If your home was listed for sale when the coronavirus pandemic escalated, you might have joined the ranks of many sellers and taken your home off the market. At the beginning of the COVID-19 outbreak, stay-at-home orders and social distancing guidelines led many to believe there was no viable way to sell a home in the current climate.
However, thanks to a rapid pivot by real estate professionals across the country, consumers have been buying and selling homes despite coronavirus-related restrictions. By implementing virtual tours and virtual open houses, along with digitizing much of the transaction process, savvy agents and sellers have been able to close deals in the many states where real estate was deemed an essential business.
And now, as states begin to reopen for business, the timing might be even better to put your home on the market…or back on the market. According to the Weekly Housing Trends Report from realtor.com® for the week ending May 9, after several weeks of near 40 percent declines year-over-year, new listings made a significant jump back with a -29 percent decline year-over-year.
If you're anxious to sell your home, talk to your local real estate professional about why this could be a great time to sell. Consider the following:
Discuss the specifics of your particular situation and market with an experienced real estate professional in your area. Local expertise is more important than ever!
Plan on applying for a home mortgage, car loan or new credit card? Lenders will be looking at your credit score to determine if you're a responsible borrower. The higher your credit score, the more likely a lender will qualify you and offer the best terms.
Although boosting your score requires time and discipline, here are five simple steps to take:
1. Pay Bills on Time
When lenders review your credit report, they're very interested in how reliably you pay your bills. That's because past payment performance is usually considered a good predictor of future performance.
You can help this credit-scoring factor by paying all your bills on time. That includes not just credit card and loan bills, but also bills for rent, utilities, cellphones and so on. Similarly, paying late or less than the minimum amount can hurt your score. Use automatic payments or calendar reminders to help ensure you pay on time every month.
If you're behind on payments, bring them current ASAP. Although late or missed payments appear as negative information on your credit report for seven years, their impact on your score declines over time: Older late payments have less effect than recent ones.
2. Pay Off Debt
The credit utilization ratio is another important number in credit score calculations. It's calculated by adding all your credit card balances at any given time and dividing that amount by your total credit limit. For example, if you typically charge about $2,000 each month and your total credit limit across all your cards is $10,000, your utilization ratio is 20 percent.
Lenders prefer ratios of 30 percent or less, and people with the best credit scores often have very low ratios. A low ratio shows lenders you haven't maxed out your credit cards and can manage credit well. You can improve your ratio by paying off debt and keeping credit card balances low.
3. Don't Close Unused Credit Cards
Keeping unused credit cards open—as long as they're not costing you money in annual fees—is a smart strategy, because closing an account may increase your credit utilization ratio. Owing the same amount but having fewer open accounts may lower your credit score.
4. Don't Apply for Too Much New Credit
Opening a new credit card can increase your overall credit limit, but the act of applying for credit creates a hard inquiry on your credit report. Too many hard inquiries can hurt your credit score, though this effect will fade over time. (Hard inquiries remain on credit reports for two years.) Unnecessary credit can also tempt you to overspend and accumulate debt, so apply for new credit accounts only as needed.
5. Dispute Credit Report Inaccuracies
You should check your credit reports at all three major reporting bureaus (TransUnion, Equifax and Experian) for any inaccuracies. Incorrect information on credit reports could drag scores down. Verify that the accounts listed on your reports are correct. If you see errors, dispute the information and get it corrected right away.
Are you considering having your children share a bedroom? Maybe your current place or new home you're looking at doesn't have a lot of room, or maybe you want to save space for other purposes. Like with most decisions, there are both pros and cons for you to weigh:
More Space Options: Having kids bunk together could free up space to use as a playroom, office or guest room. If you plan on having another child within the next year or so, you could also turn the extra room into a nursery when the time comes.
Sharing: All parents try to teach their children about sharing, and when kids live in the same room, they are encouraged to not only learn how to share a space, but also how to share each other's toys and other items. The experience could also help prepare children to share space when they have roommates at summer camp or later in college.
Bonding: Living in the same room could inspire siblings to spend more time together and become a team. If your children are young, you might walk in to find them reading a book together. If they're older, they might confide in their sibling or console each other when something bad happens, thus building a stronger bond.
Sleep: Young children tend to sleep better and feel more secure knowing there's a sibling next to them in the room, especially if one of your kids is afraid of the dark. This could mean fewer late nights getting up to check closets for the Boogeyman or sleeping in a crowded bed with your child. Also, older children might go to bed–or at least quiet down–quicker if their sibling is an early sleeper.
Sickness: It's difficult enough to keep everyone in the family from catching a member's cold or flu, but it is nearly impossible to prevent siblings who share a room from getting each other sick.
Privacy Issues: Children have little to no privacy when sharing a room, which could lead to frustration and feelings of rejection. Even if siblings enjoy spending time together, that doesn't mean they'll want to include each other when it comes to having playdates or sleepovers with friends. Many older children, especially teenagers, also crave privacy and independence.
Clutter: A messy room is bound to be twice as bad when you've got two kids throwing clothes and other items around. If your home doesn't have a separate playroom, a shared bedroom can get cluttered with toys fast. Furthermore, kids' piles of stuff and necessary furniture tend to get bigger as they get older; the room, however, stays the same size.
Fights: Siblings naturally fight from time to time, but living in a confined space together might intensify or spur more arguments, especially if the kids' personalities are polar opposites. When sharing a room, children won't have their own rooms to escape to and cool off.
Some people believe it's beneficial for siblings to room together, while some claim it only works when the kids are of the same sex or similar in age. Conversely, others suggest it's best to give siblings their own rooms whenever possible.
Ultimately, it's up to you to decide what's best for your family and circumstances.
Let me guess: You are interested in buying a foreclosure property? When you want to buy a home, but the mortgage payments are difficult to afford, buying a foreclosure can look attractive. The unfortunate previous homeowner will have struggled with the costs of the mortgage, ending up with the home foreclosing to the lender.
The bank or other financial lender wants to sell these homes and get as much of their money back as they can. They are looking to get their money back quickly, and this can mean selling for less than the market value. This is where you can pick up a bargain that would otherwise cost more than you could afford.
Buying a foreclosed home is a little different from a standard sale, and there are some things you need to know. While you might be concerned about purchasing a foreclosure, if you are prepared to do more research and take slightly more risk, there could be significant savings to be made.
Let's review the foreclosure procedures and the steps you should follow to successfully close on a home.
Stages of Foreclosure
A foreclosure goes through different stages, and this will change what you have to do to buy the home.
The pre-foreclosure is when the property is still owned by the person who is having difficulty with the mortgage payments. They are keen to sell to avoid the full foreclosure of their home. This is also known as a short sale, and the seller will often need the permission of the lender to sell the home for less than the loan amount. This can be a difficult situation, with two parties having a say in the sale.
A short sale will need to make financial sense to the lender for them to approve it. Don't think you can make an offer on a short sale that is not within a reasonable amount from the fair market value. The mortgage holder will send an appraiser out to evaluate the property. The lender will not agree to sell the home significantly under what the appraiser has reported.
Can you get a discount? Sure, in most cases, you can—just don't expect it to be monumental.
The next stage in a foreclosure process is the property getting auctioned. Typically, the seller will have missed quite a few mortgage payments. They will also be notified that if they don't catch up on the mortgage payments due, the lender will initiate foreclosure proceedings. If the owner does not catch up, the lender will eventually file for foreclosure.
Once the home has gone into foreclosure, it will be offered for sale in an auction. This is the most common way to buy a foreclosed home and can mean that the transaction happens quickly. A buyer will typically need cash to buy, and there are other risks involved.
There may not be the chance to properly research an auction property. This could mean that there are repairs needed or a lien on the title, which could result in unforeseen expenses. You, unfortunately, are buying the home "as is" and "where-is." Many times, you will not be able to set foot inside the property before the auction takes place. Buying a home at auction is not for the faint of heart.
There is a significant risk you are buying a money pit or a home that could have any number of problems, including liens or title issues. You could spend tens of thousands of dollars trying to clear up these problems. The keyword? RISKY!
If the home doesn't sell at auction, the property moves to the real estate-owned or REO stage. This means that the lender owns the house and will likely sell it through a real estate agency. Bank-owned homes are far less risky to an end buyer because by the time the bank owns the property and sells it again, all the liens and issues will be squared away.
The bank will be selling the home to the buyer with a clean title. Bank-owned homes are usually priced near market value, but if they don't sell reasonably quickly, the bank will often discount them to get it off the books. Banks are not interested in being property owners.
Setting Your Budget
Understanding what you can afford is an integral part of buying a home, and this is particularly true with a foreclosed home. You may be able to find a home that is far cheaper than it would otherwise be, but you still need to set your budget to avoid problems.
Write down your monthly income and costs, so that you can better understand what mortgage payments you can cope with. Failure to do this could lead to your new home becoming a foreclosure once again. It is also advisable when you're about to purchase any home to make sure your financial house is in order. Getting a copy of your credit report and checking it for errors will be prudent as they can severely impact the loan terms you'll get.
When you know your budget, you should get pre-approved by a lender. They will check your credit and tell you how much they are willing to offer you. This enables you to narrow down your search to foreclosures within the mortgage pre-approval amount.
With a pre-approval letter in hand, you will be a more attractive buyer. The bank selling the home will know that the sale should close faster, and this could be the difference if there are multiple interested buyers.
Your credit score is essential during the pre-approval process. Any changes to your score or financial situation after the pre-approval could result in you not getting final approval for the loan amount expected. You should avoid taking out any new credit in that period, to prevent the chance of your mortgage not being approved.
The Benefits of Experience
One of the best tips for buying a foreclosure is to find a real estate agent who has experience with distressed properties. If you aren't entirely familiar with either purchasing a foreclosure property or the area you are looking to buy, the services of an experienced buyer's real estate agent will be essential to guide you in the right direction.
They will have an understanding of the prices in the area and will know if the foreclosure is really the bargain you are looking for. Finding the right agent should also give you access to properties you might have otherwise missed.
The experience of the real estate agent should help you to understand the issues involved in the purchase and alert you to any legal concerns which you could run into.
Presenting an Offer
How you make an offer on the property will depend on the foreclosure stage it is at. Your real estate agent will contact the owner of the home or will be with you during the auction. During an auction, you need to stick to your budget and not get in a bidding war with another party.
When buying a short sale or bank-owned property, the offer should be contingent on having a home inspection. If there are significant problems, however, don't expect the lender to make the repairs. Home inspections will generally be for informational purposes only. They won't be interested in negotiations or fixing problems with the home, so walk away if the issues are too much for you.
Make sure you stay in line with all of the contract dates, so you don't forfeit your earnest money.
Final Thoughts on Buying a Foreclosure
Do research where you can and avoid making a quick decision to reduce the risk. If you are prepared for the extra issues of a foreclosure property, you could find yourself a good deal. There should be far more due diligence on your part to make sure you're not walking into a hornet's nest. Hiring an attorney will be highly advisable to make sure your interests are protected.
Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell Metrowest Massachusetts real estate for the past 33 years.
Owning a home is infinitely rewarding but issues do pop up, and there's no need to call a handyman every time something goes haywire. The home repair experts at HGTV suggest four things every homeowner should know how to do:
Change smoke detector batteries. Do this twice a year or anytime you hear a loud chirping. Get up on a ladder and twist the body of the unit off the bracket. If it isn't hardwired, it will completely remove. Change the battery and twist it back in place.
Find the main water shut-off valve. If you ever come home to a flooded floor, you need to be able to shut off the water to the whole house ASAP, especially if the source of the water leak is unclear. That's why every homeowner should know where her main shutoff valve is, and every home is different. Look near the perimeter of the house at ground level nearest your water meter. The shutoff valve might be in a basement, crawlspace, closet or garage, but should never be covered over with drywall. Look for an access panel or hose bibb (a threaded faucet.)
Change the air filters in your HVAC system. Locate your return air intake and open the door by releasing the clips at the top of the frame. The disposable filter rests just inside. Note the size and/or take it with you to the home store for comparison. Bring a stack of new filters home, slide a new one in place and close and latch the door.
Find a wall stud. If you're hanging a picture or shelf, you need to be able to locate a wall stud to nail into for support. You can shell out the 20 bucks for a battery-powered stud finder, but there is a simple alternative. Start by locating an electrical outlet along the wall, since the receptacles are typically fastened to one side of a stud. Studs should be located every 16 inches or so, although yours may vary. Tap on the drywall—it should sound hollow as you move to the left or right. As the sound changes, that indicates where the stud is.