Buying or Selling your home, please contact Realtor Gurdeep Shergill @ 559-349-1481 or http://gurdeepshergill.blueroof360.com CALBRE#01887739
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1. A Home Sold but Not Bought
When you put your home on the market, getting an offer can be easier than finding a house you’d like to purchase. This can put you in the position of nearly having your home sold without a new place for your family to go. One way to avoid this is to research new homes before putting yours on the market. You can get all your research together so when the time comes, you can make informed decisions quickly. If your home is already getting offers, consider accepting one with a longer timeline for closing or making the acceptance contingent upon you finding a new home. In extreme cases, you can even rent your home from the buyer until you’re ready to move. Contact me to discuss what timelines are best for your situation so you can enjoy a smooth transition.
2. Depersonalizing Your Home
As you prepare your home for buyers, you need to help them envision their family living in the space that your family loves. Though it can be hard, it’s important to remove a lot of the uniqueness your family brings. Store those beloved family photos until it’s time to unpack your new home. While lively wallpaper and paint colors may be perfect for your family, replace them with neutral tones for others. The last thing you want is a buyer passing on your home because they thought one room was “just too green.” Upgrade to hide the years of use; new appliances, carpets, and countertops are all possibilities to get more interest and higher offers. Each home is different, so contact me for a personal consultation.
3. The Smell of a Sale
Odors are tied to memories, people, and emotions. When you put your home on the market, you’re encouraging strangers to walk through and not only look but also smell around. Most homes have some odor which can be neutral or even pleasant, but it’s hard for someone who lives there to identify it. Ask a friend to walk through and describe what she smells in each room. Some rooms, especially those with pets, will need professional carpet cleaning or replacement along with deep furniture cleaning. When buyers are coming, bake something with strong, pleasant smells like chocolate cookies or cinnamon bread. To skip the baking, slice (and serve) pieces of citrus. Your buyers will love the aroma, and you’ll love the offers. When you’re ready to start the process, contact me for an individual consultation.
4. Curb Appeal
Did you know most home buyers make a decision about whether they like a home within 12 seconds of stepping out of their car? Curb appeal can make or break a sale. Invest time in all the lawn maintenance you’ve been putting off. In the summer, this means mowing and watering the lawn. In the winter, it means shoveling regularly and discarding broken branches and other debris. If you have a garden, spend some time weeding and beautifying the area. A new layer of mulch can make it look new. For a low maintenance option, create beautiful rock gardens. Anything that lets buyers enjoy the exterior will impress. Don’t forget to replace broken shutters and repaint as needed. Contact me for an individual consultation.
5. Painting your Home to Sell
Repainting your interior walls before putting your home on the market is a low cost way to increase the appeal and perceived value of the house. Choose a light, neutral color like brown, tan, or beige. Never paint the walls white as this is actually a harsh tone that makes rooms look smaller. To make your job easier, paint all the rooms the same color. You can paint the ceiling the same as well, but if it’s a few shades lighter, it will pop more. In fact, the lighter color actually makes the ceiling look higher and the room bigger. If you have time to paint the rooms differently, opt for reds, oranges, or yellows in the kitchen, light yellows or tans in the bathroom, blues or browns in the bedroom, and darker browns in the home office. Each home is a little different, so contact me for an individual consultation.
6. New Bathroom Look
A bathroom that looks old and outdated can be a huge turnoff to a buyer. But you don’t need to invest in a remodel to get buyers to invest in you. Replace the toilet and vanity if they look dingy, which can often be done for less than $500. Install white lights above the vanity and lay down a new bath rug that matches the new towels. Deep clean the tub and consider refinishing it for extra shine. If you can make the buyer feel as if she is walking into a spa, you’re sure to impress. Get a new shower curtain and tie it back with ribbons. Light a few candles with peaceful scents and roll washcloths into a decorative pile beside the sink. It is amazing what a thorough cleaning and new linens can do to a bathroom. Contact me for an individual consultation and even more ideas.
7. Shooting Your Home
When your home goes on the market, the first thing buyers will look through is your online photographs. From there, they will usually decide whether it’s a home they want to see in person… or not. Capturing your home’s essence on camera is crucial. An investment in a professional photographer may pay off, but a good real estate professional can often get good photos without one. To get ideal photos, they may ask to minimize the amount of furniture so the shots enhance the size of the room. Positioning the camera in front of an expanse of floor rather than behind a piece of furniture or half wall also does the same. Shooting in natural light is best, but repositioning lamps if necessary to brighten corners with white light can add great impact. Aiming the flash at the ceiling when taking pictures also enhances photos; reflected light is more similar to sunlight. You agent may want to try different angles and different times of the day, to find the most ideal shooting conditions. Contact me with questions regarding highlighting the best features of your home.
8. Tiny Treasures
In many homes, there is one space that doesn’t seem to serve a purpose. The tiny room with slanted walls on the top floor or the teeny space below the stairs is often used for storage. If you can convert these areas to usable space, you have one more feature to add value to your home. If you can fit a comfy chair and install some shelves filled with books you’ve created a library. Add a chair and a computer to a closet with a waist high shelf and you have an office nook. Install wall shelves in any open corner in the bathroom to stylishly store linens. Every space has the potential to be a selling point. Contact me for an individual consultation to help your home reach its potential.
9. Selling with Kids
When you have kids and a home for sale, maintaining a buyer friendly environment can be challenging. Give yourself one full day to declutter for every room in your home. After you’ve finished, put as many things in storage as possible, especially large children’s toys. Anything that you can do without for a few months should be gone. For things that are staying, create an organization system. Plastic storage bins that stack are perfect for accessing and stowing toys quickly. If you have a diaper changing station, work to make it as minimalistic as possible. Put the diapers, wipes, and other necessities in a nearby drawer so they’re out of sight. Use baby blankets and stuffed animals to add color to the room, but again, less is more. Contact me for a personal consultation to help simplify this delicate procedure.
1. Budgeting for Home Ownership
As the largest and likely most important purchase you’ll ever make, home ownership requires careful budgeting. This includes planning not only for a down payment and a monthly mortgage, but also taxes, repairs, and other costs through the life of the home. You’ll have to hire at least one inspector and appraiser before making an offer, then be prepared to pay 2-4% of your mortgage in closing costs. After the move, you’ll have to pay property taxes, which can rise over time. You’ll also need insurance, possibly a homeowners association membership, and certainly utilities. Budgeting for routine maintenance and repairs is also prudent. Even with these costs, when making a “smart” purchase with the help of an outstanding real estate professional, homeownership is often a sound financial investment. To learn more about how to prepare, contact me for a private consultation.
2. Professional Help When Buying a Home
Working with a real estate agent is essential to getting the best price on your home, but that’s not the only professional you’ll want to find. Many home buyers find it useful to talk to several mortgage brokers to ensure they get the fairest rate and payment plan. If you’re planning significant renovations, a contractor that you trust can help keep your improvement dreams alive. Even if you want the home as is, you’ll need an inspector and appraiser to give you an assessment of the true value and hazards of the home. Finally, to guide you through the paperwork, you may need a real estate lawyer, which many states now require by law. When you’re ready to start building those connections, reach out to me for a private consultation.
3. Evaluating Re-Sale Potential
When buying a home, you don’t always think about the selling it. Yet a typical home buyer will stay put for a little over ten years, then move on to greener pastures. What your once-new home will be worth at that point depends on its location, structure, and condition, among other things. Ideally, the home will be situated in a quiet, peaceful neighborhood, yet be close to roads, shopping, schools, and other attractions. Inside, the layout and structure are key. More bedrooms mean more value, as well as additions and amenities desired in your geographic area, like pools, enclosed porches or patios, etc. High quality construction materials can keep it as good as new with only minimal maintenance while you own the home. Contact me to discuss a potential home’s value to you and to your future buyers.
4. Buying a Fixer-Upper
You may not be a true home flipper, but you may be willing to invest a little TLC into a needy home. This could be a great money saving idea or a huge mistake. If the changes are superficial, such as repainting and even retiling, a motivated buyer can be successful. If electrical or foundation repairs are needed, that’s likely best left to the professionals. Be realistic about the amount of time you can invest and when you want to have the redone areas of your home ready for use. A home inspection can reveal fairly accurately how much you’ll need to change to have your dream home, so plan on fixing all the problems the inspection turns up before embarking on a large upgrade. Contact me for a private consultation to estimate what you can invest both in money and time.
5. Buying in Winter
When there’s a chance of snow and chilly weather, fewer buyers are touring homes, meaning home sellers are often more apt to close at a lower price. Take advantage of the time with careful home evaluation. As you walk through a home, listen for the sound of the heating system. If it turns on several times during your tour, the home is likely losing heat, indicating poor insulation or drafty doors and windows. You also can, and should, ask to see recent utility bills to get a sense of how much it will cost to keep your family comfortable during the chilliest months. Drive through the neighborhood the day after it snows to get a sense of how quickly the roads are plowed and driveways shoveled. For more ideas on what to look for, contact me for a private consultation.
6. Buying in a Fast Market
In many areas, homes are spending only two weeks on the market before being swept up by an interested buyer. It’s time to act fast, but not hastily. Before you begin to look at homes, talk to a mortgage broker about getting preapproved for a loan. When you find the home you want, you can make a reasonable offer without waiting on the bank. Skip low-ball offers completely, as these will be dismissed compared to the other quick offers. As much as possible, try to look past cosmetic defects in a home. Landscaping and a new coat of paint are easy beauty fixes. Contact me so that I can keep an eye on MLS listings, letting you know about new properties you may be interested in before they are even posted on public sites.
7. How to Lose a Preapproval Offer
Damaging your credit worthiness is easier than most people imagine. Before you apply for a home loan, you’ve likely worked on increasing your credit score, but after you are pre-approved for a loan, a bank can still revoke their offer. This means things like buying a car or furniture on credit can cost you a home deal. Anything that increases the amount you owe puts your potential loan in jeopardy, including co-signing on someone else’s loan. Banks also look carefully at your accounts, so unusual deposits or withdrawals are red flags that indicate you may not be as financially reliable as they thought. Similarly, job changes are dangerous, so work to close your new home deal before making any major changes. For more tips, contact me for a private consultation.
8. Buying a Neighborhood
When you buy a new home, you’re purchasing more than the plot of land and house. You’re also buying into the community surrounding your home. Before choosing an area, step back and evaluate what you value. Do you want to be near local nightlife? Parks and family oriented places? How far are you willing to commute? Do you want neighborhood parties or neighbors that leave you alone? When you’ve found a likely home, talk to the neighbors to see what the area’s really like. Look up crime statistics. Visit the neighborhood at different times, including during the day, the evening, and at rush hour. You may find your little oasis has some hidden faults. Contact me for a private consultation and an in depth look into different local neighborhoods.
9. Skipping Buyer’s Stress
Buying a home is an emotional and anxiety ridden process. Even after finding a home and making an offer, you’ll worriedly wait by the phone for the seller’s response. Ready to take some of the stress out? Start by scheduling a private consultation with me. Rather than having you wait in the dark, we’ll talk through what the home buying process entails and what reasonable timelines for each step are. Knowing what is happening behind the scenes will help calm your nerves. While the seller considers, you can focus on other things like packing your home or just spending time with the family. Or you can opt to strategize for various outcomes. We can decide what our immediate response will be to each of the seller’s possible actions. That way, the lag time is minimized. Contact me to start the process and get answers to those nagging questions.
Here’s how to clean up your credit so you get the least-expensive home loan possible.
Getting the loan that suits your situation at the best possible price and terms makes homebuying easier and more affordable. Here are seven ways to boost your credit score so you can do just that.
1. Know your credit score
Credit scores range from 300 to 850, and the higher, the better. They’re based on whether you’ve paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You’ll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms.
You’re entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, Equifax, Experian, and TransUnion. Access all three versions of your credit report at www.annualcreditreport.com. Review them to ensure the information is accurate.
2. Correct errors on your credit report
If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there’s an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit-reporting agencies.
3. Pay every bill on time
You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You’ll also save money because you’ll keep the money you’ve been spending on late fees. Credit card or mortgage companies probably won’t report minor late payments, those less than 30 days overdue, but you’ll still have to pay late fees.
4. Use credit carefully
Another good way to boost your credit score is to pay your credit card bills in full every month. If you can’t do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.
5. Take care with the length of your credit
Credit rating agencies also consider the length of your credit history. If you’ve had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you’re not using them.
6. Don’t use all the credit you’re offered
Credit scores are also based on how much credit you use compared with how much you’re offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.
7. Be patient
It can take time for your credit score to climb once you’ve begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you’ll do to your credit score.
Do you ever wonder why your mortgage statements sometimes come from different companies? There’s a reason for that, and it’s called the secondary mortgage market.
The process of applying for and maintaining payments on a mortgage can be complex — primarily because of what happens behind the scenes. To make it even more confusing, the company that originally lent you the money to buy your new home will likely sell your mortgage in the secondary mortgage market to an investor.
What’s the secondary mortgage market?
This is where investors — such as Freddie Mac, Fannie Mae, pension funds, hedge funds, other mortgage companies, and banks, for example — purchase assets or loans, including mortgages, as well as the bonds that finance these assets.
While lenders tend to hold high-balance loans in their portfolio, they usually sell most mortgages because that’s the easiest way a lender can generate cash to make new mortgages. Without the secondary mortgage market, lenders wouldn’t be able to originate as many mortgages as they do.
Investors like snapping up mortgages because they’re backed by a tangible asset that you can see and touch, and that builds value over time — your home. Generally, house values go up, but in the event that they don’t and a borrower defaults, the equity in the home, or your down payment, is intended to cover this loss. This is why most lenders restrict a mortgage’s loan-to-value ratio, or LTV, to 80% of the house value.
Does this sale affect me, the borrower?
Yes, and it starts at the application process. But you shouldn’t be worried; it’s nothing you haven’t probably already heard about, especially if you’re been doing your homework. (And law protects you from abuses by the new owner of your loan).
For a lender to be able to sell in the secondary mortgage market, the loans need to meet the requirements of the investor buying them; it makes sense that investors are willing to pay more for higher-quality mortgages.
In essence, mortgages are underwritten so that they can be sold for the best possible price. This is why underwriting guidelines can be strict and why lenders want to see proof of employment and income to make sure you can afford to repay the loan without stretching your budget.
The interest rate you’re offered also reflects the price that investors will pay for your mortgage — and lenders use all kinds of info such as credit score and debt-to-income ratios to determine your overall mortgage-worthiness (read: likelihood of repayment). It’s easier to sell a mortgage in the secondary market when an investor is confident the borrower is unlikely to default.
What happens to borrowers who can’t repay?
The Consumer Financial Protection Bureau (CFPB) works to protect someone who is struggling to pay the mortgage. Even though a new company now owns the loan, this company still has to follow standards to collect on a delinquent mortgage. To prevent servicer abuses, servicers are required to reach out to borrowers to help them solve the problem through options such as a loan modification or short sale before foreclosing on a loan. Servicers are also required to inform borrowers about interest rate changes and balances, for example, so that there are no surprises.
Will the terms change once my mortgage is sold?
Mortgages can be modified, but not unless the borrower and lender both agree on the new terms. The Real Estate Settlement Procedures Act, which also is enforced by the CFPB, prohibits lenders and servicers, as well as any subsequent companies that own your loan, from changing the terms of your mortgage without your consent.
Unless you ask that the interest rate or another term on the note be changed and the lender or new owner agrees, or you agree to a change the lender or new owner proposes, the new owner of your mortgage can’t make any changes.
Use Common Sense
We use a variety of technologies and techniques to help ensure that our products and services are secure. You should protect yourself, too, by making an effort to protect yourself when you use your personal computer or conduct business online.
Here are some of the steps you can take:
- Don’t give out financial information such as checking account and credit card numbers—and especially your Social Security Number—on the phone unless you initiate the call and know the person or organization you’re dealing with. Don’t give that information to any stranger, even one claiming to be from Chase.
- Don’t pre-print your driver’s license, telephone or Social Security numbers on your checks.
- Report lost or stolen checks immediately. Also, review new checks to make sure none has been stolen in transit.
- Store cancelled checks—and new checks—in a safe place.
- Notify your bank of suspicious phone inquiries such as those asking for account information to “verify a statement” or “award a prize.”
- Guard your Personal Identification Numbers (PINs) for your ATM and credit cards, and don’t write on or keep your PINs with your cards. You should also guard your ATM and credit card receipts. Thieves can use them to access your accounts.
- Be creative in selecting Personal Identification Numbers for your ATM and credit cards, and Passwords that enable you to access other accounts. Don’t use birth dates, parts of your Social Security or driver’s license numbers, address or children’s or spouse’s names. Remember: If someone has stolen your identity, he or she probably has some or all of this information.
- If you receive financial solicitations that you’re not interested in, tear them up before throwing them away, so thieves can’t use them to assume your identity. Destroy any other financial documents, such as bank statements or invoices, before disposing of them.
- Don’t put outgoing mail in or on your mailbox. Drop it into a secure, official Postal Service collection box. Thieves may use your mail to steal your identity.
- If regular bills fail to reach you, call the company to find out why. Someone may have filed a false change-of-address notice to direct your information to his or her address.
- If your bills include suspicious items, don’t ignore them. Instead, investigate immediately to head off any possible fraud before it occurs.
In recent years, mortgage rates have remained relatively low, although they’ve slightly risen above the extreme lows they hit after the 2008 housing crisis. So, what will the mortgage rates in 2015 be like?
Interest rates are hard to predict, but the Mortgage Bankers Association expects the average rate on a 30-year fixed-rate mortgage to rise gradually to around 5 percent by the end of 2015 as the U.S. economy grows and the job market improves. All economies are tied together, and due to the economic and political turmoil in other parts of the world, U.S. mortgage rates will likely not rise much more than that.
Many analysts predict that lenders will likely begin to loosen credit standards that were put into place after the housing crisis. Because standards were so loose prior to the housing crisis, lenders have been much more strict on mortgage loan standards, but 2015 may see a change in that trend.
When you decide to purchase a home, the word “escrow” comes up often. You may or may not know what it actually means, but it will become an important part of the home buying process. In the homebuying process, escrow happens, or opens, when the buyer and seller sign a purchase agreement, and the buyer puts down a deposit. Escrow protects all parties involved by making sure that no funds change hands until all conditions in the agreement are met.
Escrow requires a neutral third party such as an escrow officer from an escrow company or someone from a title company. The duties of an escrow officer include: following the instructions given by the principals and parties to the transaction in a timely manner, handling the funds and documents in accordance with the instructions, paying all bills as authorized, closing the escrow when all terms and conditions have been met, distributing the funds in accordance with the instructions given, providing an accounting for the closing, and providing a Settlement Statement.
After escrow opens, the contract dictates how the homebuying process is handled. The escrow officer opens escrow by collecting the contract and the buyer’s deposit. The escrow holder has the obligation to keep all the funds and documents safe while they are in the possession of the escrow holder, and to disburse funds and/or convey the title only when all the provisions of the escrow have been complied with.
Generally, the contract factors in contingencies for homeowners insurance, home inspections, financing, repairs and other tasks to be accomplished by the buyer and/or seller before the transaction can be completed. When each contingency is met, the buyer and/or seller sign a contingency release form. Once the loan is funded and all the contingencies have been met, the title is cleared, the buyer inspects the property, and the parties prepare for the closing.
Once all the paperwork is signed and all conditions in the contract have been met, escrow closes and the escrow officer records a new deed in the buyer’s name, the seller gets paid for the home, and all other monies are disbursed.
The escrow officer maintains contact with the lender. In the processing and closing of escrow, the escrow holder is obligated to comply with the lender’s instructions. Paperwork and documents cannot be interpreted or explained by escrow officers, so it’s important for both buyers and sellers to ensure that they understand all paperwork and conditions involved in the transaction.
- Published on 01/21/2014 – 9:39 am
- Credit/Written by Business Journal Staff