Four Questions Your Realtor Probably Won’t Answer

Adapted from an article by Stephanie Booth | Realtor.com

Your Realtor can answer almost any question about a house you’re interested in, but if you ask certain questions, you probably won’t get an answer. By not responding, they’re staying on the right side of the Fair Housing Act, which prohibits housing discrimination based on race, religion, sex, or family/economic status.

Here are the top 4 questions agents are asked, but most likely will not answer:

Is this a good place to raise a family?

Realtors who either encourage or discourage home buyers based on a question about children can face consequences in court. If you want to know this info, you’ll have to do your own research.

What’s the neighborhood like?

A friend will answer this question but your Realtor won’t because the answer could be deemed prejudicial. To check an area’s ethnic makeup, visit the U.S. Census website, which has all the details you want to know.

Is this area safe?

The answer to this could be construed as racist or classist, so most agents will keep their lips sealed on this one. Visit MyLocalCrime.com to access recent local crimes or vandalism.

How are the schools here?

A Realtor has to be careful not to let their answer be construed as a coded message about race. He or she can suggest websites that rank schools (ie, Great Schools and School Digger).

Whether you’re a buyer or seller, I can answer specific and legal questions about a property. If I’m not allowed to answer your question, I’ll direct you to the answers where you can check them out yourselves. If I don’t know the answer, I’ll find it for you. I strive to make your real estate transactions pleasant and successful.  My clients will vouch for that–check here to read some of their testimonials! http://bit.ly/2p573wu


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What’s the Best Credit Score to Get A Good Mortgage?

So you want to buy a house and you wonder how your credit score will impact your ability to get a mortgage loan with a good interest rate.

A perfect credit score is 850, but all scores 760 and above are considered to be in the best range. Mortgage lenders want your business and will offer you loans with the lowest interest rates.

A good score is from 700 to 759 and a fair score is from 650 to 699. Since a lower score means you’ve had some late payments or other dings on your credit history, lenders see you as more likely to default on your home loan. They may still give you a mortgage, but it will be at a higher interest rate.

Credit scores below 650 are considered poor. This doesn’t necessarily mean you can’t qualify for a loan, but it may be tough, and you’ll pay a higher interest rate.

If your score is lower than you’d hoped, you can raise your credit score. Just keep in mind that you can’t improve a credit score overnight, which is why you should check your credit score annually—long before you want to start house hunting.

If you want to buy a home or you know someone who’s looking to buy a home, contact me to learn your financing options. I can refer you to experienced mortgage loan officers who will consider your financial standing and help you get the best possible loan. Then we can begin your home search.


How Do Comparable Sales Impact My Listing Price

Adapted from an article authored by John N Frank, REALTOR.org

 

In order for your Realtor to establish an accurate valuation in which to list your home, he/she analyzes comparable data—the sales price of neighboring and similar homes that have recently sold.

However, in addition to comps, other factors enter into the equation and they affect how your home compares to neighboring homes.

Location within the neighborhood


If your home is situated near a highway, high power lines or other undesirable locations, it will bring a lower price than your neighbors.

Your home’s lot

If your lot has an odd configuration, or the backyard is chopped off and doesn’t have much useable space, it will bring your price down.

Renovations

Neighboring homes that have recently been updated will get a higher price than those homes that have not been updated. In this case, you can make home renovations that will boost your home’s sales price OR sell your home as-is for a lower price.

New construction

If your neighborhood area has several subdivisions under construction, this will definitely affect the market value of your home since you will be selling in direct competition with new housing. If builders are offering new construction incentives, buyers may find it less expensive to buy new than purchase an existing home. Your Realtor will pull comps from local builders to show the possible impact on your home’s value.

The difference between listing price and sales price

Many sellers will go online to see listing prices for other homes on the market in their neighborhood and ask their agent to price their home accordingly. It’s important to know that listing price is not an accurate measure of any home’s value. The SELLING price is what counts, and that’s what your agent will analyze for an accurate listing price for your home.

Other points that will affect how your house measures up price-wise in your neighborhood are:

  • The style of your home. Is it similar to others in the neighborhood and a popular design that appeals to the average buyer?
  • What price range are adjoining subdivisions? If there is a significant price difference, either higher or lower, it will impact your valuation.
  • Your neighbor’s home—is it one of those occasional eye-sores on your street? If the yard is unkempt or the house is in poor repair, you can believe it will affect the value of your home and likely make it more difficult to sell.

    When Laura Van Meter prepares a market valuation for you, she will deliver the BEST price in which to list your home, and she’ll back up her findings with comparable data.  She’ll also take into consideration any of the above factors that may apply to your home. Her record of sold listings, as well as recommendations from previous clients, means you can be confident that she is placing your home on the market at the BEST possible price.  If you or someone you know is thinking of selling their home, call Laura at 682.551.0336. Let a true professional go to work for YOU!

It’s About to Get Easier to Qualify for a Mortgage

Adapted from an article authored by Clare Trapasso | Realtor.com

We’re living in expensive times, but aspiring homeowners might soon get a break as it becomes a little easier for those with student, credit card, and car loan debt to qualify for a mortgage.

Fannie Mae plans to increase its allowable debt-to-income ratio from 45% to 50% on July 29. This means that more borrowers on the cusp of getting a loan (e.g., millennial, first-time, and lower- to moderate-income borrowers carrying more debt) could potentially qualify for a mortgage backed by Fannie.

The debt-to-income ratio is calculated by taking a potential borrower’s monthly gross income and dividing it by the borrower’s recurring debts such as monthly car payments. Lenders use this ratio to figure out if borrowers can afford to make their mortgage payments each month.

Fannie made the change after analyzing years of data that looked at the ability of borrowers to make their monthly payments. It determined that increasing the ratio will enable more qualified borrowers to get a mortgage loan.

Fannie, which purchases and guarantees mortgages, was already granting ratios of up to 50% with certain conditions—such as if the borrowers had deeper cash reserves, underwent financial counseling, or had higher incomes. The new change opens the door to borrowers with more debt who can’t meet those conditions.

However, not everyone will be benefit from the change. Fannie Mae insures mortgages, but it’s still banks, credit unions, and other financial entities that make the loans—and those lenders have their own criteria for debt-to-income ratios. But the increased debt allowance could encourage more lenders to make changes to their ratios.

A higher debt ratio isn’t a silver bullet for loan seekers, though. If you don’t have a good credit score or a sufficiently large down payment, it won’t change the outcome of your application.

Buyers who can’t qualify, even with the higher ratios, should consider other alternatives. The most logical answer is to look for homes in the lower end of their budget, find a trustworthy co-signer, or simply come up with more down payment money.

I assist my clients to secure mortgage financing and work with several lenders who are experienced in getting clients approved.  If you or someone you know is looking to buy or sell a home, this is an excellent time to be active in the market.  Call me at 682.551.0336 to discuss your housing requirements, or check out my website here:  http://www.homearlingtonmansfield.com/


Can’t Make That 20% Down Payment?

Adapted from an article authored by Carla Fried  | CNBC  

 

Many potential homeowners are unable to buy a home because they can’t come up with the 20% down payment. The National Association of Realtors reports the medium price tag of $236,000 in our current market, which equates to more than $47,000 required for the down payment.  That’s a hurdle too high for many buyers, especially first time home buyers.

If a buyer purchases a home with less than 20% down, then mortgage insurance enters the picture. Adding the insurance premium to the monthly mortgage payment places a higher burden on the homeowner and limits his buying power.

Purchasing mortgage insurance presents several scenarios:

If you have a good credit score, PMI (private mortgage insurance) on a conventional mortgage may be your best option. Once you have the 20% equity, your lender is required to drop the insurance.

If you’re considering a FHA loan, it may have a lower monthly payment, but the mortgage insurance is permanent—you will pay the premium for the life of the loan or until you refinance the loan once you hit the 20% equity mark.

If you’re a military veteran, it is recommended you work with a lender experienced in mortgages backed by the Department of Veterans Affairs. The 0% down payment required for a VA-backed loan is hard to beat, although there is an upfront fee of 2.15% or 3.3% of the loan amount, that fee be rolled into the mortgage.

Another option available to borrowers to avoid the 20% requirement is an 80-10-10 loan. This allows the buyer to make a 10% down payment and requires taking out two mortgages.  The primary mortgage covers 80% of the loan value; a 2nd mortgage, often called a piggyback loan, covers 10%; and the other 10% is the down payment.  It eliminates the need to buy mortgage insurance.

It’s a bit more hassle, in that there are two loans that need to close. The lender handling the primary mortgage will coordinate getting the piggyback, which may come from a different lender. You may pay a few hundred dollars to open the piggyback but shouldn’t be charged again for the appraisal, title insurance and other requirements you’ve covered with the primary. Piggybacks are typically home equity lines of credit (HELOC), which are variable rate loans and subject to increasing interest rates.

I love helping my clients purchase the home of their dreams and I know the in’s-and-out’s of home buying.  I’m experienced in creating the right conditions for buyers to purchase that home.  If you or someone you know needs help in the home buying process, call me at 682.551.0336.  I’ve helped 100’s of clients work toward successful closings and home ownership.


5 Tips to Boost Your Credit Score FAST

Adapted from an article by Angela Colley | REALTOR.com

Lower your credit score fast

So you want to buy a house but you don’t think your credit score is going to get you approved by a mortgage lender. Here are some tips to improve that score in record time!

1. Pay down your balances like a ninja

Credit utilization (or the amount you can borrow versus the amount of debt you’re carrying) accounts for 30% of your credit score. The more available credit you have, the better.

Estimated time for improvement: One month

2. Get your bills current

Paying bills on time is the single most important factor in a credit score. When paid on time, your credit score will improve in one to two months.  If you’re less than 30 days late and you can make the payment today, do it! Creditors don’t typically report until after the 30-day mark.

Estimated time for improvement: One to two months

3. Open a new account

Opening a new credit account will increase your total outstanding credit line (the amount you have available on that card).

Secondly, if you have only one type of credit card, opening another type of credit account can help your “credit mix,” a term the credit bureaus use to indicate whether a person can handle different kinds of accounts.

Be careful though – do NOT apply for a credit card when you shop, where the store offers a discount off your purchase. If you do, you’ll take a hit on the number of recent credit inquiries, and those are negative points to your score.

Estimated time for improvement: One to six weeks, based on processing and reporting your new account

4. Become an authorized user

Have a responsible partner or family member? Becoming an authorized user on one of their accounts will let you piggyback onto their good credit history. Just make sure the person you choose actually pays his bills on time and keeps the debts low.

Estimated time for improvement: Immediately

5. Don’t bother with additional payment histories

Asking your wireless provider or utility company to report your credit history has very little impact on your overall score, so it’s probably not worth the trouble.

So, if you really want that new house, buckle down and get busy. By implementing these tips, you can bring up your credit score in a relatively short amount of time.

When you are ready to buy, speak with Laura Van Meter. She will assist you in your new home search, from the very first step all the way thru your closing, when you walk away with the keys to your new home!

To see homes listed in the MLS, click here.

Click here to get a current estimate of your home’s market value.  The value estimate I prepare for you is much more accurate, relevant and current that those instant estimates you get on the national real estate sites.


 

Don’t Overprice Your Home! And Here’s Why…..

5 Common (but Terrible) Reasons for Overpricing Your Home
Adapted from author Craig Donofrio | Realtor.com
CLICK HERE to find out what your home is worth

We know, we know—you love your house and you know all its special fine points. And of course, you want to list your treasured home at a price that reflects all those good points that you’re sure potential buyers will recognize as truly outstanding.

Perhaps you’ve seen the comps for your neighborhood, but you just know your home is worth more, so you’re going to list it at a higher price.

The following list are reasons sellers overprice their home, and none of them is smart. If you price your home too high, it’ll take longer to sell, raising doubts in buyers’ minds about whether there’s something wrong with it, and you’ll probably have to drop the price eventually anyway. So don’t fall for any of these five common justifications sellers use to inflate the price of their beloved property.

1. You have the Midas touch in decor (you think)

The reason that interiors are often painted white or neutral colors before a sale is because it allows potential buyers to envision their own decorating. Your quirky or colorful touches might not be for everyone, and can actually devalue your house.

Alexandra Axsen, owner and managing broker of Lake Okanagan Realty in British Columbia, Canada, listed a home whose bathrooms were all sorts of strange colors—olive-green toilets, a purple bathtub, and a pink sink. When Axsen recommended to the seller a price that factored in the cost of necessary updates, things got a little heated.

“He got very upset and argued with me that his colorful fixtures added value, because people are tired of the all-white, stale hospital look,” Axsen explains.

So they tried the seller’s way first, listing it for his desired price. It didn’t sell, and buyers gave feedback that the home was overpriced. After weeks on the market, the seller finally agreed to lower the price. It sold within a month.

2. You’re nitpicking comps

Comps (or comparable market analysis) are valuable reference points that allow your Realtor to compare your home to similar nearby homes in order to price it to sell. But some homeowners place too much value on ultimately negligible differences between their home and the comps.

An agent in Atlanta has heard sellers make these statements: “My home has a 60-gallon hot water heater; every other home has 40. My deck is 60 feet larger. My den has real barn wood paneling.”

Small features like this might be worth pointing out to potential buyers, but they’re not going to make or break a deal—and trying to price your home based on the size of your deck is a setup for disappointment. Plus, you might not see the flaws in your home—your deck might be big, but it might also need work.

Your Realtor looks at all the features of your home from an objective point of view, primarily based upon how potential buyers may view it, and by a careful analysis of comps for homes similar to yours. Your idea of the ideal listing price will be based on emotion; an experienced Realtor will deliver a realistic, market-based suggested listing price.  Rely on his/her knowledge!

3. You’re too focused on your ROI

A house is an investment, and everyone wants a return on their investment. Couple that with emotional attachment, and you’re primed to mark up your home’s value.

“Sellers think that their house is worth what they want or need to sell it for, but the harsh reality is that a home is worth whatever a buyer is ready, willing, and able to pay for it,” states another real estate agent.

Even in a seller’s market, there’s no guarantee that you’ll make money on your house. And just because you need $450,000 to buy that house on Greener Pastures Lane doesn’t mean you can sell your house for the same amount.

4. You built it yourself, so you’re emotionally invested

Speaking of emotional attachments, if you built your home yourself, you might have some serious issues with overpricing your property.

Case in point: Ariel Dagan, an associate broker in New York City, co-listed a property for a woman who priced a townhouse she built herself at $18.5 million. Dagan’s team tried to get the woman to lower her price, but she was adamant about sticking with the high price tag and ultimately dropped Dagan and his team from the property.

“Shortly after we were dropped from the listing, the price dropped from $18.5 million to $16.9 million,” Dagan says. “Eight months later, the listing sold for $15.5 million—or 19.35% less than the original asking price.”

So, why does that happen? Dagan calls it the “Ikea effect.”

“Most people who buy furniture from Ikea and assemble it themselves think it’s more valuable than it really is, because they built it,” he explains. “Same thing happens in today’s real estate market.”

5. You’re imagining you’ll haggle

Perhaps the most common reason people overprice their home is because they’re looking to negotiate so they want to price their house 10% higher than it’s market value, fully expecting a buyer to offer a lowball offer which will net them the price they wanted all along.

It doesn’t work like that in today’s real estate market.  It’s better and smarter to price it right and create interest and demand where buyers are chasing you, versus you chasing the market backward [and] searching for the demand. Don’t be afraid to price your home fairly, or even underprice it—which is likely to attract buyers and boost the price to where it should be.  Every home sells when it’s priced right.

If you’re thinking of selling,  CLICK HERE TO LEARN YOUR SUGGESTED LISTING PRICE.   Your home may be worth more than you think, and I will provide you with an accurate estimate of your ideal listing price. Above all, do NOT rely on the generalized pricing estimates provided in the national real estate sites (Zillow, Trulia, etc.).