Home-Selling Checklist: 12 Things To Do Before Selling Your House

Getting ready to sell your house? Then it’s time to roll up your sleeves and get to work because there are tons of things to do before listing your home!

Selling a home, after all, entails a whole lot more than just planting a “For Sale” sign on your front lawn or uploading a few random photos of your place—especially if you’re angling for the most cash. (And, honestly, who isn’t?) That’s why we put together the ultimate checklist for selling a house.

Things to do before selling your house

So before you put your house on the market, peruse this checklist for selling a house of what to do. Some of these tips are surprisingly easy, while others might require a bit more elbow grease. But they’re bound to pay off once buyers start oohing and ahhing over your place—and hopefully ponying up a great offer.

1. Find a great real estate agent

Think you can sell your home yourself, and pocket the cash you would otherwise pay a real estate agent?

It can be tempting, especially in a hot market, but resist the urge, says Jon Sterling, a real estate consultant with Keller Williams Realty in San Francisco. He’s found that a “for sale by owner” transaction is almost always a disaster, leading you to sacrifice both money and time. That’s why one of the most important things to do before selling your house is find a great real estate agent.

That said, don’t just blindly hire the real estate agent who most recently sent you a flyer or the one your uncle’s friend’s co-worker’s cousin used. Do some research to find a real estate agent who is knowledgeable about your specific market, and then interview her to make sure she’s a good fit.

Your real estate agent should be someone you feel comfortable working with, whom you trust to sell your house for top dollar. Don’t be afraid to talk to a few real estate agents before picking one.

2. Consider your curb appeal

Yes, for better or worse, buyers do tend to judge a book by its cover. You want to make sure potential buyers’ first impression of your home is a good one—and inspires them to stop by the open house or schedule a tour—so they can see more.

By investing some effort in relatively easy fixes, like planting colorful flowers and repainting your front door, the outside of your house can beckon prospective buyers to come on in.

If you’re not sure how to improve your home’s curb appeal, ask your real estate agent for advice on how others in your area have improved the exterior before selling their houses.

3. Declutter living areas

Less is definitely more when it comes to getting your house ready to show, notes Boris Sharapan Fabrikant, a real estate broker with Triplemint.

Do a clean sweep of counters, windowsills, tables, and all other visible areas, and then tackle behind closed doors: closets, drawers, and cupboards—since virtually nothing is off-limits for curious buyers.

If the house is overflowing with stuff, buyers might worry that the house won’t have ample space for their own belongings. They won’t sign up to pay a mortgage if they think they’ll also have to rent a storage space.

Take your excess stuff and donate it, or pack it up to be stored off-site. Not only will clearing clutter help your house look more appealing to buyers, it will also help you once you’ve accepted an offer and it’s time to move into a new home. Moving out will be easier if some of your stuff is already be packed.

4. Depersonalize your space

The next step on your checklist for selling a house? Sellers should remove any distractions so the buyers can visualize themselves and their family living in the property, says Kipton Cronkite, a real estate agent with Douglas Elliman in New York.

He says sellers should remove personal items and family photos, as well as bold artwork and furniture that might make the home less appealing to the general public. The goal is to create a blank canvas on which buyers can project their own visions of living there, and loving it.

5. Repaint walls to neutral tones

You might love that orange accent wall, but if it’s your potential buyer’s least favorite color, that could be a turnoff, warns Sharapan Fabrikant.

“You’re pretty safe with a neutral color because it’s rare that someone hates it, but the other benefit is that a light color allows [buyers] to envision what the walls would look like with the color of their choice,” he points out.

It’s the seller’s job to help buyers picture themselves in the house. If they don’t feel at home, they’ll probably look at other real estate options.

6. Touch up any scuff marks

Even if you’re not doing a full-on repainting project, pay special attention to scrubbing and then touching up baseboards, walls, and doors to make the house sparkle and look cared-for.

Selling almost any home can be tricky, but selling a home with lots of little problems and small repair needs can be downright difficult. When buyers walk into an open house, or go on a home tour, they want to fall in love with the house, not add a bunch of small repairs to their to-do list.

In order to impress buyers (and sell your house quickly), fix up your house before putting it on the market.

With a home that is fixed up and move-in ready, you will probably see more interest, and may even see multiple offers.

7. Fix any loose handles

It’s a small thing, sure, but you’d be surprised by the negative effect a loose handle or missing lightbulb can have on a buyer, notes Sharapan Fabrikant.

“It can make them stop and think ‘What else is broken here?’” he explains.

For a buyer, submitting an offer, and later committing to a mortgage, is a big deal. When you’re selling your home, you don’t want to give any buyers doubt that your house will make a great home.

8. Add some plants

When staging your house, remember that green is good: Plants create a bright and more welcoming environment. You might also want to consider a bouquet of flowers or bowl of fruit on the kitchen counter or dining table.

Some plants and natural elements will impress buyers by bringing some extra color and life to your decor.

9. Conduct a smell test

Foul odors, even slight ones, can be a deal breaker, and the problem is that you might not even notice them, says Sharapan Fabrikant.

He recommends inviting an unbiased third party in to try to detect any pet smells or lingering odors from your kitchen.

If the smells are pervasive, prepare to do some deep cleaning as many buyers are on to seller’s “masking techniques” such as candles or plug-in room deodorizers. Plus, covering up odors with a stronger scent might backfire if the buyer doesn’t like the smell of lavender or artificial citrus.

10. Clean, clean, clean

Once you’re done cleaning your house, clean some more. Even if you’re not worried about what buyers will think of your home’s scent, you want your property to look spotless.

Think of it this way: You’ll probably have professional photos taken of your house when it looks its best. Naturally, you’ll want your house to always look like it does in those pictures.

When selling your home, it’s important to keep everything tidy for buyers, and you never know when a buyer is going to want to schedule a last-minute tour. Remember to take special care with the bathroom, making sure the tile, counters, shower, and floors shine.

11. Hide valuables

From art to jewelry, keep your treasures are out of sight, either locked up or stored off-site, recommends Kronkite.

You can’t trust everyone who comes into your house, even when you’re trying to sell it. Sometimes things disappear during an open house, and there’s little the seller can do to get those things back. Take care to hide your valuables or move them to a safe space away from your home.

12. Consider staging

Does your house scream 1985? Nothing invigorates a house like some new furnishings or a perfectly chosen mirror. The key is getting your home staged by a professional.

Home stagers will evaluate the current condition and belongings in your house and determine what elements might raise the bar. They might recommend you buy or rent some items, or they might just reorganize your knickknacks and bookshelves in a whole new (that is, better) way.

Stagers know the real estate market, and what sells, so it’s important to take their advice and not take offense when they make big changes. Their job is to help drum up interest from potential buyers, which is always good news to the seller.

Cathie Ericson writes about real estate, finance, and health. She lives in Portland, OR.

TwitterFollow @CathieEricson.

For the original article visit Realtor.com

Home Appraisals 101: 5 Things Appraisers Wish Sellers Knew

Home appraisals are a piece of the selling process where you may have to let go of the reins. Lenders often require the use of their own, FHA-approved home appraiser. That means you get zero say in who’s determining the financial value of the home you’ve lived in, loved, and sunk your savings into.

Here are some things sellers can do—straight from the home appraisers’ mouths—to navigate the process of home appraisals.

Keep in mind that home appraisers aren’t magicians

The appraiser won’t know what your home is worth the second they walk in the door because home appraisals aren’t magic.

“People think we know the value of the property as soon as we see it,” says Michael Coyle, the founder of The Coyle Group in Lafayette Hill, PA.

That’s simply not the case. A good understanding of the home appraisal process will go a long way toward comprehending how your home’s value is determined.

First, a home appraiser will pull comparable listings (called “comps”) from the nearby area. These are homes similar in style, location, and square footage sold within the past few years. Then, they will come by your house to determine its condition and quality, as well as any other factors that would affect the cost of the home, and use that information — along with the comps — to make an accurate assessment.

This usually takes at least a few days — and definitely more than a few hours.

Prep your space — and its occupants for the home appraisals

No, the home appraiser isn’t coming by to judge the cleanliness of your homestead — but it’s still good form to declutter, dust, and mop beforehand to show your home in its best light, according to appraiser Adam Wiener, the founder of Aladdin Appraisal in Auburndale, MA.

Home appraisals won’t typically devalue your home because it’s messy—but a neat, organized home might help you.

“Even if they’re not consciously aware of it, the appraiser might value (a messy home) a little lower,” Wiener says.

Also, make sure the occupants of your home are prepared for the appraiser’s arrival, including teenagers who tend to stay holed up in their rooms.

“And make sure everyone’s clothed,” Coyle adds. “Sometimes, they forget to tell the teenager.”

Get your paperwork in order before home appraisals

Before any and all home appraisals, gather all the information you have about the house and send it over. Most appraisers will ask for this upfront, either directly or through the lender or broker.

Coyle recommends having on hand a list of major improvements as well as detailed info about the age and condition of the roof, HVAC systems, and major appliances. For any DIY projects, make sure you have the original permits.

“My favorite customers are the ones who have all the information ready for me,” he says.

There’s nothing worse than an appraiser pulling comps for a 1,200-square-foot 1920s Cape Cod–style house, only to realize on the day of appraisal that your primary bedroom addition adds an additional 500 square feet.

When that happens “none of my comps are any good and my values are off,” Wiener says.

And that means more work—and more time before a final assessment can be reached.

So go the full-disclosure route.

“Hand it to them on a silver platter: Here’s my neat, gorgeous house, shown in its best light and all the things that are awesome about it,” Wiener says.

Don’t put too much stock in home improvements

We’re sure your brand-new kitchen is stunning but don’t be surprised if it doesn’t proportionally raise your home’s market value when it comes to the home appraisals.

Home appraisers stress moderation in assuming how much your shiny, brand-new kitchen will add directly to the worth of your house. If you spent $50,000, you’re likely to see only a fraction of that returned in value. That goes double for a new pool, which “does not bring as much value as people think,” Coyle says. (This might vary if you live in a hot climate where pools are near expected.)

As for your finished basement: Sorry, but that’s even less help. Most home appraisers use ANSI standards for measuring the square footage of a home, which excludes any rooms below grade. That doesn’t mean your basement has no value, but it doesn’t technically add space.

If you’re thinking about adding a feature to your home before you have it appraised, ask your real estate agent if it’s worth the cost. Here’s how to find a real estate agent in your area.

Don’t engage in listing ‘puffery’

Before listing, make sure you and your agent take a realistic look at what your home actually offers. Are you including the basement square footage in the total? Are you hoping no one will notice your roof isn’t new? Preparing yourself ahead of time with a pragmatic estimate will ease the appraisal process.

And above all else, make sure not to fudge the numbers.

“There’s an epidemic of puffery,” Wiener says.

This is particularly rampant in areas where the assessor’s information isn’t accessible online. When you know potential buyers have to actually, gasp, go in person to look up the sketches, it might be a lot more tempting to pad some square footage here and there.

After all, who will notice?

Here’s who: Your appraiser—who’s happy to go to the office and pull 20 or 30 comps. And they won’t be fooled.

Jamie Wiebe writes about home design and real estate for realtor.com. She has previously written for House Beautiful, Elle Decor, Real Simple, Veranda, and more.

For the original article, visit Realtor.com

Expert Quotes on the 2024 Housing Market Forecast

If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market in 2024. In 2023, higher mortgage rates, confusion over home price headlines, and a lack of homes for sale created some challenges for buyers and sellers looking to make a move. But what’s on the horizon for the new year?

The good news is, many experts are optimistic we’ve turned a corner and are headed in a positive direction.

Mortgage Rates Expected To Ease

Recently, mortgage rates have started to come back down. This has offered hope to buyers dealing with affordability challenges. Mark Fleming, Chief Economist at First American, explains how they may continue to drop:

“Mortgage rates have already retreated from recent peaks near 8 percent and may fall further . . .”

Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says:

“For home buyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market.”

The Supply of Homes for Sale May Grow

As rates ease, activity in the housing market should pick up because more buyers and sellers who had been holding off will jump back into action. If more sellers list, the supply of homes for sale will grow – a trend we’ve already started to see this year. Lisa Sturtevant, Chief Economist at Bright MLS, says:

“Supply will loosen up in 2024. Even homeowners who have been characterized as being ‘locked in’ to low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new listings over the course of the year, particularly as rates move closer to 6.5%.”

Home Price Growth Should Moderate

And mortgage rates pulling back isn’t the only positive sign for affordability. Home price growth is expected to moderate too, as inventory improves but is still low overall. As the Home Price Expectation Survey (HPES) from Fannie Mae, a survey of over 100 economists, investment strategists, and housing market analysts, says:

“On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively.” 

To wrap it up, experts project 2024 will be a better year for the housing market. So, if you’re thinking about making a move next year, know that early signs show we’re turning a corner. As Mike Simonsen, President and Founder of Altos Research, puts it:

“We’re going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume . . . All in all, things are looking up for the U.S. housing market in 2024.”

Bottom Line

Experts are optimistic about what 2024 holds for the housing market. If you’re looking to buy or sell a home in the new year, the best way to ensure you’re up to date on the latest forecasts is to partner with a trusted real estate agent. 

For the original article, visit Keeping Current Matters.

ON THE HOUSE: 10 WAYS TO SAVE MONEY ON BUYING A HOME TODAY

How can first-time homebuyers save money when mortgage rates are at 20-year highs and home prices are rising again?

There’s no doubt that buying a home today is expensive. Mortgage rates are above 7%, home prices have begun climbing again, and bidding wars are back.

But for first-time buyers who are determined to become homeowners, there are a few ways to cut costs and lower mortgage payments. Some require a bit of creative thinking; others may take some perseverance.

Below are 10 tips to save money when purchasing a home in today’s crazily expensive market.

1. Improve your credit score and pay down old debt

Paying off old debt might not seem like a way to save money, but hear me out. Lenders are less worried about borrowers defaulting on their loans if they have a proven track record of paying off their debt on time.

So borrowers with higher credit scores can usually snag lower mortgage rates and fewer fees on their loans.

This is where the savings can add up. Upfront fees on a loan can total thousands of dollars at closing—and higher mortgage rates have the potential to add tens of thousands of dollars over the life of a 30-year loan.

Plus, those with less debt can often qualify for larger loans.

2. Shop around for a mortgage

Make lenders compete for your business. Many buyers think they’re stuck with the lender that wrote them their loan pre-approval letter. Or they believe all lenders charge the same amount. That’s simply not true.

You can save tens of thousands of dollars over the life of your loan by making lenders compete over your business. With fewer borrowers seeking loans due to the higher mortgage rates, lenders may be more amenable to giving you a break.

And if you get a better offer from one lender but would prefer to use another, you can always see if your mortgage company of choice will match the better offer. This is how I snagged a lower mortgage rate, without buying points, and had fees waived when I bought a home two years ago.

3. Consider a FHA loan

Federal Housing Administration loans have long been popular with first-time buyers who can’t make large down payments. Borrowers can put down as little as 3.5% of the purchase price of their home with these loans. Plus, they can often get lower mortgage rates than those making a 20% down payment with a conventional loan.

However, there are a few downsides to this loan. Borrowers typically have to pay private mortgage insurance on their loans every month until they reach 20% equity in their home.

In addition, homes purchased with these loans must go through a thorough inspection and may require the seller to make repairs before the loan is approved. There are also limits on how much buyers can borrow. Plus, borrowers typically must have at least a 580 credit score to qualify for putting just 3.5% down.

4. Snag a VA or USDA loan

You can buy a home with 0% down—if you can qualify for one of these loans.

Activity-duty military personnel, veterans, their spouses, and those purchasing homes in rural areas can often qualify for a Veterans Affairs or U.S. Department of Agriculture mortgage where buyers don’t have to put anything down.

Bonus: These loans often come with lower mortgage rates, and VA loans typically don’t require private mortgage insurance.

5. Choose a 15-year mortgage

Choosing a 15-year mortgage can save you quite a bit of money over the long term, but buyers should anticipate higher monthly payments over the short term.

Mortgage rates are generally much lower on these loans than for a 30-year fixed-rate mortgage. You also pay the home off in half of the time. But since you’re paying it off earlier, your monthly payments can be much larger.

6. Buy mortgage points

Purchasing mortgage points from your lender can cost you more upfront when you take out a loan. But it can lower your mortgage payments permanently, saving you quite a bit of money each month.

Typically, points are sold in 0.25% increments. They generally cost about 1% of the full amount of the mortgage. So to bring your mortgage rate down by a quarter of a percentage, you would pay $4,500 on a $450,000 loan.

Make sure you plan on staying in your home for a while before purchasing points. It might not make much financial sense if you plan to sell in just a few years.

7. Shop for new construction

Look beyond the sticker price when considering buying new construction. Even if the purchase price is higher than a similarly sized home on the resale market, buyers might wind up with lower monthly mortgage payments than if they had purchased an older residence.

Many builders are buying mortgage rates down either permanently or through temporary 3-2-1 or 2-1 buy-downs. The larger, national builders often have lending arms that make it easier to provide those mortgage savings to buyers. Even smaller builders might offer similar incentives to attract buyers.

In addition, new construction isn’t as costly as many buyers believe. Many of the larger builders today are striving to put up smaller, more affordable homes. That’s helped to narrow the gap in prices.

In July, there was only a $30,000 difference between the median price of a typical new home, at $436,700, and an existing one, at $406,700, according to government and National Association of Realtors® data.

8. Seek out down payment assistance programs

This is one of my favorite tips because everyone loves free money! There are more than 2,000 down payment assistance programs available across the country for all first-time and even repeat buyers who qualify.

These programs provide assistance to buyers based on their annual incomes, professions, military service, racial backgrounds, disabilities, and where they are looking for homes, among other qualifications.

(Buyers can see what they might be eligible for here.)

9. Look at the homes that no one wants

Most buyers want a cute, turnkey home with a nicely landscaped yard. But they might be missing the potential of an attractively priced fixer-upper or a home that’s been sitting on the market for a while with a discounted price tag.

Homes become stigmatized in the minds of some buyers if they’re on the market for long periods or if deals fall through. But that might not be the fault of the seller or indicate something wrong with the property. It might be the buyer who was under contract couldn’t secure financing or changed their plans.

Other homes may not seem attractive in photos or in person, but they might just need a coat of paint and some minor cosmetic work to clean up nicely. And with all that money you’re saving on the purchase price, you might be able to turn these properties into some really special homes.

Just be sure to hire a home inspector and have a chat with a remodeler before you put in an offer so you understand the scale of the work that’s needed and how much it’s going to cost you.

10. Negotiate with sellers

Even in today’s competitive market, buyers can attempt to negotiate with sellers. Nothing ventured, nothing gained.

Now, this probably won’t work for well-priced homes oozing curb appeal in the most desirable neighborhoods. But sellers of homes that have been sitting on the market for a while, homes that need some work, or homes in less desirable locations mightº be willing to make a deal.

Some common things today’s buyers are asking for are for sellers to contribute to their closing costs, make pricey repairs, and temporarily buy down their mortgage rates for the first two or three years of their mortgage.

For this and related articles, please visit Realtor.com

The Perfect Home Could Be the One You Perfect After Buying

There’s no denying mortgage rates and home prices are higher now than they were last year and that’s impacting what you can afford. At the same time, there are still fewer homes available for sale than the norm. These are two of the biggest hurdles buyers are facing today. But there are ways to overcome these things and still make your dream of homeownership a reality.

As you set out to make a purchase this season, you’ll want to be strategic. This includes taking a close look at your wish list and considering what features you really need in your next home versus which ones are nice-to-have. This will help you avoid overextending your budget or limiting your pool of options too much because you’re searching for that perfect home.

Danielle Hale, Chief Economist at Realtor.com, explains:

“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, . . . Another key point is to avoid stretching your budget, as tempting as it may be . . .”

To help identify what you truly need, make a list of all the features you’ll want to see. From there, work to break those features into categories. Here’s a great way to organize your list:

• Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).

• Nice-To-Haves – These are features you’d love to have but can live without. Nice-to-haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of these, it’s a contender (examples: a second home office, a garage, etc.).

• Dream State – This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: a pool, multiple walk-in closets, etc.).

If you’re only willing to tour homes that have all of your dream features, you may be cutting down your options too much and making it harder on yourself (and your budget) than necessary.

While you’d love to have granite countertops or a pool in the backyard, those are both things you could potentially add after you move. Instead, it may be best to focus on finding the things that you can’t change (like location or a certain number of rooms). Then, you can upgrade or add some of the other features or finishes you want later on.

Sometimes the perfect home is the one you perfect after buying it.

Once you’ve categorized your list in a way that works for you, discuss your top priorities with your real estate agent. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your top needs.

Bottom Line

With the current affordability challenges and limited housing supply, you’ll want to be strategic so you can find a home that meets your needs while staying within your budget. Connect with a real estate agent who can help make that possible.

To see the original article, visit Keeping Current Matters

Pantone Announced the Color of the Year 2024 and It’ll Give You All the Fuzzy Feels

The sweet and soft hue marks the 25th anniversary of the Pantone Color of the Year program.

With all of the color predictions rolling in at the end of the year, perhaps the most anticipated one is Pantone’s Color of the Year—Pantone is considered the leading global color authority across various industries after all. The world collectively holds its breath for the announcement, and now we can all exhale, because they just revealed their Color of the Year 2024, Peach Fuzz, a sherbet-like orange hue. The sweet and soft shade is a vast departure from last year’s color, Viva Magenta, a bold and dramatic crimson red. 

Pantone’s Top Color Trends for Spring 2024 Are All About Bold Transformation

Peach Fuzz is supposed to be “a compassionate and nurturing soft peach shade conveying a heartfelt kindness,” Pantone states in their announcement. We’re living in a period that’s rife with turmoil and controversy, and the velvety, pastel color is the brand’s response to this. The softness of the shade connotes peacefulness and the hope for a more caring and collaborative future.

Laurie Pressman, vice president of the Pantone Color Institute, says, “We see an increased focus on community and people across the world reframing how they want to live and evaluating what is important—that being the comfort of being close to those we love. The color is one whose warm and welcoming embrace conveys a message of compassion and whose cozy sensibility brings people together and enriches the soul.” We have to agree—it has a nurturing and calming aura, for sure!

Another element Peach Fuzz unexpectedly brings to the table is tactility—”fuzz” introduces an extra sensory angle and plays into the “soft” quality the color communicates. “An idea as much as a feeling, PANTONE 13-1023 Peach Fuzz awakens our senses to the comforting presence of tactility and cocooned warmth,” says Leatrice Eiseman, executive director of the Pantone Color Institute. 

A Little Background on Pantone’s Color of the Year

If you’re curious about when Pantone selects their Color of the Year, they shared with Real Simple that they do copious research starting at the beginning of the year. So for example, for their 2024 shade, they started doing their homework in very early 2023. As for how they select the color, Pantone takes a very comprehensive approach to the process. They take a step back and look at the zeitgeist to see what’s trending. (They mentioned colors similar to Peach Fuzz were all spotted at the Met Gala, for example.) The brand also confirmed they do lots of color-word association studies to inform their decision. Their Color of the Year program has been running for 25 years now. Fun fact: the very first color was Cerulean Blue, announced in 1999! 

Leslie Corona is the Senior Home Editor at REAL SIMPLE magazine. She has been styling, organizing, writing, and reporting on all things in the home space for a decade. She was previously at Good Housekeeping, HGTV Magazine, and Parents. She has shared her expertise on the TODAY show, Cheddar, and local television news outlets.

To see the original article by Leslie Corona visit Real Simple

10 THINGS MOST HOMEBUYERS GET WRONG ABOUT GETTING A MORTGAGE TODAY

While buying a home has always been a challenging milestone, today’s high interest rates have made this dream even harder to achieve.

Over the past two years, interest rates on home loans have nearly doubled from the 3% range to around 7% today. This tacks many hundreds extra onto the monthly expense of housing, stretching some homebuyers’ budgets to the breaking point. And while there are ways to lower those costs, navigating the home loan process is extremely complicated—particularly for first-time homebuyers.

“It’s very important for first-timers to do research and understand all their options before they start looking for a home,” says Cara Ameer, a real estate agent with Coldwell Banker who is licensed in California and Florida. “Doing your due diligence can help you avoid some of the most common rookie mistakes, so you come out not only with the home of your dreams, but also a mortgage you can afford.”

Here are some common blunders homebuyers make when attempting to secure a mortgage.

1. Focusing too much on the interest rate

Probably the most common mistake homebuyers make is simply assuming that the lower the interest rate, the better the deal. But what they might not realize is that to get an ultralow rate, there are often hidden fees—and those fees could mean they ultimately end up paying more.

“Many lenders, especially in more recent years, have started to charge hidden points in an effort to advertise a much lower mortgage rate to potential applicants,” warns Jason Gelios, author of “Think Like a Realtor” and a real estate agent with Community Choice Realty in South East Michigan.

“It’s great to have the most attractive rate, but if the lender has you paying junk fees to obtain that rate, it might not make sense,” he adds.

Mortgage points are a fee that lenders can charge to applicants to lower their interest rate through the life of the loan. This process is also known as “buying down the rate,” and the fee is paid to the lender as its own fee.

In other words, “buying down the rate” or “buying points” are just a fancy way of saying you’re paying more fees upfront to get a lower interest rate.

As a result, it’s important for mortgage seekers to ask for an estimate of all fees included in their mortgage offer, and not just the interest rate.

2. Assuming you need a 20% down payment

“There’s a common but detrimental misconception that’s causing some potential first-time owners to delay starting the homebuying process, and that is the belief that it still takes 20% down to buy,” says Cindy Allen, veteran real estate agent and founder of DFWMoves in Southlake, TX.

In reality, according to a new study from Self Financial, the average down payment needed in the U.S. for first-time buyers is $12,274 (around 6%), in addition to $1,983 in closing costs.

“Fannie Mae has had a 3% down, first-time homebuyer mortgage for years now, which competes with FHA’s 3.5% down,” says Yifan Zhang, CEO of the host-to-own homebuying program Loftium. “The only difference is that home prices have risen so much recently that these programs are probably more popular now.”

However, keep in mind that you will have to pay private mortgage insurance if you put less than 20% down, which increases your monthly payments.

3. Assuming you can get a loan instantly

Many borrowers assume that in today’s instant-gratification culture, they can get a mortgage in days or even minutes. Not so.

“Even the mortgage lenders with splashy apps and websites still may need a phone call, manual document collection, or other time-consuming steps,” says Zhang.

In fact, many home tours might be off-limits until you’ve been vetted by a lender.

“Buyers may not be able to even see a home without providing a copy of their pre-approval letter just to schedule an appointment,” says Ameer. “Many listing agents are requiring that, no matter the price range. This is no longer just for high-end properties.”

4. Thinking pre-qualification means you’re approved for the loan

While getting pre-qualified for a loan is a good first step, it does not mean you’re guaranteed the money. Pre-approval is better because it means lenders have reviewed your finances.

In the past, pre-approval was typically enough to pass muster. In today’s ultracompetitive market, however, you might want to get fully approved from the get-go before you make an offer.

“Full approval means the buyer has been underwritten prior to making an offer—they have submitted all of their required documents, the lender has reviewed it and been able to vet them to basically say they are solid and just need to get an accepted offer on a property for the loan to go through,” says Ameer.

Being fully approved also allows buyers to close the deal in a much shorter time—two to three weeks in most cases.

This can give buyers the edge, as Ameer points out, “given today’s tight market with low inventory. Listing agents are going to recommend their seller ask for shorter time periods for loan approval.”

5. Not considering first-time homebuyer programs

Newbies who feel overwhelmed by the financial barriers to homeownership might be pleasantly surprised to learn that there are first-time homebuyer programs to help them get over the hump.

“You can find programs that offer help with closing costs and down payments, lower interest rates, and even tax credits to free up some of your savings,” says Allen. “And if you’re a first responder or educator, active-duty military or veteran, there are often special programs available for you, too.”

For example, Allen says just this past January she was involved in a $352,000 transaction where the buyers were granted over $6,000 toward closing costs and escrow through a first-time buyer program. They were then able to use the $6,000 they saved as additional down payment funds.

6. Failing to check your credit score

You really need to check your credit score prior to talking to mortgage lenders because ultimately, this number—which represents how well you’ve paid off past debts—will affect the interest rate you’re offered.

“Not tackling easy options for improving your credit score before taking out a mortgage is a big mistake for first-time homebuyers,” says Zhang. “Today, there are tons of credit improvement tools you can use to quickly and easily tackle your credit. Even just paying off a credit card can bump you into a higher credit category and save you hundreds each month on your mortgage.”

At the very least, make sure you know what your score is by checking it with CreditKarma.com or one of the top three ratings bureaus: TransUnion, Experian, and Equifax.

7. Picking the wrong type of loan

Are you better off going with an FHA, VA, or USDA loan or some other type entirely? Don’t know what these acronyms mean? There are many types of mortgages available, each with its own pros and cons based on your own personal circumstances.

“Know your loan options because an inexperienced loan representative may not know all the available programs or may not present all the possibilities,” says attorney Bruce Ailion, a real estate agent with Re/Max Town & Country, Atlanta. “Learn about the types of loans before talking with a professional to know the right questions to ask.”

8. Underestimating fees beyond the down payment

The down payment is not the only cost you’ll have when buying a home and securing a mortgage.

“People talk about the down payment required but rarely talk about the ancillary costs required for purchasing a home like closing costs, title, appraisal, and first-year homeowners insurance upfront,” says Nicole Rueth, senior vice president and producing branch manager, The Rueth Team of Fairway Independent Mortgage Corp. “It’s a mistake not to factor these in, because they can add up to an additional $5,000 to $12,000 down.”

9. Not preparing for the possibility of a low appraisal

Before lenders front the money for a house, they will have an independent home appraiser estimate its value. Many first-time buyers don’t realize that with listing prices so high, it’s entirely possible that their appraisal will come in lower, which means the lender will loan only that much.

“Given the rapidly rising asking prices and multiple-offer scenarios going on, it is quite possible that a property may not appraise at the agreed upon contract sales price. But a bank is only going to base their loan amount off of the appraised price, not what a buyer and seller agreed to pay,” says Ameer. “Buyers may not be able to come up with the cash to cover the difference between the appraised value and the contract sales price, so only offer what you know you can cover out of pocket should that happen.”

10. Not shopping around for the right lender

Not all lenders are created equal and work the same way. That’s why you really should shop around and find someone you trust who will pick up the phone when you call.

“In today’s market, it is imperative that you work with someone reputable who is reachable by cellphone seven days a week, because various questions and scenarios will come up as you embark on your property search and you may need some guidance that is crucial to having the winning offer,” says Ameer. “These situations often happen outside of typical office hours.”

This is one reason real estate agents typically prefer to use local lenders because they are accessible and reliable.

“Local lenders have a proven track record to maintain and value not just the client but the Realtor relationships they work hard to create,” says Kim Jungles, a loan officer with Atlantic Coast Mortgage in Ashburn, VA. “Online lenders for the most part are very difficult to speak with, let alone be available to write a pre-approval letter after 5 p.m. on Friday.”

For this and similar articles, please visit Realtor.com

The Surprising Trend in the Number of Homes Coming onto the Market

If you’re thinking about moving, it’s important to know what’s happening in the housing market. Here’s an update on the supply of homes currently for sale. Whether you’re buying or selling, the number of homes in your area is something you should pay attention to.

In the housing market, there are regular patterns that happen every year, called seasonality. Spring is the peak homebuying season and also when the most homes are typically listed for sale (homes coming onto the market are known in the industry as new listings). In the second half of each year, the number of new listings typically decreases as the pace of sales slows down.

The graph below uses data from Realtor.com to provide a visual of this seasonality. It shows how this year (the black line) is breaking from the norm (see graph below):

Looking at this graph, three things become clear:

• 2017-2019 (the blue and gray lines) follow the same general pattern. These years were very typical in the housing market and their lines on the graph show normal, seasonal trends.

• Starting in 2020, the data broke from the normal trend. The big drop down in 2020 (the orange line) signals when the pandemic hit and many sellers paused their plans to move. 2021 (the green line) and 2022 (the red line) follow the normal trend a bit more, but still are abnormal in their own ways.

• This year (the black line) is truly unique. The steep drop off in new listings that usually occurs this time of year hasn’t happened. If 2023 followed the norm, the line representing this year would look more like the dotted black line. Instead, what’s happening is the number of new listings is stabilizing. And, there are even more new listings coming to the market this year compared to the same time last year.

What Does This Mean for You?

• For buyers, new listings stabilizing is a positive sign. It means you have a more steady stream of options coming onto the market and more choices for your next home than you would have at the same time last year. This opens up possibilities and allows you to explore a variety of homes that suit your needs.

• For sellers, while new listings are breaking seasonal norms, inventory is still well below where it was before the pandemic. If you look again at the graph, you’ll see the black line for this year is still lower than normal, meaning inventory isn’t going up dramatically and prices aren’t heading for a crash. And with less competition from other sellers than you’d see in a more typical year, your house has a better chance to be in the spotlight and attract eager buyers.

Bottom Line

Whether you're on the hunt for your next home or thinking of selling, now might just be the perfect time to make your move. If you have questions or concerns about the availability of homes in your local area, connect with a real estate agent.

To read the original article, visit Keeping Current Matters

Down Payment Assistance Programs Can Help Pave the Way to Homeownership

If you’re looking to buy a home, your down payment doesn’t have to be a big hurdle. According to the National Association of Realtors (NAR), 38% of first-time homebuyers find saving for a down payment the most challenging step. But the reality is, you probably don’t need to put down as much as you think:

Data from NAR shows the median down payment hasn’t been over 20% since 2005. In fact, the median down payment for all homebuyers today is only 15%. And it’s even lower for first-time homebuyers at 8%. But just because that’s the median, it doesn’t mean you have to put that much down. Some qualified buyers put down even less.

For example, there are loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants. But let’s focus in on another valuable resource that may be able to help with your down payment: down payment assistance programs.

First-Time and Repeat Buyers Are Often Eligible

According to Down Payment Resource, there are thousands of programs available for homebuyers – and 75% of these are down payment assistance programs.

And it’s not just first-time homebuyers that are eligible. That means no matter where you are in your homebuying journey, there could be an option available for you. As Down Payment Resource notes:

“You don’t have to be a first-time buyer. Over 39% of all [homeownership] programs are for repeat homebuyers who have owned a home in the last 3 years.”

The best place to start as you search for more information is with a trusted real estate professional. They’ll be able to share more information about what may be available, including additional programs for specific professions or communities. 

Additional Down Payment Resources That Can Help

Here are a few down payment assistance programs that are helping many of today’s buyers achieve the dream of homeownership:

• Teacher Next Door is designed to help teachers, first responders, health providers, government employees, active-duty military personnel, and veterans reach their down payment goals.

• Fannie Mae provides down-payment assistance to eligible first-time homebuyers living in majority-Latino communities.

• Freddie Mac also has options designed specifically for homebuyers with modest credit scores and limited funds for a down payment.

• The 3By30 program lays out actionable strategies to add 3 million new Black homeowners by 2030. These programs offer valuable resources for potential buyers, making it easier for them to secure down payments and realize their dream of homeownership.

• For Native Americans, Down Payment Resource highlights 42 U.S. homebuyer assistance programs across 14 states that ease the path to homeownership by providing support with down payments and other associated costs.

Even if you don’t qualify for these types of programs, there are many other federal, state, and local options available to look into. And a real estate professional can help you find the ones that meet your needs as you explore what’s available. 

Bottom Line

Achieving the dream of having a home may be more within reach than you think, especially when you know where to find the right support. To learn more, reach out to a real estate professional who can guide you through the available resources.

To read the original article, visit Keeping Current Matters

RENTING VS. OWNING — WHAT ARE THE ADVANTAGES?

Many Americans doubt their ability to cover the costs of buying a home. But that only means exchanging monthly mortgage payments for monthly rent payments.

Renting vs. owning — what are the advantages of each? Here are some things to consider before signing your next lease.

Advantages of Renting

Renting a house or an apartment has several distinct advantages, including:

• Fixed rent

• No property taxes or HOA fees

• Lower insurance costs (no homeowners insurance)

• Your landlord is responsible for all repairs and maintenance

• Various amenities (e.g., pools, gyms, common areas, etc.)

Furthermore, you’re usually only locked into a year-to-year contract when you rent. Unlike buying a house, you won’t be tied to your rental property any longer than you want, which can be ideal for young professionals, college students, or those who need to relocate frequently.

Advantages of Owning a Home

Young adults especially find themselves torn between renting vs. owning — what are the advantages of buying a home? There are a few, such as:

• Homeowners build equity with each mortgage payment

• Mortgage payments are often cheaper than renting

• Freedom to modify the property as you see fit

• More room for you and your family

• No need to share living spaces or walls with neighbors

• Available tax deductions

For many Americans, owning vs. renting can be a better option for building equity meaning the value you invest in a property. Otherwise, your rental monthly payments merely go to support your landlord, which isn’t the best long-term outlook.

Financial Considerations for Renting vs. Owning a Home

Chances are that your decision about whether to rent or buy has to do with finances and the current housing market. Here’s how to think through the different costs associated with owning vs. renting.

Upfront Costs

Buying a home comes with greater initial costs. Even if you don’t make a traditional 20% down payment, you’ll still be responsible for closing costs and administrative fees that can make the process costly.

By comparison, renters usually only have to put down a security deposit equal to one month’s rent, and this payment is fully refundable as long as you don’t damage the property.

Ongoing Costs

Some ongoing costs will be lower when you rent. For instance, many landlords perform maintenance and landscaping on the rental property. Likewise, renters don’t have to worry about real estate taxes, homeowners insurance, or other costs associated with owning a home.

On the other hand, rental payments can often be steep and unpredictable. In some cases, mortgage payments can actually be lower than what you would pay for monthly rent. And with fixed-rate mortgages, you won’t experience any surprise price hikes over the course of your loan.

If you’re thinking about buying a house, an online mortgage calculator can help you figure out how much you can expect to pay every month compared to renting.

Potential Savings

When you’re young, renting may give you time to build your credit and savings account. In that respect, it can provide a path toward financial stability — assuming you can secure a rent payment that’s lower than a mortgage.

On the flip side, homeowners can generally deduct property taxes and home offices in some states, and these tax benefits don’t always apply the same way to renters.

Lifestyle Factors for Renting vs. Owning

Your finances may be your primary consideration, but it’s also important to think about your current living situation.

Generally speaking, it isn’t a good idea to purchase a house if you’re planning on moving within the next five years. If your job is unstable or you’re finishing your education, renting can give you more flexibility than buying.

Others, however, may crave the stability that comes with homeownership. If you start a family, you may need more living space, a yard, or access to local amenities such as schools and playgrounds.

Impact on Long-Term Financial Goals

Your long-term financial decisions and goals should also influence your choice to rent vs. own. Homeownership allows you to build equity in your home. Once you’ve paid off your mortgage, you’ll own your property outright, and the value of your home will stay with you.

The same cannot be said for those who are renters. Renting may be a short-term necessity, but it won’t help you reach your long-term goals.

Loan Products for First-Time Homebuyers

Some renters stay put because they’re wary of high home prices, while others assume you can only buy a home after saving a full 20% for a down payment. The reality, however, is that there are many loan products that can make owning vs. renting an easy decision.

FHA Loans

FHA loans backed by the Federal Housing Administration are designed for homeowners with substandard credit. As long as your credit is 500 or above, you can obtain a home loan with only 10% down. And if your credit score is 580 or above, you only need 3.5% down, putting homeownership within easier reach.

VA Loans

If you or your spouse are a current or former member of the U.S. Military, you can get a loan backed by the U.S. Department of Veterans Affairs. These loans don’t require any money down and are available even to those with below-average credit.

Understand the benefits and qualifications for a VA loan.

USDA Loans

Loans backed by the U.S. Department of Agriculture are another zero-down payment option aimed at buyers who purchase a home in a qualifying rural or suburban area.

If you think a USDA loan may apply to you, learn more.

Conventional Loans

Conventional loans offer the lowest interest rates for buyers with solid credit. And even these loan programs only require a 3% down payment, making it even easier to become a proud homeowner.

Understand the pros and cons of conventional loans here.

Find the Home of Your Dreams

Don’t let fear of home prices keep you locked into your decisions to rent forever. Act now by talking to a local loan officer. We can help you secure loan options that fit your lifestyle and budget.

For this and similar articles, please visit CrossCountry Mortgage