Hater-Proof Your Home

In my experience, there’s one fundamental truth about haters:  you can never fully escape them. The only way to live a 100% hater-free life is to never stick your neck out, and never do anything because, as the saying goes, you simply cannot please all of the people all of the time.

And this is particularly true with real estate and putting your home on the market - because homes, locations, aesthetics and such are so much a matter of personal preference, some people will find something to criticize about even the most perfectly staged, priciest properties on the market.  

As a home seller, your job is not to try to make your home be all things to all people.  That said, you don’t want to be the house that nearly every buyer and broker sees, rolls their eyes and utters the same few, predictable deal-killing criticisms. Fortunately, what is predictable is avoidable. Let’s explore the most common things buyers hate about listings they see. In the process, you’ll get equipped to sidestep those issues and, in large part, hater-proof your own home.

House Hater Complaint #1:  Odors. Some of you might think I’m beating a dead horse, here. But as long as house hunters keep emailing me to ask why, in the name of all that is sacred, they keep seeing homes that smell like all sorts of madness and mayhem, I’m going to keep repeating this message. 

Viewing a home sounds like it’s all about the visual of the experience. And visuals are critical - your home should be in its Sunday best, so to speak, when it’s being shown, in terms of being spruced, staged and clutter-free. But when a buyer comes to see your home, they don’t turn off the rest of their senses. And there is nothing that can turn a buyer off from a home, they’d otherwise like, quicker than a powerfully bad odor - in particular, cigarette and pet odors in a house that seems to have been well-cleaned create the concern that they might be permanent and that the buyer might not be able to get rid of them without dropping some serious cash on cleaning or even removing wall, window and floor coverings.

If you are a seller and you know that someone has been habitually smoking in your home or that you have had a “challenge,” let’s say, with pet accidents, do not ignore the problem. And do not think that because you had the carpet shampooed or the drapes cleaned, or because YOU can’t smell anything, that the problem is gone.  The fact is that the human sense of smell very quickly gets used to smells that it lives with or is surrounded with on a regular basis.  So it’s critical to get your agent, stager or even your friends and family members - who don’t live with you and love you enough to be honest! - to help you detect bad smells and odors, and make sure they are eradicated by any means necessary, before you place your home on the market.

House Hater Complaint #2:  Glaringly extreme overpricing. There’s the kind of overpricing that makes a buyer say, “Hmmm - seems a bit high. Let’s go see it, but we might have to offer a little less than the asking price if we like it.”  Then there’s the kind of overpricing that makes buyer say “I’ll wait until a price reduction” or worse, hold their sides from laughing. 

When overpricing is glaring, many buyers and buyer’s brokers will comment on it or inquire about it. What they are less likely to do is actually come out and see the place - especially if they weed it out online after comparing its specs to all the other homes in the area and the price range.  Often, homes this severely overpriced simply don’t sell, or not until after they’ve had some serious price cuts or have been on the market so long buyers begin to feel confident about making lowball offers.

In fact, the goal is the opposite - you want your home to stand out as a property that is not dirt cheap, but does present a good value for the money - that’s what motivates buyers to get out of their chairs and into the property for a viewing.

Here’s how to hater-proof your home’s listing against this issue: fixate on the comps. Smart sellers deactivate their emotional attachment and very human tendency to overvalue their precious homes by poring over the sales prices (not list prices) of similar, nearby homes that have recently sold. Your agent will be happy to help you walk through this data and will almost certainly recommend a list price, but ultimately you make the decision about the price point to list your home at.

Also, consider using your broker’s first Open House as an additional hater-proof measure: if the agents overwhelmingly comment that they think the home is significantly overpriced, listen.

House Hater Complaint #3:  Dirt and messes. Possibly the single largest source of House Hater Complaints I’ve ever heard are the dirt, messes, piles and personal belongings that buyers find so distracting, when they walk into a home for a viewing or Open House. Obviously, homes that are filthy from floor to ceiling are fertile fodder for haters, but often those homes are bank-owned or otherwise distressed so that the sellers aren’t likely to do much.  What is underestimated is how often even savvy home buyers are distracted (and disgusted) by relatively clean homes that just have a few outstanding messes, like piles of dirty dishes in the sink, piles of dog poo in the yard or even piles of papers, mail, books or clothes lying out in plain view.  

Will one or two such items ruin the sale of your home? Perhaps not. But a few of them (or more) can certainly distract a buyer enough that they fixate on your messes and, in the process, fail to see what is so great about your property.  And as I see it, cleaning up, meticulously, before every single showing is free - so it makes no sense to even run the risk of turning off a prospective buyer by letting messes get in the way of their ability to visualize themselves and their families flourishing in your home.
  
House Hater Complaint #4:  Lots of little malfunctions.  All of us tend to think our homes are in fantastic condition.  After all, you have the furnace maintained regularly, you’ve got granite and dual paned windows - maybe you even had the floors refinished or the walls painted in preparation for putting your place on the market. 

That’s all fantastic - all the non-cosmetic work you’ve done to maintain and improve your home should be trumpeted in your marketing materials, and the cosmetic items will (or should) speak for themselves. But here’s the thing: buyers who visit your home won’t be running your dishwasher or testing the furnace (at least not until inspections).  What they will do - almost unconsciously - is:
    •    flick light and fan switches
    •    open or close window coverings, closet, room and entry doors, 
    •    open and close drawers, cupboards, gates and fences and
    •    hold the handrails as they walk up and down the stairs.  
They will hear leaky faucets and point out water spots from long-ago repaired leaks, and they will notice (or potentially trip on) uneven exterior tiles, paths and walkways. And even though these items might be vastly less expensive to fix than the roof or sewer line you had replaced, they are much more visible and noticeable to a buyer.  In fact, buyers don’t always even know that the little malfunctions and repairs that need doing are little or inexpensive. And when they notice a bunch of these sorts of things in a single property, they can jump to the conclusion that the whole place is rickety. 

Since these little fixes are inexpensive to make, have them completed before you list, if at all possible. You might even ask your agent to walk through the property with you and to give you a handyperson reference for someone they know works efficiently.

Source: Trulia

Buying in Miami

Sunny Miami Florida is without a doubt one of the hottest real estate markets in the world. Over the years, Miami has noticed a lot of changes in it’s real estate market. Miami Florida has always been known for it’s pristine beaches and activities, making it perfect for a vacation home or a permanent home for anyone wanting to live close to one of the best cities in the world.

In the past, Southern Florida was known to be a realtor’s dream of a real estate market with extremely explosive growth potential. During the beginning of the year 2000, Florida noticed some high rises in real estate. In most areas, including Sunny Isle Beach, the prices of real estate went up as much as 250% in some areas. This was a drastic change in price, making real estate in Florida very hard to afford.

This change in price let the world know that Florida was very sought after for real estate. Although the prices were very high, this also changed the entire economic structure throughout Florida, resulting in more businesses, work opportunities, and a lot more income. Even though it brought more opportunities, the economic growth also helped to make Florida a very expensive city to reside in.

Miami Florida is the second largest city in the state, making it a great choice for real estate. These days, the homes here aren’t very expensive. If you are interested in renting a home or apartment here, you may find it to be moderate to high priced. Miami has long been known for sunshine and fun, which is one of the reasons why so many people decide to purchase real estate there.

Although the past has noticed a lot of interest in real estate for Miami, the future will always be in question. Homes and housing units will always be built here, although real estate agents have found it increasingly difficult to sell homes. Even though some homes will sell a lot faster than others, there are some homes that remain on the market for months and months at a time.

As you may have guessed, Miami Florida has noticed a bit of a drop in real estate price and transactions over the years. Although past years have noticed Miami real estate to skyrocket in both price and appeal, the future makes many wonder. A lot of areas here are harder to sell now days, with many sellers having to lower their prices just to make a sell.

In the future, Miami real estate will continue to be popular, although the trend of high and low will always be there. Miami is still one of the best cities in the world to live in, no matter how much the real estate trend fluctuates.

Source: New Home Programs

10 Powerful Words to Use When Listing Your Home

Trulia shares more wisdom on listing your home. Of course, I'll help you write your listing, but these guidelines may spark ideas for us both!

“A picture is worth a thousand words,” the age-old adage goes. And this is particularly true in real estate, which is why it’s so critical for sellers to make sure their agents post polished photos that tell an accurate story about their home, while showing it in its best light. That said, in most listing systems and property flyers, you don’t have the opportunity to post a thousand words’ worth of text describing your home: you might get 100 words, at best - and many systems limit you to just a couple of hundredcharacters in total.

To market your home like a pro, you’ve got to make sure that every single one of these precious characters counts, adding something powerful to the picture that your home’s listing photos have already created. Here’s a double-digit list of words, phrases and word families that you and your listing agent can use to craft a vivid listing description of your home - and the lifestyle you want buyers to visualize living in it.

1. “Walkable to. . .” Listen, I’m aware that some people feel the phrase “walk to” is fraught with political correctness pitfalls, from possible insensitivities to our friends and relatives who cannot walk due to a physical disability to vagaries and confusion presented by wide variances in what you and I might consider “walkable.” But the concept is valid: home buyers have a soft spot in their hearts for homes that are highly accessible to the shops, parks, cafes and cultural amenities they want to make a part of their everyday lives.

The results of a study by Walkscore.com bears this out: buyers are simply willing to pay more for homes with high “walkability” rankings, compared with homes in sprawling neighborhoods where cars are necessary to get to and from essentials.

Accordingly, if your home is within walking distance or otherwise well-located vis-a-vis nearby conveniences, you should shout it from the rooftops. I mean, include it in your listing description.

To do this, you might actually include the hot spots and major employers your home is “walkable to” if you and your agent agree that it’s the best way to paint the picture of your home’s proximity to desirable amenities and community resources. Alternatively, consider strategies like giving a precise distance, number of blocks or length of the drive (at the legal speed limit) it would take to get from your home to the target amenities, on average.

2. Feel, floor plan and flow. Words which indicate that a home is characterized by stretches of clean, clear space, light, flow and openness of floor plan are generally attractive to buyers, and can trigger their interest in coming to see your home. However, what is even more important in a listing description is that you avoid the temptation to flat-out manipulate buyers/readers by inaccurately describing your home in an effort to get them there at any cost!

If your home has a darker, more compartmentalized floor plan, don’t say it’s bright and open - instead, reference it as offering a more formal style of living, or leave the ‘flow’ descriptions out entirely and let the pictures do that work instead.

3. Lifestyle upgrades for first-time buyers. If your home is in an area, a price range or has other characteristics that are treasured by first-time buyers, you can get major bang out of every listing description word by simply mentioning the ways in which life in your home would represent a big lifestyle upgrade compared to living in an apartment or a rental. For example, dropping verbal clues that your home has ample storage spaces, offers exceptional privacy and quiet, or has uniquely usable furnished or otherwise ready-to-enjoy outdoor living spaces are all mentions that can capture the attention of even the most bargain-hungry first-time buyers.

4. Materials. If your home’s finishes include materials that your agent feels are particularly desired by buyers in your area, you might want to call those materials out in your home’s listing. In fact, in their 2005 book Freakonomics, economists Steven Levitt and Stephen Dubner ran some numbers and found five words which, when present in listings, were positively correlated with higher purchase prices - and three of the five were finish materials: granite, Corian and maple. (The other two? State-of-the-art and gourmet.)

As you explore whether you should be calling out your home’s finish materials in your listing description, keep in mind two things: (1) what buyers prefer changes over time, and (2) different buyers prefer different materials. So, while granite counters and hardwood floors were the materials du jour a couple of years back, buyers are increasingly responsive to mentions of more avant garde materials like concrete countertops and cork floors.

5. Brand names. Describing your home’s style or design aesthetic with reference to brand names is a pithy, yet power-packed, way to communicate a great deal of information and paint a contextual and stylistic picture, with very few words. For example, describing a home as Pottery Barn chic sparks images of family-style living spaces that are well-coordinated and comfortable. While declaring that your home’s decor or fittings are styled after a Restoration Hardware aesthetic creates images of upscale, polished and modern takes on vintage-inspired looks. You’d better believe that people in the market for homes are also in the market for designs and furnishings, a truth you can use to create a quick mental image of your home by evoking any brand with a particularly strong aesthetic, from Crate and Barrel to Neiman Marcus.

Another way brand names can be powerfully included in your home’s listing is joint with #1, by indicating the popular stores and shopping corridors that are conveniently accessible from the property. Mentioning the home’s proximity to “shopping and dining” is good; detailing that it is less than a half-mile from Trader Joe’s, Whole Foods and the Elmwood shops is great.

And, of course, if your kitchen appliances are Wolf, Viking or Miele, your closets were custom-designed by California Closets or your home has other name-brand built-ins or items you’re including in the sale that are valuable and sought-after, drop those brand names, too!

6. Neighborhood names. If your home is in a desirable or up-and-coming neighborhood, don’t just assume that buyers are going to find it by searching for listings on a map, within a certain radius or within a particular zip code. Including the actual name of your district or neighborhood allows your home’s listing to become searchable for that term.

In particular, if your home typifies a style of home for which your area is well-known, dropping the names of both the neighborhood and the style can pack a one-two punch with just a couple of words, e.g. Westbrook Victorian, Broadmoor Tudor and Rockridge Craftsman.

7. “Built-in” or “custom.” Caveat: throwing a custom hot rod tricycle, bonsai tree trimming workshop or other arcane “value-adds” into the deal is not necessarily a compelling proposition for buyers. But if you have had custom features with wide appeal built into your home, you should definitely consider mentioning them.

Some that fit the bill include:
• Custom desks and bookcases
• Built-in closet organizers and garage storage systems
• Customized recycling centers or backyard composters
• Custom, artisan-built wood doors, windows and cabinetry
• Built-in furniture like breakfast nook banquettes and window seats.

8. On trend features. I’m not suggesting that you stage or change your home to make it line up with short-lived trends, but I am suggesting that you work with your agent to keep your finger on the pulse of current shifts in what buyers like and make sure to trigger those preferences with mentions of your home’s features that map to buyer’s wish lists.

For example, urban farming is hot right now - if you have a kitchen garden, a chicken coop or an in-ground composter, make mention of them in your listing. In the same vein, buyers are looking for home with features that are both environmentally and financially responsible, so if your home has solar panels, dual-paned windows, low-flow shower heads or was recently remodeled with low-VOC paints and no-emission/sustainable flooring, these green features should also be considered for inclusion in your home’s listing description.

9. Little kitchen luxuries. Buyers like food prep space, plentiful counter space, professional-grade appliances and - that Holy Grail of kitchen features: islands. Other mention-worthy kitchen features that can change a buyer from indifferent to interested in a viewing include breakfast nooks, vegetable sinks and pot-fillers (a plumbed-in faucet right over the stove) and stoves that run on gas (vs. electric).

10. Differentiators from the competition. Think of your home’s listing description as a luxury chauffeur that escorts prospective buyers right to the very best features of your home. Don’t make buyers have to hunt around for the reasons why they should see your home instead of the one across the street! If your home is on a premium lot, or has an extra bathroom or a mother-in-law unit compared to the others for sale in your subdivision or town at the same price range - mention it. And same goes for pricing, condition or incentives you’re offering, like prepaid HOA dues or closing cost credits: whatever your home has going for it that others lack should be front and center in your listing.

Resolve to Buy

Realtor shares some information on making the house of your dreams a reality this year:

Is one of your New Year’s Resolutions to move into your own home in 2013? One of the keys to making the home-buying process easier and more understandable is planning. In doing so, you’ll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the home-buying process. Follow these steps to achieve your goal of home ownership in 2013.

Resolution #1: Decide What You Want
Let’s start with the fun part. The first step is to decide what you are looking for. You need to determine the what, where, and when of your purchase. What kind of house are you looking for? Where would you like to live? When would you like to buy? Spend a lot of time thinking about this, a new home is a serious commitment and you want to choose somewhere where you can happily live for several years.

It can be helpful to write down all the information you have gathered. Be sure to take note of other important factors such as whether or not you hope to expand your family or if you plan to remain at your job for a long period of time. Consider such things as pricing, location, size, amenities (extras such as a pool or extra-large kitchen) and design (one floor or two, colonial or modern, etc.). You may want to order your priorities so that you will be prepared to make difficult decisions quickly. If you can’t get a home at your price with all the features you want, then what features are most important? For instance, would you trade fewer bedrooms for a larger kitchen? How about a longer commute for a bigger lot and lower cost?

Resolution #2: Get Your Financial House in Order
Once you have an idea of what you are looking for it’s time to get realistic and determine what you can afford. How much do you have available for a down payment? What is your monthly budget for a mortgage payment? Do you have money for closing costs and taxes? Is your financial house in order? Few people can buy a home for cash. According to the National Association of REALTORS® (NAR), nearly nine out of 10 buyers finance their purchase, which means that virtually all buyers — especially first-time purchasers — required a loan. You should start the mortgage process before bidding on a home. By meeting with lenders — either online or face to face — and looking at loan options, you will find which programs best meet your needs and how much you can afford.

Resolution #3: Get Your Pre-Approval Before House Hunting
“Pre-approval” means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a pre-approval letter, which shows your borrowing power. You can visit as many lenders as you like and get several pre-approvals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.

Although not a final loan commitment, the pre-approval letter can be shown to listing brokers when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained. The loan officer will carefully review your financial situation, including your credit report and other information. The lender will then suggest programs which most-closely meet your needs.

Resolution #4: Find Your Realtor
Buying and selling real estate is a complex matter. At first it might seem that by checking local picture books or online sites you could quickly find the right home at the right price. But no two properties — even two identical models on the same street — are precisely and exactly alike. Homes differ and so do contract terms, financing options, inspection requirements and closing costs. In this maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more.

Resolution #5: Find Your New Home 
Now we are back into the fun stuff. A home is more than just a collection of bedrooms and bathrooms. Several properties — each with four bedrooms, three baths, and the same price — may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. Here’s where the information you gathered in Resolution #1 comes into play. You already know what you want.

Resolution #6: Understand Your Mortgage Options
Financing is routinely greater than the original purchase price of a home (after including interest and closing costs). Because financing is so important, buyers should have as much information as possible regarding mortgage options and costs.

How much down? Loans with 5 percent down or less are available — in fact, loans from major lenders with no money down have appeared in recent years. If you place less than 20 percent down, lenders will want the mortgage guaranteed by an outside third party such as the Veterans Administration (VA), the Federal Housing Administration (FHA) or a private mortgage insurer (PMI, or private mortgage insurance, is required by lender to protect against any mortgage defaults).

The best rates and terms are only available to those with solid credit. To get the best loans, make a point of paying credit cards, installment payments, rent and mortgage bills in full and on time.To obtain a loan you must complete a written loan application and provide supporting documentation. Specific documents include recent pay stubs, rental checks and tax returns for the past two or three years if you are self-employed. During the pre-qualification procedure, the loan officer will describe the type of paperwork required. Mortgage financing can be obtained from mortgage bankers, mortgage brokers, savings and loan associations, mutual savings banks, commercial banks, credit unions, and insurance companies.

Resolution #7: Make An Offer
Once you have found a home you want to make an offer on you have three choices: accept the listed price and create a contract; reject it and not make an offer; or suggest different terms and make a counter-offer. If you choose this last option, the seller may accept, reject or make a counter-offer. You sometimes hear that the amount of your offer should be x percent below the seller’s asking price or y percent less than you’re really willing to pay. In practice, the offer depends on the basic laws of supply and demand: If many buyers are competing for homes, then sellers will likely get full-price offers and sometimes even more. If demand is weak, then offers below the asking price may be in order. The process of making offers varies around the country. In a typical situation, you will complete an offer that the Realtor will present to the owner and the owner’s representative.

A number of inspections are common in residential realty transactions. They include checks for termites, surveys to determine boundaries, appraisals to determine value for lenders, title reviews and structural inspections. During these examinations, an inspector comes to the property to determine if there are material physical defects and whether expensive repairs and replacements are likely to be required in the next few years. This is an opportunity to examine the property’s mechanics and structure, ask questions and learn far more about the property than is possible with an informal walk-through.

Resolution #8: Protect Yourself With Insurance
No one would drive a car without insurance, so it figures that no homeowner should be without insurance. Title insurance is purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid. Coverage includes “lenders” policies, which protect buyers up to the mortgage value of the property, and “owners” coverage, which protects owners up to the purchase price. In other words, “owners” coverage protects both the mortgage amount and the value of the down payment.

Homeowner’s insurance provides fire, theft and liability coverage. Homeowners’ policies are required by lenders and often cover a surprising number of items, including in some cases such personal property as wedding rings, furniture and home office equipment. In high-risk flood-prone areas, flood insurance may be required. This insurance is issued by the federal government and provides as much as $250,000 in coverage for a single-family home plus $100,000 for contents.

For new homes, home warranties bought from third parties by home builders are generally designed to provide several forms of protection: workmanship for the first year, mechanical problems such as plumbing and wiring for the first two years, and structural defects for up to 10 years. Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.

Resolution #9: Close On Your New Home
The closing process, which in different parts of the country is also known as “settlement” or “escrow,” is increasingly computerized and automated. In many cases, buyers and sellers don’t need to attend a specific event; signed paperwork can be sent to the closing agent via overnight delivery.

Settlement is a brief process where all of the necessary paperwork needed to complete the transaction is signed. Title to the property is transferred from seller to buyer. The buyer receives the keys and the seller receives payment for the home. From the amount credited to the seller, the closing agent subtracts money to pay off the existing mortgage and other transaction costs. Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices.

Before closing, buyers typically have a final opportunity to walk through the property to assure that its condition has not materially changed since the sale agreement was signed. At closing itself, all papers have been prepared by closing agents, title companies, lenders and lawyers. This paperwork reflects the sale agreement and allows all parties to the transaction to verify their interests. For instance, buyers get the title to the property, lenders have their loans recorded in the public records and state governments collect their transfer taxes.

Resolution #10: Tie Up Loose Ends
You've done it. You've looked at properties, made an offer, obtained financing and gone to closing. What’s next?

Those papers you received at settlement are extremely valuable, so hold on to them! In the short-term they can help establish tax deductions for the year in which the property was purchased. In the future, such papers will be important for tax purposes when the property is sold, and in some cases, for calculating estate taxes.

Also at closing, determine the status of the utilities required by the home, items such as water, sewage, gas, electric and oil service. You want utility bills to be paid in full by owners as of closing and you also want services transferred to your name for billing. Usually such transfers can be done without turning off utilities. About two weeks after closing, contact your local property records office and confirm that your deed has been officially recorded. Such records are public notices that show your interest in the property.

When you move in, you may want to replace all locks just to be safe. Many owners make a photo or video record of the home and their possessions for insurance purposes and then keep the records in a safety deposit box. Your insurance provider can recommend what to photograph and how to secure it. You want to maintain fire, theft and liability insurance. As the value of your property increases such coverage should also rise.

Enjoy your home. Owning real estate involves contracts, loans, and taxes, but ultimately what’s most important is that home ownership should be a wonderful experience.

Do in December, Sell in 2013

Source: Trulia

True Confession: I set a handful of New Year’s Resolutions every single year. Why? They work for me - I’ve got probably a 75 percent success rate. Some of this is in the science of setting the Resolution the right way in the first place, including the preparation.

Here’s my secret: I always get started in December. I like to use my holiday down-time to plan things out, gather up the resources or do the research I need, figure out what my challenges are likely to be and make a plan to deactivate them, set appointments with any professional I need to get on board to make my goals happen and even get some momentum built up with my new eating program, workout plan, financial goals or career endeavors. 

I aim to be like that old Marines commercial - by January 1, I’ve already done more than most Resolution-setters do all year!

And I’d like to help you do the same.  Let’s boost the chances that your home buying or selling goals for 2013 will be successful by devoting a little time in December to getting things lined up and in motion.  Here is my short list of tasks I would put on my December to-do list if I wanted to buy or sell a home next year:

1.  Handle your credit horrors.  Maybe you don’t have any credit horrors - kudos to you! But let’s get real, this year will be a year in which many post-foreclosure, post-bankruptcy, post-layoff Americans will find themselves sufficiently recovered, post-recession, to get back into the real estate market and buy a home. If you count yourself among the number of 2013 wanna-be buyers who experienced a financial glitch of any degree during the recession, December is the right time to start pulling your credit reports and doing a damage assessement and control campaign.

• Visit AnnualCreditReport.com (the only website through which you can access your government-mandated free reports) and order your own credit reports from all three reporting bureaus.
• Review them all, line-by-line, checking for errors and discrepancies. It is extremely common for paid-off accounts to still be reporting as delinquent, for foreclosed mortgages to still be listed as open and past-due and for bills that were settled in collection to be reported as behind. Follow the instructions to dispute any such errors you see.
• When you talk with your mortgage broker (see #4), go over the reports with them again, getting a read on precisely when your foreclosure, bankruptcy, delinquencies, gaps in employment or other credit woes will be sufficiently “seasoned” (i.e., long ago) to allow you to qualify for another loan, and get their advice on any action items, like paying a particular debt or set of credit cards down to $X amount will be important for you to complete before you try for a legitimate pre-approval next year.

In fact, this last point applies to everyone - whether or not you think you have any dings on your credit report. It’s essential to get clear on any of the work you’ll need to do to optimize your credit standing now, as the payoffs, disputes and other credit work that can move the needle on your score may take some time.

2.  Purge.  It’s time.  Time to get rid of all that things you know qualify as clutter - all of the stuff you know buyers won’t want to see when they tour your home, and all the stuff that you won’t want to move to your next place. If you donate your junk before the end of the year, you might be able to get a receipt and deduction for the taxes you file in 2013.  And tax break or not, getting all that stuff out of your attic, your closets, your shelves and your rooms will clear up loads of mental space and energy, minimize some of the overwhelm latent in the prospect of moving - and might even surface a few things you can sell to boost your down payment savings or your home staging budget.

Clutter clearing gets overwhelming when you simply lack the time, in the face of everyday urgencies, to invest a few hours or days to go deep, pull out all the minutae and memory-laden How better to spend those wintry days between Christmas and New Year’s than to clear out the clutter in your home - and your mind?

3.  Plan your prep. If you’re thinking of selling your home in 2013, now is a great time to start organizing your list (or spreadsheet, or Evernote file) of home preparation tasks that need to get done before you put the place on the market. Things like painting, carpeting, landscaping and other preparation tasks can be less taxing and less disruptive to your life if you have plenty of time to collect bids, sock away the cash to cover the costs and arrange projects at your family’s convenience or during off-seasons, when contractors might be wiling to charge a bit less.  

Talk with your agent before you put a plan in place; they can help you make good decisions which projects to do (and which to forego), as well as choosing finish materials and colors that will appeal to the broadest segment of buyers - to boot, they often can refer you to the most cost-effective contractors in your area for these sorts of pre-listing projects.

3.  Save. More. There’s no such thing as saving too much cash up for your down payment. If you have a home to sell, you have no idea how much you’ll take away from that transaction until it closes. And even if you’re currently renting, having maximum savings set aside allows you maximum flexibility in terms of selecting homes, competing with other buyers, covering closing costs (which can run as high as 3-4% on average for an FHA loan) and even handling post-closing repairs, appliances and property personalization.

4.  Collect your gift money.  Buyers who get gift money from a relative to apply toward their down payments are often subject to seemingly strange and definitely invasive documentation requirements - the most onerous of which is to produce copies of the gift GIVER’s bank accounts proving the source of the funds. If you know Mom, Dad, Granny or Aunt Bernie is going to chip in some cash toward your down payment in the Spring, consider asking them to go ahead and give it to you now, so you can put it in your own accounts and begin “seasoning” it as yours, which will help you avoid all those documentation demands.  

Your benefactor should check with their financial and tax advisors to be sure the gift is structured so as to avoid any tax implications, before they give it.

5.  Connect with an agent and a mortgage broker - stat.  Don’t wait until the month before you want to buy or sell to ring up your trusty agent and initiate the conversation. Ask around for referrals or find an agent here on Trulia Voices now, get a mortgage broker (or 3) on the phone, and ask them to help brief you long-lead topics like:

• Whether your market is a buyer’s market or seller’s market, and how that translates into what you can and should expect when you plan to buy or sell next year
• Whether there are any area-specific timing issues you should factor in as you map out your timeline
• What - given the specifics of your financials, your savings, any past credit or other issues you have - you should be doing now in terms of paying bills down, settting savings targets, and such
• What changes, if any, you should plan on making to your property before listing it
• What sort of property you can get for your money in the areas you’re targeting as a buyer, and what kind of money you can expect to command for your property in your local market (this, obviously, will change over time - even over the few months or so between now and the time you list your home, but it still helps to have a general ides of the current market values).

6.  Go Open House hunting.  If you’re selling next year, it’s essential to get a real-life read on what the competition’s like, everything from what sorts of houses in your area are listed at various price points to what your target buyers are going to be seeing on their way into or out of your house.  There’s no reality check on your own home’s preparation and staging - its overall readiness for listing - like putting on a buyer’s shoes and taking a tour through similar homes in your area.  And there’s no time for this reality check like right now: when Open Houses are still a-plenty, you have more time to attend them, and you still have plenty of time to process your takeaways and incorporate them into your own property preparations.

Open House hunting is also helpful for those who have home buying on their 2013 to-do lists.  It’s the only way you can start understanding how to decipher the listings you see online into a reality-based set of expectations about a property.  It’s also the best way to get indoctrinated deeply into the realities of what you get on your local market at various price points, and it’s the most impactful strategy for starting the process of negotiating compromises with your co-buyers.

7.  Think hard about your deductions, if you’re self-employed. In the wake of the recession, most mortgage guidelines for self-employed borrowers changed, so that your income for purposes of qualifying is assumed to be the average of your last two years’ Adjusted Gross Income, as reported on your federal income tax returns.  That means lenders calculate your income after all your business-related and other deductions, not before.

So, yes, this does mean that maximizing your deductions may impact your ability to qualify for a home loan in 2013.  But them’s the breaks - better to know this before you file your tax return, in the event it might change something about how you file.  Loop your tax advisor, business bookkeeper and mortgage broker into your decision-making process about your 2012 taxes before filing, if you’re self-employed and plan to buy or refinance your home next year. 

Find the Downpayment

If buying a home is on your New Year’s Resolution list for 2013, know this: your biggest challenge will almost certainly be coming up with your down payment and closing costs.

Whether you’re trying to scrape by with 3.5 percent for an FHA loan or you’re planning to put down a full 20 percent, saving for a down payment might be the largest savings endeavor you ever undertake, after retirement planning.

But don’t let that daunt you. Look at it as more of a challenge or a game than a slow-slogging deprivation-driven chore. In fact, I suggest that you add something to your scrounging and saving: scavenging. Finding your down payment money hidden in resources that are right in front of you can be a fruitful and fun angle to take on an otherwise overwhelming goal.

Use this short list of oft-untapped down payment treasure troves to open your eyes to funds that might be hidden in plain sight:

1. Your budget’s biggest line items. I like to get maximum bang for my buck. And I like to enjoy my life, too, so depriving myself of little luxuries without getting much mileage toward my goal is definitely low on my savings strategies list. But I’ve often found that if you take your top 10 or so monthly expenses, there are almost always at least one or two that you could slash significantly or totally do without, push come to shove: all without feeling as deprived as you would if you cut your daily coffee.

Home buying is one of those push-meet-shove-type situations. If you’re serious about coming up with your down payment funds, sit down during your holiday off-days, and backtrack over your monthly budget (if you have one) or your last month’s checking account statements. Isolate your top 10 budgetary line items and do an internal gut check on whether there is anything on this list that you can slash or eliminate.

If this seems obvious or silly to you, don’t scoff before you give it a chance. I have seen buyers do this exercise and decide to:

move home or to a cheaper place to eliminate rent
go from two cars to one to eliminate a car payment
cancel cable or switch cell phone service providers to get rid of a hundred bucks or more every month, pressing fast-forward on their down payment savings and home buying plans by many months, even years.

2. Your bad habits. Have you heard yourself say - out loud or internally - I’ve got to stop:

• smoking
• drinking so much
• eating out so much
• eating so much junk
• watching so much TV
• drinking so many sugary coffee drinks
• impulse shopping
• OSUI: Online Shopping Under the Influence (it’s a real thing - I promise!)- or anything in that vein? Well, each of these are bad habits that cost. And because they are often engaged in compulsively, they can cost much, much more over time than you have any idea you’re actually spending. 

Again, far be it from me to suggest that someone who works hard every day shouldn’t treat themselves to a coffee or lunch here or there. The fact is, if you deprive yourself too severely, there’s a good chance your efforts to cut back and save will be very short-lived, and possibly even backlash into binging behavior. But if there’s a habit you’ve been wanting to change for health or other reasons that also costs you a pretty penny, you might find it easier to make those changes when you know you’re doing it in service of your vision of owning a home.

So, make a project of it. Figure out roughly what you’re spending on your bad habit, and set up an automatic saving transfer from your checking account into your down payment savings account. Then, get and leverage some habit-changing resources, like those at ChangeAnything.com or in one of my favorite books this year, The Power of Habit: Why We Do What We Do in Life and Business. Then, when you feel the compulsion to engage in your bad habit, come to Trulia instead and peruse new listings in the price range and neighborhood of your own target dream home - that will help you stay on track by staying mindful of what’s really important.

3. Your stuff. When you need to save money, there are really only two levers you can pull: you can spend less, or you can make more. Selling stuff you have and don’t use or need is a relatively painless way to make more money to go toward your down payment. If you’re really serious about home buying, put everything on the table.

I’ve known buyers-to-be who sold any and everything, including:

• cars and motorcycles
• clothes, costumes, shoes and handbags
• hobby-related gear (bikes, tools and even costumes)
• furniture and antiques
• and electronics, CDs and even books (think: TVs, computers, old smart phones, etc.)

to fund their down payment and home buying-related debt elimination plans.

Don’t underestimate the amount of cash you can bring in from the stuff you already own. Millions of home owners worldwide are now renting out rooms or floors of their current homes for short periods of time on sites like Airbnb and VRBO. Sites like Getaround and Zimride allow you to rent out the extra seats in your car - or the whole vehicle, if you’re not too faint of heart!

4. Your skills and time. One way to make more money, as discussed above, is to liquidate the things you have lying around. Another way is to get to work! Spend your off-time, your evenings and weekends leveraging your professional skills or personal hobbies to bring in some extra cash. A friend of mine recently had a savings target she was trying to reach and actually sent her whole circle of friends an email detailing (a) what she was selling and (b) what sorts of projects she was willing to do to get there - she earned well into the four figures, in less than a month.

Maybe you can sew or knit stuff to sell on Etsy, grow things in your backyard to sell at the farmer’s market or, like one enterprising Mom I know, use your baking and cake decorating skills to monetize your kids’ classmates’ birthday parties. Or maybe you’re more interested in cooking, house cleaning, babysitting or dog walking - in fact, another acquaintance of mine has earned thousands of “extra” dollars dog sitting while she works at home. If that sort of thing is not up your alley, think about whether you can help people you know with their small business projects, like research, bookkeeping or office organizing projects.

Once you get serious about coming up with your down payment cash and decide to be creative about where to find that money, using your skills and your time creatively is a power-packed way to open the financial floodgates. Consider starting out with a simple email to your circle of acquaintances or by listing your services on a site like TaskRabbit.

5. Your loved ones. Some folks are fortunate enough to have cash-flush loved ones who would love nothing more than to help you have a home of your own. The best case scenario is to have some idea of what sort of gift money you can count on as far in advance as possible, as it will impact your own savings targets and your lender’s documentation requirements. If you have a parent, sibling or auntie who has mentioned their interest in giving you this sort of gift, it’s not bizarre to bring the subject up, express your gratitude and let them know that you’re planning to buy in 2013 so you can have a detailed conversation about logistics - including their financial, tax or estate planning pros, if it makes sense.

Alternatively, if your home buying plans are timed alongside your wedding plans, graduation plans or new baby due date, consider opening a down payment registry, so well-wishers can funnel their gift funds right into your real estate savings. For example, the federal Dpeartment of Housing and Urban Development (HUD) allows small gifts to be combined in a single savings account and eliminates otherwise onerous gift money documentation requirements with the FHA Bridal Registry program, which is available around weddings and “other legitimate occasions where substantial gifts are typically received by an individual or individuals.”

Touch base with your lender and agent to see whether there are any registry programs that might make sense for your situation.

Finally, buyers who decide to team up with their BFFs, siblings, parents or other loved ones to buy a place they can jointly own and/or live in might be able to structure things so that they have to come up with less down payment money than they would otherwise - the co-buyer comes up with the rest! Think about whether this sort of arrangement might help you and your loved one accomplish your respective financial and real estate goals, in one fell swoop.

6. Your employer. Believe it or not, some employers actually offer down payment and other forms of mortgage assistance to employees. In particular, universities and governmental agencies that employ first responders who are required to live locally for their jobs (e.g., police, fire and other emergency personnel) often have housing assistance programs that can include down payment funds or access to mortgage programs with lower down payment requirements.

Even if you don’t work for one of these sorts of agencies, if you are relocating for work, touch base with your HR department to find out whether there are any relocation benefits that can help you make up the difference between the cash you have and the down payment you need to make your move.

7. Your city, county or state. What you’ve heard is true: there are few, if any, down payment assistance programs still available on a national level. But many states, counties and cities offer their own down payment assistance programs, which are generally available to folks falling into one or more of the following categories:

• first-time buyers (people who haven’t owned a home in the area in the last 3 years)
• buyers in low- or moderate-income brackets 
• or those buying homes in a particular part of town.

Your mortgage pro and real estate agent should be able to help you track down any such local programs applicable to you. In fact, this is one great reason to touch base with them at the beginning of your down payment savings adventure versus waiting until the end. But make sure you read up on the programs extensively before you decide to opt into one. Many of them run out of cash over the course of the year, so shouldn't be counted on; others may require you to repay any assistance received if and when you sell or move - things you should keep in mind at the outset.






Source: Trulia

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