Temple/Belton Real Estate Blog

    Bad credit tranlates into financing rejections and prohibitively high loan rates.  That's why buyers need a real estate professional who can help them understand the credit system and show them the value of repairing their credit, if necessary, in order to qualify for a mortgage.

    Unfortunately, some people believe that if they have bad credit, they are doomed to having to live with it forever and don't realize that credit can be repaired so that they can buy a house.  Also, it is important for consumers to check their credit reports to make sure mistakes have not been made on them which falsely give a perception of bad credit.  Unfortunately for borrowers, most credit reports do contain inaccurate information.  A June 2004 study performed by the U.S. Public Interest Research Group showed that 23 percent of consumers had mistakes on their credit reports serious enough to result in the denial of credit.  All told, an amazing 79 percent of consumers had some mistake.  The Fair Credit Reporting Act (FCRA) gives consumers the ability to correct, update, amend, and take action regarding the contents of a credit report.  It also guarantees consumers accuracy, fairness, and privacy in their credit reports.

    This Act protects consumers only if they take action, however.  Credit bureaus report the information they are given by creditors; they don't verify it.  If an error occurs, the burden of discovering and correcting it rests on the consumer.  Here's what you should do before you apply for a mortage to make sure your credit reports are accurate:

1. Find out what's in your file.  Every U.S. consumer is now entitled to one free credit report annually from each of the three credit bureaus:  Experian, Equifax, and TransUnion.  You can go to www.annualcreditreport.com to download a report from each of these entities.  You should also know that if you are denied a mortgage or other credit, the lender must tell you whether information in your credit report played a role in the denial.
2. Dispute inaccurate information.  You can dispute errors online from the above website.  Another option is to write a letter to all three credit breaus detailing the dispute.  This should include documentation such as cancelled checks showing payment, a discharge from bankruptcy, etc.
3. Dispute inaccurate items at the source.  You will want to contact the credit card company or other source of the inaccurate information because that may be the easier way to resolve the error.
4. Excise outdated information.  By law, credit bureaus are supposed to remove information pertaining to the credit scores--such as a late payment or collection--that is more than 7 years old.  Make sure this has in fact been done.  Ensuring that the credit bureau removes older information is very important since it can still negatively affect a credit score.
5. Protect credit identity.  If you feel your credit has been compromised, you can request that a credit agency put a "fraud alert" on your account.  You can take an even more aggressive step to protect your credit from identity thieves by paying credit bureaus to put a security freeze on your credit.  You can then temporarily lift the freeze when you apply for a mortgage.

Here are a few tips for those who truly do have bad credit and need to repair it:

1. Get your spending under control.  Pay cash and don't use credit cards!
2. For one or two late payments, ask the lender to re-age the loan.
3. Give it time.  Even after a foreclosure, a credit score can be repaired within three years.  A foreclosure should be removed from the record after 7 years and a Chapter 7 bankruptcy after 10 years.

A professional REALTOR® can help you with all these issues concerning credit because helping a client work with a lender or clean up their credit is all part of their training and expertise.  

    Staging is somewhat of a new buzz word in the real estate industry--but it has actually been around since at least 1972.  TV shows such as HGTV have brought it to the forefront of the public in recent years.  In today's slowed market, staging your home for sale absolutely makes sense.  The selling of property hasn't changed in one very essential way and never will--the buyers determine how much a product will sell for!  That's right--as a seller you can put a price on your property, but the buyer will determine whether they are willing to pay your price or not.  While sellers believe that they set the price of their home when they sell it, it is actually the marketplace that sets the price.  And something important for a seller to remember:  A house has two buyers--one is the buyer who eventually purchases the house, but until then, the seller is the buyer because the seller must continue to pay the mortgage--must continue buying the house--until another buyer comes along.

    So when considering the marketplace, not only must you make sure you have the house priced appropriately, you must make it look as the next buyers imagine they would want their home to look.  This is where a professional REALTOR® and a stager can help a seller get their house sold in the shortest amount of time for top dollar.  A real estate professional has access to data on homes comparable to yours that have sold recently or that are currently on the market and in direct competition with yours.  They will help you as a seller set the best price for your home.  This price will be higher the better your house looks both inside and out.  This is where a professional stager can benefit a seller.  A seller must remember that a buyer is looking for a product (a house) and the space inside that house.  So staging is making your home look like a model home which includes decluttering, cleaning, removing unnecessary items from each room to show the size of the room so that your buyers can image themselves living in that space.  How you live in your home is not how you sell your house--they aren't buying your things, only the house you have put them in.  So packing up personal items and things that will be packed for moving anyway, is one of the biggest things a seller can do to market their home.

    As an ASP (Accredited Staging Professional) real estate agent, I can help you with both the pricing and staging of your home and then help you through all the steps of marketing and selling your home.  If you would like more information, contact Susan Jones at 254-770-7933 or 254-773-0900 or my email address susan@c21accent.com. 

    Despite home price drops in many cities, remodeling projects are holding their own as a way for owners to add value.  In the most recent issue of REALTOR^® magazine, the top projects that bring paybacks are listed by areas of the country.  In the Central Texas area, the following projects are bringing in good returns.  Once again, exterior remodeling projects lead the way for recovery on dollars spent.  Replacement projects that boost curb appeal--siding, windows, and decks--give you the greatest chance of recouping your money.  A deck with midrange wood returns approximately 87.3%; siding can give you a return of 80.4% to 86.7% depending on the type of siding used; replacing windows can give a return of 76.5% up to 79.2%, again depending on the type of windows used.  Inside projects that are a good value include an attic-to-bedroom remodel with a return of 81.6%; a midrange kitchen upgrade can help you realize 87.9%; a master bath upscale remodel could net a 73.1% return; and if you happen to have a basement in this area, you could see as much as a 93.3% return. 

    Why are renovations holding their value better than home prices today?  "When housing slows down, people stay put and renovate their house to make it more livable," says Paul Zuch, president of Capital Improvements, a designing, buidling, and remodeling company in Dallas.  Recent renovations also make buyers' lives easier.  When a homeowner remodels, the buyer doesn't have to think about painting and other upgrades so they are willing to pay more for the home.  This also relieves sellers' stress because it removes some of the negotiations for repairs that are generally a part of the transaction.

    This doesn't mean that every home owner should do every renovation, even in a more stable real estate market.  A homeowner needs to make sure the neighborhood will support the improvements.  This is where a trained professional REALTOR^® can help.  Check with one in your area to help you determine what improvements pay so that when you do get ready to sell, you will realize the return on investment you were hoping to see. 

information for this article taken from REALTOR^® magazine Dec. 2008

Get the Most Out of Moving

excerpt of article by Jerrold J. Stern

    Moving expenses present excellent tax-savings opportunities.  Three types of tests need to be met to obtain moving-related deductions--a "start of work" test, two distance tests and a time test.  A different set of rules applies to members of the armed services and retirees.

Start of Work Test

    The taxpayer must begin working in the new location within one year of the move, but it is not necessary that employment be obtained before the move.  Certain exceptions allow the one-year period to be extended.

Distance Test #1

    The distance from the new home to the new job location must be less than the distance from the previous home to the new job location.  This rule is waived if the taxpayer spends less time or money traveling from the new home to the new job.  This is also waived if the taxpayer is required to live at a new location as a condiiton of employment.  This could be the case for some government or private-sector secur

ty personnel or medical personnel.

Distance Test #2

    A second distance test is applied to make certain the taxpayer's new job location requires relocation.  This test requires the taxpayer's travel to the new job without the move to increase by at least 50 miles. 

Time Test

    The taxpayer-employee must be employed on a full-time basis at the new workplace for 39 weeks during the first 12 months following the move.  For self-employed individuals, the requirement is 39 weeks during the first 12 months and for a total of 78 weeks during the first 24 months after they arrive in the general area of the new employment.  Either the taxpayer or the taxpayer's spouse can satisfy one of the two time tests, but weeks worked by one spouse cannot be added to weeks worked by the other spouse.

Deducations

    All moving expenses that are deductible are "above-the-line deductions," meaning they are deductibe regardless of whether the taxpayer itemizes their deductons.  The cost of one trip from the old residence to the new residence per vehicle is allowed.  Actual expenses for gas and oil or a standard mileage rate must be used.

    The benefits of deducting moving expenses can be sizable, but the rules and calculations can be complicated.  Consultation with a tax accountant or tax attorney is recommended.

    If you're a homebuyer, the Texas First Time Homebuyer Program can help turn your first mortage into a new lease on life.  This program offers Texans mortgage loans below market rate, down payment and closing cost assistance, and incentives on homes purchased in targeted areas.  Thanks to the Texas First Time Homebuyer Program, buying a first home has never been easier.

    To be eligible, you may not have owned a home for the past three years, and must meet certain income guidelines--many Texans qualify.  Purchases may include any new or existing home or condominium in the state of Texas.

    To get started with the Texas First Time Homebuyer Program, simply contact us and we will get you started on the road to home ownership.  Our Affordable Housing Specialist, Susan Jones, will be glad to help you through the process.  Just fill out the response form found on our website and we will be in touch with you as soon as possible or call Susan at 254-770-7933.

    Let the Texas First Time Homebuyer Program turn your dream home into a reality!

    Many times buyers get so excited about finding just the perfect home that they begin rushing out to buy new furniture and other things that will go in their new home once they move in.  What they fail to think about is that during the interim between finding that perfect home and closing on it and moving in, mortgage loan officers are going through the steps to get them qualified for a loan.  During that time, everything must be done to guard the buyer's credit so that the loan will be approved.  Here is a list of seven things you should never do prior to buying a home--begin abiding by these months before you actually begin a loan process. 

WHY OWN?

There are many great reasons to consider owning a home:

• You'll have a place that is yours!  You'll own it, have a place to raise your children and becom a part of your community.  You can pass your home down to your children, and their children, creating security for generations to come.
• You may pay less to own a home than you would to rent--and it's yours at the end!  Homeownership can reduce the federal income taxes you pay.  You can deduct the interest on your home mortgage and property taxes you pay on your home on the tax returns you file each year.  These tax savings partially reduce, or offset somewhat, the actual cost of owning your home.
• Your monthly payments won't ever go up if you choose  a fixed-rate mortgage!  If you choose a mortgage with a fixed-interest rate (one that stays the same for the life of the loan, say 30 years), you'll pay the same mortgage payment each month for the entire 30 years of the loan (if your taxes go up, your escrow will go up--increasing your monthly payment).
• You'll build a good nest egg!  Owning a home and building equity is the single greatest source of financial security and independence for the majority of people who've taken this step.

(Information from Freddie Mac Online Guide to the Homebuying Process)

    The Texas Department of Housing and Community Affairs (TDHCA) has several programs available for first-time homebuyers who are ready to purchase a home.  A certified Affordable Housing Specialist in our office can help you with purchasing your first home in Texas.  Three programs are available and the hightlights of each are given below:

H.R. 3211--$7,500 Tax Credit

• Temporary tax credit available to 1st-time homebuyers who purchase a home on or after April 9, 2008 and before July 1, 2009.
• One-time credit to be taken with 2008 or 2009 tax return.
• $7,500 is repayable; starting 2 years after credit is claimed at $500 per year for 15 years.
• If home is sold during 15 years, remaining credit amount would be due from profit of the home sale.  If there is no profit (gain on sale), the remaining credit payback would be forgiven.
• CAN NOT claim credit if home was purchased through a mortgage revenue bond (MRB) program--Texas MCC or Texas First Time Homebuyer Program.

Mortgage Credit Certificate Program

• Available to 1st-time homebuyers; person who has not owned a home as primary resident in the last 3 (three) years qualifies as 1st-time.
• The Mortgage Credit Certificate (MCC) allows the homebuyer (if there is a tax liability) the benefit of a dollar-for-dollar reduction of their tax bill in the event income taxes are owed.
• The MCC can be used to gross up income or ratios to enable borrower to qualify for mortgage loan ($166.67 permonth = $2,000 per year).
• The MCC enables the homeowner to claim a tax credit of 30% of annual interest paid, not to exceed $2,000 per year, for the LIFE OF THE LOAN.
• No repayment provisions on MCC credit.
• May be suject to Recapture Tax but ONLY if they meet Recapture criteria.
• Available through a network of participating lenders.

Texas First Time Homebuyer Program (TDHCA Bond)

• Available to 1st-time homebuyers; person who has not owned a home as primary residence in the last 3 years.
• Provides a below market interest rate.
• Provides 4% assistance, to income eligible borrowers, for down-payment and/or closing cost.
• 4% in the form of a GRANT--non-repayable.
• Mortagage loan is at a safe, affordable 30-year fixed rate.
• Lower interest rate--lower monthly payment.
• May be subject to Recapture Tax but ONLY if they meet Recapture criteria.
• Available through a network of participating lenders.

To learn how one of these programs might benefit you as a first-time homebuyer in Texas, contact Bill or Susan Jones at 254.773.0900.

    We've all heard the saying "a picture is worth a thousand words"--and it couldn't be more true than when buyers are looking at your home.  Very few buyers have the imagination to visualize beyond what they see.  Smart sellers realize this and work hard to show their home in its best light--and that is what staging is all about.  The number one issue in getting a home sold is price and that price must match the condition of the home.  Staging is a way to show off what you get in that home that makes it worth the price.

    Sellers should never ask if they should stage--they should ask how they should stage.  Staging is an essential part of marketing your home.  This process goes from the most basic step of simply cleaning the house and cleaning out (decluttering) the house to extensive repairs, improvements, and rearrangement of the furniture. 

    Research has shown that staged homes, on average, sell in half the time as non-staged homes and sell for more than non-staged homes.  Buyer sophistication and exposure to even such things as HGTV makes them well aware of the difference between a "lived-in" house and a "model" home ready to show. 

    As you prepare to sell your home, you need to think of it as one of those "model" homes that people walk through during open houses of new subdivisions.  It should be warm, inviting, comfortable, well-kept and impersonal so that the potential buyers can see themselves and their family in your space instead of you.  Also, don't forget about curb appeal.  Poor outside appearance generally signals to a potential buyer that there will be poor maintenance and hidden problems inside.

    At Century 21 Accent, we offer staging consultation to help our sellers get the most money in the quickest time for their home.  Contact us today at www.c21accent.com or 254-773-0900 and let us show you what we can do to help you list and sell your home.