range from a low of 300 to a high of 850. According to FICO, about 1.4 percent of Americans with credit scores have a perfect 850.

Last summer, however, the company announced that the average score in the United States reached an all-time high of 704, up four points from 2017’s average.

So, what’s the magic number you’ll need to buy a house?

It depends on the type of loan you’ll be pursuing.

  • FHA – 580 and above to qualify for the 3.5 percent down payment and 500 and above with a 10 percent down payment.
  • Veterans Administration (VA) – The VA doesn’t loan money so it doesn’t mandate a minimum credit score. Most VA lenders want to see at least a 620 score, although some lenders may approve a borrower with a 580 score.
  • Rural Development (USDA) – 640 and above.
  • Conventional loans – 620 and above

Since requirements change occasionally, use the above minimum scores as a general guideline and consult with a lender for current requirements.

How does a low score impact the homebuying process?

If you find your credit score on the borderline, just barely acceptable to a lender, you may run into the following problems along the road to homeownership.

You’ll pay more for your house payment every month

First, your credit score will determine the interest rate on your loan.

Use  FICO’s Loan Savings Calculator to determine how much money you can save by raising your credit score before applying for a loan.

Home insurance rates are higher for those with poor credit

If you won’t be paying cash for the home, the lender will demand that the home be insured. And, if you’re credit is poor, you’ll pay more than homeowners with good credit pay.

“People with poor credit pay at least twice as much as people with excellent credit in 37 states and Washington, D.C.,” according to Laura Adams, InsuranceQuotes’ senior analyst.

Live in West Virginia? A poor credit score may doom you to paying more than twice the rate (208 percent).

And, since insurance is one of the four components of your mortgage payment (principal, interest, taxes and insurance), a higher premium will impact how much you pay for the home each month.

How quickly can I raise my credit score?

The first step to take when trying to raise your credit score quickly is to look for errors in your credit reports. You are entitled to a free copy of your reports every 12 months, from all three credit reporting bureaus.

The Federal Trade Commission recommends that you order these reports from annualcreditreport.com, the only agency authorized by the U.S. government.

Items to look for in your credit report include:

  • Personal information – Ensure that your name, address and Social Security number are accurate.
  • Check all listed account numbers for accuracy.
  • Check that there are no accounts listed as closed which are actually open.
  • Look for accounts that are incorrectly listed as delinquent.

You will find more tips on what to look for in your credit report online, at consumerfinance.gov. If you find errors, dispute them according to the bureau’s instructions. These are listed on each credit report.

In the meantime, don’t open any new credit accounts. Since the credit bureaus don’t know how you’ll use this credit, they consider you a higher credit risk with new credit and it may result in as much as a 10-point reduction in your score.

Don’t close any credit card accounts, either. The lack of installment credit makes you appear riskier.

Pay your bills on time

Since your payment history accounts for 35 percent of your credit score, late payments are brutal on your credit score. Start meeting those payment deadlines.

Consider putting the accounts that you typically pay late on an automatic payment schedule with your bank.

Don’t be shy about obtaining financial counselling. You’ll find a list of approved credit counseling agencies on the Department of Justice website.

Or, consider meeting with a non-profit housing counselor in your area. You’ll find a list of U.S. Department of Housing and Urban Development-approved counselors online at consumerfinance.gov.

Budget your way to a new home

Buying a home isn’t as easy as walking up to a lender and requesting a mortgage. You’ll need cash for a down payment and the loan’s closing costs, unless you’re applying for a VA or USDA loan.

If you’ll be going after a conventional loan, you’ll typically (but not always) need 20 percent of the loan amount as the down payment.

Right now, the median sales price of a home in the U.S. is $240,000. Based on that price, you’ll need to come up with between $8,400 and $48,000 (depending on the loan program) just for the down payment.

Then, there are closing costs to consider. These vary, but they are typically between 2 and 5 percent of the loan amount.

Unless you have a stack of cash sitting around, you’ll need to start saving, and that takes careful planning. A well-though out budget is your road map.

The Budget

It’s important to get your budget in writing, whether that means using a spreadsheet, paper and pencil or personal finance software. Financial guru Dave Ramsey recommends the free budgeting software at everydollar.com or try Microsoft Money Plus Sunset Deluxe

The most basic of budgets includes your income and your outgo. Income should include all money from all sources.

Outgo includes not only your fixed expenses, such as rent or mortgage payments and installment loan payments, but variable expenses (utilities, telephone, etc.) and every single penny you spend on a daily basis.

Some spending that is frequently overlooked by budgeters includes:

  • Money given to charity
  • Dining out (yes, even that bagel and coffee you stop for each morning)
  • Transportation expenses (fuel, insurance, tolls and parking)
  • Auto maintenance
  • Pets (food, accessories, vet visits)

Keep a small notebook on you while you’re away from home so that you can quickly jot down the small purchases we all make every day. These may include items such as coffee and bus fare.

Give it a Trial Run

Take the new budget for a spin for a month or two and see how it fits and adjust where necessary.

Your budget will show you where you spend your money every week. More important, it will show you areas you can cut ― unnecessary spending that you can add to your house fund instead.

By the way, open an online savings account in which to stash your house fund and forego the debit card. Without a debit card, these accounts are a bit harder to access than a brick and mortar bank so you’ll be less tempted to raid the account.

Choose a fee-free account such as those offered by:

Today’s homebuyer has options when it comes to buying a home for the least amount of cash out-of-pocket. Go for one of the low-down payment programs and ensure your real estate agent requests that the seller pay a closing cost credit.

These two items alone will slash your cash out-lay tremendously and you’ll be in your new home sooner, rather than later.

3 Critical Home Seller Mistakes and How to Avoid Them

Real estate isn’t a game for the faint of heart. To ensure that you walk away from the deal with the maximum amount of money possible requires following a time-tested process.

Unfortunately, not all real estate agents counsel their clients on the do’s and don’ts of selling a home so mistakes happen frequently.

Let’s take a look at three of the most critical mistakes that home sellers make and how to avoid making them.      

1. Overpricing the Home

A home sale isn’t like a yard sale where folks haggle over prices. Sure, there may be price negotiations, but don’t count on them when coming up with a price for the home.

Pricing high to give the buyer “wiggle room” to negotiate isn’t wise.

Your agent will place your home on the Multiple Listing Service (MLS)  database shortly after taking your listing. He or she will enter all the particulars of the home and the price.

Other agents in the area will search the MLS for homes that their buying clients may be interested in viewing. These searches are almost always based on price.

When you overprice your home, it will show up in searches for larger, newer and nicer homes – homes that yours can’t compare with.

So, it will sit on the market with view buyers viewing it in person. When a home sits for too long, buyers’ agents and their clients get the impression that you aren’t a serious seller and, in the end, your home may become stigmatized.

A home’s value is determined by what buyers are willing to pay for it, not what the homeowner wants to get for it.

To determine what buyers are willing to pay requires an analysis of homes similar to yours that have recently sold.

It doesn’t matter what your friend Connie across the street is asking for her house, it only matters what she finally realizes when the deal closes.

The biggest mistake a home seller can make is to lose that most valuable marketing period – the first few weeks after the home hits the market.

Unless the market is red-hot for sellers and multiple offers are the norm, work with your agent to determine the home’s value and price it right.

2. Not preparing the house

“You only have one chance to make a good first impression,” isn’t just excellent advice for a job interview. Houses make impressions as well and if you don’t take the time to ensure yours makes an impact immediately you may end up leaving money on the table.

Preparation starts with cleaning the home until it is immaculate. Paint any walls that need it, make repairs to dripping faucets, sagging screens and loose banisters.

Staging the home – hiring a decorator to rearrange furniture and add decorative items – isn’t a must but it has proven to bring more money at the close of the sale.

Finally, never neglect the exterior of the home. What a buyer sees when he drives up to the curb must be compelling enough to make him want to see what’s on the inside.

3. Putting restrictions on showings

Being flexible is a must when your home is on the market. This means not putting too many restrictions on showing times.

If you require a 24-hour notice or will only allow the home to be shown during certain hours, you restrict the pool of buyers that may be interested in purchasing the home.

Flexibility also means being willing to leave the home at a moment’s notice so that an agent can show it. It means leaving for the entire day if your agent wants to hold an open house.

Yes, it’s a bother and it’s inconvenient. But the homeowner hanging around during showings and open houses is intimidating to buyers and they won’t feel free to truly investigate the house.

Bonus Tip

One of the biggest mistakes a homeowner can make is to be less-than truthful about all aspects of the home.

Disclosure is your duty non-disclosure of a known material fact can land you in court. You must tell a potential buyer both the good and the bad about the house and the neighborhood.

Ask your real estate agent any questions you may have about the disclosure process and your role in it.

How to sell a home as a landlord

Tenants come in two “flavors,” affable and nightmarish. We hope, for your sake, that when it comes time to sell your rental your tenants are the former. The whole process will go much smoother.

If they are disagreeable, you may want to take option 1 when deciding when to list your rental property.

Timing the sale of your rental property

Option 1: Wait

Many landlords decide that their tenants aren’t the type of people to tolerate the home sale process so they decide to wait until the lease is up.

The biggest problem with this decision is that the property will be vacant, and vacant homes don’t show as well as furnished homes. Of course, you can get around this problem by hiring a professional home stager.

If you’re on a tight budget, have only the most important rooms staged, such as the kitchen, bathrooms, master bedroom and garage.

Then, consider that you’ll be on the hook for the mortgage payments until the home closes escrow. Speak with your agent about how long it may take to ready the home for sale, market the home and to close escrow.

This will help you decide if you can afford the carrying costs of the home without tenants in place.

The lack of tenants, on the other hand, makes it easier to perform any needed repairs or updates to the home. It also offers maximum flexibility to buyers’ agents.

Option 2: List now

There are many things to consider if you choose to list the home while the tenants are still living in it. As previously mentioned, you’ll avoid having to pay the carrying costs of the home while it’s for sale.

Another advantage to listing now is that the home will be attractive to investors. If the tenants want to remain after the sale, they are much more likely to be cooperative during the process and the potential investor/buyer has the bonus of in-place tenants when the purchase closes.

The disadvantages of this scenario are many, however. Here are a few things to consider:

  • Although a furnished home is easier to sell, is the tenants’ furniture, accessories and overall taste in decor something that will appeal to the home’s target buyer or what a stager can work with?
  • Has the tenant taken care of the home?
  • Is the tenant amenable to keeping the home clean at all times?
  • Do you have a good relationship with the tenants or can you create goodwill prior to listing the home?
  • The tenants will be acting on your behalf when it comes to scheduling showings with buyers’ agents. An unhappy tenant can make or break the sale by sabotaging showings, delaying inspections and being generally uncooperative.

There are ways to entice your tenants to be more cooperative. Consider the following concessions:

  • If it’s not already in the lease, offer the tenants the first right of refusal. This means that before accepting an offer, you must notify the tenants. At this point, they will decide whether or not they wish to buy the home. If they decline, you are free to entertain other offers.
  • Give the tenants a rent-free month.
  • Offer the tenants a reduced rent until the home sells.
  • Offer them a financial bonus for every showing. Have the showing agent sign off on a register to prove the home was shown.
  • Offer to pay their moving costs.
  • Offer a bonus when the home sells (such as an extra $500 when they move out).

Review the lease and, if necessary, consult with your attorney before you make a final decision on which path to take. We’re happy to work with you on timing the sale for your needs.

Remodeling projects that give the most bang for the buck

The “Remodeling 2019 Cost vs. Value Report*” has just recently been released. A deep dive into which remodeling projects provide a homeowner with the best return on the money invested, the latest report is full of surprises.

In last year’s report, the three projects with the highest ROI were all improvements to the home’s exterior. These included:

  • Garage door replacement (98.3%)
  • Manufactured stone veneer (97.1%)
  • Entry door replacement (91.3%)

If you’re considering making repairs or remodeling your home and want to know how much the project will add to the value of your home, read on.

By the way, the report is broken down into “mid-range” and “upscale” projects. The former uses standard materials while the latter incorporates higher-priced versions.

Replace your garage door

The project on the list that returns the most money on your investment when you sell your home is a new garage door.

Although it costs more to do this year and the ROI is lower than it was in 2018, garage door replacement has maintained its number one spot on the list for two consecutive years.

This makes sense, since curb appeal is so important to a homeowner’s bottom line when the home is on the market.

This project is considered “upscale,” and it will run you about $3,600 (the national average). This price includes removing and disposing of the existing garage door and tracks and the installation of the new one.

The project calls for a four-section door on “new heavy-duty galvanized steel tracks; reuse existing motorized opener.”

It also has all the bells and whistles, such as foam insulation, thermal seals, windows and high-end hardware.

No, you won’t see a return of that $3,600 at the closing table when you sell the home, but you will get close. The upscale garage door replacement project yields a 97.5 percent return, or $3,520.

Remember, these are national averages. Costs vary among regions.

New siding

Although it’s listed as a mid-range project, ripping out the vinyl siding on your home and replacing it with manufactured stone veneer is pricey. But it completely transforms a home’s curb appeal.

The cost for this home renovation project includes removing the vinyl siding and replacing it with the stone veneer, underlaid with moisture barriers (two layers). This is a simplistic explanation of the scope of this project. You can read more and see before and after sketches at costvsvalue.com.

This project, on a national average basis, costs $8,907 (last year’s cost was $8,221) and its return on investment via your home’s value is projected to be $8,449, a 94.9 percent ROI.

Remodel the kitchen (just a little)

Kitchens help sell homes and if yours needs a minor remodel (using mid-range materials), now may be the time to get it done.

It’s a pricey job with an average national cost of $22,507. This price, for a 200 square-foot kitchen, includes new cabinet and drawer fronts (shaker-style) and countertops.

Add in a new stove and refrigerator (energy-efficient), sink and faucet, flooring and fresh paint for an 80.5 percent return on the money you invest.

When looking at the national average price of a project, keep in mind that the survey was conducted in 2018, when the remodeling industry was enjoying a “robust market,” according to the study’s authors, and prices were substantially higher because of tariffs.

This year’s costs may be quite different.

Keep in mind, as well, that the value added by home improvement projects is subjective. As the study’s authors explain, getting rid of a small bedroom to enlarge a bathroom “may be seen by a potential buyer as the loss of a bedroom, rather than the gain of a luxury bathroom”

 

* © 2019 Hanley Wood, LLC. Complete data from the Remodeling 2019 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.

Hey boomer: Considering buying a home in a retirement community?

Now, before you turn your nose up at the topic, we aren’t talking about senior living communities – those group homes for baby boomers and their elders where they take a little bus to Walmart once a week and someone else does all the cooking.

We’re talking about retirement communities – for boomers who are active and independent and want to downsize yet still be around people their age. They’re sometimes called “55+ communities.”

Yes, it’s the one case that a community can legally discriminate by saying “no youngsters allowed.” At least to live there.

Recent studies show that many boomers prefer to retire to urban centers, where they can be around a diverse age group, walk where they need to go and take advantage of the cultural and dining experiences that downtowns have to offer.

But, there’s still a big chunk of retirees who choose retirement communities so they can hang out with folks who share a common historic and cultural perspective. People closer in age.

Whether it’s a resort retirement community, a golf course community or a typical neighborhood-type community designated for “seniors,” there’s a lot to consider when buying a home in which to spend the rest of your life.

Will you relocate?

Spending an occasional holiday in a certain region and settling in for year-round living are two entirely different things. Even in the balmiest cities, there are changes in the weather and climate that you may not be familiar with.

For example, have you ever heard of Boise, Idaho’s inversion layer? It’s an atmospheric condition that traps polluted air in the valley, making it unhealthy to breathe for some residents.

The layer also traps moisture, creating “dense fog and gray, sunless days that we can get in the winter,” according to the Argus Observer online.

Even in what seems to be the “endless summer” of Hawaii, “vog” can hang in the air on the Big Island during volcanic eruptions. Oh, and the dust – covering windshields and even your indoor furniture.

While these are seasonal or event-dependent considerations, they are considerations, nonetheless. Learn all you can about the climate, weather and other events that may impact you, especially if you have an ongoing respiratory illness.

Then, spend some time in your choice of retirement cities during the off-season. For instance, spend an August in Florida to ensure you can tolerate the humidity, visit Arizona in early spring if you’re an allergy sufferer.

Oh, and if super-hot weather doesn’t agree with you and you have your heart set on retiring in Henderson, Nevada, visit during July when the average temperature is 105 degrees.

Who else lives there?

If you’re toying with the idea of buying a home in a “resort-style” retirement community, you’ll be spending more time with your neighbors than you would if you chose a standard 55+ neighborhood.

Tour the area during the times when the social activities you’re interested in participating in take place. Strike up conversations and study the group. See if these are people with whom you have a lot in common and with whom you’d like to spend more time.

While many of the homes in these types of retirement communities are of the condo variety, those that offer single-family homes frequently come without fences between neighbors.

In a standard neighborhood type arrangement, drive or walk through the neighborhood at different times of day and do stop and chat with any residents who are outside. 

Do you need nearby medical facilities?

Sure, this seems to be a no-brainer when choosing where to retire, but you’d be surprised how many people fall in love with a community that isn’t convenient to needed medical care.

The financial considerations

If there’s one thing that can greatly impact your income during retirement it’s taxes. To estimate your monthly obligations, including your new mortgage payment, requires careful consideration of taxes.

Seven states currently have no state income taxes:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

Add Tennessee to the list, starting in 2021. While New Hampshire doesn’t “tax an individual’s earned income (W-2 wages),” it does impose a 5% tax on income from interest and dividends, according to BankRate.com.

But lack of a state income tax shouldn’t be your only consideration when thinking about paying as little tax during retirement as possible.

Buying even the least expensive home in a retirement community may not be worth it if that community is located in a state that taxes Social Security benefits, pensions and retirement plan distributions.

Since you’re buying a home, first look into property taxes. These can add greatly to your monthly mortgage payment.

Kiplinger.com offers a list of 10 Most Tax-Friendly States for Retirees and USAToday.com compares Average Property Taxes for all 50 States and D.C.

Bad credit home loans

It doesn’t take much to diminish a credit score. Something as small as a 30-day late payment can cause it to plummet.

If that payment goes another 30 days late, your credit score (which, for FICO, ranges between 300 to 850) will fall even more.

Soon, you may be considered a subprime borrower (those with credit scores below 670).

In December of last year, 71 percent of all home loans (for purchases, not refinances) went to borrowers with FICO scores over 700, according to Ellie Mae’s Origination Insight Report.

While this may sound devastating to someone with a low credit score, the reality is a bit better, at least right now.

In late 2018, banks reported eased lending standards for subprime borrowers.

Yes, it’s hard to get a mortgage with a credit score of less than 700, but it’s not impossible. Your best bet is to pursue an FHA loan.

While the agency will insure a loan to a borrower with even a 500-credit score, that borrower won’t be offered the attractive 3.5 percent down payment option but will have to pay at least 10 percent down.

FHA background

The Federal Housing Administration is an office of the Department of Housing and Urban Development (HUD).

According to the former’s website, the program “costs taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely.”

Which is not entirely true. After the last recession, FHA requested and got a taxpayer-funded bailout of about $1.7 billion.

FHA doesn’t grant loans, it ensures their repayment and, as mentioned earlier, it will do so even for borrowers with FICO scores as low as 500.

But your credit score isn’t the whole ball of wax

FHA’s requirements don’t always match lenders’ requirements.

So, although FHA says “Hey, we’ll insure a loan for this guy or gal with a 580-credit score,” the lender may say “Well, that’s just swell, but we don’t make loans to people with scores that low.”

While you can go online and try to find lenders’ minimum score requirements, why bother? Speak with a mortgage broker and let him or her do the heavy lifting for you.

Here are the steps to take to find an FHA-approved lender.

  1. Go online and navigate to HUD’s website.
  2. Leave the “Lender Name” box blank but enter city, county, state and ZIP Code.
  3. Under “Insurance Type,” tick only the box for “Title II Mortgage Programs.”
  4. Tick only the box for “Single Family Originator Only” under the “Service-Originator Type” heading. Click on “Search.”
  5. Contact the lender of your choice from the list provided.

Another option for borrowers with low credit scores

Bank of America and Neighborhood Assistance Corporation of America offer mortgages to certain low- and medium-income borrowers with poor credit. Some borrowers even qualify for zero down-payment loans.

Known as “character-based” lending, the program takes a wholistic view of the borrower’s finances, making allowances for credit dings for things such as late-paid medical bills.

It’s not an easy process, but well worth it if you’ve been turned down elsewhere. Find out more about the program online at Naca.com.

As soon as you get that loan pre-approval letter, call us. We love house hunting!

Make your vacant home irresistible to homebuyers

Let’s face it, not many of us can easily envision the lifestyle that an empty room might provide. This is why paint stores offer clever apps that allow us to see how a new color will look in our space and why model homes and condos are staged.

Yes, selling a vacant home is a bit more challenging than selling one that is occupied. These are homes that offer no promises of sanctuary and not even a hint of the simple, blissful moments one might realize under their roofs.

That lived-in, well-loved appeal left the home when you did.

It doesn’t matter why you had to move out of the house before it sold. What matters now is how you’re going to sell it — how does one market a vacant home?

You’ll need to spend some time – and some money – getting it right. But, since studies demonstrate that it takes significantly longer to sell an unfurnished home, the investment of your time and money will be completely worth it.

Want to know how to jazz up a vacant home? Read on.

DIY home staging

If you have an eye for design, consider staging at least the most important rooms in the home. Even if you aren’t particularly decorating-inclined, you’ll find brilliant DIY staging tips online at Better Homes & Gardens, HGTV’s “Designed to Sell” and A&E’s “Sell this House.”

The key to successful staging, however, happens before you decorate. Cleaning the home, from top-to-bottom and removing your excess belongings gives you a clean slate on which to work your magic.

Often, just a few well-placed pieces of furniture and accessories will help a home look lived-in.

Hire a professional home stager

If you have more money than time, hire a professional home stager. For one fee, the designer will bring in furniture, accessories and arrange them in a manner that shows off the home’s interior for maximum appeal to homebuyers.

Most homeowners spend between $433 and $909 to have their homes staged, according to statistics posted at ImproveNet.com. Prices vary by region and according to the size of the home, how much staging you require and the home’s price point.

Don’t neglect the yard

The front yard landscaping is especially important when a home is for sale. It’s what entices (or repels) people to enter the home. Keep the lawn green and mowed, the beds free of debris and shrubs and trees trimmed.

Studies prove that a furnished home sells 78 percent quicker, and for closer to asking price than a vacant home. Yes, selling a home with no “life” in it is challenging, but not impossible.

Prepare now to sell your home this spring

In all of our years in the real estate industry, here’s a truth we’ve learned: it’s the proactive homeowner who ends up having the smoothest home sale and, typically, makes the most money.

If you start now, you’ll have plenty of time to prepare your home (and yourself) for the spring market and be among those success stories.

Will you be buying a home when this one sells?

Let’s get a market analysis done now so that we have at least a rough idea of your home’s current market value. Yes, it’s a bit early, but we just need a ballpark figure for you to take to a lender.

He or she can then present options for buying the next home. The worst thing you can do is sell your home before being pre-approved for a loan for your next home, so speak with the lender about what you need to do, financially, to ensure mortgage approval.

Consider a pre-sale home inspection

Having your home professionally inspected before putting it on the market is proactivity on steroids. After all, one of the most common home sale deal-breakers is the home inspection report.

Or, more specifically, issues in the report that the buyer perceives as insurmountable.

Let’s find out now what an inspector will learn with a thorough home inspection. That way, we can discuss the issues and decide which absolutely must be remedied and which don’t. And, since we’re starting so early, you’ll have time to get the work done before the home hits the MLS in spring.

Do what you can to increase curb appeal

Spring officially arrives on March 20 this year so you have plenty of time to get the home ready for the market.

Now is obviously not the right time of year to get out in the garden, mow the lawn or do any of the other tasks required to get the landscaping in shape for a home sale. There are things you can do, however, that don’t necessarily involve gardening.

  • Dismantle the mailbox, bring it in the garage and slap some fresh paint on it.
  • Shop for a new doormat, larger address numbers and porch light fixture.
  • Draw out a plan for where you’ll plant pops of color when the weather warms.
  • Make a list of early spring chores in the front yard. Clearing debris, trimming hedges and trees, spreading fresh mulch and whatever else you’ll need to make the exterior of the home more appealing to buyers.

Pre-staging

Now is the perfect time to construct a home staging plan. Pre-staging makes the job go easier.

This may include removing personal items, deep cleaning, applying fresh paint and culling excess items from cupboards, drawers, the pantry and closets (to make them appear roomier).

Not all homes require staging but if yours does, it is one of the most important parts of any marketing plan.

Again, don’t wait

A home sale includes a lot of details that you’ll want to pay attention to when the time comes.

In the meantime, it’s a smart move to rid yourself of the little distractions, such as small home repairs and accomplishing cosmetic touch-ups.

The spring real estate market is right around the corner. The time to prepare for a spring home sale is right now.