If you are considering making a move this year -- buying a home, or selling your current place and buying another one, this is a fantastic list of New Year's Real Estate Resolutions from HGTV's FrontDoor.
I really appreciate how it breaks down a really complicated and time/money-intensive process and breaks it down into bite-size, doable pieces. Some of the items should be on everybody's list this year, even if you aren't thinking of making a move in the near future - because you never know when a new opportunity might arise, or a situation involving a possible move could come up. I hate to see sellers with years of postponed maintenance, clutter, and required updating that is needed when they are faced with an unexpected need or desire to sell their house.
I am definitely going to add these to my own list of New Year's Resolutions (wow, that thing is getting LONG).#1: I will begin thinking about fixing up my house--now.
Even if you have a smidge of doubt that you're going to sell this year, this is a smart strategy that will only help you, no matter what you do. Because the best way to start prepping your house for sale isn't to put an ad in the paper but to start working on home repairs and making sure your house is more than livable."Sellers frequently underestimate the amount of time required to prepare a home for the market," says John E. Horton, chairman of the Austin Board of Realtors in Austin, Texas and the owner of John Horton Realty. "Many sellers want top dollar when their home is not in top condition. As homeowners, we live in our homes every day and we become accustomed to the normal wear and tear, but prospective buyers see a house through their own critical lens."So start getting critical and start a list of home improvement projects. Don't stress if you don't have the money to embark on an expensive $50,000 remodeling of the kitchen, but you have to make what you have look its best. If the kitchen has peeling wallpaper or loose floor tiles, you know what you have to do.Another thing to consider. Does your house look like a time capsule from 1986? This may be time to update your home.
#2: I will clean out my house now.
While you're fixing up your home, you should really be thinking about all of the junk that has piled up over the years. If your basement and garage look like they could be filmed in one of those hoarder reality shows, then not only should you begin carting trash out to the curb now, so you can make a better impression on future buyers, do you really want to pack that up and move it with you to a new house? And if the answer is--well, as a matter of fact, yes, I do want my junk in the next house--then invest in some cardboard boxes now and begin organizing at least some of your clutter now. Might as well. It's going to take you awhile.
#3: I will plan now to price my house as though we're living in 2011 and not 2007.
Chad Rogers, a Realtor with the prestigious Hilton & Hyland real estate brokerage, which specializes in selling luxury homes in Los Angeles, is sympathetic."No one ever likes to hear that their home is worth less than they thought," says Rogers. "It's a tough reality for people to be in, but it is a reality. No matter if your home is worth $200,000 or $60 million, it needs to be competitively priced or else it's not going to sell. I always tell sellers that they can sting now or sting much worse, later when their home becomes a stale listing. The price that a home is worth after sitting on the market for six months to a year will be far less than if it was priced right from the get-go."Now, maybe you'll be one of the lucky ones and will be able to sell your house for more than you imagined. But do the research and see what comparable houses are going for in your neighborhood and price accordingly, even if it's really, really painful. If you're going to someday live in your dream home, you can't live in a dream world.
#4: Before I look to buy, I will seek pre-approval for my mortgage.
Even the most inexperienced homebuyer probably recognizes that this is important. But in case you're unaware, before you get very deep in the home buying process, you should go to a lender and try to get pre-approved for a mortgage. You won't be locked into any interest rates yet, says Nicole Hall, editor-in-chief of the blog on LendingTree.com, a well-known online site that offers comparison shopping and access to mortgages and other types of loans. She says that at this point the goal is "simply to make sure that a lender will actually loan you the money to buy a house."As Horton says, "It's emotionally draining to fall in love with a house and not be able to secure a loan."And when you do go looking for interest rates, Hall recommends shopping around because what one financial institution will offer you these days might vary wildly from what another one will. "The market's been going through a volatile period," she says, "making it crucial that consumers shop around before locking in a rate."
#5: Before I look to buy, I will clean up my credit score.
Closely related to the pre-approval resolution, if you suspect you won't get into buying your house until the last half of 2011 or maybe even 2012, then at least look into cleaning up your credit history, to increase the odds of getting pre-approved. Every 12 months, you can get a free credit report from each of the major credit bureaus, and it's incredibly easy to do: just visit
AnnualCreditReport.com, and you can be looking at your credit report on your computer screen within a couple minutes. You can order all three credit histories at once, if you want, but if you'd like to be able to look at your credit history relative often, and for free, it might be more beneficial to order one every four months, so you can monitor your credit history, again, for free, indefinitely.Just make sure that it's actually AnnualCreditReport.com that's the the web site you click on; there are numerous similarly-sounding sites out there that either make you pay for your credit history or they will give you a week-long free trial, and if you forget to cancel it, suddenly you're paying a monthly fee to have constant access to your credit history as well as other services like having your credit report monitored.
#6: I will number crunch and buy a house I can afford.
Granted, in today's market, it's harder than it used to be to buy a house out of your price range. In the past, many lenders used whatever creative financing they could devise to get you in the most expensive house they could, but now banks are taking a hard look (maybe too hard, some might say) at whether you truly can make the mortgage payments. That said, you yourself still need to whip out the calculator and scrutinize the financial side of owning a house. There's plenty to consider, from how fat a mortgage payment you can afford to pay to whether you want to pay for additional points--a portion of the interest that you pay at closing--in order to get a lower interest rate.
#7: I will think long term.
It used to be that it was pretty common for a first-time homebuyer to purchase a modest-sized house and consider it their starter home. In other words, there would be more, maybe quite a few more, houses in your future. Aiming for a modest abode is great--see resolution #5--but because there are so many costs involved in purchasing a home, and because the real estate market is slowly coming out of a long slump, it's not a great move to buy a house if you think you'll be there less than two years, and all the better if you can envision yourself living there for at least four or five years and possibly longer. For instance, if you sell your house within two years of moving there, and you make money on it, you'll pay capital gains taxes, which could negate that profit.If you're able to sell in a few years and know you won't take a loss, and you can easily enough trade up, great, and good for you. But in the meantime, when you're looking at a house, take a look at the community around your prospective home. Ask yourself whether you can imagine living here in ten years. For instance, maybe you're single, young and while you want to marry and have kids, you can't imagine that you'll be doing that for another five or ten years. Check out the school district anyway. If it's pretty crummy, and you know you want kids, the smarter move is to look for a community that does have a nicer school district. You want a community that you can grow into, not one that already has you thinking about an exit strategy. Because if you can't exit easily, you're going to be very unhappy.
#8: I will make this a business transaction and not an emotional decision.
That's a little easier said than done, of course, and to some extent when you buy a home, it should be emotional. If you tour a house, register absolutely no feelings and think "whatever" while agreeing to buy it... well, maybe you should seek some counseling.But beyond the emotions, this is a financial transaction, and if you can keep that in mind, you'll likely come through this in better shape, argues Horton. "Owners who consider that their home may be just one of many properties competing in a free and open market are better equipped to make the decisions necessary to get their homes sold," he says. "While it is a home to the sellers, it's typically just another house to potential buyers until they move in and make it their home."So if you happen to overhear a potential buyer whisper to their Realtor or spouse, "This house is a joke," or you're close to getting a buyer when they suddenly veer off course and make an offer on a different home, or you make what you think is an awesome offer and it's rejected, try not to let it get to you. When it comes to home buying, everything may feel personal, but at the same time, nothing's personal.
#9: I will get a pre-inspection for my own house, before I sell it.
This may be a resolution you can break or not even make. If your house is relatively new, or if you're a conscientious homeowner who is always tinkering and working with your home, and you
know that you have a problem-free house, then getting a home inspector to come out and look your place over is probably overkill and not worth your money, if money's a little tight.But if you've been living in your house for awhile, and especially if you know it needs some work, this is something worth considering. "Sellers can better position themselves in the market by having a pre-listing inspection conducted on the home now and then have the opportunity to have any issues corrected before the house goes on the market and before the purchaser's inspector finds the problems and puts the sale of the house in jeopardy," says Reggie Marston, president of Residential Equity Management Home Inspections in Springfield, Va. and the original house detective on the HGTV series
The House Detective.It is, adds Marston, a "tough, tough market out there now." His argument is that since it's a buyer's market, your house "better shine and be in pristine condition."And if you can get a handle on anything wrong with your house before you start selling, obviously your home is going to tower above the other competition in your community.
#10: I will think about moving and other logistics now.
True, you have plenty of other things to worry about, but the point of thinking
now about how you're going to haul your belongings from one dwelling to another is that by the time moving day comes, you won't be worried. It's far too early to reserve a moving day, but it's not too soon to search web sites and call moving companies and find out what their rates are now, so you can decide whether you're going to be hiring professionals or, once again, plying your friends and family with bribes of pizza and beer. If this is your first house, you can research homeowner's insurance. You can start thinking about what you're going to do with your dog when your Realtor brings small groups of strangers trooping through your home. You'll never think of everything, but if you think of
anything, anything at all, your future self will gratefully look back and think your present self is an utter genius.
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