Can You Trust Zillow’s Home Price Zestimate? In a Word: No.

I got an email from Zillow last week. Seems my house has gone up in value another $2,000+ dollars in the past 30 days. And it’s going to rise another 3.5% in the next year, according to their Zestimate®. Fab!

Except that it’s just speculation. When it comes to Zillow’s Zestimates, you have to take the numbers with a grain of salt. Make that a big shake of salt, right over your shoulder. And maybe a stiff drink. And a frank conversation with your real estate agent.

“Shoppers, sellers and buyers routinely quote Zestimates to realty agents – and to one another – as gauges of market value,” said the Los Angeles Times. “If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers’ list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000. Disparities like these are daily occurrences and, in the words of one realty agent who posted on the industry blog ActiveRain, they are ‘the bane of my existence.'”

Are faulty Zillow estimates irritating, dangerous, somewhere in the middle? It all depends on your personal situation. A real estate investor, a seller in a high-end neighborhood, or an obsessive real estate watcher (ahem) may be able to brush off a $15,000 error. But for many people across the country, the word of Zillow might as well be the word of God. So, yeah, dangerous.

Price errors

Errors in sales prices are one of the issues Investopedia pointed out in its look at Zillow’s Zestimates.


spoty
“Zillow factors the date and price of the last sale into its estimate, and in some areas, these data make up a big part of the figure. If this information is inaccurate, it can throw off the Zestimate,” they said. “And since comparable sales also affect a home’s Zestimate, a mistake in one home’s sales price record can affect the Zestimates of other homes in the area. The Zestimate also takes into account actual property taxes paid, exceptions to tax assessments and other publicly available property tax data. Tax assessor’s property values can be inaccurate, though. The tax assessor’s database might have a mistake related to a property’s basic information, causing the assessed value to be too high or too low.”

In June, Zillow’s much-maligned (by industry experts, anyway) Zestimates got an upgrade with a new algorithm. Zillow CEO Spencer Rascoff has famously called his company’s price estimates, “a good starting point” and copped to a median error rate of approximately 8%. With their new algorithm, they say it’s dropped to 6.1%.


Marketwatch
John Wake, an economist and real estate agent from Real Estate Decoded, applied Zillow’s updated 6.1% margin of error to “Zillow’s own estimate of the median sale price in the U.S. in May 2016 of $229,737 and got a typical error of $14,000. He then took a sample city, Denver – a city in which estimates are actually more accurate than average” – and found “the error spread in 2016 is a lot tighter and more focused on the bullseye of the actual sales price,” but that “their Zestimates are scattershot.”

In his example, “a Denver home has a fair market value of $300,000. According to Zillow’s Zestimate Accuracy Table, 10% of their Zestimate prices were off by more than 20% from the actual sale prices. Half of that 10% are Zestimates that are too high by 20% or more, and half are Zestimates that are too low by 20% or more. That means you have a 5% chance Zillow will give you a Zestimate of $360,000 OR MORE, and a 5% chance Zillow will give you a Zestimate of $240,00 OR LESS. Yikes!”

Missing data

It gets even more complicated without all the data that gets fed into Zillow’s algorithm. Limit the available info and the margin for error grows.

That same email I received included a couple of new listings and info on recent sold homes in the area. Notice anything interesting about these recent sales?

Yep, no sales prices. Texas is one of about a dozen states without a mandatory price disclosure law, which makes property appraisals challenging and which makes it even more difficult for Zillow to come up with an accurate Zestimate since it eliminates one of their key data points.

In the case of my home, they’re a good $11,000–15,000 high on their sales price estimate. And that’s based on my direct knowledge of sales prices in my neighborhood—not list prices, not tax assessments, and not assumed sales prices based on trends.

Which brings up another issue that leads to inaccurate estimates. In many neighborhoods, sales trends and prices vary street to street. But Zillow’s estimates are a one-size-fits-all program. In my masterplan, the building of high-density units on the southern edge of the community a few years back took a bite out of the value of homes on the perimeter streets. Sales of homes with a first-floor master also get a bump here.

And then there’s the fact that this community is also split between two elementary schools. Zillow wouldn’t know which one buyers prefer and wouldn’t account for a difference in sales price between two otherwise comparable homes. But, people who live here would, and so would the local real estate agents.

Which only reinforces the importance of working with one, BTW.

WRITTEN BY JAYMI NACIRI

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The 4 Things Home Buyers Really Want in Kitchen Cabinetry

A great kitchen design can dramatically increase your property value – if you want to attract prospective buyers, your kitchen is the perfect place to invest money. The trick is to get it to appeal to the majority of people by spending your money on what most of them really want.

Kitchen cabinetry can do much to attract the right buyers. There are four key factors to consider: quality, symmetry, color and layout. If you can get these key elements right with your cabinetry, you’re bound to have a higher home value.

The 4 Things Most Buyers Want in a Kitchen

1. Quality

The number of cabinets you have is not as important as the quality of the cabinetry. The fewer cabinets you add to your kitchen renovation, the less expensive it will be. Choose quality over quantity.

Do: Choose quality hinges and runners, including soft-close drawers, and custom-made cabinetry.

Don’t: Go for large fillers and ill-fitted modular cabinetry.

Open Floor Plan

Keep the cost down by keeping the cabinet count down. Design the kitchen layout to keep it light, bright and with an open plan, without using tons of cabinets.

Note: Excessive internal organizers aren’t essential if you are planning on reselling your home. They are wonderful in adding value to your personal use of the kitchen but are not always a wise choice if you are renovating purely to sell. Internal drawer and cabinet fit-outs are often expensive, and the extra money you spend on these accessories may not come back to you when you’re selling your property.

2. Symmetry

The eye is naturally drawn to appreciate symmetry and repetition. When you’re renovating to sell, keep your kitchen cabinetry simple and appealing. Elegance has a way of being understated, and simplicity is key when you are trying to appeal to the majority of buyers.

Do: Keep the wall cabinetry sizes the same where possible. Drawers look nice when they are large and expansive – if you have multiple sets, keep them the same size, with the same proportion of drawers.

Hale Aina By The Sea

Don’t: Add multiple cabinets in varying sizes. Try to keep the look and feel consistent in the whole space.

3. Light, Bright Spaces

Many buyers here in Australia want an open, light and airy space. A kitchen that is white makes the space feel bigger. White is also a universally appealing color and leaves a blank slate so buyers can reenvision the space.

house A

Do: Keep the space open, bright and light with white cabinetry. If you want some contrast, go for a darker bench top. Backsplashes should be kept fairly neutral too – try to introduce texture instead of color into the backsplash. The more neutral and elegant the space is, the more potential buyers you will attract.

Don’t: Use darker-color cabinetry, which can make the space feel closed. While adding a strong color may suit your taste, it may not be to everybody’s liking. You want to attract as many potential buyers as possible, and while white may not be the most daring color for your cabinetry, it’s the most popular.

4. An Open Layout

Designing your kitchen to have a sensible and open layout is pivotal to increasing property value when you’re renovating to sell. In Australia, the trend is moving toward open-plan living and multifunctional spaces.

Kitchen

Do: Have a large open-plan space with a kitchen island if possible. Buyers often want to multitask in the kitchen. They want to cook, have their kids do their homework and socialize in it.

Don’t: Place your kitchen in a small and poky room. The kitchen is now often the hub of the house, and buyers want to see a kitchen that is interactive and sociable.

Related Articles:

Houzz is the leading platform for home remodeling and design, providing people with everything they need to improve their homes from start to finish – online or from a mobile device. From decorating a small room to building a custom home and everything in between, Houzz connects millions of homeowners, home design enthusiasts and home improvement professionals across the country and around the world.

WRITTEN BY HOUZZ.COM

How To Sell Your Home In 2017

It’s 2017. Now what? Yes, the new year is typically a time for hope and renewal and for those who are looking to sell – and simultaneously buy – a home, it can represent a fresh start. But this year, political and social realities are giving some would-be home sellers pause.

Thankfully, the real estate market continues to show real strength, with many housing experts projecting home sales prices and inventory to rise in 2017, replacing doubts with consumer confidence.

“Housing prices rose nationally by around 6% in 2016, but the expected increase in 2017 ranges from 3% to 5%,” said 24/7 Wall St. “With inventory of existing homes at historic lows and a rise in interest rates thanks to the Federal Reserve, housing inventory for 2017 is almost certain to rise. For prospective sellers that means that if you were planning to sell your home this year, it’s time to get cracking.”

If you’re thinking about selling this year, these tips will help.

Be patient

Sales have been swift in many parts of the country for several years now. That can make sellers who don’t get offers on day one feel antsy. Despite some ultra-competitive markets where multiple offers and offer-asking-price sales skew the national numbers, across the country, the average days on market of a home for sale is 50.

Price it right

You may be tempted to price your home at the top of the market – or set a new top if you’re in an especially desirable area and if inventory is low. But overpriced homes don’t sell, which is probably why your real estate agent is recommending a lower listing price.


padrerealestate.com
If you’re insistent about your price, don’t be surprised if you get zero bites or the nibbles you do get are far below what you’re asking. Your agent’s pricing strategy will be based on market conditions and designed to get you the most money in the least amount of time. What it won’t be based on: What you owe on the home, what you think it’s worth based on your own estimation, or what you need to get out of it to buy your dream home.

Don’t be afraid to loan shop

If you’re selling your home to buy another, like most people, you might be concerned about rising mortgage rates. Rates are still near historic lows despite The Fed raising interest rates at the end of 2016 and indicating that further increases are in store for this year.

“Because the mortgage rate makes a big difference in how much you’ll pay for your home, it makes financial sense to shop around for the lowest rate you can qualify for,” said Investopedia. But many people don’t look beyond the first offer. According to a mortgage borrowers survey, “Almost half of borrowers seriously consider only a single lender or broker before deciding where to apply,” and “Seventy-seven percent of borrowers only end up applying with a single lender or broker, instead of filling out applications with multiple lenders or brokers to see which can offer the best deal,” said the Consumer Financial Protection Bureau.

Asking your real estate agent for a few different trusted referrals could make a big difference. “Getting an interest rate of 4.0% instead of 4.5% translates into approximately $60 savings per month,” they said. “Over the first five years, you would save about $3,500 in mortgage payments. In addition, the lower interest rate means that you’d pay off an additional $1,400 in principal in the first five years, even while making lower payments.”


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Make sure your home is clean and lean

It’s more important than ever to make sure your home is as close to perfect as possible before you put it on the market. Unless your agent is planning to market the home as a “project,” it needs to be spotless. You’d be surprised how much better your home can look just by applying some simple staging secrets.

Listen to your agent’s advice

Staging may only be the beginning of what your home requires to get it sold, and your agent’s advice will be critical to getting it where it needs to be. “Sure, you no doubt know more about your home than anyone else. But your real estate agent knows more about how to sell it,” said Realtor.com. “And your agent may make some suggestions you might not like to hear. It’s tempting to take offense or just ignore this advice, but if you do, you could risk seeing your house sit on the market and grow stale.”

Be careful of over improvements

Getting your home in great shape may mean making some improvements, updates, and upgrades. But be careful not to go too far.

“Dying to install new kitchen cabinets or retile your master bath? Home sellers often assume any upgrades they make to their home will pay them back in full once they sell, but that’s rarely the case,” said Realtor.com. “On average you will recoup just about 64% of the money you spend on renovations once you sell—and certain improvements can actually work against you if they’re unusual or undesirable in your market, Jason Shepherd, co-founder of Atlas Real Estate Group, told them.

It’s 2017. Now what? Yes, the new year is typically a time for hope and renewal and for those who are looking to sell – and simultaneously buy – a home, it can represent a fresh start. But this year, political and social realities are giving some would-be home sellers pause.

Thankfully, the real estate market continues to show real strength, with many housing experts projecting home sales prices and inventory to rise in 2017, replacing doubts with consumer confidence.

“Housing prices rose nationally by around 6% in 2016, but the expected increase in 2017 ranges from 3% to 5%,” said 24/7 Wall St. “With inventory of existing homes at historic lows and a rise in interest rates thanks to the Federal Reserve, housing inventory for 2017 is almost certain to rise. For prospective sellers that means that if you were planning to sell your home this year, it’s time to get cracking.”

If you’re thinking about selling this year, these tips will help.

Be patient

Sales have been swift in many parts of the country for several years now. That can make sellers who don’t get offers on day one feel antsy. Despite some ultra-competitive markets where multiple offers and offer-asking-price sales skew the national numbers, across the country, the average days on market of a home for sale is 50.

Price it right

You may be tempted to price your home at the top of the market – or set a new top if you’re in an especially desirable area and if inventory is low. But overpriced homes don’t sell, which is probably why your real estate agent is recommending a lower listing price.


padrerealestate.com
If you’re insistent about your price, don’t be surprised if you get zero bites or the nibbles you do get are far below what you’re asking. Your agent’s pricing strategy will be based on market conditions and designed to get you the most money in the least amount of time. What it won’t be based on: What you owe on the home, what you think it’s worth based on your own estimation, or what you need to get out of it to buy your dream home.

Don’t be afraid to loan shop

If you’re selling your home to buy another, like most people, you might be concerned about rising mortgage rates. Rates are still near historic lows despite The Fed raising interest rates at the end of 2016 and indicating that further increases are in store for this year.

“Because the mortgage rate makes a big difference in how much you’ll pay for your home, it makes financial sense to shop around for the lowest rate you can qualify for,” said Investopedia. But many people don’t look beyond the first offer. According to a mortgage borrowers survey, “Almost half of borrowers seriously consider only a single lender or broker before deciding where to apply,” and “Seventy-seven percent of borrowers only end up applying with a single lender or broker, instead of filling out applications with multiple lenders or brokers to see which can offer the best deal,” said the Consumer Financial Protection Bureau.

Asking your real estate agent for a few different trusted referrals could make a big difference. “Getting an interest rate of 4.0% instead of 4.5% translates into approximately $60 savings per month,” they said. “Over the first five years, you would save about $3,500 in mortgage payments. In addition, the lower interest rate means that you’d pay off an additional $1,400 in principal in the first five years, even while making lower payments.”


whiteorchidinteriors.com
Make sure your home is clean and lean

It’s more important than ever to make sure your home is as close to perfect as possible before you put it on the market. Unless your agent is planning to market the home as a “project,” it needs to be spotless. You’d be surprised how much better your home can look just by applying some simple staging secrets.

Listen to your agent’s advice

Staging may only be the beginning of what your home requires to get it sold, and your agent’s advice will be critical to getting it where it needs to be. “Sure, you no doubt know more about your home than anyone else. But your real estate agent knows more about how to sell it,” said Realtor.com. “And your agent may make some suggestions you might not like to hear. It’s tempting to take offense or just ignore this advice, but if you do, you could risk seeing your house sit on the market and grow stale.”

Be careful of over improvements

Getting your home in great shape may mean making some improvements, updates, and upgrades. But be careful not to go too far.

“Dying to install new kitchen cabinets or retile your master bath? Home sellers often assume any upgrades they make to their home will pay them back in full once they sell, but that’s rarely the case,” said Realtor.com. “On average you will recoup just about 64% of the money you spend on renovations once you sell—and certain improvements can actually work against you if they’re unusual or undesirable in your market, Jason Shepherd, co-founder of Atlas Real Estate Group, told them.

WRITTEN BY JAYMI NACIRI

Don’t Be Naughty: Important Etiquette Tips When Visiting Open Houses

Looking for a home can be a tedious process, and if you’ve been to multiple showings and in and out of open houses – and, especially, if you’ve been outbid on one or more homes you were counting on – you might be starting to lose your cool.

On the flip side, if you’ve ever sold a home, you’re probably well aware of the grueling process of cleaning up after folks who’ve been stomping through your home, leaving their mess and their footprints and their bad manners behind. So, don’t be like them. Check your muddy shoes at the door, but bring your etiquette inside. Need more details about the do’s and don’ts of touring homes? Read on.

Wipe your feet

Or, better yet, remove your shoes. Remember that the sellers have presumably gone to great links to clean and stage their home, which probably means freshly shampooed carpets. Your muddy footprints will not be received well.


End of Lease Cleaning
Don’t leave a present behind

If you must use the restroom while touring homes for sale, make sure you do a few things first:

“In case you’re wondering, yes, it’s OK to use the bathroom if you absolutely can’t wait, but asking the host first can avoid embarrassment,” said The Tennessean.

Check that the plumbing is working – If it’s a vacant or brand-new house, that might not be the case.

Look for toilet paper – You don’t want to be left in a drip-dry situation.

Flush! – Sounds like a given, but you’d be surprised.

Clean up after yourself – Just because you don’t lift the seat at home doesn’t mean you shouldn’t here. And if you just can’t bring yourself to do it, wipe up the seat when you’re done. Come on. You know this.

No stealing

Yeah, it happens. More than you might think. If your moral compass isn’t enough to keep you from getting sticky fingers in an open house, consider this: More and more houses now have security cameras that will undoubtedly catch you in the act.

Keep your hands off the meds

Yes, this would seem to be a given as well. But prescription medication is a temptation for some visitors. In some cases, “fake buyers” tour homes for sale with the express purpose of stealing. In fact, “The most commonly stolen item is prescription medicine, followed closely by jewelry and small electronics” during home showings, said NOLO.


Baristanet
Home sellers who don’t secure valuables and medications are “just asking for it,” according to some housing experts. But that doesn’t mean you have to answer. That goes for medications you may consider harmless, like Tylenol or Tums, too. Sellers probably can’t keep people from looking in their medicine cabinet, because: storage. But touching their stuff is another story. When all else fails, remember the Golden Rule, and do unto others.

Don’t rifle through the homeowners’ things

Speaking of opening medicine cabinets…Is it acceptable to open and look inside closets and kitchen and bathroom cabinets and drawers? Absolutely. But going through dresser drawers, nightstands, and other private spaces that have zero relevance when it comes to purchasing the home – not so much. Remember, you’re looking at the storage space, not casing the place. You can be curious all day. But acting on that curiosity is uncool.

Be careful where you sit

“Avoid sitting on the furniture. It might not be real,” said The Tennessean. “Growing numbers of Realtors are using cardboard or inflatable furniture to decorate empty rooms.” Messing up a newly made bed or smooshing perfectly placed pillows takes away from the staging, so, if you do have a seat on the furniture, it’s good form to fluff it up again before you leave.

Don’t disregard special requests

Is it frustrating that you can’t get into the third bedroom because the seller’s kitty is locked up in there during the showing? Sure. Do you want to be responsible for the cat escaping and getting hit by a car because you ignored the note that says, “Cat in here, please don’t enter?” Nope. If you’re really interested in the home and not seeing that room is a deal breaker, you can always set up a second visit.


Pinterest
Keep an eye your kids

You may be tempted to let them run off and see their potential bedrooms, but if they’re out of eyesight and earshot, they could potentially be doing damage to the house, or getting injured. You don’t want to create a situation where there’s liability involved…especially when you’re trying to buy a house! Realtor.com recommends letting the listing agent know if you plan to bring your kids so they can help you navigate any potential hazards.

WRITTEN BY JAYMI NACIRI

What Do Rising Rates Mean For Homeownership In 2017?

The Fed raised interest rates last week, causing a ripple of concern among those who are worried about the effects on higher mortgage rates and the greater impact on the real estate market. But what do rising rates really mean for homebuyers? We’ve taken the temperature of several housing experts to get their take on the homebuying landscape for 2017.

Rates will continue to rise… or will they?

“When the rate was raised last week, the Fed predicted it would raise rates three more times in 2017, up from two in its previous forecast. But those predicted increases are just that – predictions, said the Berkshire Eagle. “A year ago, the Fed projected that it would raise rates four times in 2016 but has ended up doing so just once.”

Many housing authorities expect that rates will, indeed rise, and are eyeing a 5% benchmark.

“My forecast is for the 30-year fixed rate to rise above 4.5 percent by year’s end, and worst case scenario, knock on the door of 5 percent,” Matthew Gardner, chief economist at Windermere, told Inman.

Rising rates will impact homeownership…or will they?

Realtor.com predicts that home prices will continue to rise next year, increasing 3.9 percent. Their estimation of how high mortgage rates will go: 4.5 percent. Will the combination of rising prices and rates kill housing market momentum? The Mortgage Reports doesn’t think so.


TFS
The good news of rising rates, they said, is that “home price increases could finally slow. Home shoppers may once again find ‘deals’ in the 2017 market. Home values have been catapulted upward by almost-free borrowing. Home buyers were getting 30-year fixed rates in the low 3s, and fifteen year rates solidly in the 2s. That’s lower than the rate of inflation is likely to be in coming years. Cheap money makes monthly payments lower. Homes are affordable, even at very high prices. In 2017, though, that trend could reverse. Rising payments could mean fewer bidding wars and over-market-price offers.”

That could mean that buyers “have a better chance at securing a home at a reasonable price. Affordability may continue its winning streak, despite rising rates. 2017 should remain a stellar year to be a home shopper.”

But OC Housing News isn’t so sure. “Higher mortgage interest rates lead to lower sales or lower prices, but most likely, lower sales. Mortgage rates fell from mid-2010 through early 2013 just to maintain a low level of demand,” they said. “When interest rates went up, in what was supposedly a strong market recovery, demand immediately dropped off. Assuming a consistent payment, higher mortgage rates decrease the size of the loan and reduce the amount borrowers can bid on real estate. If rising mortgage rates result in smaller loan balances, then either sales volumes will go down, or house prices will go down, or perhaps some combination of both – unless you believe rapid wage inflation is on the horizon.”


TREO
Job growth will counteract the effects of rising rates and home prices…or will it?

It’s the prospect of job growth that has many people talking.

“November’s job growth outpaced October, indicating that the economy is growing at a healthy pace and should continue to do so,” said My Mortgage Insider. “The increase of jobs added is a sign that the economy is healthy. Another encouraging statistic is the decrease in the unemployment rate…from 4.9% to 4.6%. The strong economic conditions are likely going to (continue to) force mortgage rates higher. Generally speaking, mortgage rates are going to increase whenever the economy is doing well or whenever there is confidence in the market”.

The good news for those who are worried about rising rates is that “higher wage growth could offset the effect of higher mortgage rates,” said the Wall Street Journal. Although, for those who were thinking of relocating, the prospects may not sound sound so encouraging. “The fact that so many homeowners enjoy such low rates could also prove an economic brake, creating a disincentive for homeowners to move to a new city in pursuit of a new job if it means their mortgage might be more expensive,” said David Berson, chief economist at Nationwide Insurance.

WRITTEN BY JAYMI NACIRI

Landscaping Tips That Will Wow Buyers

Your front yard is the red carpet inviting buyers into the beauty that is your home. If it’s rugged, messy and unkempt, buyers will take one look and then keep on driving to the next property on their list. Don’t let that happen by making your front yard luscious and as amazing as the inside of your home.

What areas should you focus on in your front yard? Where do you start? To help you break down the revitalization of your front yard, here are the steps you should take:

1. Cut the grass.

Buyers don’t want to trudge through high grass as though they were in the Amazon or on a safari in Africa. This means the lawn mower needs to be out at least once a week if not every other week, keeping it trimmed and maintained. It also needs to be green so it looks alive and lush. Water so the sun doesn’t dry out the lawn and turn it yellow or brown. A professional landscaper can help maintain a balance of trimming and growth so it looks just right for buyers.

2. Plant more shade trees.

One or two trees in the front yard are all right, but if you want to really add some shade, plant more. Shade trees will detract from the glare of the sun, and it can help decrease the temperature of the house if they’re placed close to windows. It also will help keep the lawn green with moisture. You can plant trees that are shorter and will grow by the time the new owner buys the home, but be sure they’re strong and can handle the climate.

3. Install outdoor lighting.

Outdoor lighting is a good way to both illuminate the house at night and accent parts of your yard. Depending on where you install the lights, your house will look very appealing at night to those buyers who might not have time to do their shopping during the day. Outdoor lighting also helps to illuminate a path like a sidewalk to get from the curb to your front door for easier navigation. It helps to accent the beauty of your landscaping which all together increases the beauty of your home.

4. Consider adding flowers for more color.

If your front yard has a lot of greenery, you should increase the yard appeal by adding more colors. Flowers are a great and simple way to do this, as well as shrubbery with different blooms. Perennials are the best for this because they last for more than a year, which means less maintenance for the seller and the new homeowner. They come in a wide variety of colors and types so the yard can be decorated with any number of them while still requiring less maintenance.

5. Keep everything clean!

In addition to keeping the lawn trimmed, everything else should be clean. Anywhere that can build up dirt or grime – siding, porch, front door, driveway – should be cleaned on a regular basis. Buyers don’t want to see a lot of dirt and mess, and it will detract from them wanting to walk into the house. So take a broom, a power washer and a few hours on the weekend to keep everything sparkling clean. Don’t have a power washer? A professional power washing service can cost as little as $293.

Photos courtesy of DesignMine

WRITTEN BY REALTY TIMES STAFF

7 Important Steps To Help You Buy Your First Home In 2017

Thinking about buying your first home? What an exciting time this is bound to be. And, also, what a (potentially) overwhelming, confusing, and stress-filled time. It can easily veer into scary territory if you’re not prepared and not surrounding yourself with professionals who can help guide you in the right direction.

These seven tips can help you make that dream of homeownership come true in 2017.

1. Work with the right real estate agent

The guy next door or your brother’s girlfriend’s cousin who just got his real estate license may be hungry to get your business, but that doesn’t mean he’s your best bet. An experienced agent quite simply knows things that someone who is brand new probably doesn’t. An experienced agent will also have important relationships in place that may be able to help buyers in every facet of the home purchase, including:

Finding houses that aren’t even listed yet

Finding homes that may be slightly outside of a buyer’s criteria but that are worthy of consideration

Leveraging industry relationships to get you great deals or better terms

Managing appraisals and inspections

Working through every step of the purchase process and handling any issues that pop up along the way

Negotiating a deal that works for both sides


realtymyths.com
2. Don’t be afraid to talk to multiple lenders

Your Realtor will most likely have several lenders they have worked with and can refer you to. You may also want to speak to loved ones and get a referral or two from someone they’ve worked with successfully. Each lender may have a different recommendation and/or knowledge of a special loan that works for you, so it makes sense to look at a few different options.

3. Mind your credit

Many people have no idea what their credit score is, but if you’re thinking about buying a home, knowledge is power. Different loans have different minimum credit score requirements, and it could be that your score doesn’t measure up for the best loan rates, or maybe you need to do some work to qualify for even the most lenient loan.

A good mortgage lender can advise you on your best options to raise your score, from removing any errors on your credit report, to paying any delinquent accounts, to exploring credit repair options. The earlier you learn your score and delve into the details with a qualified lender, the more time you have to address any issues you find.


Total Mortgage
4. Save, save, save

For many people, getting the down payment together is the hardest part of buying a home. And the closing costs can be an unwelcome surprise for those who weren’t expecting to have to come up with even more cash. When you first set out to buy a home, make sure you know how much you have to save. Your lender should be able to give you a pretty good ballpark based on a certain home price. Housing experts recommend adding 5% to that number just to be safe.

Even if you’ve never been a great saver in the past, there are strategies you can use that will help you build the nest egg you need for your down payment and closing costs, including these tips from nerdwallet:

  • Automatic transfers from your checking account to your savings can help to make the process mandatory – and maybe a little less painful.
  • Save raises and bonuses rather than spending them.
  • Set aside tax refunds.
  • Keep the change. At least a couple of banks have variations on this theme. For example, Bank of America allows debit card users to sign up for a service that rounds up purchases to the nearest dollar and puts the change into a linked savings account.
  • Visualize your goal. Slap big, beautiful photos of your dream house on the refrigerator, near your office workspace – and wrap a small one around the primary credit card in your wallet. You might charge less and save more.”

As for where to put that money while you watch it grow, experts recommend that “If the plan is to become a homeowner in the next 12 months, the money should be kept completely liquid. That means you can easily access it at any time,” said CNN Money. “The best way to do that is in a good old-fashioned savings account, Schulte said. Look for one with a higher yield. In today’s low rate environment, that probably means an online-only account like Ally or Synchrony Bank, which currently pay around 1% annually.”

5. Lock in your rate

Rates can be unpredictable. Locking in a rate when you get close to buying, which your lender will undoubtedly recommend, can protect you if rates rise. Many lenders also offer a one-time adjustment in case rates go down.


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6. Stay at your job

Not happy at work and thinking about making a change? If you’re looking to buy a home, you may have to delay that plan. Part of your qualification for a mortgage will be based on your job history. Making a big change just before you buy or during the escrow process will be problematic. Lenders advise buyers to stay the course until after the home closes escrow.

7. Don’t open new credit cards or buy a new car

Your lender will spell out the do’s and don’ts of how to protect your credit when trying to buy a house, but if you haven’t yet talked to anyone and you think you’re getting close to be purchase-ready, that Kohl’s card you take out to save 20% on your $100 bill could cost you. Before you take out any new debt, check with a lender.

WRITTEN BY JAYMI NACIRI