This week, Kristin Ayers - our group's transaction manager - forwarded me an article that cited a number of reasons why a buyer should avoid purchasing a short sale or pre-foreclosure property. Of the 11 reasons they provided to avoid short sales, 10 were inaccurate. Therefore, as someone who lists and sells a number of short sale properties in the Charlotte Metro area, here are a few tips to aid you when offering on a short sale property.
1. What the Seller Owes Really Doesn't Matter
The article on short sales this week noted that buyers should be concerned with the amount the seller owes when compared to the market value of today. That is false. The reason why a home is listed as a short sale is that the seller owes more than the home is worth. In some neighborhoods, the banks are settling short sale properties for 40-50-60% of the previous purchase price because those sales figures are no longer relevant. As a buyer, you shouldn't focus on that number either but rather the market value of the property today. If a seller had private mortgage insurance, it can occasionally complicate the transaction but with so many mortgage insurers going belly up, their impact is becoming less and less.
2. Your Offer Should Be Within 10% of Market Value
No the banks are not giving these homes away but neither are they giving away bank-owned homes. Short sale offers within 10% of the fair market value of the property are accepted 9 out of 10 times. Some buyers prefer to low-ball the bank because they do not understand the bank's valuation process. However, low-ball offers are typically countered to by the bank at full market value. Therefore, a buyer who is not willing to pay 10% of fair market value should step aside.
So who determines what fair market value is: a local real estate agent or an appraiser. Depending on the price of the home, the values may be set by a local real estate professional (often not the listing agent) after the contract between buyer and seller. Often times, the agent who set's the price for the bank will be the one to list the property for sale should the short sale fail and the home ends up in foreclosure. As a result, they want a low-priced listing they can sell and routinely price the home low for the market. Also, bank owned homes are priced in the same manner (usually it's the short sale price) with the banks accepting within a percentage of the listed price.
3. Ask Questions of the Listing Agent
Ask 10 agents the way a short sale should be handled and you'll get 10 answers. Therefore, ask your agent to quiz the listing agent as to how many offers the property has, how your offer will be treated by the bank, where the seller is the short sale process, if a title search was done to reveal additional liens, etc. Our group handles short sales in this manner:
1. When an offer comes in from a buyer, it is negotiated between buyer and seller then signed by the seller creating a binding contract.
2. All other offers after the time of contract are accepted as backup-contracts only.
3. If the bank asks for all offers, we respond that we have 1 contract and x backup offers. We take a counter, if any, to the primary buyer and negotiate the sale with them. If they fail to consummate the transaction, we move to the next buyer with a backup contract. If we do not have a backup contract, the property is relisted for sale.
4. Once we have all parties in agreement, the buyer moves to closing.
4. Do Not Ask for Repairs to be Made
Short sales, like bank-owned properties, are sold in 'AS-IS' condition. Let's face it: the sellers are broke! If they hired someone to make the repairs, chances are they won't have the funds to pay them. We recommend that buyers to perform their home inspections even though the property is being sold 'AS-IS' because there are usually a host of latent issues that need to be resolved. Proactive buyers should consider performing their inspections pre-contract and use any repair work as leverage in their negotiations. For example, if the home has a bad roof, price the home with a bad roof, make your offer with the idea that you will need to replace that roof, and let the listing agent know the roof is bad. Word will travel and it will work in your favor to encourage a lower price.
5. No Contingencies and Be Prepared to Wait
Unfortunately, there's nothing short about a short sale. The banks are under staffed to meet the needs of sellers and think that with a 10+% unemployment rate, how many sellers are requesting assistance? Therefore, you need to be patient. That also means that you should not even think about asking for a contingency on the sale of your current home. Once the bank approves the short sale, you must close within 30-45 days. As a result, you must be flexible - preferably living with friends, family, or in a month-to-month rental - in order to consider a short sale. However, bank-owned homes are the same way so what's the big deal?
Never say no to a short sale in spite of what your agent may tell you. You're getting a great home for a great deal but like all good things, they take some time. The banks are getting easier to work with and routinely, the banks are paying real estate agents their full commissions so it's a win-win. In fact this entire year, we only had 1 short sale that did not pay well and it was one where we represented the buyer and the listing agent was very inexperienced. Even in that scenario, we were able to close the home in less than 60 days. By all means, do not expect that every short sale will work out and unfortunately, those are the ones you hear about most.
Over the last few months, I have received a number of phone calls from potential buyers of foreclosed properties who identify themselves has having bad credit. At first, I thought this was a fluke -a random buyer or two who thought I may know of a program to sell distressed properties to people with a history of not paying their bills on time. However, as of late, the calls have become numerous and as a result, I am posting this as a reality check for would-be home buyers.
First: if you know for certain that your credit is lousy, buying a home is probably the last thing you should be thinking of doing. The best advice would be to figure out what you owe and then develop a plan to pay down those debts. It may mean sacrifice or even taking a second job but there's not a single solitary bank that wants to lend money to people who have demonstrated that they pay their bills occasionally. While lenders will say to you that you only need to pay down your debts to a certain level, I would say pay down your credit cards and other lines to zero - then cut up your cards. Granted, there are mortgage programs that are not credit score driven however they don't ignore your credit history all together.
Second: if your home that you own is going into foreclosure, don't expect to purchase another home before the sale date. Mortgage lates are reported on your credit report even before the foreclosure. While not the end of the world credit-wise, no one in their right mind would lend a mortgage to someone who has chosen not to pay on the home they currently own. Many buyers a year or two ago purchased a new home and then let their old home go into foreclosure instead of selling it. The banks are wise to this practice and exercise every precaution to ensure that they do not end up with such a client.
Third: if you're broke, you're not buying a house. Best practices say that you should invest at least 20% of the purchase price as a down payment. Most mortgage minimums are 3.5% for FHA and 10% for conventional. There are mortgage products that will finance a home for up to 100% of the purchase price however this isn't for everyone. If you are going to go that route, you should at least have the money you would have used for a down payment in your reserves for an emergency or for when you sell. The problem many buyers run into is that when it comes time to sell, they cannot afford to because of a lack of equity and then must request a settlement or short sale from the bank.
My work with sellers that have fallen on hard times has driven the point home that it is absolutely necessary for you to live debt free and well below your means. If that doesn't suit you, then you should either change your standards or increase your income. When I purchased my first home in 2002, I put 20% down and had a little left in reserves for a rainy day that I had anticipated on growing. Six months after moving into my new home, I was out of work and now relying on my savings. Thankfully, I was able to find work in a few months, hold on to the home, and later sold it for a big profit. There were many nights where I lied in bed, heart pounding, mind racing, as I was wondering how i was ever going to put that money I was not living on back. However, as stressful as that situation was, it would have made it a million times more stressful if I was absolutely broke and facing the reality of losing everything.
So if you have bad credit or no money, start today with a game plan to improve your situation before you start thinking of purchasing a home.
Everyone wants to find a great home at a great price in today's market. However, spotting one is difficult given the level of available inventory and the number of confusing messages from family, friends, and others. Here are three types of properties that you may want to look into when attempting to spot that next great deal.
Homes Owned by or Involved in a Corporate Relocation
Relocation companies exist to aid corporations attract and relocate talent from out of state. In the past, most relocation companies offered properties at market value and were content to hold to their bottom line as values increased over time. In a declining market, the relocation companies are now offering the properties below market value; often at a price that would only be available through a bank-owned home or a short sale. The secret is that occasionally, the employer will pick up the tab on the difference of what may be owed on the home as a part of their employee's compensation package. Additionally, the homes are pre-inspected with repairs made prior to being listed for sale. The downside is that homes involved in a corporate relocation are not that easy to come by however you agent should know the keys to finding these properties.
The Good:Aggressively priced, Motivated Seller, Pre-inspected with repairs made. The Bad: Difficult to find and not available in every market.
Bank-Owned Properties (REO)
Bank owned properties are all the rage throughout the United States. The media has whipped up a frenzy among buyers that EVERY seller is just one payment away from foreclosure, which isn't true. Also, most are sold under the guise that there's absolutely nothing wrong with them, which may be somewhat true. What is true about a bank owned property, also known as an REO, is that for the RIGHT buyer, they can represent an awesome opportunity. However, if you are someone who's only prior home improvement experience consists of vacuuming the floor, an REO is not for you. If you're seeking into your first home, an REO is also not for you. Bank owned properties are sold AS-IS!
When you are looking at bank-owned properties, you must consider the costs associated with bringing the home back up to a livable standard. Most buyers only consider the ovbious problems (broken window, missing appliances) but there may be a whole host of deferred maintenance items that may need to be addressed as well. If you lost your job today, chances are you're not going to spend $20,000 on a new roof. I highly recommend taking along your trusted contractor and an inspector before making an offer on a bank owned home so that you will know what it is you're actually buying. Don't assume that a home that a new, never-lived in home is a great deal and will not have any issues. The questions you need to consider are at what point did the builder know when they were going to out of money and when did it finally occur? Also, was the home constructed to code with permits and did it pass all of the inspections?
Finally, REO homes are sold below market value so you need to act quickly and figure out if the bank is offering the home at a fair price or an unreal price. The banks do not want to own real estate and so they will offer the property below market value as a way to get it off the books quickly. Chances are that you're not the only one checking out the home, so you need to be prepared to offer the asking price or more.
During the summer, a buyer approached my team looking for our assistance to purchase a new bank-owned property in a gated neighborhood. Upon glancing the listing, it seemed the home was too good to be true at the price that was being shown in the listing. On site, the home looked great with 99% of all of the working being completed with a few punch-list items remaining...so we thought. Upon further inspection, we discovered the home never passed plumbing, electrical, or the framing inspection and would have to be demolished upon purchase. Our due-diligence ahead of time saved us from an inevitable lawsuit and we found the buyer another home that better suited their needs.
The Good: Below Market Value, Perfect if you know what you're doing. The Bad: Poor choice for the inexperienced DIYer or someone with limited cash reserves, due diligence required, must act quickly.
Well-Aged Listings
Cheese and wine are not the only things that get better with age; real estate can as well. Homes that have been on the market for a substantial length typically yield an excellent price, depending on the motivation of the seller. A closer look at the Charlotte real estate market in September revealed that the homes that in excess of 180 days typically sold at 85% of the sellers original asking price, where as the properties that closed in less than 99 days received closer to 92%. A few properties closed for less than 70% of the seller's original asking price, which can a great buy. The million dollar question is why did the home sit on the market for so long? Some are over-priced to begin with and the seller chased the market so far down that they ultimately settled with ever the market would yield. Others were dated and the buyers could not see the potential. Either way, for the right buyer, searching out a listing that has been on the market long enough to collect social security is an excellent way to score that deal of a lifetime.
The Good: 10-15% below market value. The Bad: The age of the listing may be as a result of the seller's lack of motivation...but you won't know unless you make an offer.
Data gathered for September 1 - September 30, 2009
New Active Listings
In the month of September, 243 single family homes were added to the market of available inventory in east Charlotte; a 7.60% decline over September 2008.
Pending Homes
110 homes in east Charlotte (area 2) were placed under contract in September, which was a 2.8% increase over 2009 but a 36.78% decline over 2007.
Sold Units
Only 98 single family homes in east Charlotte closed during the month of September, 6.67% fewer than a year ago and 51% fewer than in 2006.
Average Sold Price
The average sold price of the homes that closed in east Charlotte in September was $118,807, 25.78% lower than from a year ago and 18.71% than in 2005. For the sales that closed from January to September, the average sales price $131,572.
Percentage of the Listing Price Received
Sellers received 91.33% of their original asking price; 89.72% when the seller concessions are taken into consideration. For the homes that closed in less than 99 days, sellers received 93.67% of their asking price and 88.31% for the homes that closed between 100 and 180 days. The homes that were on the market for more than 180 days yielded only 84.92% of the original asking price.
Average Days on Market
The average selling time for a home in east Charlotte during the month of September was 94 days. When compared to August, the homes that closed during September closed 9.62% quicker although it will take 30.56% longer than it did during September 2007.
Seller Concession
53% of the homes that closed in September offered a seller concession to the buyer averaging $3891. A seller concession can be anything from paying lender’s fees, HOA fees in advance, taxes, insurance, or even a country club membership.Sold Price as a Percentage of Tax Value
Of the 88 homes that had a tax value associated with the listing, 64.7% sold at or below the assessed property tax value. When taken as a whole, properties in area 2 sold at 101.58% of their tax value.
Buyer Financing
Of the homes that sold in September, 4 buyers used VA financing, 36 used FHA, 35 used Conventional Financing, 26 cash and 2 other.
Single Family Homes in Mecklenburg County North CarolinaArea 9 including:
Abbington, Aberdeen Park, Americana Park, Avery Glen, Barkley, Barley Greens, Barrington, Beckett, Biddle Heights, Biddleville, Biltmore park, Birkdale, Braemar, Brasilia park, Brookfield, Brookline, Capps, Carrington Ridge, Carronbrige, Cashion Woods, Cedarfield, Chastain, Cindy Park, Claiborne Woods, Cradon Park, Crosswinds, Davis Meadows, Double Oaks, Douglas Park, Edmore Estates, Elizabeth Oaks, Firestone, Fox Chase, Fox Glenn, Gaitwood, Genesis Park, Gilead, Glenhaven, Glenwyck, Grass Meadows, Griers Grove, Hagers Ferry, Hambright Woods, Hamilton Village, Hawk Ridge, Hemby Woods, Henderson Park, Hunters Pointe, Huntington Forest, Hyde Park, Keeneland, Keener Creek, Lakeview Village, Lakewood, Latta Springs, Laurel Woods, Lawing Pond, Lea Woods, Lincold Heights, LInda Vista Place, Linden Estates, Macaulay, McCoy Crossing, McCrorey Heights, McIntyre, Melborne, Miranda, Northwood Estates, Oakdale, Oaklawn park, Oakview Commons, Peachtree, Pinebrook, Preston Village, Quail Ridge, Raven Ridge, Regency Park, Ridgemont, Riverview Acres, Rolling hills, Shelton Rige, Slater Ridge, Slater Springs, Stephens Grove, Stewarts Glen, Stillwell, Stone Hollow, Stonegate Farms, Stratford Forest, Sunset Oaks, Sunset Linda Vista, Sunset Village, Tanners Creek, Taylor Place, The Woodlands, Timberview, Torrence Crossing, Trinity Park, University Park, Villages at Rosedale, Walden Ridge, Walnut Creek, Washington Heights, Woodlands and Wynfield.
Data gathered for September 1 - September 30, 2009
New Listings
During the month of September, 177 single family detached homes were listed for sale in North Charlotte, Cornelius, Davidson, and Huntersville (area 9); a 3.28% decline over 2008 and a 22.37% decline over 2007.
Pending Sales
91 homes were placed under contract during September, which was 12.35% greater than occurred in 2008. Compared to August, September's pending home sales were off only 6.19%.
Sold Listings
85 homes closed during the month of September, a gain of 23.19% over August and 10.39% over the previous September. When compared to September 2005, September's closed sales were down 43.71% from the four year high.
Average Sold Price
For September, the average sold price for a home in north Charlotte, Cornelius, Huntersville, and Davidson (area 9) was $159,870, down 2.68% from August and 6.91% from a year ago. The cumulative average sales price from January through September for area 9 is only 154,688, down 16% when compared to the 184,882 during the same period in 2008.
Days on Market
The average days on market for homes that closed during September in Huntersville, Davidson, Cornelius, and Charlotte was 87, down 17.92% from August but 3.57% from the year prior. It took the average seller 128.95% longer to sell their home this September than it did in September 2006.
Seller Concessions
42% of all the closed sales in September in area 9 recorded a seller concession, averaging $3,889. A seller concession can be anything from paying lender’s fees, HOA fees in advance, taxes, insurance, or even a country club membership. By comparison, only three of the homes that closed in September offered an agent bonus.
Tax Value as compared to Sold Price
52% of the sales in this area of Mecklenburg county closed at a sales price below the homes assessed tax value. Taken as a whole, the homes that closed during September closed at 100.51% of tax value.
Original Listing Price to Sold Price
Seller received 92.48% of their original listed price at closing, 91.33% when the seller concessions are figured in. For the homes that closed in less than 99 days, sellers received 95.10% of their original asking price while homes that were on the market for 100-180 days yielded only 89.82% of the original asking price. The sellers with homes on the market for greater than 180 days received only 87.61% of their original asking prices with one home, listed for 869 days, closing at 47.06% of asking price.
Buyer Financing
Of the closings that occurred in north Charlotte, Davidson, Huntersville, and Cornelius (area 9) in September, 34 used conventional financing, 24 FHA, and 20 paid cash, 1 Other and 3 VA.
Single Family Homes in Mecklenburg County North CarolinaArea 1 including:
Charlotte, Cornelius, Davidson, and Huntersville Neighborhoods East of I-77, North of N. Tryon Street, West of Cabarrus County, and South of Iredell County including the neighborhoods of Highland Creek, Vermillion, Heritage Green, River Run, Skybrook, Northstone, Cambridge Grove, and others.
Data gathered for September 1 - September 30, 2009
New Listings
In September, 347 new single family detached homes were added to the inventory of available listings in north Charlotte. While September's new inventory were up 7.76% when compared to 2008 year over year, this September's new inventory was the second lowest since prior to 2005.
Pending Listings
159 homes were placed under contract in the month of September in north Charlotte, down 5.36% from 2008 and 38.37% from 2005.
Sold Listings
141 sellers found their way to the closing table during September, an 11.02% increase over August but a 4.73% decline over 2008 and a 37.89% over 2007.
Average Sold Price
The average sold price for single family detached homes in north Charlotte (area 1) during the month of September fell to $166,402, a decline of 28.07% over last September and the lowest average sales price in over 48 straight months.
Days on Market
Fewer sales during 2009 led to an increase in the average days on market for the homes that sold during September. Sellers were on the market for 101 days before receiving a contract, a 17.44% increase over the year prior and a 98% increase over 2006.
Seller Concessions
In 55% of the sales that closed during the month of September, the seller offered the buyer a concession averaging $4109. A seller concession can be anything from paying lender’s fees, HOA fees in advance, taxes, insurance, or even a country club membership. By comparison, only three of the homes that closed in September offered an agent bonus.
Buyer Financing
Of the 141 closings in northeast Charlotte in September, 48 used conventional financing, 64 FHA, and 22 paid cash, 6 used VA financing, and 3 utilized “other” forms of financing.
Tax Value as compared to Sold Price
76 of the sales that closed in north Charlotte (area 1) during the month of September closed either at or below the assessed tax value. Only 53 closed above the assessed tax value, averaging 98.55% for all of the closed sales during September. Only 12 out of the 141 closed homes did not have a tax value associated with their listing.
Original Listing Price to Sold Price
Sellers received 92.09% of their original asking price at closing. When the seller concessions are figured into the equation, the amount received was 90.75% of their original asking price. Sellers that received a contract in less than 99 days received 95.08% of their original asking price, while homes that sold between 100-180 days received only 87.47%. The 23 homes that sold in over 180 days only received 86% of their original asking price (84.21% with concessions).
Data gathered for September 1, 2009 - September 30, 2009 from the CMLS
Active Listings
September added 134 single family detached homes to the over market of inventory in Charlotte, Mint Hill, and Matthews area 3. September 2009's new inventory figures were 37.09% lower than in 2007 and 27.58 lower than in 2008.
Pending Units
Seventy eight single family homes received contract in Charlotte, Matthews, and Mint Hill (area 3) in September, which was a 8.24% decline over 2008 and and a 43.07% decline when compared to 2007.
Sold Units
Sixty-seven homes were sold in September, a 17.54% increase over the same time period in 2008. However, when compared to the same month sales from 2005- 2007, September 2009's sales were down an average of 43.76%
Average Sales Price
The average sales price for homes that sold in Charlotte, Mint Hill, and Matthews (area 3) during September was $165,398. September 2009's average sales price was the lowest since 2005 and 25.88% lower when compared to 2008.
Average Days on Market
The average days on the market for the single family detached homes increased 47.3% to 109 days. September's DOM was the highest in over five years.
Seller Concession
36 of the 67 closed sales in September offered the buyer a concession which averaged to $5,173. A seller concession can be anything from paying a lender’s closing costs, HOA fees in advance, taxes, insurance, or even a country club membership.
Sold Price as a Percentage of Tax Value
39% of of the homes that closed in September in Matthews, Mint Hill, and Charlotte (Area 3) sold at or below their assessed tax value. On average, homes sold at 124.65% of their assessed tax values.
Sales Price as a Percentage of Original List Price
On average, sellers received 92.28% of their original asking price or 90.5% when concessions are considered. Of the homes that closed in less than 99 days, the seller received 96.18% of their original asking price while homes that were on the market greater than 99 days received only 85.61%. Sellers of homes that were on the market for greater than 180 days received only 82.82% of their original asking price. Buyer Financing
Of the homes that sold in September, 32 utilized an FHA loan, 19 obtained a Conventional mortgage, 3 VA, 1 used a financing program offered by the North Carolina Housing Finance Agency, 2 were other, and 8 cash.
Interior Features: Hardwood flooring, 9' ceilings, open floor plan, 2nd and 3rd floor living rooms, master suite, jack and jill guest baths, gas cooktop in kitchen
Community Features: Community pool, clubhouse, tennis courts, and recreation area
Description: Short Sale / Pre-Foreclosure in the heart of south Charlotte. Well appointed home features hardwood floors throughout main & 3rd floors, chef's kitchen, lot's of natural light, 2 sitting rooms off Master Suite, 3 Great Rooms and so much more. Don't miss the breathtaking 3rd level Media Room. Sold AS-IS
For additional information or a showing:
Susan Shirley or Jonathan Osman
The Charlotte House Hunter Group
Description:This delightful transitional with spacious fenced yard features soaring ceilings in the great room, open kitchen with center island and tall cabinetry, pergola over the rear deck, separate. mud / laundry room. The master suite features a tub & separate shower along with an unbelievably large walk-in closet. An added bonus is the tankless water heater. Approximately 10 miles to I-485.
For additional information or a showing:
Susan Shirley or Jonathan Osman
The Charlotte House Hunter Group
Single Family Homes in Mecklenburg County North CarolinaArea 4 including:
Mecklenburg County North CarolinaArea 4 including: Charlotte, Matthews. Neighborhoods West of Hwy 74, Independence Blvd. and East of Providence Road including, Grier Heights, Chantilly, Cotswold, Elizabeth, Eastover, Beverly Crest, Sardis Woods, High Timbers, Downtown Matthews, Lansdowne, Providence Plantation, and others.
Data gathered for September 1, 2009 - September 30, 2009
New Listings
One hundred and ninety-two single family detached listings were added to the market in south Charlotte and Matthews during September. That was a 4.48% decline in the number of new active listings over the September the year prior. As of the date of this blog, the total inventory of active available single family detached properties in area 4 is 794
Pending Sales
Pending sales rose in September 13.11% from the year prior to 69 properties receiving and ratifying contracts. This was a same as in August, however a 36% drop from 2007 and a 56% decline since 2005.
Sold Listings
Single family detached home sales increased in September 5.97% from August and 7.58% from September '08 to finish the month with 71 closed sales. While a far cry from the sales volume from 2005-2007, it is an increase nonetheless over a tough 2008.
Days on Market
The average days on market for a home in Charlotte and Matthews area 4 for sales in September remained a flat 96 days over the year prior. September's sales had the second lowest average Days on Market since March, besting the summer months.
Seller Concessions
44% of the homes that closed in September offered a seller concession to the buyer as a part of the contract. The average concession amount was $4,138. A seller concession can be anything from paying a lender's closing costs, HOA fees in advance, taxes, insurance, or even a country club membership.
Tax Value as compared to Sold Price
Of the homes that closed in September in Charlotte and Matthews area 4, only 6 properties sold below their assessed tax value. On average, homes in area 4 sold at 135.11% of their tax value, with two selling over 200% of tax value. When adjusted out, the percentage drops to 124.59% of tax value.
Average Sold Price
In September, the average sales price for Charlotte area Matthews area 4 was $306,217, down 7.75% from the year prior and 15.12% lower than in 2007. The average sold price are still higher than in 2006 and 2005.
Percentage of Listed Price Received
On average, sellers received 91.42% of their original asking price. When concessions are included into the equation, sellers received 90.59% of their original asking price for the sales in September. For properties listed for fewer than 99 days, the percentage increases to 93.91% of asking price while older listings only averaged 86.86%. Bargain hunters must consider the older inventory on the market as sellers, whose homes were on the market for greater than 6 months, received only 81.64% of their original asking price.
Types of Sales
Of the 71 recorded sales in September, only 1 short sale listing closed as well as one home involved in a corporate relocation. The rest of the sales were between a seller or investor and buyer. Of the 794 active homes for sale in area 4 today, 7 are owned by relocation companies, 21 are bank owned, 25 are involved in a short sale, and 6 are owned in an estate.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
First: if you know for certain that your credit is lousy, buying a home is probably the last thing you should be thinking of doing. The best advice would be to figure out what you owe and then develop a plan to pay down those debts. It may mean sacrifice or even taking a second job but there's not a single solitary bank that wants to lend money to people who have demonstrated that they pay their bills occasionally. While lenders will say to you that you only need to pay down your debts to a certain level, I would say pay down your credit cards and other lines to zero - then cut up your cards. Granted, there are mortgage programs that are not credit score driven however they don't ignore your credit history all together.
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