In today’s real estate market, the mortgage rules seem to be in constant flux. Here are some common credit questions that will help you make sure you are positioned well to get that home loan (or any other loan for that matter).

Will ordering my credit report negatively affect my credit score?
No, it will not have a negative impact on your score. The most important factor to your credit score is your credit history. Do you pay your bills on time? Are you maxed out on all your credit cards? Do you have a long credit history?

I just found an error on my report, can that be changed?
Yes, it can. You can try to write the company yourself with proof of the error. You can request your mortgage broker to write a letter on your behalf. The Department of Housing and Urban Development also has credit counselors available to answer your questions. www.hud.gov/counseling.

Where can I see my credit report?
Every year you can get a free credit report from the three major credit bureaus. They are Experian, TransUnion, and Equifax. According to the FTC website, www.annualcreditreport.com is the only authorized online source for a free credit report under federal law.

I have a blemish on my credit report; can I get it removed fast?
Unfortunately, no. Time is the only thing that will remove bad credit from your report. The FTC requires the bureaus to keep your credit information current for the last 7 years. After 7 years the bad credit blemish will “fall off” your report (10 years for a bankruptcy).

How to I get a better credit score?
Well, it’s easier said than done these days. You can reduce your debt and pay your bills on time. When a lender looks at your debt to income ratio, they like to see it below 36%.

I know it’s a self centered headline, but that doesn’t happen very often, so what the heck.

After I published a blog post on Glen Ellyn and Wheaton 2008 sales, market times and total number of homes sold, Brian Hudson, reporter for the Glen Ellyn News and Wheaton Leader called me about my statistics. We had a wonderful talk and he asked if I would mind being quoted in his article. Well, no; please go ahead and quote me!

He later called me back and asked if I would be willing to find a buyer and do a photo shoot for the article. I called Kathy Quaid, another fabulous agent in my office. I told her I have a house if she could bring the buyer. We met the photographer at 120 Tennyson, Wheaton. Kathy did an amazing job showing her client all the features of this wonderful home.

Not only does the article cover home sales in Wheaton and Glen Ellyn, but talks about the decrease of tax revenues and an interview with Kathy Doremus of the DuPage Homeownership Center, a nonprofit affordable housing agency.

Don’t get too down about the headline. I just ran numbers for Wheaton townhouses and the prices actually went up in 2008. There is hope!

There are some quick, easy and inexpensive ways to make your home more attractive to potential buyers. Most of these ideas take more time than money.

Clean goes a long, long way, even in an outdated home. Buyers like to know that a home has been loved and well maintained. I once had a seller who keep her files in the dishwasher. According to her, the dishwasher just didn’t get the dishes clean enough. I’m not saying you need to go that far, but scrub every corner of your home, it will pay off.

Furniture placement – rearranging furniture can give your rooms the energy and space they need. Remove any extra furniture, tables, knick-knacks and books. Make sure there is enough space to walk around the whole room.

Paint – this has to be one of the most inexpensive ways to freshen up a room. Feel free to do the work yourself, but if you need help picking paint colors, definitely pay a professional for their advice. The wrong paint color and a lot of wallpaper can turn off buyers.

Clutter – admit it, we all have it. You can organize it and put it in pretty containers, or better yet, pack it up and move it to a storage unit or neatly stack it in the garage. Your goal is to move, get a head start and pack it away now.

Green it up – add some green household plants for warmth and texture. Set some fresh cut flowers on the dinning room table or in the bathroom. Just make sure to keep them watered and looking good. And never use artificial plants.

Update – updating doesn’t mean spending a ton of money. You can replace switch plates, cabinet handles, light bulbs, sinks, door knobs, bath towels, welcome mats and toilet seats. None of those things will break the bank, and they will go a long way to freshen up your home.

Lighting – make sure you have enough lights in the home. Even during the day, turn on lights for a showing.

Our government is making an effort to entice first time homebuyers to purchase houses. On July 20, 2008, then President Bush signed into law, as part of the Housing and Economic Recovery Act of 2008, a $7,500 tax credit for first time homebuyers. This tax credit is available from April 9, 2008 to July 1, 2009.

Here are some details you need to know:

• The tax credit if for 10% of the cost of the home, not to exceed $7,500.
• The tax credit must be paid back over a 15 year period. It is however, an interest-free loan.
• The property purchased must be used as a primary residence.
• A single borrower must have an adjusted gross income of $75,000 or less. That goes up to $150,000 if you file a joint return.
• You must be a first time homebuyer.

If you choose to sell your home before the 15 years are up, you owe the IRS. Say you still owe $3000 and you make a $20,000 profit from your home when you sell. You would pay the IRS that $3000 at closing and walk away with $17,000.

Stay tuned, you never know when our government will change the rules and hopefully make this a gift, instead of a interest-free loan!

 

Both the Wall Street Journal and Bloomberg.com are reporting today that homes sales in December had their biggest monthly increase in nearly seven years. Homes sales were up 6.5% nationally in December 2008.

Most likely this is due to buyers taking advantage of home price cuts and homes in foreclosure.

 

Some great news for Wheaton real estate. 2008 condo and townhome average prices have gone up 11% since 2007! That is wonderful news considering the current real estate market and financial credit situation.

The market times have gone up considerably and the number of homes sold have been more than cut in half from the height of the market in 2005. However, these numbers are more consistent with single family homes in Wheaton.

 

There are some basic rules to selling your home: The first, and most important, is price it right the first time. This is followed closely by allow people inside to see the property. I know, the second seems a little obvious, but it is just as important as rule number one.

I just received this email from a selling agent.

“Did your client’s ever end up buying? My listing is still available, they are having a showing tomorrow at 11:00, I try to condense or combine showings because the seller has two babies, let me know if there is still any interest.”

Well, I tried to preview that property for my client back in early December. They were not allowing previews to agents because it disrupts the family. My clients did not have a lot of time to see properties, so I was previewing everything before bringing them inside. We ended up seeing 12 properties that weekend, one of which we bid on (closing this week – horary!). The house that wouldn’t let me inside and wouldn’t work around my client’s viewing schedule lost out on a very qualified buyer.

In any market, and especially in this one, it is imperative to allow people inside your home to see it. You can not sell a property with 25 photos or a virtual tour – no matter how good they are. Buyers want to walk around, look in closets, and see the view from the kitchen window. Once buyers have moved on, they rarely look back.

I am very understanding of schedules, dinners, nap times and Sunday morning family time. However, the buyer must be allowed to see the merchandise. And, they must be allowed to see it when THEY want to see it (within reason of course). No seller should turn away showings, EVER.

I thought it would be more beneficial to look at 2008 Wheaton Real Estate numbers in context with those same numbers from past years. I have gone back to 2005. This should give us a good idea of where we have been.

This first graph is of average sale price. The average sale price of Wheaton homes went up in 2006, had a plateau in 2007 and then dropped to just below 2005 sales prices. Now these are just averages. There are neighborhoods around town where the numbers are even lower, more in line with 2003 prices. It just depends on where you live.

The next two graphs are pretty self explanatory. The days on the market have gone up considerably from 2005 and the next graph shows the number of homes actually sold have gone down each year.

 

I thought it would be more beneficial to look at 2008 Glen Ellyn Real Estate numbers in context with those same numbers from past years. I have gone back to 2005. This should give us a good idea of where we have been.

This first graph is of average sale price. The average sale price of Glen Ellyn homes had a plateau in 2005 and 2006. It went up considerably in 2007 and then dropped to below 2005 sales prices. Now these are just averages. These are just Glen Ellyn real estate averages; let me know if you need a more detailed breakdown for your neighborhood.

The next two graphs are Days on the Market and Number of Homes Sold. The days on the market have gone up considerably from 2005 and the next graph shows the number of homes actually sold have gone down each year.

 

I went on a listing presentation this week and I didn’t get the job. I am a competitive person and I don’t really like to loose out to another agent. However, character and integrity are all I really have. I will not lie to people. I will not tell them what they want to hear just so they like me and I get their business. It is a tough market out there and we all need to be realistic on pricing.

Going in, I knew that they paid more for the home than it is currently worth. I presented 3 comparable properties; all were of similar size, age, construction and location. They all closed within the last 6 months. The comparable homes sold for $480,000, $495,000 and $545,000. The one that sold for $480,000 was the closest in terms of condition and updates. The home that sold for $495,000 had an updated kitchen and updated appliances. The larger home for $545,000 had a top of the line gourmet kitchen and updated baths. I told the sellers that they needed to price their home closer to the first two, maybe starting out at $499,900 or $509,000. If they want to sell in a reasonable amount of time, they need to get the pricing right the first time, or they will linger on the market. There is about 14 months of inventory on the market in their price range.

The next day I received and email from the seller asking: “Do you have any other comps that you considered in addition to the 3 presented?”

This was my reply: “I could pull other listings and make the numbers say anything you would like, numbers are easily manipulated. However, a higher listing price will limit the number of showings and prolong the listing time. Even if we do get a buyer to write a contract, the banks will use these three sales to determine the assessed value. If that number is less than what the buyer said they will pay, there is a good chance the buyer won't get the mortgage anyway.”

Well, the other agent they called in pulled three “comparable” properties and somehow came up with a list price of $650,000. Wow, that means one of us is off by more $150,000. That is a lot of money. Needless to say, they went with the agent who told them their house was worth way more than it actually is.

Am I upset I didn’t get the listing? No. I can’t sell a house that in my opinion is listed so far above what other homes in the neighborhood have sold for. I wish these sellers and their agent all the best. Who knows, maybe I will get to be their second agent.