By: Amber Hunt
Buying or selling a home is a big decision. Before putting your home up for sale or starting your search for a new home, there is some basic information to keep in mind. Familiarize yourself with the following if you are a buyer:
1. Know your credit score. Find out what your credit score is and if it’s low, take the necessary measures to improve it. Learn what your full credit potential is and empower yourself with the means to achieve it. The lower your credit score, the higher your costs of borrowing. To find out where your credit stands, take a look at your credit score and report for free.
2. Hold off on other big purchases. Anytime you open a new credit account (credit card, auto loan, etc.) your credit score could drop. Wait to make these large investments until after your mortgage application is complete.
3. Get a home inspection. Have an engineer or independent home inspector complete a full inspection of the home, including the roof, basement, foundation, heating, pipes, etc. Find all costly flaws before you buy a home. Don’t skimp on this crucial part of the buying process. Spending a little up front could end up saving you hundreds or thousands in costly repairs.
4. Find the right neighborhood. If your perfect home is in a less-than-perfect neighborhood, it maybe not be very worthwhile in terms of quality of life or home value. Learn as much as you can about the neighborhood online, by visiting the area or from local libraries.
5. Budget for insurance. Make sure you have included insurance costs in your home buying budget and understand what is – and what is not – covered. Before you buy a home, find out what it will cost to insure it. If you are in areas that are at a higher risk for floods, earthquakes or other natural disasters, evaluate your standard policy and make sure you are covered for anything that could severely damage you home.
If you’re selling your home, keep these tips in mind:
1. Evaluate the need for a real estate agent. If you want to be firm in your asking price, you may want to try to sell the home yourself without help from a real estate agent. Keep in mind that you will need an attorney for all paperwork and the closing. If you decide to work with an agent, make sure you are working with a seller’s agent. Evaluate your agent’s background and sales history and limit your initial commitment to no more than three months. You can always extend this if the agent is doing a good job and you’re happy with their work.
2. List a fair price. Be reasonable about your asking price. Do your research and be aware of what other comparable homes have sold for in your area. Take the location, age of the house, economic conditions and improvements you’ve made into consideration.
3. Complete some improvements. Basic improvements, such as fixing up the house, painting and cleaning up the grounds, can have an impact on buyers. Think about curb appeal and how to get the biggest bang for your buck (and your efforts).
4. Offer incentives. Offering purchasers help with their closing costs could speed up the sale of your home. Encourage your sales agent by offering a higher commission. Be careful – don’t over-commit yourself. There are some things you can offer the buyer and other things you cannot. Be in a position to negotiate.
5. Review mortgage options for your next purchase. Before you decide to sell your house, be aware of what mortgage options are available to you, especially if you’re planning on buying a more expensive property. Find out how much you’re eligible to borrow and evaluate how much you can afford to pay for your next home.
Related articles from the Quizzle Wire:
- 10 Credit Score Facts and Fictions
- Top 3 Tips to Make Your Home a Green Home
- 11 Budget Planning Mistakes to Avoid
- How to Reach the Right Buying Audience When Selling Your Home
- Top 3 Mistakes People Make When Shopping for a Mortgage
This article was originally featured on Quicken Loans Mortgage News, where personal finance writer, Amber Hunt, specializes in writing about mortgages and helping people refinance.