This Article Is About The Things To Avoid Selling Your Home And Mistakes To Avoid
Great news for homeowners who were stuck from selling their homes due to their homes being underwater. The real estate market is hot nationwide. With mortgage rates increasing at a record pace, the housing market is still hot with no signs of a slowdown. Most homeowners with upside-down mortgages are now in the black. There is more demand for homes than there is inventory. Home prices have steadily been increasing. Many homeowners who thought they could never sell their homes can now have hope in selling their home and purchasing another home. Homeowners thinking of home but could not due to home value being worth less than what was owed, now can profit from their sale.
Listing Home To Sell And Things To Avoid Selling Your Home
There are Things To Avoid Selling Your Home to get the top sales price. To maximize the price of selling a home, there are Things To Avoid Selling Your Home. Selling your home is not rocket science. Anyone can list their home, get offers on their home, and close on their home. However, there is more to it when it comes to listing and Things To Avoid Selling Your Home.
Mortgage standards have really tightened up after the real estate and mortgage collapse of 2008. Borrowers who have not gone through the mortgage approval process recently need to think twice. They need to realize that it is not like the old hay days whereas long borrowers applied for a mortgage they get an automatic approval Tighter and new lending guidelines come into play. Buyers intending on buying another home after selling a current home need to make sure they qualify for a mortgage.
Home Buyers
As for the potential buyer to the new home?
- Homeowners need to make sure that the potential buyer of the home has an iron-clad pre-approval
- The home buyer needs to be qualified so there are no last-minute mortgage denial
- A last-minute mortgage denial can spiral everything out of control
- Buyers who are not armed with a solid pre-approval can and will affect the chances of the sellers buying their home purchase
Get Pre-Approved Prior To Selling Home
Homeowners planning on selling a home and buying another home, don’t just assume they will qualify for a mortgage loan on their next home purchase because they are able to afford the mortgage payments. There are strict mortgage lending guidelines that have been recently implemented with regard to credit and income.
There are types of income that mortgage lenders cannot use such as the following:
- part-time income
- bonus income
- royalty income
- overtime income
- other income
The above income cannot be used if it has not been seasoned for at least two years.
Mortgage Loan Limits
There are mortgage lending caps on government and conventional loans. Due to increasing home prices both HUD and the FHFA have increased FHA and Conforming Loan Limits for the past five years so homebuyers are not priced out of the housing market. Conventional mortgage loan borrowers can qualify for conforming mortgages with a maximum 50% debt to income ratio. There are new collection guidelines with mortgage lending where now mortgage lenders will take 5% of the unpaid collection account balance and apply that to the borrower’s debt to income calculations. Medical collections do not count. Borrowers might have errors on the credit reports which affects credit scores which may need weeks if not months to correct them. Once homeowners have made a decision in selling home and need a mortgage loan to purchase another home make sure they consult with a loan officer to see if they qualify.
Window Dressing And Things To Avoid Selling Your Home
The first 90 days of a listing of a home is the most crucial time for homeowners to get a real estate offer:
- Most professional realtors will say that the first impression is what attracts home buyers
- Hire a realtor who homeowners feel comfortable with
- Interview several realtors and see what they have to say
- Every realtor has a different approach to marketing their listing
- Some marketing ideas might not appeal to home sellers
- Some realtors feel that an open house is a waste of time
- Other realtors strongly believe in open houses
- Home sellers might not want an open house and let a bunch of strangers roam their home
- Some realtors may recommend staging home
- Others do not believe in home staging
- One of the major Things To Avoid Selling Your Home is clutter
- Clutter is always a negative
- All clutter in and outside of your home should be removed
Right Pricing Of Home
Things To Avoid Selling Your Home is overpricing home. One of the most important factors when selling home is the pricing of a home. Home may have all of the amenities other homes in the area do not have. Maybe the best home in the block. However, if the home does not appraise out, sellers will not be able to sell the home to a buyer that is dependent on a mortgage. Mortgage lenders go off an appraisal when approving a mortgage to a home buyer. If a home is priced over the appraised value, the chances are that the deal may not close unless the home buyer is willing to come up with the extra cash. Many homebuyers do not have the extra cash to cough up above the appraised value. The Realtor should be able to help homeowners price homes accordingly.
Make Sure Home Buyer Has Iron Clad Pre-Approval
If the homeowner gets an offer make sure that the homebuyer has an iron-clad pre-approval. All mortgage loan pre-approvals are not created equal. It depends on the mortgage loan originator and lender.
Did the home buyer’s mortgage loan originator check the following:
- credit
- financials
- run their mortgage application through Fannie Mae’s and/or Freddie Mac’s Automated Underwriting System?
Did they get an approve/eligible per DU FINDINGS and/or LP FINDINGS? Sellers should have a realtor and/or mortgage loan originator contact the home buyer’s mortgage loan originator to see how strong of a borrower the home buyer is and the type of pre-approval.
Make Sure Everything Is In Working Order
When selling a home, the home buyer will most likely need an appraisal. Both FHA and Conventional appraisers need to inspect the home and make sure there are no hazards and everything is in working conditions. There cannot be peeling paint, broken or cracked glass, and all plumbing, electric, and HVAC systems need to be in working condition. If the appraiser shows up and the garage door does not work, the garage door needs to be fixed and the appraiser needs to come back and do a re-inspection which will not cost additional fees to the home buyer but can delay the home closing.
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