6 Tips for a Quick Home Sale in 2016

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Sold Home For Sale Sign
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By Laura Agadoni

When it comes to timing your home sale, predicting the real estate market can seem impossible. Even psychics don’t always know what the future holds for real estate. But you can make some predictions based on what’s happened in past real estate cycles.

For starters, 2016 is an election year. There’s also talk of interest rates potentially rising even higher than the quarter-point hike that went into effect in December, the first such rate increase since 2006. Your strategies for selling, because of those issues and more, might differ this year.

Here are six clever tips to learn how to sell a house fast and to help your home sell quickly in 2016.

1. Price the home right.

If you ask two real estate agents whether you should underprice or overprice your home for sale, you might get opposite responses. The overprice camp believes you can get more money by asking for more money.

The underprice side believes you’ll pique the interest of more potential buyers by asking less than the price that comparable properties fetch. That could start a bidding war, which could drive the price back up.

“I am a huge proponent of underpricing just ever so slightly,” says Brett Miles, an agent with Douglas Elliman in New York. “Buyers are extremely savvy these days and watch the market like hawks. They are well aware of the bloated asking prices we are experiencing currently.”

Sellers have been “successfully pushing the envelope on ask for three-plus years,” says James Brune, also an agent with Douglas Elliman in New York. “But prices are plateauing now,” he says. “Sellers will need to be realistic and price at or below current market to get maximum interest [in their home].”

2. Finance the sale yourself.

Federal Reserve officials are calling for a gradual rate increase over time. The federal funds rate has been 0 percent for years. The recent December increase brings the rate to 0.25%. The next increase will bring it to 0.5 percent, and there could be more increases after that. “If mortgage rates [keep rising], this will begin to affect affordability across the board,” says Brune.

One way to help a potential buyer afford to buy your home if interest rates rise is to “offer to finance the purchase; be the bank,” says Miles. If you finance the deal, you can make the monthly payments work for your buyer by offering a lower interest rate than they could get from a traditional mortgage lender.

3. Stage your home.

It’s always a good idea to present your home in the best light possible before a sale, and doing so becomes even more important during a buyer’s market.

If buyers believe election results “will affect their pocketbooks directly, they may wait to buy,” says Miles. The same happens with increased interest rates. “People sit where they are [instead of buying],” says Jessica Dolan, a Pennsylvania home stager. “Therefore, it becomes a buyer’s market, and sellers will really need to make their properties shine through.”

Dolan suggests some tips and tricks, many of which won’t cost you anything, except a little elbow grease:

— Deep-clean from top to bottom.

Remove screens from windows to let in more light (make sure the glass is clean).

Clear all walkways throughout the house.

Make sure all doors, closets, and cabinets can open easily.

Put out fresh fruit on the kitchen table and fresh flowers on bathroom counters.

Display clean towels in bathrooms.

Hide all personal items in bathrooms, including trash cans.

Pull furniture away from walls to create social sitting areas.

Give each room a purpose, especially oddly shaped or random rooms.

Paint the ceilings white, especially in dark rooms, to reflect more light.

4. Prepare for El Niño.

The topic of weather is more than just small talk when it comes to selling your home. Extreme weather conditions, such as more rain from El Niño, for example, play a role. And El Niño is likely to be a factor during winter and early spring 2016, according to the National Oceanic and Atmospheric Administration.

“It may seem strange that a weather event could have an impact on home sales, but knowing that weather is coming can be a deciding factor for purchasing older homes, fixer-uppers, and anything with a roofing, foundation, or plumbing problem,” says Alexander Ruggie of 911 Restoration.

But there are ways to make your home more marketable during El Niño conditions, says Ruggie:

For colder-climate homes: Add gutter heaters, which keep gutters and downspouts running free and clear. Doing so helps prevent ceiling leaks from overflows from increased snowfall.

For homes in warmer climates: Keep water at bay by adding weatherproofing tape and new window glazing.
For homes with basements: Purchase a sump pump.

You can also appeal to environmentally conscious buyers by installing a water catchment system to harvest rainwater from El Niño.

5. Time the sale.

Springtime and early summer are traditionally good times to put your house on the market for a quick sale. And this becomes even more important in 2016 since it’s an election year.

“Election years mean uncertainty to a housing market,” says Mike Minihan, a real estate agent in Atlanta. “If you are concerned that the election could potentially throw a wrench in the market, [spring and early summer] will be early enough in the year to get the house sold before wild speculation starts breeding fear in homebuyers.”

6. Target millennials.

It’s a safe bet that when you sell your home in 2016, your target market will be millennials, people between the ages of 18 and 34.

“Baby boomers will start to cash out of their houses, which will put more houses on the market,” says Sam Heskel, CEO of Nadlan Valuation, a New York City appraisal company. An increased inventory of homes combined with an improving job market “will enable more millennials to become homebuyers.”

Millennials tend to like backyard decks, gourmet kitchens, open floor plans, balconies with views, and vegetable gardens. If your home has any of those amenities, feature them in your marketing.


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Will an Adjustable Rate Mortgage Cost an Arm and a Leg?

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B5JD2X A magnifying glass highlights fixed interest rate and adjustable interest rate mortgage loans as part of a real estate co

By Geoff Williams

If you’re buying a house soon, you may be mulling over the idea of getting an adjustable-rate mortgage. Or you were, until you heard about the Federal Reserve’s recent decision to raise interest rates a quarter point. That likely put a chill on many homeowners’ desires to have an adjustable-rate mortgage, also known as an ARM.

If you currently have an ARM, you might be in full-blown-panic mode, wondering if your interest rate is going to climb soon.

“My voicemail and email has been inundated by my clients, friends and partners all asking the same question, ‘What should I do about my ARM mortgage and when?'” says Drew Grandi, a loan originator with Wintrust Mortgage in Massachusetts.

What should you do? It really depends. An ARM can be a terrific strategy for paying a mortgage, or a terrible one. Before you get one, or get rid of one, you need to think about how you want to proceed.

What Is an ARM?

It’s a home loan with a fixed interest rate, usually for five years — but after that, it can adjust every year. (That’s why you’ll often hear ARMs referred to as a 5/1 ARM, although you could have a fixed interest rate for a different period, like a 7/1 ARM or 10/1 ARM.)

After those five or more years are up, the interest rate can go up or down for the duration of your mortgage.

Because the interest rate could go up, it can be risky to have an adjustable rate. Nobody wants an ARM to cost them an arm and a leg.

So why get an ARM if your monthly mortgage payment can turn on you like that? Because the fixed rate for those five years or so is lower than a traditional fixed mortgage rate. It hasn’t been all that much lower in recent years, of course, since all mortgage rates have been low. Still, even a percentage point can reduce a mortgage payment enough to save a homeowner thousands of dollars in the long run.

How High Can an ARM Go?

While your monthly mortgage payment can adjust every year to a higher and higher rate, there is a limit to how much financial pain you’ll endure.

“There are protective caps, so the loan cannot adjust higher than the designated annual cap or lifetime overall rate cap,” says Staci Titsworth, regional manager of PNC Mortgage in Pittsburgh. This is looked upon as insurance against risk.

“Most ARMs are capped so that your interest rate will not exceed more than 5 percent above your original rate,” Grandi says.

That doesn’t sound so bad, but it can add up. Grandi offers an example of the homeowner who has a 5/1 ARM at 3 percent on a $300,000 mortgage. That would mean you’re paying $1,264.81 a month for the first five years, he says. If interest rates shot up, the most you would pay is 8 percent on that $300,000, which would mean a max monthly payment of $2,201.29, or about $936 more than your original payment.

If you are thinking about an ARM, Titsworth suggests having the loan officer run a few examples of payments, including the worst-case-scenario payment. It may be eye-opening.

What if You Have an ARM Now?

Don’t panic, Grandi says. “Everyone currently in an ARM should not necessarily be hounding their mortgage expert to refinance into a fixed-rate mortgage,” he says.

In fact, if you have a low-rate ARM now and you refinance into a 30-year fixed-rate mortgage, you’d likely pay around 4 percent and your monthly payment would jump a little. With that previous $300,000 ARM example, Grandi says, the homeowner’s payment would go up less than $200 a month.

That may well be worth it to have the comfort of knowing you have a fixed mortgage payment. But if you’re planning to move in the next couple of years, you’re probably better off keeping the ARM. That’s because one of the biggest factors in whether you should get an ARM is how long you plan to live in your house. Generally, if you’re going to live in your home for a short time before selling it, an ARM is considered a financially shrewd move.

“I’m a big believer in ARM loans and have one now,” Titsworth says. “Adjustable rate mortgages are a good option for consumers that have a shorter-term need, and also those that are comfortable with a little risk,” she adds.

Who Shouldn’t Get an ARM?

Do what you want, but if you’d like some general rules of thumb, there are three types of homeowners who should likely avoid an ARM.

First-time homebuyers. Ali Vafai, president of The Money Source, a national correspondent lender and mortgage loan servicer on New York’s Long Island, says first-time homebuyers or those with little down payment should not choose ARM loans. Since rates are near historic lows today, he says it’s very likely rates will be higher in five years and payments would increase after the fixed period. Even if you’re not planning to stay very long, maybe you’ll discover you hate moving and and realize you don’t want to go anywhere.

— People on a tight budget. So you scraped up your down payment, barely, and you figure you can afford to live in a house if you pare back your budget a bit. It sure doesn’t sound like you would do well if, in five years, your monthly mortgage payment shot up a couple hundred dollars a month.

— Natural-born worriers. As has been duly noted, ARMs are a risk. Before you get an ARM, ask yourself some risk-related questions, Grandi suggests.

For instance, when you’ve been living in your home for two years, will you suddenly have sleepless nights because you aren’t sure what your mortgage payment will be in three years?

“Do you expect continued doom and gloom for the United States’ economy with unemployment increasing and inflation staying low?” Grandi asks.

In other words, if you a worrier, the ARM is probably not for you.

Titsworth agrees. She loves the ARM, though, and points out what isn’t often emphasized: When your fixed rate ends and it adjusts, your monthly payment doesn’t necessarily have to go higher. “It’s possible the rate could drop,” she says.

Still, all in all, “ARM loans are typically not the product of choice for someone that believes they will be in their home long term and wants [the] peace of mind of knowing what their payment will be,” Titsworth says. “The long-term fixed rates come with less risk and therefore a higher rate.”


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Small Fed Move Doesn’t Mean You Can’t Buy a Home

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Rising Interest Rates
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By Devon Thorsby

The Federal Reserve announced Wednesday that interest rates would increase by 0.25 percent, or 25 basis points.

The last time the Fed raised rates, “the iPhone didn’t even exist,” says Mark Fleming, chief economist for title insurance company First American Financial Corporation.

Interest rates in the U.S. have been close to zero for the last seven years, intentionally kept low to allow employment and the market to recover from the crash in 2008.

For new homebuyers, the expectation of a rate hike spurred many to buy in the months leading up to the decision and encouraged a cycle of refinancing from existing homeowners.

But the moderate rate increase does not spell doom if you’re looking to buy a home — in fact, it may give you the push you need to get out there and buy your home before interest rates rise again, something economists are predicting for 2016.

How will rising interest rates affect you as a homebuyer? U.S. News asked experts to weigh in on whether you should be concerned about your ability to afford a mortgage and what you should know about interest rates in the next year.

The Fed’s decision doesn’t affect your interest rate as much as you may think. While the interest rate policy changes will affect how interest rates are offered, mortgage rates function separately, and are in fact far more volatile than the Fed’s interest rate.

Jonathan Smoke, chief economist for realtor.com, explains rates for new fixed mortgages not only fluctuate on their own, but have changed in anticipation of increased Fed interest rates, without any actual change in policy.

“When you look at the volatility of what rates have done around the ‘what is the Fed going to do’ all year long, we’ve had enormous movement in mortgage rates,” Smoke says. “We’ve had roughly 70 basis points of movement in the 30-year [fixed-rate mortgage] alone in the last 12 months when the Fed hasn’t done anything.”

Rising interest rates don’t mean you can’t find a mortgage that works for you. The rate hike by the Fed is minor and isn’t likely to squeeze too many consumers out of being able to buy a home. You might have to reconfigure what you put down versus what you pay monthly but as Smoke emphasizes, mortgage rates differ from day to day and lender to lender.

“It’s like buying gasoline — it’s different by provider, it’s different one street to the next,” Smoke says.

Higher interest rates can give the push you need. Many economists are expecting interest rates to continue to increase throughout the next year by a total of 1 percent, and while they are small, steady increases, getting a mortgage on the lower end is always a better idea than waiting and paying more.

Steve Rick, chief economist for CUNA Mutual Group, which builds financial products for credit unions nationwide, says that extra push to get homebuyers and other consumers moving in the market could serve as an additional stimulus for the economy.

“We could see faster economic growth next year because the Fed is raising rates, because it will help with confidence, and it will help with people trying to get ahead of the rising rate environment,” Rick says.

Increased rates can help keep home appreciation in line with wage increases. As housing markets continue to recover from the recession, home values have been appreciating rapidly, outpacing wage increases and making it more difficult for everyone to afford them.

“When you raise rates, you slow down the pace of house price appreciation,” Fleming says, noting mortgage rates will go up regardless of the Fed’s decision. By slowing the increase of home prices, the same people who could afford a house today will likely be able to afford the same house down the line, without being edged out by rapid property appreciation.

But at the moment, Rick notes, “housing is still relatively affordable,” and after such a long period of no interest rate changes, the Fed’s decision to increase rates by 0.25 percent isn’t going to stop people from making big purchases such as cars or homes with financing.

If you already own a home, you likely don’t have to worry about adjustable-rate mortgages. Because chances are you don’t have one. “The majority of mortgages that were taken out in the last couple years were 30-year fixed mortgages,” says Svenja Gudell, chief economist for Zillow. “We’re talking 85 to 90 percent of originations.”

Gudell notes many homebuyers are overinsured with a 30-year fixed rate mortgage — because the chances they’ll stay in one home for 30 years are slim — but many are not willing to take the risk of facing higher rates down the line in the wake of the subprime mortgage crisis.

But if you get an ARM, you don’t need to be scared. ARMs typically have a locked interest rate between five and seven years, so your interest rate is unaffected as long as you’re in that period. But even if you are in the floating rate part of your mortgage, Gudell and Fleming agree that rate hikes down the line will likely remain affordable.

“The increase in the mortgage rates are going to be so tame and so controlled that [homeowners] will be able to adjust over time,” Gudell says.

Fleming adds that a 1 percent total increase by the end of 2016 will likely bring your interest rate to 4 to 5 percent, equating to about $50 to $70 per month in additional payments, which is minimal. “You can find 50 bucks by going to Starbucks less often,” he says.

You should still shop around. Treat your mortgage like any other major purchase — weigh your options and compare rates before you sign on the bottom line. The mortgage, and your ability to pay it off, are just as important as the house you choose to buy.

“Consumers will be able to mitigate some of the increases by putting as much effort into finding their mortgage as they do in finding their dream home,” Smoke says. “You don’t just take the first offer; you don’t just go to the lender that was recommended. Pursue and understand that you can get different rates.”


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How Not to Decorate if You’re Selling This Holiday Season

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Christmas Lighting
Getty ImagesThis home’s decorations might thrill people out looking for light displays but could be a turnoff for potential homebuyers.

By Blake Miller

You don’t have to pretend the holidays don’t exist if your home is on the market this time of year.

Selling a home during the holidays can be tricky. Decorations could turn off potential buyers who might have been interested in buying a particular home — if they hadn’t been distracted by the huge collection of inflatable decor in the front yard.

Curb appeal is an important element of real estate at any time of the year,” says professional home stager Krisztina M. Bell of Virtually Staging Properties Inc. in Atlanta. “During the holiday season, curb appeal often takes on a new meaning as people decorate their homes and landscapes to reflect the joy [of the season]. There is a fine line between attractive outdoor decorating and pushing the limits, especially when staging a home during the holidays.”

The good news is that you don’t have to completely avoid holiday decor. In fact, says Justin Udy, a real estate agent with Century 21 Everest Realty Group in Utah, “homes can actually show better during the holidays.”

Here are five ways to enhance your home’s curb appeal during the holidays.

Light it Up

“A well-lit entryway provides a charming invitation for guests or potential homebuyers,” says Bell. “Use LED candles or lanterns with globes to light entryway steps and walkways. If there is a wreath or arrangement on the door, place a spotlight on that area to highlight the festive accessory and create a warm, welcoming glow.”

If you must decorate with string lights, white lights are best, adds Bell. “White outdoor lights on the outside of a home are recommended, and are inspiring and beautiful,” Bell says.

Skip the Kitsch

While you may adore that waving Santa inflatable in your yard or shrubs covered in colored lights, rethink bold statement decorations when your house is on the market. “Avoid the blowup snowman, reindeer and the like strewn about on the front lawn, as you don’t want to distract and take away from the features of the home,” says Bell. “Less is best.”

Keep it Minimal

Similar to when you’re getting your home ready to sell when it’s not the holiday season, the concept of less is more also holds true this time of year. (So keep the tchotchkes to a minimum.)

“It is key to maintain a very clean and crisp appearance,” says Josh Myler, a real estate agent with The Agency in Los Angeles. “Buyers want to feel comfortable but also have the room to envision their own belongings and decorations in what might just be their new home. Clutter is never a good thing, and the holidays have a tendency to bring out more of it.”

Create Vignettes

Focus on simple yet eye-pleasing holiday vignettes throughout your home. “Create a vignette in a wheelbarrow, or use a small section of patio,” suggests Bell. “Use simple holiday decorations, plants, and other items to create an attractive scene to spruce up outdoor spaces.”

Fashion a Welcoming Entry

If you decide to rid your home of all holiday decor except for a few key items, make sure to include a wreath on your door. “One of the great things about wreaths is that they can easily be customized to match the personality of the home,” says Bell. “A simple live wreath on the front door is classy. Add a big bow for major impact.”


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Going Bust: Pain of Vegas Housing Crash Still Isn’t Over

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ShutterstockAway from the bright lights and big money, the Las Vegas housing market still has not recovered fully from the collapse.

By Melissa Allison

For the past decade, housing in Las Vegas has been a scene straight out of the Wild West. Rules have been bent, and lives ruined — a consequence of a housing crisis that caused such catastrophic and widespread declines in home values that much of the city remains on its knees. (Click here for Zillow’s video on the Las Vegas bust.)

At one point in 2012, more than 70 percent of Las Vegas homeowners with mortgages were underwater, many of them owing more than twice what their homes were worth.

The negative equity rate has fallen to 25 percent but remains higher than any other major market. In normal markets and times, that rate is closer to 3 percent.

Among those affected is Terrie Brooks, a bingo agent for 30 years who never dreamed she’d resort to giving blood to pay her mortgage.

With income of $60,000 a year and money in savings, she paid her mortgage for four years after the recession hit and her employer cut her hours.

She fell behind after her college-age son, who rode a moped between classes and work to save on gas money, was in a terrible accident. A traumatic brain injury left him incapacitated for two years before he died.

“I thought I had put away for a rainy day and was keeping up. Once my son was in the hospital, I didn’t care,” said Brooks, who often stayed home, even when work called, to feed her son and otherwise care for him.

“I gained weight, my health went to hell. You don’t care anymore…. Then you say, ‘Look what a mess I’ve gotten into because I didn’t care.'”

Brooks tried to make up for the lost hours by selling blood and participating in focus groups.

She also tried to get a loan modification but became stuck in a bureaucratic cycle — a process so common it was the subject of one of the focus groups she was paid to attend.

Squatters and Their Tenants

Getting a loan modification when people all over town — and many across the country — want one too is no simple thing.

Some people give up and stop paying.

“I closed a deal in August where a guy hadn’t made a payment in 88 months,” said Tim Kelly Kiernan, a real estate agent with Re/Max Benchmark Realty.

“It wasn’t illegal. He was just playing the system.”

ZillowTim Kelly Kiernan

That homeowner wasn’t alone, by a long shot.

Many people in Las Vegas stopped paying their mortgages for months and years at a time with little consequence.

Some filed for bankruptcy and walked away, assuming lenders would take ownership, only to return years later to find the homes still in their names.

Sometimes, their homes had been taken over by squatters or, more absurdly, by renters making monthly payments to someone who’d swooped in and pretended to be the owner of an empty house.

Kiernan had one such client who ended up doing a short sale — negotiating with his lender to sell the house for less than he owed — and walking away with cash to relocate (and to leave the house in good condition).

There were even cases of homeowners being sued by squatters who were injured while squatting, Kiernan said.

“I can’t make this stuff up,” he said. “There are all these crazy stories, and [that] story is very common — people filing bankruptcy and leaving their property thinking they were done.”

Tangled in Red Tape

Getting lenders’ attention is the hard part.

For a while after the housing bubble burst, lenders rubber-stamped foreclosures so fast — in Las Vegas, foreclosures reached six times the national rate — that they ended up in trouble and were forced to slow down.

Now they often approve short sales and loan modifications, if a borrower keeps the same lender long enough to negotiate such a deal and to exchange the proper paperwork.

“It can be very frustrating,” said Christine Miller, a lawyer at the Legal Aid Center of Southern Nevada.

“Even though you sent a packet, and the fax transmittal shows 54 pages went through, they [the lender] will say they don’t have it, or to send it again.”

It’s against mortgage servicing regulations to draw out the process, but fighting that means filing a complaint with the Consumer Financial Protection Bureau, “and that’s a process” as well, Miller said.

Tangled in financial red tape, some homeowners turn to experts like Judah Zakalik, an attorney who for two years defended banks against predatory lending lawsuits, then was laid off and switched to the consumer side.

ZillowJudah Zakalik

People have to be careful where they turn for help, Zakalik said.

“When we started in 2009, there were probably over 250 loan modification specialists and attorneys in this city doing this work,” he said. “A lot of them were taking advantage of people’s desperation.”

Some charged upfront fees, then skipped town. Others filed bankruptcy papers but didn’t take clients’ names off homes — and squatters often beat lenders to those properties.

Even now, people are renting abandoned homes from landlords who are not the rightful owners. “I see it at least once every two weeks. I saw it this morning,” Zakalik said.

A Morality Shift

Despite their dire situations, many people balk at filing for bankruptcy or not making mortgage payments.

“They’ve been told, ‘You’re a bad person if you do that,'” Zakalik said.

During the recession, he said, “I’d sit down with people and have discussions about their morality. [I’d tell them] you have to look out for your family’s future. If you throw $700,000 at this loan, you’re taking away money you could invest in your future, your retirement, your children’s future.”

The need for those discussions has waned.

“People understand that now. They understand that corporations are looking out for their own best interests, and they have to look out for themselves.”

There’s been a shift in moral consciousness, he said, “at least in this city.”

Military retiree Robert Lujano stopped making payments just to get his lender’s attention.

“They said, ‘You’re not making payments.’ And I said, ‘That’s right. Didn’t I try for five years to get you to refinance?'” Lujano recalled.

He negotiated a short sale that included $2,500 in relocation fees. It only marginally hurt his credit score, and he plans to buy another house next spring.

“This would be a great time for many, many people to buy a house,” he said.

With help from the legal aid center, Brooks also renegotiated her mortgage — but the relief is temporary.

Her monthly payment has dropped from $1,300 to $760. After 22 years, however, she will owe the full balance of her original loan — $100,000.

“They said, in a couple years I can do a short sale,” Brooks related hopefully.

If not, there’s bound to be another way.

Already, a passel of homeowners are pioneering another mortgage frontier: re-defaults.


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Preapproved for a Loan? Don’t Blow It With Holiday Shopping

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By Kayla Albert

After receiving the preapproval on your home loan — the anxiously awaited first big step toward homeownership — you likely breathed a sigh of relief that the official “proving yourself” part of the process was over.

Not so fast, if you’re searching for a home during the holidays.

Before you get swept up in the tide of frantic holiday shopping, it’s important to know that going overboard on gifts for friends and family can impact the total loan amount you’re ultimately approved for, and it could even kill the approval entirely.

Here are a few ways you can ensure you make it all the way from preapproval to purchase with no hiccups en route.

1. Don’t apply for new credit or rack up new debt.

When you reach the cash register with your arms full of holiday gifts, it’s easy to entertain the idea of opening a store credit card. Just fill out the application, add your John Hancock, and you could be walking away with a significant amount off your total purchase.

However, opening this line of credit requires a hard credit inquiry — one that could ding your credit in the process. In addition, you could impact your debt-to-income ratio or signal to the lender that you are a greater risk than they previously thought.

Tammi Robson, a mortgage broker at Metro Lenders in Denver, tells her clients about the importance of being debt-free or keeping debt levels stable during the home-buying process. This means avoiding major purchases such as a car or that new dining-room set until the entire home-buying process is complete.

“Most lenders do ‘debt monitoring’ during the loan process, meaning they pull internal credit reports,” Robson says. “If new debt shows up or credit scores go down, it will affect loan qualification.”

2. Don’t move around large amounts of money.

While constantly shuttling funds back and forth might be how you manage your money, it can create a huge headache for lenders, who must be able to track the movement of funds from account to account. If they cannot track the funds, the money movement could appear suspicious — a red flag signaling undocumented funds or money troubles they hadn’t seen before.

In addition, if your family is all about doling out the cash for the holidays, you could be putting yourself in a precarious position. Lenders will also be scouring your accounts for any unusual deposits — those that are 50 percent or more of your monthly income — or any unusual cash withdrawals. These will need to be thoroughly explained to maintain your approved status.

It’s all about keeping the status quo between preapproval and closing — something that can be more challenging during the holiday season.

3. Don’t ignore your bills.

A recent study by Neighborworks determined that one in three American adults has no savings on hand. Pair this with an expected holiday spending rate of $805 per person, and it’s no wonder bills become a heavy burden to bear come January.

Unfortunately, even if your holiday spending gets out of hand, loan preapproval isn’t a pass to be less diligent about maintaining a spot-free bill payment history. In fact, it’s more important than ever to make sure all bills are paid on time and in full.

Payment history makes up 30 percent of your credit score, and even one late payment can have devastating effects. How much exactly? According to Credit.com, if your payment is over 30 days late (the typical grace period given by lenders), it could lower your score anywhere from 60 to 110 points — a substantial amount even if you’re starting with a high score.

If that late payment is on an existing mortgage, a lender could opt to deny your loan altogether. Even if it’s not a complete denial, you’ll need to explain in writing why the late payment occurred.

Here’s the bottom line.

If you’ve been preapproved for a mortgage, you’ve successfully cleared one substantial hurdle — a bank or lender has looked at your overall financial health and stamped you as a qualified candidate.

But preapproval is not the same as approval, and now, as holiday sales are calling, it’s important to keep the finish line in sight. After all, you wouldn’t want a few financial missteps to make your dream of homeownership come to a crashing halt.


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What You’re Doing That Annoys Your Real Estate Agent

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C4TG64 Portrait of a real estate agent consulting a mature couple at office couple; happy; office; pointing; teamwork; planning

By Devon Thorsby

Real estate agents see and hear a lot, and while shockingly few things surprise them, there’s a fine line between need-to-know and TMI. But the more transparent a client is during the buying or selling process, the better the broker can meet his or her needs.

Luis D. Ortiz, associate broker at Douglas Elliman Real Estate and star of Bravo’s “Million Dollar Listing New York,” equates the nitty-gritty details of a seller’s personal life to a doctor visit. When the doctor asks how often you drink, “everybody says ‘socially’ when really they drink every night,” Ortiz says. “The more transparent you are of a person, the more they can get to the core of the problem.”

To get the most out of your relationship with your real estate agent, avoid these red flags that can end up landing you with the wrong agent or the right one running for the hills.

Telling an Agent You’re Not Sure About Selling

Agents typically don’t collect a fee until their client either sells his or her current home or purchases a new one. Any time and money spent before then on marketing and other services is out of the agent’s pocket. Simply dipping your toes in the water to see if your house generates interest — and then pulling back — isn’t going to be very enticing for a broker.

“I’m not sure I’m going to take that seller on as a client,” says Greg Cooper, manager and broker at Berkshire Hathaway Home Services in Indianapolis. “The process costs everybody time and money, so why waste it unnecessarily?”

And as Ortiz points out, putting your house on the market experimentally can have adverse effects on other homes that are actually for sale. “It gives the buyers [a] perception that the apartment is not sellable [or] that the market may be turning into a buyer’s market,” Ortiz says.

Saying You Don’t Have a Time Frame

Not having a deadline can leave brokers unsure of your commitment. Agents understand when their clients have a strict time frame, and can appreciate a few extra days or weeks to close a deal on the right home. But being told they have no target date to sell or purchase a home will leave them wondering if they’re wasting their efforts.

Cooper says serious homebuyers will typically have a reason, such as a growing family or moving for a job, that brings about the change in living situation. A lack of deadline puts up a flag that you may also lack commitment to carrying out a deal. “My question for them would be, ‘Why do you have all the time in the world? What are you trying to accomplish?’ That goes back to, ‘We’re not really sure what we want to do,’ and that’s just not a situation, in all candor, that’s beneficial 98 percent of the time to the client and the broker,” Cooper says.

One of the first questions Ortiz asks on any listing appointment is why the homeowners is selling. “You have to know if this person is real or not,” Ortiz says. “I want to know because that sets the conversation and what my expectations should be.”

Lying About Your Motivation

Your real estate agent will have to know a lot about you — your financial health, your needs and wants in a living space and any life-changing events that could cause you to buy or sell at a specific time — to do his or her job properly. In order to work successfully with your agent, honesty is the best policy.

Cooper says one of the first questions he asks potential clients is why they are looking to sell, primarily to get a full understanding of the clients’ needs and how he can best fill them. “If I’ve got a seller who is changing jobs or who is going through a divorce, those things clearly affect the motivation level they have to sell the home,” he says.

An agent you’ve carefully selected and can trust will keep your personal life private. And by knowing your reason for moving, he or she can better meet your needs. Joe Manausa of Joe Manausa Real Estate in Tallahassee, Florida, says full disclosure can also help prepare agents for what they may face down the line. He gives the example of spouses left in the dark: “There are times we’ve been hired to sell a home, and after they sign the documents I get a call from one of them saying, ‘Hey, he doesn’t know it, but we’re getting divorced, and that’s why we’re selling.”

Overpricing Your Home

You’ve hired a professional to help you throughout the process, and it’s important to give the agent enough breathing room to be the pro, particularly when it comes to pricing. Starting the process with nonnegotiable expectations is a good way to get off on the wrong foot.

Manausa explains that overpricing your home will often leave it on the market longer because the right buyers won’t see it. “People go online and the first thing they do is they shop by price range. If you’re overpriced, the people that do see your house [are] comparing it to nicer houses — they don’t want to see yours,” Manausa says.

Asking Your Friends What They Think Your Home is Worth

The only thing worse than coming up with your own unrealistic number could be having friends come up with the number, especially when they’re not in the real estate business.

Ortiz says a friend’s pricing recommendation often show how kind the friend is but has nothing to do with the actual value of the home. “They’re all your friends and they’ll tell you for the sake of telling you your house is worth $20 million [when] it’s only worth five dollars,” Ortiz says.

Rather than have the agent compete with other opinions, keep your friends’ kind valuations of your home to yourself.


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Gather ‘Round the Table: 5 Distinctive Dining Room Styles

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Courtesy of Zillow Digs

By Kerrie Kelly

Dining rooms are a wonderful place to express your style through furniture, lighting, art, and color. Here are five favorite dining room styles, and the elements that make them so appealing.

Tailored and Traditional

Traditional style is all about the details: intricate carving, unique upholstery, textured linens, and statement lighting contribute to this exquisite look. Take your style traditional by focusing on architectural details like embellished table legs or an ornate console serving as a bar.

Paneling is also a classic element found in traditional dining rooms. A gray-toned wall with bright white trim creates a crisp and clean look. Top off the style with an eye-catching chandelier and a few sconces along the wall for ideal ambiance.

Some other style-boosting elements? Mixed finishes, graceful decorations, and textured rugs balance the look.

Courtesy of Zillow Digs

Modern and Modish

The modern-style dining room takes many shapes and forms, but some themes are very prominent and consistent throughout. Abstract art serves as a must-have focal point in any contemporary setting, but especially in a dining room. Modern art and decor add just the right amount of movement to an otherwise structured style.

Clean lines and crisp corners are another important detail in contemporary design. Whether your chairs’ frames are perfectly rectangular, or your table’s angles are prominent and precise, having perfectly formed 90-degree angles is key to a modern motif.

Other favorite contemporary design elements include high-gloss finishes, metallic details, and sleek and simple tablescapes.


Courtesy of Zillow Digs.

Restful and Rustic

Rustic design often conjures up images of old log cabins and less-than-lovely ski lodges. Because the rustic look is so heavily influenced by wood and organic textures, it’s best to keep it as light and airy as possible, adding in elements of contemporary and traditional designs.

Try creating fresh farmhouse style with exposed beams, a distressed dining room table with bench seating, and plenty of greenery. Details like barn-inspired doors, nailhead trim, and reclaimed wood offer up a refined version of the classic rustic style.

Courtesy of Zillow Digs

Cool and Cottage

If you’re partial to the calm and collected vibe of the Nantucket shoreline, you might be a fan of cottage design. This cozy and unpretentious style offers a light and bright alternative to traditional design with distressed wood elements, tons of texture, and simple, elegant lighting. You can’t go wrong pairing a seagrass rug with an ornate dining table.

Keep colors soft and sinuous with tones of gray, beige and white, and lightly add pattern with an area rug, table linens, or upholstered chairs. Other cottage elements to consider: gentle patina on surfaces like tables, consoles, and shelves, slipcovered chairs, and curated tabletop decor.

Courtesy of Kerrie Kelly Design Lab via Zillow

Trendy and Transitional

Taking cues from modern and traditional design, the transitional style is a cultivation of contemporary elements and classic architecture. Minimal accents and culled accessories lend a clean touch to a timeless dining room setting, and the less-is-more-approach is alive and well throughout the space with statement lighting and just a few curated fittings detailing the space.

If you’d like to mimic the transitional style further, consider these design elements: crisp window treatments, a calming color palette, and organic decor.

Courtesy of Zillow Digs

While these are only a handful of the possible design styles to outfit your dining room, they are great starting points.


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How to Help Your Adult Kids Buy Their First Home

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real estate agent showing...

By Susan Johnston Taylor

As families gather for the holidays, some adult children or their parents will broach the topic of real estate and how to make that first home purchase.

For parents who have the funds and desire to help adult children buy a home, gifting a down payment is one of the most common ways to help. But it’s not the only option.

Here’s a look at several ways parents can assist their children in becoming homeowners.

Gifting a Down Payment

For an owner-occupied property (not an investment property), mortgage lenders typically allow borrowers to use money gifted from a family member as a portion of the down payment. However, if it’s a recent gift, the borrowers must be able to prove the origin of those funds and provide a letter affirming that the money is a gift and does not need to be repaid.

Bob Collins, a mortgage broker with Signal Hill Mortgage in California, says parents gifting a down payment often treat it as “here’s your inheritance in advance,” so they can see the benefit of that money during their lifetime.

This approach puts the gift-giver under some scrutiny with the lender, but not nearly as much as other options. “All we have to do is verify that they have the funds to give, and we get a gift letter,” says Greg Cook, a mortgage consultant in Southern California. “Then they send the money to the settlement agent, and as long as it matches up with the gift letter, we’re good to go.”

If the gift exceeds the Internal Revenue Service’s annual gift tax exclusion of $14,000 per recipient per year, then it may require extra tax paperwork. However, a married couple could each give $14,000 to a child and a child’s spouse, for a maximum of $56,000 in four separate gift checks.

Offering a Family Loan

Given the current low interest rates on savings vehicles such as certificates of deposit, or CDs, relatives with cash to spare might choose to loan money to a family member to buy a home in lieu of the buyer getting a traditional mortgage. “It’s a win on both sides,” says Dan Yu, managing principal of EisnerAmper Wealth Advisors in New York. “If Mom and Dad went to the bank and said, ‘What will you pay me for a five-year CD?’ If the son or daughter went to the bank to try to borrow on a 30-year mortgage, they might have to pay 4 percent. Both sides of the family win, and mom and dad are earning a higher interest rate [than they’d get from a CD].”

However, as Yu points out, “it’s not just Mom and Dad, but rich aunts and uncles do this as well.” Assuming the lending relative has the liquidity to make the loan and is prepared to do so, the homebuyer would be able to make an offer not contingent on financing and potentially offer the seller a quicker closing, which could be an asset in competitive markets where all-cash offers are the norm.

One thing to remember with family loans is that it still needs to be at arm’s length, meaning it follows the IRS’s proscribed interest rates based on the term of the loan.

If earning interest isn’t the goal, the relative giving the loan could choose to forgive up to $14,000 in interest per year under gift tax exclusions ($28,000 if they’re lending to a couple). Otherwise, lenders have to report interest payments as taxable income, just as they’d report interest from CDs or money market accounts. Borrowers can deduct mortgage interest (assuming they itemize their tax deductions) just as they would with a traditional mortgage.

Co-signing the Mortgage

In cases where an adult child’s income is too low to qualify for a mortgage on the home they want, having a parent co-sign the mortgage might help. If they can afford to take on the obligation, some parents may prefer this option if the alternative is their child buying in an area they consider unsafe or undesirable.

However, co-signing is a bit of misnomer in this case. “They’re really a co-borrower, and they’re in the deal as much as the kids are,” Cook says. “They’re under the lender’s microscope to the same extent: income, credit, current debt load, all the things that we look at for the kids.” If the child’s income is sufficient to qualify for the remaining balance on their own in the future, the loan might be refinanced in just his or her name to relieve the parents of liability.

One potential downside for parents is that the mortgage will show up on their credit as an outstanding loan obligation, which could complicate refinancing or buying another home in the future. “They’ve created an obligation for themselves that could limit anything they might want to do moving forward,” Collins says. Also, if the child misses mortgage payments, that will also impact the parents’ credit.

With all these options, you should consult a financial advisor first to make sure you can comfortably afford to help without jeopardizing your financial security. You may also want to consult your tax preparer about potential tax implications, and, depending on the circumstances, ask a lawyer how to structure the legal paperwork in case your child divorces or defaults on the loan. Nobody plans on things going awry with real estate transactions, but it can happen, so it’s best to be prepared.


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True Horror: How Much Would ‘The Exorcist’ House Be Worth?

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Couple scared at the cinema, watching horror movie
Paolo Cipriani/Getty

Ever wonder how much the home from “Poltergeist” or “The Amityville Horror” would set you back? We did the research to find out what these classic horror homes are worth.

Love ’em or loathe ’em, horror movies take center stage leading up to Halloween. But how much attention have you really paid to the horror movie homes behind the on-screen supernatural events?

In honor of the scariest season of the year, Trulia dug up the locations where some classic horror movies were filmed or where the events that inspired the scary scripts took place. Then we looked at home prices (including lots of Los Angeles real estate) for similarly sized homes in the same city, neighborhood, or ZIP code. From the instantly recognizable house in “Insidious” to the unassuming suburban home from “Poltergeist,” each of these horror movie homes has a (terrifying) story to tell — and a corresponding real estate value.

Are the prices as shocking as the horror movies themselves? You be the judge.



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