Real Estate Information Archive

- Not knowing what is on your credit report can set you up for a surprise when a potential lender pulls it for inspection. Obtain a free report through your bank or credit union so you can correct or dispute errors before you fill out a loan application. 
 

- Sending late payments on credit cards and other monthly bills during the approval process will show on your credit report. 
 

- Opening a new line of credit for large purchases will raise your debt-to-income ratio (DTI). Except in emergencies, avoid buying anything on credit until after closing on your new home. 
 

- In the same manner, closing credit accounts can negatively affect your credit score. If you have paid off credit card balances, leave them active, as this shows lenders that you have credit options available. 
 

- Trying to help a family member get a loan by co-signing with them will raise your DTI and can discourage lenders. 
 

- Unless it is completely unavoidable, changing jobs can hurt your loan chances. Lenders like to see a steady income from employment with the same company or same field. 
 

- If you are using gifted funds to assist with the down payment, do not deposit the money into your bank account without documentation from the giver. Learn more about the procedures for down payment gifts from the balance. 
 

- Do not let poor credit and lack of a 20% down payment keep you from buying a house. FHA, USDA, and the VA all have programs to help make the dream of homeownership a reality. Check each website for eligibility requirements. 

The all-important first step: before going to a lender, make sure your credit is in good standing. 
 

Being pre-approved for a mortgage does not impress many sellers, so it is important to be pre-qualified. Talk to different lenders to line up the best deal for you and your budget. 
 

Do not overestimate how much you can afford. Avoid properties on your initial search that are truly dream homes. The pre-approval process will offer a reality check because your approved mortgage amount is set. 
 

Applying for a loan for a new car, credit cards, or even new furniture to go in your home can hurt your credit score during the mortgage process. 
 

Sometimes buyers assume that all costs of buying a house are included in the loan amount, which is not the case. Closing costs, on average, are 2-5% of the purchase price of the home, and there is earnest money and a down payment to be made. 
 

Do not let your finances deter you from buying a home! While the process may take more time, there are several programs ready to assist first-time home buyers. Many require less than 20% down. Other programs provide financing for those who live in rural areas, as well as those with credit issues or lower income. Go to realtor.comⓇ for a  list of available programs. 
 

One major factor to consider is when you know the move is not permanent.  If you know you will be returning in a few years, and it may be a good idea to lease while you are away so you will not have to house hunt upon your return. 
 

Take a close look at the financial aspects of renting your house: 

- Landlord’s insurance premiums may cost more than a homeowner’s policy. Talk to your insurance agent about the differences in cost. 
 

- If you have equity in your house, or the money a sale will generate will allow for a nice deposit on another, you really should consider a sale. 
 

- Do the math--if you have a loss after all your expenses (insurance, repairs, property taxes, etc.) are deducted from the rental payments, it would be a better idea to sell. 
 

Take into consideration that in larger areas, there may be times of a vacancy.  Can you handle your current mortgage and rent or mortgage payment in the new place?  If not, put the house on the market. 
 

Renting may be a good choice if the house needs repairs or improvements to bring a good sale price, and the cost of those fixes all at once is out of your budget. 
 

Consider the occasional tenant that will not care for the property as you do. Landlord insurance will not cover normal wear-and-tear, nor intentional damage. 
 

Things can happen, and even good tenants are suddenly unable to pay rent on time--or worse, stop paying rent--and you will be stuck with the mortgage payment, not to mention the possibility of the costs of going through the eviction process.  
 

If you live in an area that attracts visitors or tourists, consider short-term leasing with an online booking company. Be sure you are within your city’s regulations for short-term rentals and consider the frequent cleaning costs and other risks taken when renting to tenants that you have little means to check into before they enter your house. 

Every prospective property seller will receive a disclosures form from their listing agent.  This form should be filled out truthfully and to the best of the seller’s knowledge. 
 

Most states want these items disclosed to the buyer:  lead paint or asbestos, previous repairs or additions, mold or water damage, pest issues, drainage problems, foundation cracks, problems with HVAC and other appliances, and roof condition/age. 
 

The listing agent will be aware of all government disclosure requirements--federal, state, and local.  Transparency from the seller is a must at this point of the property sale. 
 

“Better safe than sorry,” should be the homeowner’s motto when it comes to disclosures.  For instance, if there is a possibility that mold is an issue under the house, an inspector should have a look. 
 

Disclose minor things that you have learned to live with.  Items a seller considers small--such as a rattling window on a windy day, or a repair made many years past--can be big things to the buyer. 

The disclosure should be ready before the seller accepts an offer--for their protection. 

Once a potential buyer receives the disclosure statement, they should read it over carefully and without distraction. Any questions should be marked or written down and questions presented before the disclosure form is signed. 
 

The added expense of having a home inspection is vital to this part of the sale.  When the buyer meets the inspector, the disclosure form should be in hand so each item can be checked out thoroughly. 
 

Check local government building permit and zoning information to make sure any additions were performed legally by licensed people. 
 

If negotiations about any disclosure’s issues break down, it may be best for the buyer to walk away from the sale. 
 

In the end, doing due diligence is the best way for a buyer to find problems that will be a major issue after the sale. 
 

As soon as possible, secure the house:  check all doors and windows and be sure any valuables are safely stored away, preferably in a safe deposit box. Valuables now include anything that connects to the internet:  smartphones, tablets, and computers. 
 

Security is a must, and that could simply mean adding timers to lamps in different parts of the house to make the home look inhabited. Cancel newspaper and other regular deliveries, and have mail forwarded or check the mailbox daily.  Make sure the neighbors are aware of the death and ask them to look out for the empty home.  
 

Cleaning out the house may be difficult, and some want to start immediately after the funeral, while others may want to take their time.  In the case of larger families, set a date to begin, and have a plan in place so it is easier on everyone. 
 

Many families decide to have an in-house sale for items they will not be keeping. Set everything up in categories, and mark prices clearly; price them to sell!  If there is any speculation of something being valuable, have it appraised before you make a sale.   
 

If the house will need to be sold, contact a RealtorⓇ to help you get the house ready for the market.  Updates may be necessary for the best price, so be prepared to make changes to the home. 
 

On the other hand, some people have lived in the same house for fifty years, and never changed so much as the carpeting.  If you decide to sell as-is, your agent will know how to set the asking price.  While there are buyers who are specifically searching for a time capsule, they are not as common as those who want a turnkey house. 
 

One indication that you are running out of space is clutter. Totes of stored seasonal clothing stacked in the bedroom corner, or maybe you no longer invite friends over because the clutter is embarrassing. It is either time to declutter or move! 
 

Another sign to look for is furniture that is crammed into any available spot. 
 

If it is hard to walk through the maze of pieces you have acquired over the years, they need to be displayed or set up properly so you can enjoy them. 
 

Probably the most aggravating thing about living in a house that is too small is having to wait for a bathroom! Even a bath-and-a-half may not be enough.  It may be time to find a house with two or more full bathrooms. 
 

If you are one of the millions that are working from home now more than ever, your home office has probably taken over previously public space in the house. A house with square footage for a home office will allow everyone to get back in their own room!  
 

In today’s world, it may be necessary for the grown and flown children to come back to the nest. Have you changed their bedroom into a craft room or knocked the wall out to enlarge another space? Other than putting the wall back up, find a new home with room for everyone. 
 

On the other side of the coin, do your parents need to move in? That will mean giving up your own space so they can have some independence and privacy.  Purchasing a larger home with an in-law suite would be a better solution. 

Use what you have first. If you are already anticipating the move, hold on to any packaging your deliveries have come in. Stack them out of sight if your house is still on the market, or go ahead and pack non-necessities in them and hide them under the bed or storage area. 
 

Other items you have on hand to use: suitcases, duffel bags, trash cans, and reusable grocery bags can all be utilized to cut back on cardboard boxes. 
 

Produce boxes make great moving containers! They are very sturdy and some come with lids so you will not have to use so much tape to close them. Ask for them at local grocery stores and produce stands. 
 

Towels, sheets, and pillows can be used in place of packing material, and towels and sheets can be used for wrapping fragile items as well. Using them is a double win because you will have one less thing to pack! 
 

If it is within the budget, consider using an eco-friendly moving company. 

Already contracted with a mover? Ask them about any green options they have in place for your move. 
 

It only takes a quick search online to find a company that rents clean and ready-to-pack storage containers. Many of them will deliver them to your door, then pick them up at the new house when the containers are empty! 
 

Another option is ordering a moving kit or just the boxes from UsedCardboardBoxes. The company “rescues” misprinted or in-almost-perfect-condition used cardboard boxes that are headed for a landfill, and ships them directly to you. 

Does my credit need to be perfect?  Not necessarily, but the higher your credit score, the better the loan’s interest rate will be. Lower credit scores could cost thousands over time in higher interest rates. FICO has some tips for improving your credit score.
 

I am not sure how much house I can afford.  Lenders will look at your debt-to-income ratio when deciding to grant a home loan.  Get an idea for yourself by using this handy DTI calculator. 
 

How much money do I need for a down payment?  That depends! Most lenders require 5-20% for a down payment. USDA and FHA offer no- or low-down-payment home loans. Veterans and servicemembers have the benefit of applying for a no-down-payment VA Home Loan through the Veterans Administration as well. 
 

What is Private Mortgage Insurance (PMI) and will I have to pay? For most lenders, PMI is a requirement for homebuyers that do not pay a 20% down payment. The cost is normally included in the mortgage payment. 
 

I am pre-approved for a mortgage. Can I make an offer on a house that I love?  Sellers will likely reject an offer that has no lender back-up. Return to the bank and go through the pre-qualification process so you will know just how much you will have to offer on a property. 
 

Are there any tax advantages to owning a home?  While there are many costs associated with homeownership that renters do not have, there are tax credits for some of the taxes you pay, as well as for those who use points to get a lower interest rate. And with rent prices rising, your monthly mortgage payment could be lower than rent! 
 

How long does the whole process take?  A smooth home-buying transaction takes approximately 30-45 days. The time varies as there are so many aspects to the process, and once in a while, there are hurdles to get through. 
  

Who pays closing costs--the seller or the buyer?  In most cases, the buyer pays the closing costs, an expense that can run 3-6% of the cost of the home.  In some instances, however, the seller will offer to help with these costs as an incentive to buy the home. 

Rent-to-own agreements can also be called lease-to-own, lease-with-option-to-purchase, or simply a lease option. Lease-purchase agreements require the tenant to buy the property, and this can cause major financial issues if the tenant cannot follow through on the purchase, no matter the reason.  
 

Decide on a final purchase price at the end of the option period, or agree upon an appraisal contingency. Depending on the fluctuation of the housing market, however, this could benefit the buyer if market value goes down, but could benefit the seller if values increase.  
 

It may be a good idea to have a home inspection performed before getting into this situation. In the case that the inspection raises concerns, repair costs can be worked out between the tenant and the owner. 
 

A portion of the above-market rent will go towards the purchase of the house, most commonly in the form of a down payment.   
 

Some tenants agree to pay HOA fees (if applicable), property taxes, insurance and take care of the cost of necessary repairs. 
 

In most situations, the tenant can purchase the property at any time during the option period, but once that time is up, the option expires and the owner can sell the property to someone else. 

One very important thing to remember is that there is still a lease involved. If you fall behind on the payments, the landlord can have you evicted. Besides eviction, the option fee and extra rent paid will be lost. 
 

Sometimes a seller offers to finance the purchase altogether, and that situation will require a completely different set of agreements. Again, owner-financed sale contracts should be handled with a real estate attorney.