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Although the housing market is heating up, buying an investment in order to flip it may not be the right plan for you. Buying a flip home relies on market prices going up higher than the cost for you to refurbish it for sale. And … it has to sell.

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On the other hand, buying a second home in order to lease it can be a solid investment idea. Rental properties have long been an investment of choice for long-term thinkers. So, if you want to invest in property, here are some ways you can take advantage of current market conditions:

Rental home:

Typically, a home purchased to rent or lease should fall in the middle of the income bracket of its neighborhood. For your renters to be comfortable there and want to stay long term, it should be a neighborhood where they can make friends, establish relationships, send children to local schools, play and worship.

When your renters fit into the neighborhood, you can expect them to form a longer relationship with you. This means that your rental won’t be empty as often. Each time renters leave, you incur expenses for refurbishing the home for the next renter and loss of income from the empty home. Most often, a long-term rental home is unfurnished.

As real estate professionals, we can advise you on the right range of rental price for the neighborhood in which you plan to buy. If your rent is too high, your tenants won’t fit into the neighborhood. If your rent is too low, you risk renters that may not take good care of your home. If the cost of the home is considerably greater than the rent you can ask, you may need to look in a different area. It’s also very much worthwhile getting the help of a top property management company like this one in Southampton as they will make the whole process so much easier and more successful.

Vacation rental:

Different from a regular rental home, a vacation rental can be available from terms as short as a single night or weekend to as long as a season (three to four months). Especially for families, renting a vacation home typically offers more space at a lower cost than hotel rooms, and allows for home-cooked meals and a private, relaxing atmosphere.

Many people think a vacation rental needs to be a beach home or near a mountain resort, but a condo in Manhattan or Brooklyn, in a Hollywood neighborhood or near a theme park can be an excellent location too. In fact, rental homes in locations where businesses require employees to temporarily relocate for training is another good choice.

Because the home needs to be furnished, the initial costs may be higher, but short-term and vacation rental rates can be much higher than long-term rental rates. Care and maintenance between renters usually doesn’t require extensive repairs, painting or replacing carpets either.

An advantage to a vacation rental is that you can block out time for your own family to use the place as well. Just don’t leave lots of personal items there.

Being a landlord

Not everyone is cut out to take on the role of landlord. If you invest in a long-term rental, especially if it is out of town, consider hiring a property manager who can provide professional property management services. Property or association management professionals handle the rent, advertise for new renters, take care of landscaping, repair broken fixtures or appliances, and prepare the property between renters.

For vacation rentals, the property management in edmonton takes care of all services for the property, including adverting and guest registration. You can read the Reasons To Hire A Professional Property Manager here.

If you’re in the market for an investment property, contact a professional property management service to show you what’s available in a specific area that fits your parameters.

Views very widely on the value of hiring a professional stager to prepare your home for sale. Many real estate agents swear by it and have years of sales to back up their claim. They cite their own impressions, sales history and anecdotal evidence to underscore that professional staging adds value to the home.

On the other hand, an academic study done in 2014 by Michael Seiler, professor of real estate and finance at the College of William & Mary and co-authors, Mark Lane, associate professor in the finance department at Old Dominion University, and Vicky Seiler, researcher at Johns Hopkins University, showed virtual tours to potential buyers with staged and un-staged scenes of the same home. Buyers consistently priced the home’s value at about the same. The conclusion of the study was that the cost of professional staging does not raise the perceived value of the home.

Before you nix hiring a professional stager, however, you should know that this same study showed that staging does give buyers a positive sense of a home’s “livability” that promotes a quicker sale. Since the home in the study was in the $200,000 range, the research also does not show how staging influences the sale of a higher-priced or luxury home.

One of the results of the study was the information that while buyers believed themselves to by savvy and not influenced by “staging,” the most often believed that other buyers would be influenced by it. In essence, they thought they would know the actual value of the home more than other people would and could therefore negotiate a better price. Since the home in question was not “real” the actual outcome of a sale was not provable.

Should you hire a stager?

In the final analysis, the value of staging falls into two categories:

• Will the home sell for a higher price?
• Will the home sell more quickly?

Will the home sell for a higher price?

A 2012 survey by HomeGain of over 2,500 realtors showed that staging increased the selling price of homes from $3,000 to $3,900 and that the return on investment was more that 4500 percent. In the same study, 73 percent of the agents surveyed recommended staging.

According to ASP®, the Accredited Staging Professional training organization, citing a report by The International Association of Home Staging Professionals®, staged homes sell for an average of 17 percent higher price. On a lower priced home—say under $200,000—that 17 percent would only be $3,400 and so the cost of professional staging may seem like a wash. On a $750,000 home, however, that same 17 percent will amount to a whopping $127,500 back in your pocket.

Will the home sell more quickly?

According to The International Association of Home Staging Professionals® study, staged homes sell within an average of 11 days. Agents that swear by staging, their homes spend 73 percent LESS time on the market and are subject to fewer concessions to the buyers.

Who do you believe?

When the market is strong, many agents believe that staging may be unnecessary because properties already receive multiple offers. In a softer market, or a specific price range however, staging your home may lift it above the competition.

Answering the claims against staging by the academic study, HomeGain points out that staging is more that just painted walls and well-placed furnishings. True staging appeals to multiple senses including smell, mood, temperature, sight and memory.

Most important is to rely on the professional recommendation of your own agent. We know your market, have studied your home’s competition and have a vested interest in making the best recommendations for you.

Compliments of Virtual Results

While the housing market in most places certainly has improved and the number of foreclosed homes on the market has decrease, they will always be foreclosed homes available for purchase. Because of popular television show on house “flipping” and investment real estate, however, many buyers have unsubstantiated ideas of what buying a foreclosed home entails. Here, then, are some myths and truths about buying a foreclosed home.

It’s a hot deal:

Many buyers believe that a foreclosed home will be a very low price. The truth is that while homes may be discounted somewhat, the massive discounts people sometimes expect are unrealistic. While the “discount” may be well below what the former owner paid for the home, because of the changes in the market itself, the discount compared to other similar homes may be more modest. So, if the home is a “good deal” and does not require a tremendous investment to return it to a livable state, there is nothing to stop you buying it.

Hidden liens:

While the foreclosure removes the former owner’s mortgage debt, the home may have liens against it for back taxes, or money owed to mechanics or contractors. A thorough title search will reveal this information to you. Before making an offer to buy a foreclosed home, make certain you have this information at hand. Your real estate professional can help you uncover any financial challenges associated with past judgments and liens.

Poor maintenance

While it is a myth that most foreclosures are homes where the owners simply walked away, it is true that foreclosed homes may need some extra care to return them to their former state. When the original owner loses a job or has a financial or medical disaster that eventually leads to the foreclosure, their attention to maintenance and detail may decline simply because they are unable to do it. In addition to that, because the banking industry was slow to begin selling distressed properties, the home may have remained empty for several months, or even years. Homes that endure several seasons without the electricity on, for example, may be subject to mold and other environmental issues, and homes that rely on a sump pump to keep water from seeping in may have damage to basements or main floors from unchecked water. As an issue commonly seen by roofing contractors, you should try to keep in mind that roofs may have undetected storm damage or problems from backed-up gutters. It can be difficult for you to discern much less repair this kind of damage, so be sure to hire residential roofers to help you with that. Additionally, major appliances such as air conditioners and furnaces sometimes break down from lack of use.

Vandalism

While some angry owners may vandalize a home they are losing, for the most part, destruction is to an empty home. Opportunistic thieves believe that no one will notice missing light or plumbing fixtures, paver stones and other easily accessible objects. Broken or cracked windows may be from a stray baseball or from a major hail storm. Damaged gutters can result from falling tree limbs and broken wiring might result from rodent infestation (yes, those pesky roof rats like to eat the insulation off wiring).

A thorough home inspection is in order before you buy a distressed property even if it has not been empty for very long. We can connect you with a professional home inspector who can give you an unbiased report of what your potential new home or investment needs. We can help you make sure that your “hot deal” really is a great deal for you.

Compliments of Virtual Results

Much of the fun of owning a home is decorating it to your taste and personality. Even on a low budget, subtle or dramatic changes to color can make your home truly yours.

Check out these color schemes for this spring:

• Updated kitchen: Since the kitchen is one of the most used rooms in your home, choosing color combinations that make you happy and hues that lift your spirits is really important. If your cabinetry is dark, consider lighter or brighter wall colors. You can add a splash of turquoise or a subtle Tuscan gold to give the room dramatic contrast. With lighter cabinetry, consider a deeper tone on your walls. Mocha, brick red or an earthy moss green can give the room a calming feel. Painted cabinetry gives you many more options for both blending and contrast. Check out this helpful site to discover the look that says “you.”
• Living areas: When choosing colors, consider how you will use the room. If your living room is also your family room, media room and home office, consider how much light your room requires throughout the day and into the evening. If your living room has few windows, you may want to use some of the lighter neutrals available from DIY retailers. Today’s neutrals are not just various versions of white: they include greens, shades of taupe, warm and cool grays, and even some reddish hues. Offset your neutrals with one dramatic accent wall.
• Bedrooms: Typically, the purpose of a bedroom is to sleep. Studies show that decorating your room in restful and calming colors such a blue, greens and grays can contribute to lowering blood pressure and promote sleep while other colors stimulate the brain and can affect dreams and creativity.
  Some colors even reportedly encourage lovemaking specially if you take horny pills while others—including red—can discourage intimacy.
• Bathrooms: Your bath can be a personal spa, or the room that the kids fight over in a rush to get ready in the morning. Making your room both relaxing and functional can be a challenge. Primary to bathrooms is a paint that resists moisture and is easy to clean. Typically, a semi-gloss paint is your best option. Because a semi-gloss paint has sheen to it, testing shades in the lighting of your bathroom is important before you paint the entire room. For a smaller room, consider a brighter shade that reflects the light and gives the room a glow. In a larger room, a deeper color can evoke a sense of warmth and restfulness.

Advantages of decorating with paint:

When decorating with paint, remember that in addition to it being relatively inexpensive, it is easy to correct mistakes and to paint over very personalized colors when you’re ready to sell this home and move on to the next.

Compliments of Virtual Results

Buying a home is exciting. If you’re young, it gives you the sense of finally stepping into the adult world. If you’re at some other life change (marriage, starting a family, empty-nester) the idea of a larger (or smaller) space of your own gets those possibility juices flowing.

But … in the heady rush into new home ownership, the temptation to bite off more than you can chew financially is strong enough that potential homeowners ignore that niggling unsettled feeling, or even the warning bells clanging in their heads. Once the deal is done and move-in day is a dim memory, the reality of monthly expenses takes over.

Does that mean you shouldn’t buy a home? Of course not! What is means is that homeownership can change your lifestyle in ways that you may not anticipate. If you’re looking at buying a home, try incorporating those changes into your life beforehand to see if they are livable and if you ever need some guidance then you can contact ESG advisory services.

Higher monthly payments

For some buyers, the actual mortgage payment is less than they pay for rent. In fact, many would-be buyers consider this as the basis of their potential move into ownership, and marketers promote the idea as well. But, ownership requires more than just making the mortgage payment. Other monthly outgo includes:

• Insurance: Homeowner’s insurance is much more costly than renter’s insurance. If you own a single-family home, the cost of your coverage is based not on the home’s market value, but on the cost to rebuild it after a destructive event. If your home has special architectural details—a Victorian or Craftsman, for example—your insurance may be higher because replacing damaged detailing may require specialty products. If you live in a storm-damage area (hail, tornados, wind) or flood plain, you’ll need to cover instances like hail damage repair as well, perhaps even without too much warning. It’s important to know the details of your insurance coverage in case you need hail damage stucco repair services. Your insurance also includes coverage for your furnishings. When you move to a larger home, you have more furnishings.
• Private Mortgage Insurance: If your mortgage arrangement requires the payment of private mortgage insurance (you made a smaller than conventional downpayment or your credit is less than stellar, for instance), the amount of your monthly payment may be increased to pay PMI. Just so you know, PMI is not for your protection, it is for the lender’s protection. You’ll pay between $75 and $250 to cover your lender should you default on your mortgage.
• Association Dues: Condominium ownership nearly always requires payment of monthly or yearly association dues. These dues pay for exterior and building and pool maintenance, landscaping, liability coverage for community property and other responsibilities. In many communities, even single-family homes can require association dues to cover parks, playgrounds, pools and other shared spaces. Association dues can run into several hundred dollars each month.
• Property Taxes: Unlike renters, property owners pay the taxes used to operate cities, school districts and other municipalities. Your tax money maintains roads and pays for street-sweeping or snow removal, clearing of drainage systems, installing and maintaining street lamps, building and caring for parks and recreation facilities. In cases of newer construction, there may be special assessment taxes to cover new roads and sidewalks, traffic lights, and other new installation required by the city. Typically, special assessments end after a certain number of years.
• Local services: Often, services such as trash, water and sewerage are covered in a renter’s monthly payment. Homeowners typically pay for these services individually, so their cost must be included into the monthly outgo.
• Maintenance: An owner is responsible for maintaining the property. That means the costs to replace light bulbs and repair dripping faucets or toilet replacement for plugged toilets falls to the owner.

Have a plan

Before purchasing a home in a given area, find out an average of these other costs. To figure out interest and PMI, check out a mortgage calculator. For property taxes, search the local county records or ask your real estate agent to find out the prior year’s assessment. Add the monthly extra for all of these items to the potential mortgage payment. If it is more than you pay for rent, try living for three to six months paying the difference into a savings account that you do not access.

You may be willing to make sacrifices to afford the home of your dreams, but remember that you need to live with those sacrifices for a very long time. Giving up cable, not eating out and delaying buying new clothes seems doable in the first few months, but eventually, you may tire of the restrictions to your lifestyle. That’s why it is important to know before you buy a home how much monthly outgo fits into your lifestyle.

A real estate professional knows how to help you gather this information. We want you to be happy in your new home. After all, we want you to recommend us to others, so if we don’t help you determine the best situation for you, we only hurt ourselves.

Compliments of Virtual Results

If you’ve owned a home for a while, you know that water entering the home can be at least a hassle and at worst a cause of major destruction. Not only should keeping water from sneaking into those tiny cracks and crevices be a priority, it could make the difference between owning an asset and owning a money pit. One of the primary ways to protect your home from undesirable moisture is installing gutters, which make them a vital part of a home’s roofing system.

Benefits

Most people think that the sole purpose of rain gutters is to direct water coming off the roof toward downspouts to keep it from dripping on their heads over doorways. The value of gutters is much more that that, however. Not only that, water moving off a roof can roll under the drip edge of the roof and seep under soffits and eaves, weakening the wood. It seeps between the joints or masonry and the framework, exposing your home to mold and other damage. If subject to freezing temperatures, the water inside the wood freezes and swells, causing internal damage to beams, joists and framing.

When water is controlled, instead of just pouring off of the roof slope, it can:

• Prevent damage to siding.
• Prevent staining on brickwork.
• Preserve overhead garage doors and exterior doors from damage.
• Stabilize soil and the home’s foundation.
• Prevent sidewalks, patios and driveways from settling and landscaping from erosion.
• Protect basements and crawlspaces from flooding.

Doing gutters right

There is much more to gutter installation than simply hanging them from the eaves. In order for gutters to function correctly, they need to have the correct pitch. In general, the gutters should drop one inch in slope for every ten feet in length so that the water runs toward the downspout rather than pooling up in a low spot.

Check your gutters to make certain they are correctly sloped by placing a hose at the closed end of your gutter and allow the running water to gently flow into and through the gutter. Water should only flow toward the downspout. Click the link to learn more about gutters in relation to your roof.

Downspouts matter too

Make certain that your downspout actually direct the water away from the structure of your home. Optimal would be extending the terminal end of the downspout several feet away from your home’s foundation or onto a concrete or vinyl downspout extension. Alternatively, install underground drainage that leads away from your home’s foundation to the street gutter, or to a drywell.

Sometimes, the end of the downspout gets damaged or smashed. When this happens, water and debris can back up into the downspout and gutter, rendering them useless and setting up your home for potential damage. To address such issues promptly, it’s essential to hire roofing repairs from Proliance General Contractors & Roofing Downers Grove, located at 1423 Centre Cir Suite #2, Downers Grove, IL 60515. Reach out to them at 630-593-7030 to ensure your downspouts and gutters are in optimal condition, safeguarding your home from potential water damage and maintaining proper drainage.

Maintenance

Make certain gutters are clear of leaves and debris. Schedule cleaning gutters into your spring and fall schedules. According to gutter cleaning alexandria, after a major storm, even if your residential or commercial roofing has not sustained major damage, clear shingle residue from gutters to avoid problematic buildup.

Conclusion

If you’re looking at a home to buy, make sure the home has gutters installed. If you want to increase the value of a home you’re selling, a gutter replacement gives buyers peace of mind about potential water problems.

Just ahead of the housing bubble, flipping houses was an investor pass-time. As home prices started to rise, many would-be real estate moguls bought houses to flip hoping that the prices would increase enough in a six-month period for them to make a profit. The concept spawned reality TV shows like Flip This House and The Property Ladder.

Many savvy investors saw profits increase right up until the bubble burst. Others, particularly novice investors, became victims of fraudulent flipping schemes and unscrupulous banking practices. Post-housing bubble, investors with lots of money picked up distressed properties for lower outlay, but had a harder time actually selling those homes since potential buyers were more cautious.

The investors that survived the drastic ups and downs of the market had a Plan B. When the housing market crashed and many people lost their homes, the rental market increased. So, investors that planned for if their investment didn’t sell by turning it into rental property made it through unscathed.

In the past couple of years, the “flipping” market heated up again. But, as home prices appreciate, and there are fewer distressed homes on the market for flippers to purchase, experienced investors say now isn’t really the best time for a novice to start on their own. In fact, many investors learned lessons from the housing bubble and the crisis that ensued from it bursting.

Here are some tips to guide your potential investment:

• Not every markets is profitable: While there are lots of homes that could be purchased, rehabbed and potentially flipped in every part of the country, some placed are not seeing the kind of economic growth that makes flipping viable. You have to know your market, know local values and be prepared to by having deep pockets should the home not sell.
• Do your homework: Since there are fewer homes at the kinds of steep discounts seen in recent years, consider planning to pay full price cash, but arrange for a delay to have the home inspected. If the inspection reveals problems, the buyer can walk away, or make a lower offer to the seller and potentially get a good deal. Just remember that anything revealed during the inspection is now your responsibility to repair or replace. For instance, if the inspector discovers roofing damages, they need to be handled immediately by roofing contractors.
• Know your margins: unlike the impression you might get from watching the popular reality shows about flipping, the margins to be made from buying and selling a home are not as large as they appear. If you can find undervalued homes, you’ll have a cushion you can build into the rehab. If the difference between the purchase price and the new selling price is not as significant, avoid purchasing a home that requires thousands of dollars of repairs and upgrades or you’ll end up with a lovely home, but no income from it.
• Learn how to seek out potential houses: Lower inventory means that being able to find a home with the potential to flip is more difficult. Use your network of real estate professionals, estate attorneys and even repair contractors to learn of possible homes to buy.

Watch the trends

Real estate trends up and down. When you’re purchasing a home for your family, your motivation to buy is not as affected by those trends as when you’re purchasing as a form of investing … especially if you plan to flip it within six months. The trend upward needs to be significant enough for you to make a profit, but not so significant that potential buyers cannot get mortgage approval to purchase it.

See professional assistance

As your real estate professionals, we know the local market. We watch the trends. We know who is buying, who is selling and who is holding. We pay attention to new businesses moving to the area with the potential in increase jobs and bring in new buyers. We know which decorative repairs and upgrades are most important for a quick sale. Let us help you.

Compliments of Virtual Results

We get it … you want your home to be uniquely you … you want it to express your personality … you want colors that make you happy! But wait!  Now you want to sell this home and move on to a new canvass on which to express yourself. Which of your personal touches will add to your home’s resale value and which ones might distract lookers or detract from its appeal to buyers?

• Funky exterior colors: Unless your home is a Victorian with historic paint combinations or a unique custom home in the country, most buyers prefer colors that match or blend with the neighborhood. While they want the home to stand out for its design, they don’t want a home perceived to be out of step with its peers. If you want your home to stand out, make sure its curb appeal is based on well-cared-for landscaping, a color that blends, but is perhaps deeper or lighter than neighboring homes, and beautifully contrasting trim.
• Trendy exterior décor: Fountains, statues, gazing balls, bird baths, gnomes and outdoor wall and patio hangings certainly may express your personality and make your home stand out from its neighbors, but buyers want to put their own stamp on the place. Once you put your home on the market, consider removing these personal touches. One place you can let your individuality show is with the color of the front door. Choose a color that makes you happy … but follow your agent’s advice when getting ready to sell, and change out your preferred color for one that attracts buyers.
• Poor landscape decisions: If, in the early days of your home’s life, you plant trees whose roots may grow under the foundation or buckle the walkways, a buyer will be concerned about costly foundation repairs. Similarly, vines growing on brick walls may look beautiful, but if they’ve been there for a very long time a savvy purchaser will suspect damage to the masonry. Similarly, that koi pond may have seemed like a great idea when you installed it, but a buyer may be concerned about expensive maintenance and upkeep.
• Complicated interior wall coverings: Wallpaper trends come and go and are the most quickly outdated of interior designs. Flocked damask quickly becomes yesterday’s decorator trend for formal spaces and that border you loved in the kitchens is so last year. Removing well-hung wallpaper, trims and boarders is a messy, time-consuming project that risks damage to the walls underneath. If you know that you’re going to sell your home in a few years, consider using paint to express yourself instead of wallpaper. You can create a border with a stencil, use a faux process on a wall or simply use a variety of colors. Then, when time comes to sell, just paint over your creativity with a beautiful neutral color.
• Mismatched fixtures: During your tenure in your home you may replace single doorknobs, switch plates, faucets and light fixtures for trendy ones that do not match each other without thinking much of it. For example, you may have a Disney-themed switch plate and light fixture in your daughter’s bedroom. When you get ready to sell, however, consider replacing them all with matching neutral fixtures.

Other mistakes buyers don’t like:

• Painted brick: Both indoors and outdoors, buyers prefer exposed natural brick. If your brick is already paint, of course, you don’t need to sandblast it, just make sure it is a neutral color. But, if your brick is not painted, leave it alone.
• Along the same line, buyers prefer neutral mortar colors—in both brick and tile—overly bright or wildly contrasting colors.
• Poorly maintained pools and hot tubs: Whether in-ground or aboveground, pools and hot tubs are an iffy investment when it comes to selling your home. Buyers typically worry about the ongoing cost of their care and maintenance, and damage any leaks or cracks could cause to foundations, landscaping. Additionally, a home with a pool may be less appealing to families with small children. If you do have a pool or hot tub, be sure to keep it well maintained, and install protective fencing that meets safety guidelines.

If you have questions about the resale implications of décor in your home, contact us and we’ll guide you on the best practices for your home’s future sale.

Compliments of Virtual Results

In this current market, with home prices trending up, but access to financing is more difficult post housing bubble. So, if you want to sell your home, is it a good idea to offer seller financing?

What does seller-financing mean?

Unlike a traditional bank mortgage where a lump sum is given to the buyer to purchase the home, seller-financing means that the seller allows the buyer to make payments directly back to the seller. Most often, the homebuyer signs a promissory note with the seller that outlines the selling price, the interest rate, repayment schedule and even the consequences if the buyer defaults.

In most cases, a seller-financed note is short-term. Since most sellers don’t want to carry a note for 15 to 30 years, the typical note is for around five years with a balloon payment at the end where the buyer secures a standard loan for the remaining balance.

Is it good for the seller?

Sellers may choose to offer financing for any number of reasons, but some include:

• Being able to sell “as is.” If your home requires costly repairs, selling through owner financing may allow you to pass those costs on to the buyer instead.
• Potential investment income. Buyers looking for owner financing may be willing to pay a higher interest rate to you than you would receive through any other type of investment. Typically, you must own the home free and clear, and the buyer takes on taxes, insurance and any association dues so all income from the payments goes to the seller.
• Opening up the purchase to additional buyers. Potential homeowners that were hit with difficulty during the housing bubble may not be able to get traditional financing even though they are now able to make mortgage payments. Self-employed or contractor may not be able to get favorable loans due to tighter underwriting requirements and may desire purchasing through seller financing.

Some possible pitfalls include what happens if the buyer defaults. If the promissory note is executed correctly, the seller gets the home back along with all of the monies paid to date. At that time the seller is free to sell the home again, but the “buyers” may leave behind damage and the need for costly repairs.

Some things to consider

If you are new to owner financing, make sure to work with a real estate attorney and a professional real estate agent to make sure the sales contract and promissory note fully protect you. There may be tax ramifications to seller financing, so be sure to contact your CPA or tax professional.

Since it is in your interest for your buyer to be able to refinance at the end of the note, offer to report the payments to credit reporting agencies to help build your buyer’s credit score. While individuals typically cannot report directly to these agencies—they have strict lender guidelines—services like Virgin Money can manage and report payments for you to alternative credit reporting companies such as PRBC, that many mainstream lenders now refer to for information on potential mortgagees.

If you’re considering selling your home, and wonder about seller financing, talk to us. We can help connect you with professionals to guide you through the process while we market your home.

Compliments of Virtual Results

 If you’re even considering purchasing a home in the next year, the time to start the pre-approval process is now. Why so early? Here’s some advice to get you on track to a smooth purchase transaction. While you don’t want to actually apply for the loan until your are ready to make an offer on a home, working on the pre-approval process allows you to address any concerns that crop up on your credit report, save for extra downpayment, and know how much you can afford before you fall in love with that out-of-reach house.

Shop smart

 House hunting without knowing how much mortgage you can be approved for is like a novice making a cake without following a recipe. It might turn out okay, but more likely it will be a disaster.

 In a competitive market, you might find the perfect house, but can’t make an offer on it because you don’t know if it’s even in the ballpark of what you can afford. That house could slip through your fingers because other—more prepared—buyers know what fits their budget or overall financial situation, and can make the offer at once, of course if is your first time buying a house there are other resources you can use to afford the house you want. Many sellers, or their agents, reject offers from potential buyers that do not have a preapproval letter from their bank. When the buyer has a preapproval letter, the lender has already verified the borrower’s information, documentation, employment history, income and credit. Even though the preapproval is not an actual loan commitment, it is farther along than without it, and can shorten the underwriting process and loan approval process.

Know yourself

 Just because a friend, co-worker or family member got approved for a certain amount, that doesn’t mean you’ll qualify for the same amount, even with a similar credit profile. In fact a survey by NeighborWorks America discovered that while 40 percent of new homebuyers seek advice from family, friends and acquaintances, only about 16 percent seek advice from a real estate professional early in the process.

Fix errors

 Going through the preapproval process allows you to take a look at all the potential impediments to getting approved for the loan you need for the home you want. Here are some potential pitfalls to getting approved:

• Past credit history — a prior bankruptcy, foreclosure or short sale will hamper your new purchase. If you disclose this information to your lender up front, they can direct you toward special loan types, information or instructions that can improve your chances.
• Shopping for additional credit — applying for a vehicle loan, credit card or other form of credit can lower your credit score by adding so-called “hard inquiries.” Actually obtaining credit after you have received a pre-approval letter is unwise as well, since lenders often check your credit again prior to the actual loan approval. Adding new debt count against you qualifying for a mortgage.
• Undocumented deposits — since part of the approval process involves 60 to 90 days of bank statements, any large, out of the ordinary deposits made into your bank accounts must be accounted for. This means that a family member cannot “temporarily loan” you money to give the appearance that you have more money on hand in order to get a loan approval. If your family intends to “gift” you with money toward your down-payment, they will need to provide a letter as affidavit that the funds are a gift and not a loan that will have to be repaid.
• Changes in employment — changing positions, employers, compensation structures (from hourly to commission, for example), or other situations can affect final approval for a loan. Make sure to keep your lender in the loop if your boss offers you a different position, or an invitation to your dream job comes at the same time you’re shopping for a new home.
• Any other changes to your finances can affect your mortgage approval either positively or negatively. The one that affects it the most, however, is being less than truthful with the lender. If they discover the untruth — and most likely they will — your chances of getting a loan plunge drastically.

Seek professional advice

 As your real estate professional, we can steer you in the right direction before you get too far in the process of home shopping. We know lenders that can meet your needs and give you direction on which types of loans might work for your situation. Call us to get started today.

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