Easy Steps To Help Build Your Credit

If you’re considering buying a home next year, it’s never too early to be thinking about your credit, according to Danny Gardner of Freddie Mac. Whether you’re hoping to buy a home in spring 2016 or looking further out, this article offers some simple steps you can take between now and then to help build and maintain good credit.  Full Article

Having good credit is no accident. It’s the result of discipline and planning. Start today, and by the time you’re ready to become a homeowner, your good credit will pay off with better loan terms, lower interest rates, and greater financial opportunities in the future.

A good credit history increases the confidence of lenders and creditors when they loan money to you. When they see that you’ve paid back your loans as agreed, lenders are more likely to extend credit again. With good credit, you can borrow for major expenses – like a home – and you can borrow money at a lower cost, ultimately saving you money.

Your FICO credit score is one tool lenders use to gauge your creditworthiness. FICO scores can range from about 300 to 850 points – and your goal is to aim high. How high?  Well, to give you an idea how much having good credit matters, in the third quarter of 2015, the average borrower of a loan bought by Freddie Mac had a FICO score of 751. That represents a slight drop since the peak of the housing crisis, but still means we’re in a lending environment where having a good credit score is incredibly important. Here are some steps you can take.

Open a checking and savings account. When you open a checking and savings account, try to stay above your minimum balance, never bounce checks, and make regular deposits.

Use credit cards carefully. Credit cards are convenient and easy to use, but using them recklessly can hurt your credit. If you allow your credit cards to reach high, unpaid balances, they can cost you hundreds or thousands of dollars in interest alone. On the other hand, if you pay them in full and on time each month, credit cards can help you build excellent credit and reap the benefits that follow.

Establish credit independently. It’s important for both partners in a marriage or a relationship to establish their own credit to help achieve financial goals and to protect against unforeseen circumstances like death, divorce, or other life changes. Partners should regularly discuss household and personal expenditures to ensure that neither has an excessive amount of charges that cannot be repaid.

Honor your promise to pay. It’s essential that you honor your promise to make your credit payments on time and in the amounts scheduled. That includes your credit cards, auto and student loans, utility bills, medical bills, etc. Contact your lender or creditor immediately if you are having trouble making payments.

Know what's in your credit report. Check your credit report at least once each year at www.annualcreditreport.com to ensure its accuracy (Federal law requires that the three consumer credit reporting companies give you a free credit report annually – you just have to ask for it). If you’re planning a large purchase, check your credit report before it’s time to buy to avoid any surprises and to allow you plenty of time to correct any errors.

Take steps to restore your credit if you've had a financial setback. Contact former creditors with whom you've had a good payment record – they may be willing to help you re-establish your credit. You don't want to acquire too many credit cards, so carefully review any credit card offers you receive. And above all, avoid disreputable credit "repair" companies that promise a quick and easy fix – they could end up costing you money and dragging you further into debt. Instead, take advantage of the services provided by a local Consumer Credit Counseling Service or a HUD-approved Housing Counseling Agency.

That's Why My Home Didn't Sell

Many homeowners often have no idea why their home isn’t selling and then when their listing eventually expires they ask themselves; why didn’t my home sell? What was I missing? For the experienced, trusted Real Estate professional it’s easy to know why a home doesn’t sell, yet unfortunately when a homeowner chooses the wrong Real Estate Agent to sell their home, they only learn through trial and error. Full Article

What are the most common reasons that homes don’t sell?

1. Wrong List Price   A proven pricing method that entails reviewing recent closed sales and pending sales, typically within a 3 month, sometimes 6 month period, by comparing similar homes within a nearby radius of your home and then making any plus/minus adjustments for such things as updates, features, condition and location and how they compare to your home, a fair market value can be determined. Then they will also look at homes currently active for sale, your competition, to determine at what ideal price point should your home be placed to get your home sold.

When you list your home for sale above market value, you are missing a whole pool of Buyers well qualified to buy your home; these Buyers aren’t even looking at your home because they’re looking at your true competition where your home should be priced. With your home being priced above market value, your home is being overlooked as the Buyers in this price range where your home is priced are able to find homes priced right in this price range that will be larger with better features. So again, you’re missing Buyers. As time goes by, you agree to a price reduction, yet now your home has lost it’s fresh appeal as is present when a home first hits the market for sale. As your home lingers, it has become almost tainted as Buyers wonder why your home hasn’t sold. Tainted homes can be seen as fire sales. Offers may now come, but they can likely be at discounted prices. You don’t want to accept such a low offer, so you reject the offer and your home sits and doesn’t sell.

2. No home selling preparation  There aren’t any shortcuts when it comes to selling a home. It takes time and effort to prepare a home for sale. Preparation will almost always result in your home being sold for the most money. Such things as, cleaning, decluttering, making minor repairs or major repairs/updates when the budget allows, sets the stage for your home to be revealed in its most favorable light. If your Real Estate Agent didn’t advise you on what to do to prepare your home for sale, this can be a huge factor in why your home didn’t sell. How much preparation did you do in getting your home ready? What did your Agent recommend? “Nothing”, you say. I was afraid you’d say that.

3. Ghastly photos and/or few photos  I can’t even tell you the number of times that I’ve come across a home for sale where the photos are simply ghastly! The photos reveal dark and dingy rooms. People and pets in photos, toilet lids up, clutter and mess everywhere. I’ll also see homes that have just a few photos for prospective Buyers to see. Buyers want to see photos, lots of photos and high quality photos otherwise, they’ll skip right over your home. Did your Real Estate Agent show you your home’s online marketing presentation where photos are displayed? “No”, you answer. That’s what I thought. Most homeowners aren’t even aware of how poorly their home is being presented over the internet otherwise, they would have fired their Agent.

4. Your home wasn’t splashed in front of prospective Buyers  92% of Buyers search for homes for sale over the internet and if your home wasn’t marketed by being splashed across the internet, your home will be missed being seen by prospective Buyers. The Agent you hired should have a strong online internet marketing presence. They should know how to market themselves well, in order to market your home for sale. Try Googling their name to see what comes up? You should see pages of their presence. If they can’t market themselves how will they every market your home for sale? If they have a strong online presence this means that your home will be seen by more prospective Buyers simply by them being splashed all over the internet. In essence, you’ll be using their strong Real Estate brand to attach your listing to and be seen; it can be very powerful. Do you know if your home was marketed well? I hate to hear your answer, yet I’m sure I know the answer by now.

5. You didn’t believe in being harmonious  When there are so many parties to a Real Estate transaction it’s important to be harmonious as possible. This doesn’t mean that you have to agree to every demand, it simply means that you need to communicate well and understand that there will be a little give and take. When your Real Estate Agent calls, emails or texts you, it’s important to respond in a timely manner; the contact could likely have a contractual deadline attached to it. When you request something of the Buyer and they agree, remember this when they request something of you. There should be balance and not everything your way or the highway. If this is your style, it’s best to bottle it while selling your home and feel free to let it out after you sold your home. I certainly can’t tell you how to live your life, but only guide you during the selling of your home to meet your objective of selling your home for top dollar in the shortest amount of time.

Knowing these 5, all too common, reasons that are experienced by home Sellers when their home’s do not sell can educate you for the next time you sell your home. Or if you’re thinking about selling your home, these reasons discussed here can provide you with valuable insight before you embark on selling your home.

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The Down Payment Quandary: Trying to Save 20 Percent

After the down payment hurdle is cleared, mortgage payments tend to be lower than rent. Full Article

The crimp that high rents are putting in people’s budgets has a direct impact on how able they are to save for a down payment.  Rising home prices compound the problem, requiring an even larger heap of cash to reach the 20 percent mark, the amount typically required to avoid mortgage insurance.

People used to get there with second jobs, but lenders don’t see this as much since the recession.

“Instead, what you see is somebody graduates from college, they move back home to pay off debt and save money, and they work 50, 60 hours a week at the job that they found,” said Staci Titsworth, a regional manager for PNC Mortgage in Pittsburgh.

There are also more double-income households, and more first-time buyers waiting to buy homes where they can stay more than 5 years and possibly raise families, she said.

People are also coming in below 20 percent, which typically requires paying mortgage insurance.

Even with mortgage insurance tacked on, people tend to have lower monthly payments for mortgages than for rent. Indeed, homeowners in general can expect to spend about 15 percent of their monthly income on mortgage payments (without mortgage insurance) for a median-valued home, while renters can expect to spend 30 percent on rent.

Borrowers in pricey markets have taken the lower down payment route for years.

That’s how Sara Clarke, an editor at U.S. News & World Report, and her husband landed their first home: a townhouse in Alexandria, VA, that cost $299,500. They put down 5 percent, money saved from a childhood paper route and fast-food jobs, plus a little help from a relative.

By the time they sold it about 10 years later, they had accrued the 20 percent down payment they needed for a single-family home in Fairfax County. They even had money left over to replenish a savings account depleted by upgrades on their first kitchen, bathrooms, roof and “redoing everything we could redo.”

Assistance from parents remains a common way to get a foot in the door of your own home. Loans and gifts from family and friends rose from 8 percent to 21 percent during the recession, and was down to 13 percent last year.

JPMorgan Chase has also seen first-time buyers becoming more disciplined about spending and tapping into 401(k)s, said Sean Grzebin, the bank’s head of retail mortgage lending.

Wanna beat the home buying crowds? Winter is the time

Now that the U.S. has regained its job-creation mojo, as the October employment report showed, the demand for housing is only going to grow.  Full Article

After all, when people have jobs they can break off and form new households—ditching the roommates behind or finally moving out of Mom and Dad’s basement—and that’s what fundamentally drives home purchases.

Most of the households created over the past two years have been renting households, but based on U.S. Census data for the third quarter of this year, it appears that homeownership has started to recover.

This especially makes sense now that it is cheaper to own than rent in more than three-quarters of the counties in the U.S. And it’s not getting better— rents are rising year over year at twice the pace of listing prices. Meanwhile, mortgage rates remain at near record lows but appear poised to increase over the next year. And home prices are rising, too.  So if you qualify for a mortgage and have the funds for a down payment and closing costs—and if you intend to live in a home long enough to cover the transaction costs of buying and selling—you will be better off financially if you buy as soon as you can. After all, if you are tired of your current home now, you won’t feel better about it in six months.

The top factors driving home shoppers this summer were pent-up demand and recognition of favorable mortgage rates and home prices. These drivers will likely remain well into next year.

Yet demand for housing is extremely seasonal. In most markets in the country, we are conditioned to believe that we should buy homes in the spring and summer. So come each October, plans to purchase shift to the spring. While the school calendar and weather do influence the ideal time to move, many buyers would benefit from buying this fall and winter rather than waiting until next spring.

The 7 Steps to Buying a Home

You’ve finally found the home you love. Now what? Though every market is different, you can expect to follow these seven steps, from offer to closing. Full Article

1. Making an offer  If you’re sure the home you love is right for you, it’s time to make your move. This means writing up a formal purchase offer and signing a real estate contract.  Even though it’s early in the buying process, you still must sign a legally binding contract. With your signature, you’re committing to moving ahead with the seller. Keep in mind you can add contingencies to many real estate contracts. For example, most real estate buying offers will be contingent on a property inspection, as well as disclosure review, loan approval, appraisal and other matters. Such contingencies enable buyers to opt out of the contract if unexpected problems or concerns pop up.

2. Disclosures  In most states, sellers are legally required to provide buyers with disclosure documents, a preliminary title report, copies of city reports and any specific local documents. In California, for example, an earthquake hazards report or a geological survey is required as part of the disclosures. In some areas of the South, especially near the Gulf Coast, buyers usually receive flood maps and reports relevant to the property being considered.  In addition, sellers must disclose any known issues that might affect the property’s value or habitability. Usually, in a transfer disclosure statement, sellers must answer a series of “yes” or “no” questions about the property, the neighborhood and their experience there. If there have been leaky windows, violations from the city, work done without permits or plans for a major nearby development, the seller must disclose them. If there are significant issues, the seller’s agent would likely have brought them up before the contract signing. But if something is disclosed here that is a negative factor for you, it is your “out” of the contract.

3. The appraisal  Most buyers put a certain amount of money down toward the purchase price. The balance will come in the form of a bank loan (usually). But a bank isn’t going to hand over that money without due diligence. An appraisal is the financial institution’s way of making sure the contract price is the right price. So the lender sends out a third-party appraiser, which the buyer pays for, to confirm that the contract price is in line with the neighborhood’s comparable sales. If it’s not, the bank can deny the loan or change the terms.

4. Inspections  As part of the real estate contract, you have the right to a property inspection. The most common is a “general” property inspection, in which the inspector checks the home from the foundation to the roof and investigates all major systems and components. As the buyer, you should follow along with the inspector to learn more about the property. For example, you’ll want to know about the components (such as the water heater) and have a plan in place for maintenance.  After the general property inspection, the inspector may suggest having a specialist come out. This could be a roofer, electrician, HVAC specialist or even an engineer. Listen to the inspector and have any recommended follow-up inspections. Remember: This is your one chance to approve the property from top to bottom. If issues arise, you may be able to negotiate a fix or credit with the seller. If something major arises and it’s not what you signed up for, you can exit the contract via your inspection contingency.

5. Loan approval or commitment  In addition to making certain the property appraises at no less than the contract price, the bank will want to fully approve your credit, debt and income history. The bank will also want to approve the property’s preliminary title report to make sure there are no liens recorded against the property that might affect its value. The bank can take up to 30 days to complete its review, which should result in a loan commitment or full loan approval. Once that’s completed to the bank’s satisfaction, you’re guaranteed a loan, and you’re one step closer to closing.

6. Final walk-through  Just before closing, you should walk back through the property to make sure it’s in the condition it was when you last saw it. Make sure the seller didn’t remove any fixtures, make modifications or leave behind garbage or debris. You also want to be sure any fixes you negotiated with the seller have been completed.

7. The closing  Depending on the market, the closing may happen at an attorney’s office or with an escrow officer at a title company. In some jurisdictions, the buyer and seller don’t ever meet. Each goes in to sign their closing papers separately. In others, the buyers and sellers sign the closing documents together. Also, thanks to current technologies, some closings can now happen remotely using wire transfers and overnight delivery of documents.

Regardless of how a closing happens, if you’re a buyer and getting a loan, plan on signing dozens of documents at closing. You’ll need to show photo ID, as your signature will be notarized. Prior to the closing, your real estate agent, attorney or escrow officer should send over a closing statement to review. The statement details your final closing costs and the money you need to bring to the closing. The funds can be wired in or paid with a cashier’s check on closing day. Be sure to ask for the statement early, so there aren’t any last-minute surprises.

Why Real Estate Must Adapt to Fast-Changing Technology

The technology sector, which tends to advance rapidly in game-changing shifts, has long provided a glaring contrast to the real estate industry, which is based on long-lived assets and evolves slowly. Full Article

But that dichotomy will soon fade, according to a panel of real estate and tech leaders at ULI’s Fall Meeting in San Francisco. Along with the rest of society, real estate inevitably will be transformed by the ascendance of e-commerce, innovations such as driverless vehicles, and the rise of a new, sharing-oriented economy in which players collaborate to improve efficiency, panelists said.

The industry needs to alter its business model in order to serve tenants whose needs are different than they were in the past, said Patrick L. Phillips, ULI global chief executive officer, who led the discussion. Real estate executives need to develop more flexible leasing arrangements, which would enable companies to scale up and down to adjust to market changes, he said. The industry also needs to look at building more flexibility into building design and land use. And given the rise of collaborative relationships in the digital economy, real estate developers should look at developing closer relationships with tenants—possibly by becoming equity partners in their businesses.