Negotiate, counter or accept: Get the most when selling your home

Home Sale Negotiation

You’ve received an offer on your house. Great! Now what? You might feel so excited that you jump at the first offer you see, but there are some smart reasons to be thoughtful before accepting an offer.

It’s important to negotiate house offers to earn the best price and terms on the sale. Here are some insights you can use to accept the champion offer on your home.

    • What to consider when selling your home
    • How to approach a counter-offer
    • Negotiating a house offer or multiple offers
    • Accepting an offer on your house (and the steps that come after)

What should I do when I receive an offer on my house?

If you’ve hired a REALTOR® to represent you during the home sale process, they will receive all offers on your home from agents representing the hopeful buyer(s). Once an offer is made, your Realtor will present you with the information from the buyer’s agent. The offer details typically include:

    • A purchase agreement. This will become the binding sales contract if the offer is accepted.
    • Proposed terms of the deal, like purchase price and whether the deal is contingent on a mortgage approval (vs. an all-cash offer).
    • Proposed closing date.
    • Amount for earnest money deposit, which is monetary collateral the buyer puts down to show they’re serious about the purchase.
    • Provisions regarding title and inspections.
    • Contingencies, including home inspection or sale of the buyer’s home.

Together with your agent, you’ll review the details of the offer to determine if the terms are acceptable. From this point you can either accept, negotiate or decline the offer.

How long do home sellers have to consider an offer?

The answer to this actually depends on if you are making an offer on a home in Minnesota or in Wisconsin.

In Minnesota, there is no standard deadline to respond to an offer — and it’s pretty uncommon for a buyer to stipulate one. In Wisconsin, on the other hand, buyers are required to put a deadline on the offer. If the offer expires without a response from the seller, the buyer is free to walk away and make offers on other properties.

Should a seller ever accept the first offer?

Accepting the first offer can be advantageous for some sellers. Here are a few reasons why you may accept the first offer on your for-sale home:

    • The monetary offer and terms are acceptable to you, or beyond what you were expecting.
    • The buyer has proposed a timeline that works well for you.
    • The buyer has waived contingencies, making for a smoother path to the closing table.
    • The buyer has an all-cash offer and will not have to finance the purchase.
    • You don’t want to deal with additional showings or open houses.
    • You don’t think you’ll get a better offer from anyone else.

Keep in mind that you could drive yourself crazy wondering if you left money on the table by accepting an early or first offer. It’s important to talk with your Realtor early on about your ultimate goals for selling before you list the home. That way, when the right offer comes in — either after one day or one month — you will be ready to confidently accept it.

When can I decline an offer?

Before rejecting an offer outright, be sure to discuss the decision with your Realtor. If you feel as though a buyer will never compromise to meet in the middle, it may be time to reject an offer.

However, it’s very important to keep in mind that if you reject an offer, your reasoning must be based on the terms of the purchase agreement. You cannot, under any circumstances, discriminate against buyers based on race, religion, ethnic group or other factors not related to the terms of the purchase agreement.

What is a counter-offer and how do I make one?

If you receive an offer on your home that isn’t quite aligned with your goals, you may make a counter-offer. In a counter-offer, you are implying that you will accept the buyer’s offer, subject to one or more requested changes.

Respond with a counter-offer

A common tactic for sellers is to respond to a low bid with a counter-offer for the original list price. This shows potential buyers that the list price is what the seller intends to get for the property, and that it wasn’t a high-ball posting. A seller may also find other terms of the offer unacceptable and could make a counter-offer to remove those terms.

If the buyer agrees to your price or terms and signs the counter-offer, you’ve got a deal! Contrarily, the buyer could also submit their own counter-offer in response to yours, and the negotiation process would continue.

Leverage an expert’s advice

Navigating offers and counter-offers is a high-stakes game, and the process can be stressful and confusing as a result. Remember, your Realtor has deep market expertise and a history of negotiating the best deal for their clients, and you can lean on them heavily during this time — and rest assured that you’ll walk away with the best possible offer.

What if I receive multiple offers?

It’s possible that you’ll receive multiple offers on your home. In fact, some home sellers actually try to attract multiple offers with the hopes of being able to choose the best bid for the final property sale.

When facing multiple offers, you’re at a clear advantage — so sit back and determine the best purchase price and terms for you. Here are a few ways to react when you receive multiple offers:

    • Review all bids and choose one. Go through all offers on the home, keeping in mind that you may want to look at more than just the price. To find the best bid, you’ll also want to consider the all-around terms of the offer. You may find that one standout offer is too good to resist and decide to accept it.
    • Ask for a final offer. If the bids are close together, or you believe you can negotiate an even better price or terms, you can request for some or all buyers to submit their best and final offers.
    • Counter-offer. Rather than asking buyers for their best offer, you could also submit a counter-offer to a buyer who is close to your desired price or closing time, but not quite there.

Whether you find a winning bid after the first set of offers, or have to negotiate to get the offer you’ve been waiting for, you’ll find that your Realtor will be an invaluable asset during this process.

What do experts do to negotiate a better selling price?

The easiest way to negotiate as a seller is to make a counter-offer in response to single or multiple offers, then simply wait to see if the counter is accepted. But risk-takers may prefer to go the route of asking for blind “best” offer — after all, an eager buyer may go even beyond the sale price or terms you had in mind.

Remember, though, there is more to a home sale than just price. By thinking about considerations that go beyond the ticket price, you may end up with a sale that really works in your favor. For example, you may prefer to:

    • Request no contingencies from your buyer.
    • Ask for a faster, or slower, timeline to closing — depending on your preferred moving schedule.
    • Choose a buyer who agrees to pay all their own closing costs.
    • Put an expiration date on your counter-offer so you get a fast, final answer from buyers.

Do sellers ever reject offers for the asking price of a home?

Price is just one element of a contract, so it’s certainly possible for a seller to view a list-price offer and still reject it based on other conditions stated within the offer.

When the market (or market-segment such as a certain price point) favors sellers, you may hear about multiple offers driving prices up so that sellers receive even more than their original asking price. In a market that favors sellers, some may hope to earn more than their listing price at closing — and as a result, they may be inclined to reject their initial listing price from a buyer.

We recommend pricing your home so that you’d be pleased with a list price offer and view anything above it as a bonus. That way, you don’t set yourself up for disappointment, and you don’t irk buyers who are working in good faith to get approved for list-price offers.

What are the steps after accepting an offer?

Now, it’s on to the closing table. Your agent will help you complete the steps to closing on your home, which include:

  • Monitoring the buyer’s loan approval and title process
  • Negotiating any issues that arise prior to closing
  • Selecting a closing date
  • Finalizing any payments or negotiations you’ve made to the buyer, including any agreements you made to pay for home repairs or closing cost incentives

You’ll also want to begin packing up your home, because moving day will come faster than you realize!

Ready to get started?

Now that you’re a pro negotiator and know how to identify an offer worth accepting, are you ready to get the home sale process started? Call Clarence Oliveira with any questions – (209) 988-5254

Source: edinarealty.com ~ Image: Canva Pro

10 Tips for a Successful Open House

OPEN HOUSE

Here’s how homebuyers and sellers can prepare for and get the most out of an open house.

For a home on the market, a Sunday open house feels like a tradition to most home sellers, real estate agents, and curious neighbors who love to peek inside properties on their street.

Still, an open house can be a productive way to show a home, take a tour and connect with a real estate professional. Here are 10 tips for both buyers and sellers to make for a successful open house:

Make Your Home Tour-Ready

Even in a hot seller’s market where there are more buyers vying for a home than there are properties for sale, you’ll set yourself up for failure if you have an open house before your home is in good shape.

Eager buyers won’t overlook major flaws in your home – they’ll either opt to pass or make an offer below what you feel your home is worth. Mow the lawn, plant flowers, paint the front door if it’s seen better days, and repair any issues.

“Fix the red flags. Do not let live buyers come to your property if you did not fix your septic problem first, or you didn’t fix the mold problem in the basement,” Sheehan says.

Clean and Declutter

Beyond the larger projects you should undertake to prepare your home for tours, don’t forget to depersonalize, remove items from closets and surfaces and give the entire place a deep clean.

Clean the floors, vacuum, and wipe down baseboards and windows. Shoes, laundry, and dishes should be out of sight. Any valuables should be moved out of the house or locked away for safekeeping.

If you’re the kind of person who’s used to making your bed in the morning and not letting dishes pile up, preparing for an open house should require only a few extra steps. “I don’t know that it’s particularly difficult for a fastidious homeowner to prepare for a Sunday open,” Sheehan says.

Let People Know

In order to have people show up to your open house, they have to know about it. Your real estate agent will likely take the reins in marketing the open house with signs in front of your house and around your neighborhood as well as posting on the local multiple listing service and consumer-facing listing sites like Zillow, Trulia, and realtor.com.

The more people who know about the open house, the more you’re likely to tap into the large buyer pool. Todd Szwajkowski, a real estate broker and president of SwakeGroup at Dream Town Realty in Chicago, says that an open house the first weekend a property is on the market tends to lead to multiple offers in the current competitive environment.

Stay Away From the House

Once the house is open to the public, make yourself scarce. Just as you remove any family photos around the house, buyers don’t want to meet the seller while they’re trying to form an honest opinion of the property.

Take your pets with you during the open house as well. People may be allergic, and not everyone is a fan of dogs or cats, even if they’re friendly. Evidence of a pet in the house can also be a turnoff for some buyers – which is why deep cleaning to remove any residual pet smell is a must.

Let Your Agent Take Control

As the seller, make sure you pick a listing agent whom you trust with your home. During an open house, you have to be willing to relinquish control to your agent and trust him or her to show off your property in the best light.

Move Fast

If you’re a buyer attending an open house to consider making an offer, you have to be ready to move fast. Realtor.com reports that the inventory of homes for sale in April decreased by 53% over that past year. The average number of days on market in the U.S. was just 43 days in April, which includes time spent under contract, and is 20 days less than in April 2020, according to realtor.com.

If a home you’re serious about has an open house its first weekend on the market, come to the open house prepared with an understanding of your financial situation, a loan preapproval when possible, and a willingness to make an offer after touring.

Bring Your Own Agent, When Possible

If you’re already represented by a real estate agent, try to visit open houses together as you would a private showing. Your agent can also speak to the listing agent on your behalf – a necessity if you’re serious about making an offer.

“The pleasant and seemingly helpful open house host is not there to represent your best interest. They are there to represent the seller’s best interest,” said Ken Reid, owner of Buyers Brokers of Arizona in an April press release from the National Association of Exclusive Buyer Agents about the importance of having a buyer agent at an open house. “They are there to sell you their client’s home and collect information that will put their client in a better position to negotiate should you decide to make an offer on the home.”

Try for a Private Showing as Well

If you can, schedule a private showing outside of the open house hours. This will give you the chance to take your time and form an opinion without other competing buyers serving as a distraction.

Especially if you expect the home to have multiple offers on its first weekend on the market, try to see the home privately ahead of time. Or, if that’s not possible, attend the open house and schedule a private showing afterward to finalize your opinion. Sheehan notes she has foregone open houses for some current listings simply because there are enough requests for private showings that an open house gets in the way.

Take Notes

If the house meets your needs on paper, take the tour with your checklist of must-haves in mind and point out issues that may be deal-breakers. A crack in the wall or a sign of a possible water leak is worth jotting down to ask the listing agent or an inspector about.

With the market moving as fast as it is, notes will help you remember the pros and cons of each home you tour, which will otherwise start to blend together if you view more than a couple of houses in a day.

Source: realestate.usnews.com ~ By:  ~ Image: Canva Pro

Financial Fundamentals for First-Time Homebuyers

Are you prepping to buy your first home? If so, one of the steps you should take early on is making sure you’re financially ready for your purchase. Here are just a few of the financial fundamentals you’ll need to focus on as you set out to buy a home.

Build Your Credit

Your credit is one element that helps determine which home loan you’ll qualify for. It also impacts your mortgage interest rate. While there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.

So how do you make sure your credit is in the best shape possible when it’s time to buy? A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:

  • Tracking your credit and disputing any errors that show up on your reports.
  • Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
  • Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.

Automate Your Savings for Your House Fund

You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, faster. As the article says:

“One of the best ways to save for anything — including a down payment — is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”

Get Pre-Approved

As you prepare for your purchase, you’ll also need to have a good grasp on your budget and how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.

Pre-approval from a lender lets you know how much money you can borrow for your home loan. And having that knowledge, plus an understanding of your savings can help you decide on your target price range for a house.

From there, you can start browsing for houses online and see what’s available in your area at that general price point. This can help you really understand your options so you can start to picture your future home.

For Customized Advice, Build a Team of Professionals

Finally, the best way to make you’re prepared for your purchase is to connect with trusted real estate professionals. Having expert advisors in the industry will help you make strong decisions throughout the home-buying process based on your specific goals, finances, and situation. They know the market and can guide you toward the home of your dreams.

Bottom Line

If you’re ready to get the homebuying process started, connect with a local real estate advisor to begin building your team of professionals today.

Source: keepingcurrentmatters.com  ~ Image: Canva Pro

20 Home Renovations That Will Hurt Your Home’s Value

too much wallpaper

Your home isn’t just a source of pride or a place where you can relax after a long day — it’s also an investment in your family’s future.

And while it’s natural to want to make improvements to increase your home’s resale value, some renovations will actually cost you money in the long run. Just because you see something as an improvement doesn’t mean a potential buyer will feel the same way.

Lavish Lighting Fixtures

One common home improvement mistake is falling in love with unique or lavish light fixtures, said Alon Barzilay, founder of real estate development company Urban Conversions.

“Whether it be ceiling-mounted lights in a dining room or a hanging pendant, there is a psychological phenomenon that happens when you go to a lighting store … you’re going to pick something exciting and new instead of picking a new addition that suddenly matches the big picture,” Barzilay said.

Further, the passage of trends works against homeowners. “Whatever is in vogue today will look dated 10 years down the road when you are ready to sell,” he said. “Simple is best. Fortunately, lighting can easily be switched out at a low cost.”

Too Much Wallpaper

With its patterns and texture, wallpaper can be an overwhelming design choice for your home. Plus, it’s notoriously difficult to remove. Homebuyers might view wallpaper removal as a potential headache, and it could be the tipping point for someone who wants a more move-in-ready home.

Fresh paint and neutral colors are always a good idea to help stage your home when it’s on the market. If you do have wallpaper, think about whether it’s beneficial to remove it and repaint the walls before any showings or open houses, so your potential buyers never have to think about your wallpaper mistakes.

Texture on the Walls and Ceilings

Just like wallpaper, texture on walls and ceilings is difficult to remove. Simply knowing that a time-consuming project lies ahead might cause homebuyers to decrease their offer. Think twice before deciding on a fancy textured painting technique, and play around with textured wall décor instead.

Quirky Tiling

Any over-personalized renovation can hurt the value of a home, especially something like tiling, which requires more effort and money to replace, said Bob Gordon, realtor, and blogger at Boulder Real Estate News.

“Many buyers like to upgrade the floors in their homes,” he said. “Adding tile or wood can make an improvement in value — unless you get that person who wants the 1950s diner look and installs black-and-white tile. For their vision, this is the pinnacle of cool. But for a resale value, most homebuyers will see it as a distraction and something they will need to rip out.”

Instead of falling victim to tiling mistakes, consider going with a traditional white tile floor, and buy a rug with the style you’re going for, he recommends. If you don’t want to spend a fortune on a professional to replace the flooring, consider doing this home renovation yourself.

Too Much Carpeting

In an interview with Realtor.com, home remodeling expert Alex Biyevetskiy said that new hardwood floors can increase the sale price of a home by up to 2.5%. Compared to hardwood and laminate floors, carpet can quickly show signs of damage. Plus, colors and textures are highly based on personal preference, and any overly personal touches can decrease a home’s value.

Bright and Bold Paint Colors

Bright and bold paint colors can turn off any potential buyer who might lack a bit of vision. Fortunately, repainting a room before putting your home on the market is an easy fix, albeit an important one. Choose neutral colors to present buyers with a blank canvas, which can help them envision the home in their own style, HGTV recommends.

An Extremely High-End Kitchen

The kitchen is often seen as the heart of a home, and it’s a project many homeowners save up for. The resale value of a major, high-end kitchen remodel is actually less than what you’ll invest in it, however. In 2021, the national average for a major kitchen remodel was $75,571, but the resale value was only $43,364, according to the site Remodeling.

To avoid kitchen renovation mistakes that won’t give you a return on investment, try to focus on which aspects of the kitchen are most outdated or worn. And as tempting as it might be, consider selecting mid-range appliances rather than the expensive high-end options.

A Luxury Bathroom

An upgraded bathroom can certainly add value to a home, but it’s easy to get carried away and take the idea of luxury a little too far. Potential buyers could be scared off by bathroom remodel mistakes like over-personalized finishes and over-the-top whirlpool tubs that are hard to clean and hard for some people to climb into. Instead, consider a walk-in shower, which typically uses less floor space.

A Home Office Conversion

Thanks to improved technology, more professionals have the opportunity to work from home, and some might consider creating a dedicated home office space to get the job done. If the new office was formerly a bedroom, this could be a costly mistake.

Along with removing bedroom furniture, you will likely need to add wall outlets and phone jacks (up to $425) and install new hardware, which could bring the total cost up to $3,000, according to HomeAdvisor. If a prospective buyer would rather have the bedroom space, you spent a lot of money for nothing.

Combining Bedrooms To Create a Bigger Room

Combining two small bedrooms to create a bigger room might seem like a good idea to a young couple with no children or to empty nesters whose children have left the house. But this is a bad move if you don’t plan on staying in that home forever, said Brian Davis, real estate investor and director of education of renting resource SparkRental.

“Even small bedrooms add value to homes, as most families want children to have their own rooms but don’t mind if they’re on the small side,” he said. “In my experience, each bedroom can add about 15% to the value of a home.”

Instead of knocking down walls, try simple tricks to make your bedroom space look bigger, like lighter colors and modern, slim furniture.

Removing Closets

Michele Silverman Bedell, owner of residential agency Silversons, told MarketWatch that she’s seen firsthand how removing a closet to make room for another upgrade, such as a larger bathroom or bedroom, can hurt a home’s resale value.

“People need closets,” Bedell said. “They’ll walk in and count the number of closets per room.”

A Sunroom Addition

A sunroom can be a great space to enjoy the outdoors away from the elements, but according to Remodeling, a sunroom addition is one of the worst home renovations when it comes to returning on investment, with a cost of an addition exceeding approximately $75,000 while only adding just over $35,000 to the value of the house.

Think carefully about how often you’ll use a sunroom before committing to this costly renovation, especially if your home might be on the market soon. Plan ahead to avoid the sneaky expenses that come with renovating your home.

A Built-In Aquarium

A built-in home aquarium can make a home feel fancy and upscale, but it requires constant maintenance and can be costly to remove. Not all potential buyers will want to care for a large tank full of fish or pay for the maintenance that comes along with it. Instead, opt for a standard fish tank to avoid any issues down the line.

Built-In High-End Electronics

An in-house theater is perfect for any movie buff, but built-in or customized electronics that take up space in an otherwise usable room could be off-putting to potential buyers, according to famed home improvement expert Bob Vila. As with all home renovations, personalization can lead to a decrease in home value, and built-in technology that can quickly become outdated is no exception.

A Swimming Pool

Contrary to popular belief, a swimming pool renovation or addition is not the best way to add value to your home. In fact, according to HouseLogic, a swimming pool could increase a home’s value by 7% at most — and that’s only in certain circumstances.

“Unless you live somewhere that’s hot at least six months out of the year, pools are generally more trouble than they’re worth,” Davis said. “The only people who really want them are families with a certain age range of children, so it limits the potential buyers.”

Because of the cost to build a pool, maintenance expenses and a very minor potential value increase, a swimming pool addition simply isn’t worth it for most homeowners.

A Hot Tub

Like swimming pools, hot tubs are a gamble — they take up space and require constant maintenance. Plus, homebuyers with children might consider a hot tub a safety hazard.

If a hot tub is on your list of must-haves for your home, consider a portable hot tub versus a built-in hot tub. You could potentially take it with you when you move, or your home’s new owners can easily remove it if they prefer.

A Garage-to-Gym or Living Space Conversion

For a fitness lover, a garage-to-gym conversion might seem like a wonderful idea. To parents of a millennial who just moved back home, a garage-to-apartment conversion probably seems like a money saver. But future homebuyers might not agree.

Many people search for houses with a garage, and what they’re looking for isn’t a gym or an extra living space — they’re looking for a garage to serve its primary purpose of housing cars and storage items.

If you must use your garage space as a gym or as extra living space, be sure future homeowners can easily and inexpensively remove the renovations.

The Wrong Landscaping Investment

Homeowners are prone to certain devaluing landscaping mistakes in the name of “curb appeal.” Costly landscaping decoration will not increase the value of your home, but rather increase the maintenance required for it. A potential buyer sees this, and it might turn into a concern. Fancy decorative additions that you find attractive are pretty much subjective, as well — including your personal DIY projects.

Keep your gardens beautiful but simple and easy to maintain, and be sure any decorative additions can be easily removed.

Beautiful but Messy Trees

Trees are an important part of any landscape, but it’s important to do your research before planting anything. Beasley recommends that homeowners particularly look out for any trees with leaves or flowers that might create a mess in the yard.

Constant leaf rain is not something that will positively attract a potential homebuyer. When fall comes, they will just know it will give them a hard time.

Trees to stay away from include oak, female Ginkgo biloba, sweet gum, locust tree and Eastern white pine. These messy trees can decrease your curb appeal, and removal can set you back a hefty sum, depending on the tree’s size, Beasley said. Instead, choose an alternative tree, like an Eastern red cedar, crepe myrtle or Colorado blue spruce.

DIY Repairs

Always think twice before getting into the do-it-yourself home improvement game. Gordon said he’s seen several examples of DIY jobs that have decreased a home’s value.

“I’ve seen plenty of houses where you can tell the owner did the work,” he said. “The owner probably feels she made all the right improvements, but buyers quickly see the shoddy workmanship and unusual finished product.”

There are ways you can increase your home’s value with DIY projects, but you need to be strategic. Gordon went on to recommend hiring a pro the first time out.

“Then ask to be a part of the process and learn from the professional as they do the job,” he said.

The bottom line is that any over-personalization of your home can lead to a decrease in value. Yes, you want to live in a space you love, but think twice before investing in any major or costly renovations. And always make sure your home improvements are completed with the proper permits by licensed professionals.

Source: goingbankrates.com ~ By:  Autumn Rose  ~ Image: Canva Pro

Housing market predictions for 2023

Housing Predictions

We’re rounding the corner on 2022 and quickly heading toward a new year. That makes this a perfect time to prognosticate real estate matters for 2023. With mortgage rates escalating higher, home sales — and, in some areas, home prices — hitting the brakes, and increased uncertainty felt throughout the market, many homeowners, prospective sellers and prospective buyers are nervous about next year.

And for good reason. Consider that, at the time of this writing, the average 30-year fixed-mortgage rate is 7.04 percent. The inflation rate is an alarming 8.2 percent. And sales of previously owned homes dropped 1.5 percent in September from August to a seasonally adjusted annual rate of 4.71 million units, per the National Association of Realtors, which means that existing homes are selling at the slowest pace observed in 10 years.

We reached out to several industry experts, each of whom offered interesting forecasts and projections about where mortgage rates, home prices, buyer competition, housing supply, sales activity and home affordability are headed in 2023. Curious what the pros think? Read on for their evaluations and predictions.

Will mortgage rates continue to climb?

With interest rates roughly doubling from their lows in early 2022, it’s a fair assumption that the cost of financing a home won’t be coming down this year. But how about across 2023? Is there any light at the end of this dark tunnel?

Some say no. “Continued inflation, overall higher interest rates, a potential recession, and geopolitical tensions will force 30-year and 15-year mortgage rates up throughout 2023 and will bring the two rates closer together as short-term risks rise,” cautions Dennis Shirshikov, a strategist at Awning.com and a professor of economics and finance at City University of New York, who foresees the 30-year and 15-year benchmark mortgage loans averaging 8.75 percent and 8.25 percent, respectively, across 2023.

Robert Johnson, a professor of finance at Creighton University’s Heider College of Business, shares some of those sentiments.

“By the end of 2023, financial market participants expect that the Fed will have increased the target Fed funds rate by 175 to 200 basis points from current levels. That would translate into 30-year and 15-year mortgage rates at roughly 8.50 and 7.70 percent,” he says.

Rick Sharga, executive vice president of Market Intelligence for ATTOM Data Solutions, which analyzes real estate and property data, is more hopeful. He posits that rates peak at about 8 percent and 7.25 percent for 30-year and 15-year loans in early 2023, “then gradually come down over the course of the year somewhat to hang in the range of 6.0 percent and 5.25 percent, respectively. This is entirely dependent on the Federal Reserve’s ability to get inflation under control and ease up on its aggressive rate increases.”

Three different roads for interest rates

Nadia Evangelou, senior economist and director of Real Estate Research for the National Association of Realtors, meanwhile, envisions three different rate scenarios occurring next year.

“In scenario #1, inflation continues to remain high, forcing the Fed to raise interest rates repeatedly. That means mortgage rates will keep climbing, possibly near 8.5 percent. In scenario #2, the consumer price index responds more to the Fed’s rate hikes, and there is a gradual deceleration of inflation, causing mortgage rates to stabilize near 7 percent to 7.5 percent for 2023. In scenario #3, the Fed raises rates repeatedly to curb inflation and the economy falls into a recession. This could cause rates to likely drop to 5 percent,” she explains.

What Are Discount Points and Lender Credits?

Getting a Mortgage

A home purchase is one of the most significant financial decisions most people will ever make. Unless you’re paying for a home entirely in cash, which isn’t typical, it’s sensible to meet with your lender to discuss ways to reduce costs. Two methods of reducing how much you pay for your home are lender credit and discount points. But what is lender credit, and what are discount points?

Lender credits and discount points can have benefits, but it’s important to understand the difference between the two. To help you make an informed decision and prepare for a healthy financial future, here’s an explanation of how points and lender credits work.

What Is Lender Credit and What Are Discount Points?

As a starting point, imagine two homebuyer scenarios.

Scenario 1: A young couple decides to purchase a home where they plan to raise their growing family. Their parents are helping with the down payment, and they have sufficient funds for closing. Both individuals work full-time and have promising careers. They’re comfortable, but they’re aware of the expense of raising a family over time, and they’re concerned about their financial future.

Scenario 2: A single parent with two children in college decides to purchase a small home near the city where her children plan to live and work. Her available cash is currently limited, but with her children soon on their own, her expenses will go down. In addition, she anticipates rental income from her current home, although she may decide to sell later.

In one scenario, discount points might be a good choice, while in the other, lender credit might be the better option. Which homebuyer should choose points, and which should choose lender credit? Or neither?

Keep in mind that you’re not required to accept discount points or lender credits when applying for a mortgage but choosing to do so could help you in the short term or over time.

  • Discount points lower the interest rate of your loan by paying a certain amount upfront.
  • Lender credits allow you to lower your upfront costs by getting closing cost credits in exchange for a higher interest rate on your loan.

Among other considerations, your future plans should weigh heavily in your decision to take advantage of discount points or lender credit. Do you anticipate living in your home for the life of the loan or most of it? Is selling possible or likely in a few years? Other possibilities include refinancing later or paying the mortgage off early, both of which can make discount points less impactful.

Choosing between credits and points isn’t complicated when you understand the differences and evaluate your plans or potential lifestyle changes in the future. There is no one-size-fits-all answer, but with careful evaluation, you’ll have the information you need to make a decision.

Understanding Lender Language

In the process of searching for your new home, no doubt you’ve come across unfamiliar real estate terms. Words like pre-qual, contingencies, seller concessions, backup offers, and many others require close attention. In the same way, people who work at banks, mortgage loan companies, and other lending institutions have their own terminology. And those terms can be used in various ways.

With that in mind, mortgage lenders may seem to use points, discounts, and credit inconsistently. While specific programs are referred to with these terms, a lender may also use them in other ways.

For example, a mortgage lender might use the term “points” when talking about both discount points and lender credits. That’s because a “point” can refer to a specific amount of money: one percent of the loan amount.

Likewise, lenders also use terms like credit to talk about some form of compensation or bonus they may offer you, but that credit might not be related specifically to lender credits. For instance, if there is an error during the loan process, they may offer a “credit” to help make up for it. A mortgage lender might also offer a credit or incentive if someone referred you or the lending institution has a promotional offer, but these generally don’t impact your interest rate in the long term.

If a mortgage lender mentions terms like credits or points, don’t hesitate to ask for clarification. You’ll want to be sure of the facts and be able to make a sound decision that sets you up for success in the long term.

What Are Discount Points and How Do They Work?

Discount points allow you to pay more upfront to receive a lower interest rate. That lower interest rate could decrease your monthly mortgage payment or reduce how many payments you need to make before your home is paid off. If you don’t plan on refinancing or paying your mortgage off early, buying points could be a good option.

If you’re interested in buying points, remember that one point is equal to one percent of the loan amount. It’s not one percent of the interest rate, although it’s sometimes confused.

Let’s return to the young couple buying their first home, where they plan to raise their family.

If they take out a $100,000 loan, one point would represent 1% of that amount, or $1,000. They can also buy partial points, so a half-point would be $500, and one-and-a-quarter points would be $1,250.

If they choose to purchase points, the dollar amount will be due at closing, which will raise their total closing costs. However, the points purchased will lower the interest rate on their loan, which means they will have lower monthly payments. How much the interest rate is lowered depends on the lender.

Before deciding, they will need to ask their lender for specifics on how buying points will impact their interest rate and monthly payments. The more points they purchase, the lower their rate will be.

Your loan amount might not be as simple to work with as an even $100,000. However, your lender will make calculations appropriate to your situation and provide a Loan Estimate within three business days of you completing a loan application.  The Loan Estimate lists details such as the type of loan, the loan amount, discount points, insurance, projected monthly mortgage payments, and estimated closing costs. It’s a good idea to carefully review the Loan Estimate to ensure it fits your expectations.

Keep in mind that a Loan Estimate isn’t an approval or denial of your application, and it does not mean you can’t change the details. It’s intended only as information about the loan package you discussed with your real estate agent. You can also use it to compare other offers side by side.

If approved, and you accept, the specific information relating to discount points you may have purchased will be listed in a Closing Disclosure, which your lender will provide at least three business days before closing. This document provides the finalized details and terms of the loan including lender fees, your monthly payments, and all expenses due at closing.

The exact amount you’ll save per point depends on the type of loan, the current market, your lender, and other factors.

What Is Lender Credit and How Does It Work?

Although not completely accurate, it’s helpful to think of a lender credit as the opposite of points. When you buy discount points, your closing costs go up. However, if you accept lender credit, your closing costs go down. On the other hand, by agreeing to pay points at closing you can get a lower interest rate over the life of the loan, which means your monthly payments will be lower over the term of the loan.

The single parent mentioned earlier, who plans to buy a small house in the city where her two adult children live, might want to understand what lender is? This may be a good option for her, as she currently has limited cash, but no concerns about future income or expenses. In addition, she has uncertain plans and may decide to move to a warmer climate in five or ten years.

By selling the home she plans to purchase, she will pay off the mortgage early. That makes the higher interest rate and higher monthly payment that accompanies a lender credit less impactful over time.

Lender credits are calculated in much the same way as points, and your lender might even call them “negative points.”

Lender credits are listed in your Loan Estimate and Closing Disclosure, just as discount points are. The more credits you choose to take, the higher your interest rate will be. However, other factors such as current interest rates and type of loan can affect the actual number.

Should I Use Discount Points or Credits?

Points may seem the most appealing option for many homebuyers, as even a small increase in the interest rate can add up over a 15- or 30-year mortgage. However, the situation isn’t always so straightforward.

The decision process needs to consider how much the purchase of points lowers your interest rate and monthly payments. What’s more, if you intend to refinance later or pay off the mortgage early, then buying points may not be a wise decision.

On the other hand, opting for lender credit in exchange for higher interest rates may seem unappealing at first. However, the money you save immediately may benefit you more than higher monthly payments will stress your budget in the future.

If you add all expenses incurred during your homebuying experience, including home inspections, appraisal fees, attorney fees, pro-rated property taxes, and lender fees, among others, home buyers need a lot of cash readily available in addition to a down payment. Saving on closing costs can help pay for moving expenses, home improvement, furnishings, and other necessities.

Understanding the differences between discount points and lender credits will help you make the right decision. Evaluating the pros and cons of each according to your own situation is essential.

Pros and Cons of Discount Points

Discount points allow you to reduce your interest rate by paying a certain amount upfront. The cost of a point is equal to one percent of the loan balance, so a point is equal to $1,000 with a $100,000 loan, $2,000 with a $200,000 loan, and so on.

Pros

  • Paying for several points upfront could mean saving much more over the life of the loan.
  • Points may be worthwhile when they help you lock in a lower interest rate if mortgage rates are expected to climb.
  • A lower interest rate can mean a lower monthly payment.

Cons

  • The upfront cost may not prove worthwhile
  • The cost might not be feasible, especially considering other costs associated with homebuying and moving.
  • If you plan to refinance or pay off your mortgage early, you likely won’t see the savings you expected.

Pros and Cons of Lender Credits

Lender credits allow you to reduce upfront costs by accepting a higher interest rate

Pros

  • Lender credit saves money upfront, which is helpful if your available cash is low, or you have other immediate expenses.
  • Choosing to invest the savings into your home could help you build equity or make your home more livable from the start.
  • If you plan to sell or refinance your mortgage in the coming years, the increased interest rate may not have a substantial effect on you and may justify the initial savings.

Cons

  • A higher interest rate could add up to tens of thousands of dollars over the life of your loan, especially if you’ve chosen a 30-year term.
  • If you don’t refinance or pay off your mortgage early, you’re almost guaranteed to pay more interest than the upfront savings you gained.

Comparing Your Options

Understanding what lender credit is and how discount credits work, it’s important to evaluate your options, given your specific loan type, term, and rate. If you’re considering points or credits, you should ask your lender to help you visualize a few scenarios.

  • Request a side-by-side comparison of your loan as-is, with a chart showing the interest rate and total paid minus one point and another that’s plus one credit.
  • Ask for the same comparison, this time with the number of points or credits you’re considering (make sure they’re equal).
  • Evaluate the same comparison again, but this time using the length of time you expect to keep the loan, rather than the full loan term.

These comparisons will take some time, but it’s essential that you fully understand your options before moving forward. Remember, you can also choose to take neither points nor credits and accept your loan as-is, which may be the best choice for you.

Reducing Your Interest Rate in Other Ways

When you’re almost ready to finalize your loan, buying points is a chance to lower your interest rate. However, If you’re only considering purchasing a home, and you want to be certain you get the best possible rate, it’s important to consider the following.

  • Your debt-to-income (DTI) ratio is directly representative of the risk the lender is taking when approving you for a mortgage. Paying down debt is the fastest way to improve your credit score and reduce the risk the lender perceives, thereby lowering your interest rate.
  • Your credit score is a major factor in the interest rate you’ll qualify for. You can raise your credit score by requesting negative items you don’t recognize (i.e., late payments) to be removed from your report, paying your credit cards on time, reducing balances, avoiding new inquiries, and avoiding new account openings or closures in the year leading up to your mortgage application.
  • Your chosen loan amount will also impact your interest rate and monthly payment, as well as your “front-end DTI.” This reflects the percentage of your income required for housing costs. Choosing a loan for a lesser amount by choosing a more affordable home or making a larger down payment can reduce the lender’s risk and, therefore, reduce your rate.
  • Your down payment amount generally must be a minimum percent of the home’s sale price, which helps the lender reduce their risk because you’re staking your own cash. It also reduces the loan balance.

Get Informed and Take the Next Steps

With this information in your arsenal, you’ll no longer wonder what lender credit is. Knowledge is power, especially when it comes to saving money on your home purchase. Now you’re equipped to confidently decide which avenue is best for your financial future.

Source: capitalbankmd.com ~ Image: Canva Pro

Do These 11 Things Before Putting Your Home on the Market

Home Staging

Not sure how to get your house ready to sell? Fortunately, you can take steps before putting your home on the market to increase your chances of receiving a solid offer from a buyer. From cleaning and staging to repainting and depersonalizing, here are 11 things you can do to get a house ready to sell.

  1. Research your local housing market

    First and foremost, do your homework on the value of your home. Start by researching the local housing market through Realtor.com. Take a look at comparable sales in your neighborhood to figure out your appropriate listing price. Pay attention to the various comps’ square footage, features and location, and think about how they compare to your home. For example, your neighbor’s home may have sold for $1 million, but if your home is considerably smaller, you’ll most likely need to list your house for less. Of course, a reputable realtor should be able to assist with finding comps and determining a listing price for your home.

  2. Find a listing agent

    Speaking of realtors, we highly recommend enlisting a professional real estate agent to list your home. You should be able to find a realtor through Realtor.com and word-of-mouth recommendations. When interviewing a listing agent, ask about their experience in your neighborhood, connections to potential buyers and social media expertise. The realtor should be able to give you a thoroughly laid out plan for how they are going to sell your home.

  3. Buy more light bulbs

    Go ahead and stock up on light bulbs. When showing your house to potential buyers, all light fixtures and lamps must be turned on. For this reason, it’s important that all lights in your home have working light bulbs.

  4. Give your house a deep clean

    First impressions mean a lot. So, don’t let foul smells, dirty floors or dusty surfaces make a bad one on a potential buyer. Before listing your home (and throughout the selling process), give your home a deep clean. This means cleaning toilets, wiping surfaces, mopping floors, cleaning rugs and scrubbing bathrooms. Consider calling in the professionals (think: Stanley Steamer and a housekeeper) to ensure that your place is in pristine condition.

  5. Declutter the home

    Decluttering and organizing your space will go a long way in appealing to potential buyers. When a home is clutter-free, buyers can focus on the actual home instead of the excess junk, accessories and overflowing closets.

  6. Call a handyman

    When getting a house ready to sell, you should have your handyman on speed dial. Make sure anything and everything that needs to be fixed (think: locks, hardware, leaky faucets, running toilets, cracks in the walls, broken appliances, squeaky doors, etc.) is fixed before listing a home. Otherwise, buyers may think your home hasn’t been well taken care of, which can be a turnoff for many. Here’s why you should hire a handyman before and after your move.

  7. Paint the walls

    Now’s the time to repaint your home. Start by painting over those bright orange and green walls with neutral colors. Stick to whites, light grays, light beiges and “greige” wall colors. These shades will make your home appear bigger, brighter and more welcoming. Adding a fresh coat of paint to your home will also help cover the wall’s imperfections and convey a blank slate to potential buyers.

  8. Stage your home

    According to multiple studies, staging a home really can help it sell faster and for more money. Fortunately, staging your home’s interior can be easy and affordable. Don’t forget to also spruce up your home’s curb appeal when staging the home. After all, the outside of the home is the first thing potential buyers will see when they arrive for a showing. So, make sure that the grass is cut, the yard is landscaped, and the knick-knacks are gone (think gnomes and children’s toys). If your home looks a bit rundown, you should also consider adding a fresh coat of paint to the exterior walls. Here’s our ultimate guide to home staging.

  9. Hire a professional photographer

    Given that many potential buyers search for homes online, it’s crucial to include high-quality, professional photos in your online listing. Without excellent high-resolution images, potential buyers may (sadly) overlook your home. So, before putting it on the market, go ahead and hire a professional photographer to snap photos of your clean and staged abode. Keep in mind that a realtor should be able to help with finding a photographer, so be sure to ask who they use when interviewing real estate agents for the job.

  10. Rent a storage unit

    When getting a house ready to sell, it’s important to declutter and purge your belongings to clear the house of excess belongings. If you’re willing to rent a temporary storage unit before selling a home, this will give you a safe and secure place to store all of your extra stuff when staging and showing the house.

  11. Depersonalize your home

    When selling a home, you want to strike the perfect balance between depersonalization and the appearance of a warm, welcoming home. This means putting away most framed photos, bulletin boards and personal items (think photo albums, magazines, toys, awards, etc.) throughout the home. Leave a few nice, framed photos around the house to make the home more inviting.

Tips for selling your house quickly and efficiently

Now that your home is ready to hit the market, here are a few tips for getting it sold quickly and efficiently.

  • Invest in good listing photos – First impressions matter, so make sure your home’s listing photos highlight the home’s best features. Invest in a professional photographer who has experience with real estate photography. Your realtor should be able to help you enlist a qualified photographer so that you don’t have to search for one. Remember: You don’t need photos of every single room and closet in the home. Photos showcasing the home’s best features and selling points are a great way to entice buyers to schedule a showing.
  • Plan an open house – If you’re willing, host an open house with your realtor to create buzz around the new listing. Open houses are a great way to attract all sorts of buyers and buyer’s agents. If you end up with multiple bids – or even one great offer – in one day, you might not have to show your home over the course of multiple weeks.
  • Be flexible with showings – Showing a home to buyers is never convenient. But if you want to sell quickly and maximize your selling price, it’s important to remain flexible and accommodating when showing a house to qualified buyers. We recommend keeping your house as clean as possible and having a place where you can quickly dump clutter when needed, such as a car, outdoor shed or portable storage unit.
  • Market your home effectively – In today’s housing market, your realtor must have a good deal of marketing know-how, such as using social media channels, emails, mailers and events to stir up interest in your home. A good realtor should be able to harness different marketing strategies to find potential buyers.
  • Avoid over-improving your home – While it’s important to get your house in top condition when listing it, you shouldn’t tackle costly additions and improvements – especially if you want to sell the home quickly. Renovations can take months to finish. To sell quickly and efficiently, try simple improvements, such as decluttering, repainting, and fixing obvious issues, such as holes in the wall.

Putting your house on the market FAQs

Keep reading to find answers to the most ask questions about putting your house on the market.

What should you do to your house before you sell it?

What you do to your home before you sell it depends on its current condition, any necessary improvements that need to be made, and your chosen listing price. For instance, if you wish to list your home for a high price, you may need to make certain improvements to get your price. On the other hand, if you wish to sell a home as-is and not make improvements, then you may need to compromise on the price. We recommend asking your listing agent for guidance on both price and preparation for listing your home. You can also follow our checklist above to get your house ready to sell.

What should you not do before selling your house?

Most realtors advise not undergoing costly renovations or long, time-consuming changes to your home unless it’s necessary. You also do not want to choose the wrong real estate agent to list your home. Be sure to interview multiple agents and consider their pitches before choosing a realtor for the job. Choosing the right realtor will set your home sale up for success.

Don’t forget to also assess the local housing market to get a sense of your competition and your home’s value. The last thing you want to do is list your home too high or too low. The wrong listing price is probably the biggest mistake you can make when selling a home.

Finally, it’s important to declutter and clean when selling a home. Many sellers overlook the importance of a clutter-free home when showing a house. Don’t let your things (and mess) distract buyers from the house itself.

How long does it take to sell a house?

According to the National Association of Realtors (NAR), it takes an average of 18 days for a home to go under contract from the time of listing. Of course, the amount of time a home sits on the market depends on a number of factors, including location. According to Realtor.com, homes located in the top 10 hottest zip codes of 2021 were under contract within three to nine days from the listing day.

When is the best time to sell a house?

In general, the best time to sell a house is considered the month of May, when homes tend to sell faster and for more money. Of course, the best time for you depends on a number of different factors. Your location, life circumstances and the overall economic climate all affect whether it’s a good time to sell a house. Before you list your home, make sure you’re really ready to sell it and go through the process of showing it to strangers.

How do I get a messy house ready to sell?

Cleaning a home before showing it to potential buyers is a no-brainer. First impressions matter and a dirty home may be a deal-breaker for many. To get your house ready to sell, we recommend first decluttering and purging items you don’t need. Whether you’re throwing it away, donating it or storing it, get as much clutter out of your house as possible. Once you’ve decluttered, you should be able to organize and straighten up your house more easily. You may also want to give your home a deep clean (or, at the very least, a light clean) to put your best foot forward.

How do I make my house look good enough to sell?

Besides decluttering, organizing and cleaning, it’s important that you stage your home with furniture and accessories. Not only does staging a home make it look more appealing, but it also helps buyers picture themselves living inside your home. The “2021 Profile of Home Staging” by the National Association of Realtors states that 82 percent of buyers’ agents claimed that staging a home helped buyers visualize the property as their own. By staging a home, you’re increasing the likelihood that it will sell faster and for more money.

How do I decide on my price?

Pricing your home right is the most important thing you can do when selling a home. If you overprice the home, it could sit on the market for a long time. If you underprice the home, you’ll leave money on the table. A seasoned real estate agent should be able to give you expert price guidance. If you want to price and sell the home yourself, take a look at comparable sales (comps) in your town and neighborhood. When comparing your home to other listings, pay attention to the square footage, location, features and amenities that it offers. You’ll need to look at a wide range of comps to determine a fair asking price for your home.

Ready to move?

So, you’ve spruced up your home, put it on the market and sold it. Congrats! Now it’s time to start planning your move. To find a reliable and trustworthy moving company, check our extensive network of movers. We make it easy to compare quotes from hundreds of long-distance movers and local movers near you – free of cost. All relocation companies in our network are licensed and insured, so you can rest assured that your move will be in good hands. Best of luck and happy moving!

How Is Your Credit Score Calculated and Why Is It Important?

Your credit score affects whether you can get a credit card, rent an apartment, buy a house, start a business, or even get a cell phone contract.

You know credit scores exist. You might even know what yours is. But do you know how it’s calculated and why it’s important?

Your credit score affects whether you can get a credit card, rent an apartment, buy a house, start a business, or even get a cell phone contract.

A low credit score can limit your choice of loans or determine if you can get one at all — and if you can, it might have a high-interest rate.

“There’s a huge cost to having a low credit score that happens to people, an actual true financial cost to them, and it’s a shame that people don’t learn about this or know about it or pay attention to it until usually it’s too late,” said Colleen McCreary, consumer financial advocate at Credit Karma.

Here’s a look at how you can create healthy habits to avoid having a low credit score:

WHAT IS A CREDIT SCORE?

A credit score is a mathematical formula that helps lenders determine how likely you are to pay back a loan. Credit scores are based on your credit history and range from 300 to 850.

“It’s a score that is going to determine how comfortable people are to lend you money,” McCreary said.

If your credit score is high, you can borrow more money. But if it’s low, you can borrow less or no money, or borrow money with a high interest rate, which can then create more debt.

Banks, landlords and insurance companies look at your credit score to determine the type of credit card that you can get approved for, whether you are the right fit for an apartment, and your insurance rate, among other things.

“Essentially, the bank will say ‘Hey, you don’t have a great credit score. Instead of a 2% interest rate, we’re going to give you a 3% interest rate,'” said Kristin Myers, editor-in-chief of The Balance, a personal finance website. “It might mean that you’re paying out more money over the lifetime of a loan every single month.”

HOW IS MY CREDIT SCORE CALCULATED?

While the idea of credit scores is simple, the way they’re determined is more complicated.

Credit scores can come from several credit reporting agencies. The three most used are Experian, Equifax and TransUnion. Each has its own model to calculate credit scores.

While we know generally what factors into credit scores, the agencies don’t share their specific formulas with the public. But each produces a slightly different score.

“One is scoring like a basketball game, one is like a football game and one is scoring like a hockey game,” said McCreary, who added that you shouldn’t worry if one agency gives you a few points less than others.

Since you don’t know which agency your lender is going to use to check your credit score, McCreary also recommends that you check all three of them before requesting a large amount of credit.

Here are the factors that are frequently used to calculate your credit score:

— Bill payment history

— Length of credit history

— Current unpaid debt

— How much of your available credit you’re using

— New credit requests

— If you have had debt sent to collection, foreclosure, or a bankruptcy

One thing that doesn’t affect your credit score is how much money you make, said McCreary. But you still need to take care to only borrow the amount you can afford to pay back.

Other aspects that don’t affect your credit score include your age, where you live and your demographic information such as race, ethnicity, and gender, according to Experian.

HOW DO I FIND OUT MY CREDIT SCORE FOR FREE?

There are several ways that you can check your credit score for free. A great place to start is to check if your bank offers this service for its customers. Additionally, each of the three credit reporting agencies allows you to check your credit score for free.

Everyone is entitled to one free credit report a year from the three agencies at annualcreditreport.com, according to the federal government.

Other companies such as NerdWallet, Credit Karma and WalletHub also offer this service for free.

WHAT IS A GOOD CREDIT SCORE?

You are considered to have a good credit score if it’s 670 or higher. If your credit score is over 750, you’re considered to have a great credit score, said McCreary.

“There is this sort of dream scenario of having an over 800 credit score, that is a very high credit score and very few people get there,” said McCreary.

“Fair” credit scores are considered to be in the 580-669 range, a credit score below 580 is considered a poor credit score.

HOW CAN I IMPROVE MY CREDIT SCORE?

The journey to improve your credit score is different for everyone. But some steps that can help you tackle credit card debt include paying at least the minimum monthly payment and, if you can, paying just a bit more over the minimum so you pay less interest over time.

Additionally, McCreary recommends that you try to keep a balance between your credit or loans and the amount you can afford to pay back.

You can read more experts’ recommendations on how to increase your credit score here.

DOES CHECKING MY CREDIT SCORE LOWER IT?

Checking your credit score does not lower it unless you are making a “ hard inquiry,” which is only done when requesting a line of credit.

Soft inquiries, where you want to know your credit score, do not affect your score and it’s a good habit to check your credit often to make sure it’s accurate.

On the other hand, lenders make hard inquiries when you apply for credit like a mortgage or a car loan, and those do show up on your credit report.

McCreary recommends not making several requests for credit at the same time since this could hurt your credit score. It’s best to know beforehand what your credit score is and then apply when you are confident that your loan will get approved.

HOW CAN I CREATE HEALTHY HABITS WITH MY CREDIT SCORE?

The first step is to check at least once a year to make sure you are comfortable with your current credit score.

If you are planning to request a large credit line, you want to check your score a few months prior and see how you can start improving it. If you are currently trying to increase your credit score, it’s recommended that you check it often to see if your actions are making a difference.

If you feel you need help from a professional to improve your credit score, a good place to start is the National Association of Personal Financial Advisors ‘ search engine for registered advisors. If you notice a mistake in your credit report, you can dispute it by contacting the respective credit reporting agencies.

Being aware of your credit score and maintaining healthy habits around it is crucial to having a good credit history. However, it is important for people to know that their financial worth shouldn’t be attached to their credit score, Myers said.

“It doesn’t mean that you’re a bad person or terrible with money and that you need to constantly beat yourself up,” she said.

Source: usnews.com ~ By: ADRIANA MORGA, Associated Press ~ Image: Canva Pro

What Are Federal Fair Housing Laws?

Find out who is protected by the federal Fair Housing Act of 1968, how to spot housing discrimination and ways to report it.

In many situations, laws regarding property, housing, and the process for people moving into and out of a home are left to states, counties, and individual cities to determine. However, the federal government regulates housing most notably when it comes to discrimination, and is aimed at protecting groups who would otherwise face higher prices, lower valuations or even outright denial of housing. This protection at the federal level is known as the Fair Housing Act.

Despite federal protections against housing discrimination, as well as state and local laws that echo and even elaborate on the federal law, housing discrimination still occurs. Here’s a breakdown of how you’re protected, who enforces federal fair housing laws and how to tell if you may be facing housing discrimination.

  • What is the federal Fair Housing Act?
  • Who is protected by the federal Fair Housing Act?
  • Forms of discrimination that violate the Fair Housing Act.
  • Who enforces the federal Fair Housing Act?
  • How to avoid being a victim of housing discrimination.

What Is the Federal Fair Housing Act?

Originally enacted in 1968, the Fair Housing Act protects against housing-based discrimination, whether that’s buying or selling a home, getting a mortgage, renting a home or seeking housing assistance. In the years since, the Fair Housing Act has been amended to widen the protections people receive, in particular which qualifications are considered a protected class.

Who Is Protected by the Federal Fair Housing Act?

The federal Fair Housing Act protects against housing discrimination on the basis of:

  • Race.
  • Color.
  • National origin.
  • Religion.
  • Sex, including gender identity or sexual orientation.
  • Familial status.
  • Disability.

The law protects against discrimination from landlords, real estate companies, real estate agents, cities or other governing bodies, banks or other lending institutions and related businesses, like homeowners insurance companies.

States often have fair housing laws to further enforce such laws at the state level, and in some cases the protections go even further than the federal law. According to the Poverty & Race Research Action Council, 20 states and the District of Columbia have state laws protecting against source-of-income discrimination, which in most cases protect tenants who receive Social Security, housing vouchers or other forms of government income assistance.

Forms of Housing Discrimination That Violate the Fair Housing Act

Housing discrimination can come in many forms, and some are more obvious than others. Setting a higher rent for an individual with a disability, for example, would be a fairly blatant violation of the Fair Housing Act.

However, it’s not always easy to tell if a person’s treatment or the outcome of a deal has motives based on discrimination. Especially in cases when there are multiple people placing an offer on a house, it’s hard to tell if the decision factored in details protected in fair housing laws. Here are a few forms of housing discrimination that occur, and how they may play out:

  • Redlining. Redlining is a systemic discriminatory practice that effectively segregates parts of a city or county and undervalues property owned by a targeted group – most often racial or ethnic minorities. The practice of redlining – of which there is historical evidence in the U.S. in lending institutions, government and many other facets of the real estate industry – stunts the growth of generational wealth. While this practice was once rampant as official company policy throughout the industry, it still occurs today. A recent example of modern-day redlining was first published in The New York Times on Aug. 18 when two Johns Hopkins University professors, who are both Black, received an appraisal for their home of $472,000, which was shockingly low compared to what they were expecting. Months after that first appraisal, the couple applied for another refinance loan, removed family photos and had a white male colleague – another Johns Hopkins professor – stand in for them. The second appraiser valued the house at $750,000. The couple is now suing the original appraisal company, the appraiser and the lending institution that hired the appraisal company for racial discrimination.
  • Steering. Steering occurs when a person or company tries to influence a buyer, renter or seller’s decision because of their connection to any of the protected classes. For example, if a real estate agent were to only show a Hispanic family houses in a predominantly Hispanic neighborhood despite houses in the family’s budget located in other neighborhoods, and without them having expressed interest in that specific neighborhood, it would be considered steering. The family shopping for a home would be led to believe that neighborhood was the only option for them. More subtle forms of steering may occur when an agent discusses crime in the neighborhood, which can be coded language for racial makeup of the area, regardless of actual crime statistics and whether they would put a resident at risk of becoming victim to a crime.
  • Blockbusting. This practice, done by real estate agents and housing developers, is most often race-related. Blockbusting includes encouraging minority families to begin moving into a predominantly white neighborhood, while simultaneously working to scare white residents to move out based on the presence of the new, more diverse neighbors. The intended effect is to lower the value of properties in the neighborhood.
  • Different or More Discouraging Application Processes. A landlord, mortgage lender or even title insurance company must have the same application and due diligence process for all applicants. A different process for different applicants may be linked to discouraging members of a protected class from purchasing a home, or the separate process may make it easier to deny a loan or lease. The Federal Reserve’s Federal Fair Lending Regulations and Statutes compliance handbook lays out the details of this situation, among others, as a practice that is explicitly prohibited by fair housing laws.

Who Enforces the Federal Fair Housing Act?

The U.S. Department of Housing and Urban Development investigates claims of fair housing violations, with information about reporting via phone or online on its website. HUD will investigate the claim and if there is sufficient evidence of a fair housing violation, will try to resolve the issue and may take legal action, if deemed appropriate.

You may also report the claim to your state to investigate as well under state fair housing laws, which may be able to move through the intake and investigation process faster.

To determine if your situation is one worth pursuing in court separate from the government investigation, contact an attorney that specializes in fair housing. “If a person feels that their home appraisal or mortgage application is undervalued, the first course of action may be to gather their comps that support that feeling and contact an attorney in fair housing to review their claim,” wrote Portia M. Wood, a generational wealth planning attorney operating in the District of Columbia, Maryland, Virginia and California, in an email.

You may find that there is enough evidence to file a discrimination case that stands alone, or your attorney may have information about other victims from the same company or individual that could lead to a class action lawsuit.

How to Avoid Being a Victim of Housing Discrimination

Discrimination not only makes it harder to find a home to own or rent, but also makes it more expensive, and can ultimately diminish an individual’s ability to grow wealth over the course of his or her lifetime. Fair housing laws exist because discriminatory practices lead to sweeping and devastating results that last generations, whether that discrimination is unintended, blatant, subtle or even covert.

The best way to fight for truly fair housing opportunities and end discriminatory practices is to both report them when spotted and be armed with the right information to better identify something that could be discrimination, whether that’s shopping around for mortgage programs and interest rates, researching available homes in a variety of neighborhoods or finding comparable home prices before an appraisal.

“We have to know our numbers. It is not putting the responsibility or the onus on the individual alone to solve systemic racism – that is something that can only be done at the system and governmental levels,” Wood says. “However individuals need to arm themselves with as much information about the market as possible, including whatever comparable homes recently sold for and how are those sales compared to their appraisal, so that they are well-versed and able to counter a redline appraisal. Without knowledge you have no power.”

Source: realestate.usnews.com ~ By:  Devon Thorsby ~
Image: Canva Pro

End of Summer Sees Continued Slowdown of Home Showing Activity

Slowdown of Home Showing Activity

Sept. 30, 2022 – This year’s decline in home showing traffic began leveling off in August, according to the latest data from the ShowingTime Showing Index®.[1]

Home showing traffic is returning to earth in line with the market’s rebalancing from the record-breaking highs brought on by the pandemic. Obstacles to affordability have meant less competition and more homes for sale, giving home shoppers more time and options.

The West and Northeast regions experienced slight pickups in showing activity with the first month-over-month increases since January and April, respectively. The South and Midwest regions each saw small monthly decreases in August.

A majority of listings averaged between four and nine showings. Burlington, Vermont, again led all markets in showings per listing with an average of 12.2 and was the only market to crack double digits. More than 70 markets analyzed saw year-over-year increases in the ratio of showings per listing, compared to only four markets in July.

“The more moderate pace at which home showings are slowing down and the increase in markets that saw more showings per listing this month are signs that the market may be starting to find a new balance,” said Mike Lane, vice president of sales and industry for ShowingTime+. “Buyers will continue to see less competition for homes and have more time to tour homes they like and consider their options.”

Metropolitan Area Ratio of Showings to Listings[2] Year-Over-Year Change[3] Month-Over-Month Change[4]
Atlanta, GA 6.24 -33% -4%
Austin, TX 4.19 -45% -3%
Boston, MA 7.53 -11% 1%
Burlington, VT 12.16 5% 0%
Chicago, IL 7.04 -6% -2%
Cincinnati, OH 7.73 0% 1%
Columbus, OH 7.85 -9% 0%
Denver, CO 7.59 -40% 3%
Houston, TX 6.66 -22% -4%
Kansas City, MO/KS 8.09 -13% -6%
Las Vegas, NV 2.98 -36% -2%
Los Angeles, CA 4.40 -33% 3%
Memphis, TN 6.96 -36% -6%
Miami–Fort Lauderdale, FL 7.77 -32% -1%
Minneapolis–St. Paul, MN 6.75 -14% -2%
Nashville, TN 6.48 -33% -3%
Philadelphia, PA 7.91 -12% -3%
Phoenix, AZ 5.35 -43% 3%
Portland, OR 6.55% -29% 2%
Raleigh, NC 6.80 -33% -1%
St. Louis, MO 7.64 1% -1%
San Francisco, CA 3.28 -27% 12%
Seattle, WA 8.15 -40% 7%
Virginia Beach, VA 8.06 -15% -7%
Washington, DC 8.18 -15% -2%

Source: showingtime.com ~ Image: showingtime.com

[1] The ShowingTime Showing Index is compiled using data from more than 6 million property showings scheduled across the country each month on listings using ShowingTime products and services. It tracks the average number of appointments received on active listings during the month, then reports the numbers by region and nationally.

[2] Calculated using the average number of buyer showings per active listing on a monthly basis. July 2022.

[3] August 2021 – August 2022

[4] July 2022 – August 2022