10 Things to Do Before You List Your House

10 Things to Do Before You List Your House

Original Article by Elliott, Sara.  "10 Things to Do Before You List Your House"  28 March 2011.

Start the Countdown

Thinking about moving? One quick tour of your happy home might curdle that dream before it gets out of the planning stages. If your décor style is early desperation and you can't remember the original color of the carpeting, it's time to roll up your sleeves and blackmail someone into getting your home ready to sell.

If you absolutely can't coerce an acquaintance into putting on the honorary stained overalls or, our personal favorite, theJackson Pollock jeans, here are some vital (as in unavoidable) ways you can help improve the look of your home. Do it sooner rather than later, before a stranger enters the premises, screams like a little girl, and runs full bore in the opposite direction. Trust us, we've been there.

10 - Find Your Papers

Before you exhaust yourself trying to get the fingerprints off the walls, locate all the important papers you'll need to entice a potential buyer. The operating manuals for your appliances and HVAC system, notes about the paint colors you used on your walls and any applicable warranties are important to have on hand. They'll show the listing agent that you have things under control, even if you don't.

While you're at it, pull out your old utility bills. You're probably still in denial about having to pay for the water coming out of the tap -- and going down the drain -- but work through the pain. Those seasonal totals may help make your home look more appealing than the house one county over from you.

9 - Get Estimates

These aren't estimates of how long it's going to take you to explode when you find the six-month-old grilled cheese sandwich glued to the underside of the entertainment center. This type of estimate is about what it'll cost to replace the stuff in your home that's on its last legs -- like the furnace, roof or water heater. You may not be prepared to overhaul worn-out items now, but knowing how much it will cost could give you an edge in negotiations. You know, they say they want a cool $10,000 off the asking price when you know an update will only cost half that.

8 - Straighten the Mail Box

If your house is the one with the tilted mailbox that looks like a diseased tooth, you're probably cringing right now. Straighten it up! Haven't you ever heard of curb appeal? You want potential buyers to drive by and think someone else's home (and not yours) is the eye sore. If you're planning on listing your home, you have to lure people inside. To do that, you've got to eliminate the telltale signs that the property isn't owned by a Stepford family.

7 - Declutter

This is the time when you go through your belongings and discover that there isn't anything worth keeping. It's a sad but liberating moment. If most of your stuff is granny castoffs from the 1970s, decluttering your home will be easy. Just get the number for the junkyard and give them a call. If there are some things (probably borrowed) that are actually worth the cost of a moving van, pull them out of the general chaos and get rid of the rest. Ideally, your rooms should look open and kind of empty (marketers call that spacious). If they look more like a crammed to bursting rent-a-space unit, you've got your work cut out for you.

 

TLC TIP

A good rule of thumb is to get rid of (or hide) 30 percent of your stuff in preparation for showing your home. That means stashing away extra chairs, storage boxes, plants, magazines, CDs, clothes, exercise equipment, small appliances and books.

6 - De-Personalize

Remember when you're hubby measured how tall the kids were by carving notches into the dining room molding? Bad move. The chicken-themed kitchen was probably a mistake too. Have you ever looked in a friend's handbag? Didn't it just scream, "Invader! Get out! Get out!"  Well, you don't want your house to do that. You want your house to be so benign and neutral that anyone could imagine living there -- without you.

5 - Clean

Accept it. You're never going to be able to list you house successfully without cleaning it first. Even the maids will probably take a pass on the heavy-duty cleanup unless you make some inroads before you pass the baton.

If it's been a decade since you washed the blinds, expect the process to be painful. Actually, dirt, dust and grime may not be the worst part of tidying up. The worst part is getting at stuff to clean it. Sure, it's easy to recognize that you should pull the stove out and clean behind it every couple of months, or pull out the fridge to vacuum the condenser coils, but bench pressing your own weight may not be one of your many talents. Simple solution: Bake a pie. The smell is bound to attract an only-slightly-unwilling laborer with upper body strength. Some ice cream for after is a nice touch, too.

 

TLC TIP

Lose the gross factor by beating mold and mildew in your bathrooms and kitchen. The green and gray stuff is disgusting and can really make your home look filthy. If you have discolored caulk, replace it. Dispose of mildewed shower curtains, too.

4 - Detail the Landscaping

You know when your sweetie spends all weekend detailing thecar? Well, he should do that with the landscaping before you try to sell your home. Removing dead branches from trees, pulling weeds, painting fences and fixing driveway cracks will keep your home from giving the impression that it's gone native. Don't risk your home looking like it belongs in one of those futuristic horror movies where the ozone layer has fizzled out over the 'burbs and the only people left alive are eating dog food right out of the can.

3 - Hide the Pets

Animals shouldn't live in houses. Well, that seems to be the mantra of the real estate industry. If you own one of those slobbering, hairy pests -- that loves you unconditionally, protects you vigilantly, amuses you with its absurdities and never judges you for your failings -- hide it. That way, you won't have to explain how you managed to get all the hair out of the air conditioning ducts (because you didn't) or managed to suck the pet dander out of the carpeting (never happened).

 

DID YOU KNOW?

Cosmetic issues, like holes in drywall and chipped or peeling paint are easy to fix and can make a big difference when you're trying to make a quick sale.

2 - Plan to Get Rid of the Kids for a While

Well, actually, this is a good one to indulge in from time to time even if you aren't selling your home. When you're thinking of placing a listing, underplaying the presence of juvenile humans on the premises is a good idea. Kids are destructive. If you don't know that by now, you must not have kids and you can move to the next entry. But if you smell what we're cooking, there are some things you can do.

Once you prep your home by repairing the kid damage a prospective buyer can see, keep him from wondering about all the things he can't see by stowing the kids at grandma's house for a few days -- or until she demands that you come and get them.

1 - Take a Deep Breath -- and Some Pictures

Yes, with some work and a little luck, you may be able to get out of that dump and into the home of your dreams, or at least into a house where all the toilets work. Take some pictures before you do a major cleanup, though. Life's passages can be so contrary. Just when your kids are getting ready to move out for good, you'll think back on the old house, with its clutter, tiny windows and flimsy doors, and wish you'd kept a few pictures to remind you of what those unpredictable, implausible, frustrating and totally extraordinary early years were all about.

 

TLC TIP

Ensure the success of your house listing by finding a real estate agent who really gets you. If you end up with a Martha Stewart clone when you'd feel more comfortable with Sarah Silverman, you won't enjoy the process.

Elliott, Sara.  "10 Things to Do Before You List Your House"  28 March 2011.  HowStuffWorks.com. <http://home.howstuffworks.com/real-estate/selling-home/10-things-to-do-before-you-list-your-house.htm>  13 August 2014.

Getting a Loan with Less Frustration

The Perfect Loan File

See the original article by Mark Greene on Forbes.com here.

The media has it all wrong – securing mortgage approval and satisfying credit underwriting guidelines are not the difficulties plaguing mortgage consumers. It’s in meeting the rigorous documentation requirements that most people fall flat. The good news is, the fix is simple. Just scan, photocopy, fax, and deliver every aspect of your financial life. Then, shortly before closing, check everything again.  

Mortgage consumers who enter the mortgage approval process ready to battle their chosen mortgage lender will come out with a nightmare story to tell. As the process, requirements, and guidelines are the same for everybody, your mindset is the game-changer. Accepting the redundant documentation necessary for lender approval will make everyone’s life easier.

When I was a kid, my father occasionally issued directives that I naturally thought were superfluous, and when asked why I needed to do whatever it was he wanted me to do, his answer was often: “Because I said so.” This never seemed to address my query but always left me without a retort, and I would usually comply. This is exactly what consumers should do during the mortgage approval process. When your lender requests what seems to be over-documentation and you wonder why you need it, accept the simple edict – “because I said so.” You will find the mortgage approval process much less frustrating.

So, what’s the perfect loan? Well, it’s one that (a) pays back the lender and (b) pays back the lender on time. Underwriting the perfect loan is not the goal that mortgage lenders aspire to today.

The real goal is the perfect loan file.

Mortgage lenders have suffered staggering losses and gone out of business because of the dreaded loan repurchase. As mortgage delinquencies increased, FannieMae and FreddieMac began to audit mortgage loans they had purchased and discovered substandard and fraudulent underwriting practices that violated representations and warranties made, stating these were high quality loans. Fannie and Freddie began forcing the originating lenders of these “bad” loans to buy them back. So a small correspondent mortgage lender is forced to buy back a single mortgage loan in the amount of $250,000. This becomes a $250,000 loss to a small mortgage business for a single loan, because it will never be repaid.

It doesn’t take many of these bad loan buybacks to close the doors on many small mortgage operations. The lending houses suffered billions of dollars of losses repurchasing loans from Fannie and Freddie, and began to do the same thing for loans they had purchased from smaller originators.

The small and medium sized mortgage originators that survived created underwriting guidelines and procedures to eliminate the threat of future loan repurchase losses. The answer? The perfect loan file.

It’s no longer necessary to have excellent credit, a big down payment and stable employment with income sufficient to support your debt service to guarantee your loan approval. However, you must have a borrower profile that meets the credit underwriting guidelines for the loan you are requesting. And, more importantly, you have to be able to hard-copy-guideline-document your profile.

Every nook and cranny of your financial life has to be corroborated, double- and triple-checked, and reviewed again before closing. This way, if the originating lender has created a loan file that is exactly consistent with published underwriting guidelines and has documented while adhering to those guidelines, the chances are that your loan will not be subject to repurchase.

Borrowers also need to prepare for processing and underwriting. Processors and underwriters are the people trained and charged with gathering (processors), all of your required-for-approval financial documents, and then approving (underwriters), your loan. You can assume these people are well trained and very experienced, as they are tasked with assembling and approving a high-quality-these-people-will-pay-us-back loan file. But just how do they go about that?

The process begins with the filter – the loan originator (a.k.a loan officer, mortgage consultant, mortgage adviser, etc.) – tasked to match the qualifications of a particular mortgage deal to the appropriate underwriting guidelines. It is the filter’s job to determine if a loan scenario is approvable and to gather the documentation to support that determination. It is here, at the beginning of the approval process, where the deal is made or broken. The rest of the approval process is just papering the file.

The filter determines whether the information provided by the borrower can be validated and documented. This is simple, since most mortgages are approved by automated underwriting engines such as Desktop Underwriter, and the automated approval generates a list of the documents needed to paper the loan file. An underwriter can, at this stage, request additional supporting documentation evidence at their discretion, as not all circumstances neatly fit into the prescribed underwriting box. If the filter creates a loan file with accurate information, then secures the documentation resulting from the automated underwriting findings, the loan will close uneventfully.

So, let’s begin with the pre-approval call. Mortgage pre-approval is typically accomplished with a telephone interview. A prospective borrower calls a mortgage rep (filter), and the questions begin. There will be lots of questions as this critical phase of the process is akin to the discovery period in a trial – you’ll need to disclose everything. Expect to answer queries on what you do for a living, how long you’ve been employed in your current field, and what your salary is. If there is a co-borrower, they will have to answer the same questions.

Every dollar in checking, savings, investments and retirement accounts, also known as assets to close, as well as gifts from relatives and non-profit grants, has to be accounted for. Essentially everything appearing on a borrower’s asset-radar-screen has to be documented and explained.

If you were previously a homeowner and sold your home in a short sale, or if you own a home now and plan to keep it as an investment or rental property, there are new and specific underwriting guidelines created just for you. In these cases, full disclosure of your credit and homeownership past can potentially eliminate unforeseen mortgage approval woes. For instance, FannieMae has a new underwriting guideline called “Buy-and-Bail,” for current homeowners’ planning on keeping their existing home as an investment/rental property. Properties not meeting the 30% equity test for “Buy-and-Bail” result in additional asset requirements to purchase a new home. Buyers with a short sale history may have to wait two to three years before they are eligible for mortgage financing again. Full vetting of your previous mortgage life will save you the dreaded we-have-a-problem call from your mortgage lender.

It all comes down to your proof. If the lender asks for a specific document, give them exactly what they are asking for, not what “should be OK,” – because it won’t be.  This is where the approval process tends to go off the rails, when the lender asks for specific documentation and the borrower supplies something else. Here, too, is where both sides get frustrated. So if the lender asks for a bank statement and there are 5 pages for that bank statement, send them all 5 pages, and not just the summary. If you send them the summary page and they ask again, don’t complain that the lender keeps asking for the same thing when you never sent it in the first place. This may sound elementary, but the vast majority of mortgage approval process woes stem from scenarios just like this.

The reason the mortgage approval process is now so rigorous is simple. Avoiding defaults and loan buybacks has become the primary goal of mortgage lenders.   Higher standards are reducing loan defaults,  which should mean fewer foreclosures in the future. Government data shows that  less than 2% of loans originated in 2009, that were resold to Freddie Mac and Fannie Mae went into default after 18 months, down from more than 22% default rates for 2007 loans.

So when your lender requests specific documents from you, give it to them just “because they said so.”

You can thank my dad for that.

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