The quicker the sale the better!

3 Strategies for a Quick Home Sale

Sold Home For Sale Real Estate Sign and Beautiful New House.
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Most sellers have a specific goal when it comes to their transaction: a quick sale and top dollar. But sometimes fast action doesn’t align with achieving the highest and best value.

There are multiple schools of thought on this subject and the perspective varies not only with where you are in the country, but also by price point, neighborhood and even down to the block. When it comes to pricing and the search for a quick sale, it’s always best to get help from a local agent.

Here are some strategies you can use to get offers fast.

1. The Theory of Under-Pricing

Under-pricing means that you go to market with a list price that is just below what the comparable sales in your area support.

You can’t pinpoint the exact market value of a home until it sells. But before you list, there’s always a range. If you price your house at or below the bottom of the value range, you are under-pricing the home.

In many West Coast markets this strategy will work effectively. Take this San Francisco home, for example: priced at $1.1 million, it received 10 offers and sold for $1.425 million in less than a week.

Risk alert: If you price your home low, this plan could backfire — big time. If you don’t know your market and this strategy doesn’t work, you’d better be ready to accept that list price.

2. Staging and Market Presentation

Well-priced homes that also show well sell quickly. If you want a quick sale, you need to invest some serious time in getting the house ready.

Prepping the home means taking out large pieces of furniture and personal items, painting, replacing carpets, finishing floors and even doing some minor renovations.

Enlist the help of a home stager and take their advice, and you can be assured a quicker sale. The investment of time and money will pay itself back.

Risk alert: If you go overboard on staging or you don’t spend the time and money in the right places, it could be a waste. Don’t make staging decisions in a vacuum. Focus on kitchens and bathrooms, de-cluttering and cleaning. When in doubt, ask for help.

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Not a US citizen? Here’s what you need to know about buying a home…

Buying a Home When You’re Not a U.S. Citizen

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Immigrants are having a significant impact on the U.S. housing market. According to the Research Institute for Housing America, immigrants accounted for nearly 40% of the net increase in U.S. homeowners from 2000 to 2010. Meanwhile, the same group estimates that U.S. homeownership rates among Latino immigrants will hit 50% by the year 2020.

Overall, the number of immigrant homeowners is still relatively small, representing only 11.2% of owner-occupied homes in 2014, according to the Joint Center for Housing Studies. Even so, that’s up from 6.8% 20 years earlier.

So immigrants are clearly buying homes. But what sort of obstacles and challenges do they face that native-born homebuyers do not?

There are no legal barriers to foreign nationals buying property, owning homes or obtaining loans in the U.S.

Foreign investors buy U.S. property and do business with U.S. banks all the time — getting a mortgage and buying a home is simply more of the same, on a smaller scale.

“Residency of any kind is not a requirement for home ownership in the U.S.,” said Jason Madiedo, president of Alterra Home Loans, in Las Vegas. “The challenge for the consumer is to gain financing.”

Documenting Foreign Financial Info Can Be a Challenge

For a legal immigrant with an established employment and credit history in this country, the process of buying a home is much the same as it is for a citizen. However, there are still certain challenges that non-citizens may face when seeking to buy a home in the U.S. that native-born borrowers are unlikely to encounter.

“It becomes a little more difficult for a foreign national to buy an owner-occupied property unless they’re here with a job in the U.S.,” said Bill Ashmore, president of IMPAC Mortgage in Irvine, California. “The longer somebody’s here and the more they can document their income through tax returns, the better off they are.”

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Revolving debt just got a lot less important for borrowers…

Banks Agree to Remove Credit Notations on “Zombie” Debt

Jann Swanson | Mortgage News Daily | May 8 2015 | link

A million or more consumers nationwide may see their credit histories improve as a result of an agreement in a Federal Bankruptcy Court in White Plains, New York.  As a result of two separate lawsuits brought in the court Bank of America and JPMorgan chase have agreed to update borrowers’ credit reports to eliminate data on so-called zombie debts, delinquent accounts that had actually been extinguished in bankruptcy.

The banks, along with Citigroup and Synchrony Financial (formerly GE Capital) had been charged in the suit with retaining the information on the credit reports as live debts to enable the banks to generate higher prices for the loans when sold in pools to investors as bad debts.

According to a report in the New York Times, the banks are accused of “engineering what amounts to a subtle but ruthless debt collection tactic, effectively holding borrowers’ credit reports hostage, refusing to fix the mistakes unless people pay money for debts that they do not actually owe.”  The banks offered as a defense to the lawsuits the argument that they do comply with the law and accurately report discharged debts to the credit agencies.

According to the Times, Judge Robert D. Drain, has repeatedly refused the banks’ requests to throw out the lawsuits, criticizing Citigroup last month for its actions and saying, “I continue to believe there’s one reason, and one reason only, that Citibank refuses to change its policy… because it makes money off of it.”

The banks are also rumored to be under investigation by the Department of Justice over whether they are deliberately flouting federal bankruptcy laws which require that banks update credit reports for a borrower discharged in bankruptcy to indicate the debt is no longer owned and to remove any reference to a debt being past due or charged off.

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Do you know your history?

10% of Americans are “Credit Invisible”

Jann Swanson | Mortgage News Daily | May 6 2015 | link

About one in 10 American adults have no credit history according to a report from the Consumer Financial Protection Bureau, a total of 26 million persons who are “credit invisible.”  These are persons who have no information on file with any of the nationwide consumer reporting agencies.

Credit histories contain data on a consumers bank loans, car loans, credit card bills, student loans, and mortgages; details about the terms of credit, totals owed, payment histories, and any liens or judgments that may have been incurred.  This information is used by the agencies to produce three digit credit scores. Most decisions to grant credit and set interest rates for loans are made based on information contained in credit reports and on the resulting credit scores. As a result, those consumers who have a limited or nonexistent credit history face greater hurdles in getting credit.

CFPB says that in broad terms, those with limited credit histories can be classified as either consumers without a credit report, the “credit invisibles,” or as a second group, the “unscored.”  These are consumers who do not have enough credit history to generate a credit score or who have credit reports that contain “stale” or not recently reported information.  CFPB estimates that 19 million consumers have unscored credit records, about half of which are considered unable to be scored, a definition that differs across scoring models, and half that lack up-to-date information.  

Fair Isaac Corporation which produces the widely used FICO credit score places the number of unscored Americans at 53 million, slightly higher than CFPB’s total of those either lacking any history or with histories that cannot be scored.  CFPB says that about 189 million Americans have credit records sufficient for scoring.  

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Shopping online – not just for shoes anymore!

How to Shop for a Mortgage Online

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Ron Milman refinanced his mortgage in early 2015. A resident of an Atlanta suburb, Milman says he saved money, closed quickly, and except for one quick trip to a local bank to meet a local attorney to finalize paperwork, he never left his home office. Working strictly online and by phone, he says getting his mortgage online was a painless process for him. “I really don’t like going into an office,” he says. “It’s so much wasted time and effort.”

If you’re in the market for a home loan, whether for a purchase or refinance, you may have toyed with the idea of using an online lender. But you may be wondering what getting a mortgage online is like. How is the process different?

“The Internet provides the most convenient way for consumers to compare mortgage service offerings; as a result, a growing portion of mortgage originations are anticipated to be completed online in the years to come,” says Stephen Hoopes, an analyst with research firm IBISWorld.

It’s important to first understand that shopping for a mortgage online can be different than getting a mortgage online. In the first scenario, you may be using a service that doesn’t actually make loans but helps connect you to lenders. In the latter case, you actually apply for and complete the process largely online.

With that in mind, here are some of the differences when you get an online mortgage:

The Internet Holds Answers

Aren’t sure about a mortgage term? Need help deciding which type of loan to get, or whether to go for a longer-term loan or a shorter one? You can take a break to research it before you decide without giving a loan officer a blank stare or feeling like you are being put on the spot. Not that you can’t do that before you shop for a mortgage anyway, but apparently quite a few consumers don’t fully educate themselves on all their options when getting the largest loan of their lives.

A recent report by the Consumer Financial Protection Bureau found that almost half of borrowers seriously consider only a single lender or broker before deciding where to apply. The CFPB also says that most borrowers rely heavily on those who have a financial stake in the transaction, and less than half get a lot of their information from outside sources such as websites, financial and housing counselors, or friends, relatives or co-workers.

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Back to Basics: What is a Reverse Mortgage?

What Is a Reverse Mortgage?

Huffington Post | May 3, 2015 | link

A reverse mortgage is a type of home loan that doesn’t require any payments until after you die, as long as you continue living in your home. If you move out or decide to sell your house while still alive, the reverse mortgage comes due immediately. You can receive the loan proceeds in one lump sum or in monthly income payments.

Who Can Benefit From a Reverse Mortgage?

It’s important to be aware of the age restrictions for reverse mortgages: Everyone listed on the deed of the house, even if they don’t sign the loan, must be at least 62 years old for the house to qualify for a reverse mortgage. Also, reverse mortgages aren’t useful if you still owe a lot on your regular mortgage. For example, if you owe $100,000 on your house, and you get a reverse mortgage for $125,000, you would only receive $25,000. The rest of the reverse mortgage proceeds would be immediately applied to your regular mortgage. Here is a more in-depth explanation of how reverse mortgages work.

The main pros and cons of reverse mortgages are:

Pros of Reverse Mortgage

  • One big advantage to reverse mortgages is that credit checks are minimal. Since you don’t have to make loan payments during your lifetime, your credit score or monthly income are mostly irrelevant. However, new laws require lenders to set aside a certain amount of the loan funds if it looks like you won’t be able to afford property taxes, home repairs or mortgage insurance premiums.
  • The value of your home may have risen dramatically since you bought it. Reverse mortgages give you access to this profit while allowing you to remain in your home.
  • If you have limited income, a reverse mortgage can provide you with greater self-sufficiency and comfort.

Cons of Reverse Mortgage

  • You (or your spouse, if he or she also signed the loan) must be living in your home to keep the reverse mortgage in place. You can’t be absent for longer than 12 months, even if you have to go into a long-term care facility or move away to care for a family member. Longer absences result in the termination of the loan, and any money you received must be repaid immediately, with interest.
  • You must commit to maintaining your home and to keeping property tax and insurance payments up to date. Before the loan closes, the house is inspected, and you must sign a binding agreement to complete all recommended repairs by a specified date. The bank inspects your home to certify that you have completed these repairs as agreed.
  • A reverse mortgage usually makes it impossible to leave your house to your children. When all borrowers have passed away, the reverse mortgage must be repaid in full. In most cases, this requires the sale of the house. The only way to avoid this is if your heirs have enough personal wealth to pay off the reverse mortgage without needing to sell the house.

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Super helpful tips for starting out your home search…

10 Things I Wish My Realtor Would Have Told Me

Freshome.com | link

Ah, home ownership—the dream we all chase. Owning your own home is freeing, but it certainly catapults you quickly into the adult world of bills, brokers, and banking. There are so many things to know before buying a home, and even if you have owned and sold homes in the past, there may be things that your realtor never revealed to you.

Here we attempt to share with you the tricks of the trade, and perhaps the secrets behind the scenes, revealing what may really be happening when you hire your realtor. Here are the top then things that you will wish your realtor would have told you:

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 1) Spend A Bit More Than You Planned

While this seems to defy logic, there is some merit to spending a wee bit more than you initially intended. Say your budget is $250,000 USD. Well, it really won’t break the bank to buy that dream house for $275,000. Why?

Well, for one— your monthly mortgage payments will really only be around $15-20 more per month (depending on interest rates). Perhaps just give up your daily high-end coffee? Plus, that dream house has everything you want; it has the granite countertops; the walk-in closets; the finished basement.  These are the things you will eventually add to the less expensive house; thereby, spending that $275,000 in the long run. (Although, always be sure to stay within your means—see affordability calculator below)

outdoor porch built-in patio

 2) Buy In A Growing Neighborhood

Maybe you are single and buying your first home. Most likely, this isn’t going to be the home you raise kids in. We still encourage you to buy in a growing family neighborhood where schools are established or are in the phase of being built.

This is the perfect investment scenario. A home where families are flocking and schools are growing is only going to go up in value. So buy that family home even if you don’t plan on staying in it for the long haul—your wallet will thank you in the end.

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