Building a Sustainable Home

Sustainable housing is one that makes good use of resources and energy use to ensure there is minimal impact on the environment because of the house. The overriding principle in sustainable housing is that it must involve less energy and less waste, lower environmental impacts, and more re-use. Making a house sustainable can be done with a few small cheap projects all the way up to total home renovations – and when you’re building, you can add as many “green” aspects to the house as you want. Here are some of our best ideas.

Good Insulation of Walls

This aids in cooling, and saves on energy costs. Insulation keeps the temperature of the home stable, and badly installed insulation means the house will have to work much harder to heat and cool itself, which drives up your monthly bills and can cost a lot more over time.

Aim for the Sun

Orientate a new home for max sunlight exposure. Aim your house to the south if you want the most sunlight over the course of the day, or to the east or west if you want intense direct sunlight for half of the day. Aim your house to the north if you want little sun.

Choose Appliances with Energy Efficiency

A regular electrical appliance won’t make the cut as far as a sustainable house goes. Swap them for energy saving certified products instead. They may have a bigger price tag right now, but over the time you live in your new house, you will save multiple times what you pay for it.

Use Non-Toxic Building Materials

This may also cost a little more – the cheapest you can get is builder’s grade and those barely make the cut to be used at all. So expect the use of non-toxic building materials to run up a bill. However, non toxic building materials lower environmental impacts the house could pose.

Use Local Materials

Use lumber cut locally, products made locally, and buy as much as you can in-person. Not only does this improve the local economy, but it cuts down on transportation costs to get the products from wherever they are to you. Less traffic emissions is always a plus in our book.

Minimize Resource Waste

During construction, recycle as much waste as you can and reduce the amount of waste in general. To give an example, home building materials can be sourced from demolished projects which have been recycled. Talk to your general contractor to learn more about this.

Use Renewable Electricity Resources

This one is a little more expensive up front but literally saves tens of thousands of dollars over time. To achieve this you will install either a small scale wind turbine or a micro hydro system. Wisely choosing the power company that will offer renewable sources is also a good thing.

Build the House How You Want It The First Time

If you can handle it, build your house exactly how you want it the first time around, so that later you do not have to remodel and create more environmental waste and hardship. Think of the future – if you know you want to expand your family, build the house to reflect that.

Use Native Plant Life for Curb Appeal

If you live in a cold climate and purchase warm weather plants, they likely won’t live very long, and to replace them will mean the transportation of new plants. It will also support the bees and other pollinators to use local plant life when you are setting up your garden.

Install Solar Panels

Probably one of the most popular options, solar panels do a lot to make a home more sustainable. You can also choose to have a single solar panel instead of outfitting your entire house if finances are an issue. The one solar panel will still greatly offset your energy usage.

Use Energy Saving Bulbs

When the light fixtures are built on your new house, make sure you use energy saving bulbs. They last many thousands of hours longer than regular light bulbs and they are also easier on the electrical usage of the house. Replace incandescent lightbulbs with fluorescent or LED bulbs.

Use Multi-Socket Extension Loads

A home’s power consumption can be reduced by up to 15% if multi-socket extension loads are used. Of all of the choices to lower power consumption, this one is one of the choices with the biggest impact. One of the only other ways to reduce your impact this much is to go solar.

Build a Compost Station

Composting kitchen waste will reduce the amount of house waste in landfills, and will also reduce the costs associated with collecting the wastes. You can compost any organic material, and then use it as fertilizer in your garden – which yields more organic material that you can then compost.

Choose Organic Bedding

This choice has less to do with home-building decisions, but is still so important that we cannot surpass it. Cotton linen usage accounts for almost one third of insecticide usage in the world. Changing your bedding to organic cotton or bamboo is much more sustainable.

Choose Energy Efficient Windows

These windows keep the house cooler during the summer and warmer during the winter thanks to their excellent insulation. Regular windows do an okay job of insulating the house, but that is what these windows are specially made to do. You will save on your energy bill for sure.

Build Water Tanks to Collect Rain Water

Collect rainwater in tanks for use in bathrooms and the garden. You can’t drink it, but you can flush a toilet with it, water your plants with it, or flush the gutters with it. Rain water harvesting will assist in reducing waste of piped water, which helps out the environment.

Use a Programmable Thermostat

Thermostats are made to help give you more control over your home’s temperature, so keep the environment in mind while you are setting it. Keep your house a little warmer or cooler than you would like when you are not around or sleeping, depending on the season.

Install Low Flush Toilets

Low flush toilets can significantly assist in reducing water waste compared to traditional toilets. Traditional toilets use around 6 liters of water per flush, and low flush toilets use around 4.5 liters (or less!) per flush. This amounts to thousands of gallons of water per year!

Use Eco-Friendly Paints

Everyone knows to avoid lead paint, but that isn’t enough when you’re trying to be as eco friendly as possible. The use of paints that are plant or water based are much better than the traditional paints, which contain chemicals that are harmful to the local air quality.

Use Motion Sensing Lights Instead of Switches

Have you ever forgotten to turn a light off? If you switch to motion sensing lights, you won’t have to worry about that anymore. You’ll also save a ton in electricity – and you’ll know that you’ll only be using electricity when you really need it.

Install Skylights In Top-Floor Rooms

Skylights provide a ton of natural light as well as a little room-warming thanks to the sun. That means they are highly energy saving and reduce energy consumption by a lot! They also don’t take up a lot of wall space, meaning that you can install as many as you want!

Use Sustainable Flooring Materials

Everyone wants good looking floors, but you really can have it all with sustainable flooring materials – they look fantastic and durable, but are also great for the environment too. This is another thing that you can ask your general contractor about – they will likely point you to bamboo flooring.

Choose The Site Wisely

Avoid hazardous areas like flood zones. If you can’t, make sure your home is able to withstand the hazard. You don’t want to have to build your house twice – it’s not good for the environment! Whatever natural disaster you’re facing, make sure your house is protected against it.

Build a Smaller House

Less work, less emissions, less energy consumption, and less damage to the environment – smaller houses are just more sustainable. A larger house requires a lot more of everything, even the bad things. Try not to over-do it on the size of the house. It’s less wasteful!

Use Air Sealing

This is one of the lesser know energy efficient home ideas that people often forget about. It prevents air from exiting your house – conditioned air that you’re paying for. Make sure there is sealant at all exit points of the house – the windows, doors, vents, electrical conduits, and any other places.

Consider Efficient HVAC Design

Your AC and heat will be the largest source of energy consumption in your home. You want to use an efficient, well designed system. Consider a smart thermostat, zones, efficient equipment, mini split units, and more. HVAC is a huge portion of energy consumption and should be efficient.

A sustainable house is a home that has the least possible negative effect on our environment. What we build matters, and so does how we build it.

Reasons Your Home Isn’t Selling

Has your home been on the market for what feels like forever? You listed your home and it has been showing, of course, but no offers have come in. You know you need to make some changes, but what can you do? What should you prioritize? How do you know where you’re going wrong?

When the average number of days a home is on the market ranges from 75 to 145, a home will sell for the most amount of money in the first 30 days that it is on the market. This is because potential buyers start to wonder what is wrong with a home if it hasn’t sold in 30 days. With that being said, you want your house to sell fast! The longer it sits on the market, the more the sale will fall below list price, so you want to solve this issue as quickly as possible.

Here are some reasons your home likely isn’t selling as fast as you want it to.

The Price is Too High
We know – your house is precious to you and you feel it’s worth top dollar. But pricing a house too high is an extremely common mistake. 51% of agents say that pricing a home incorrectly is the biggest mistake a seller can make. Pricing a home for sale can be hard – you want to make a profit, but you want to be fair when you decide on a number. There are a ton of ways to look at data points to determine a fair market value for your home, but the best way to get an accurate number is to work with an appraiser and an agent. Your appraiser has no horse in the race of your house selling, so you know he or she will give you an accurate number. Also, it is your agent’s job to position their listings where they sell in the coveted first 30 days. They will be able to tell you if your asking price is too ambitious. Either way, don’t let your house sit on the market for any longer than a month without doing a price drop, no matter what anyone tells you. It can be disappointing, but isn’t the end of the world – 22% of sellers in the last ten years have reduced their asking price at least once.

Your House is Too Unique

Either you have a property that is snatched off of the market the first week, or you don’t – and one reason you might fall in the “don’t” camp is because your house is a little too unique. Very large homes, very high end or expensive homes, homes in strange areas, or homes with odd and unusual features can take a lot longer to match with a dream buyer. If you have the expendable cash, see if you can bring your home a little closer to neutral. Make sure the walls are all white, the flooring is a neutral color and style, the outside of the house has attractive landscaping that would be easy for anyone to uphold, and more. If a small remodel isn’t in your best financial interest, you can change your marketing strategy. For example, if you are trying to sell a home with multiple complete living spaces (such as a duplex turned home), change your strategy towards using the other space as a rental for extra income, instead of trying to sell one family two homes in one. Make it work for your buyer. Selling a unique home may also require the listing of the property in places other than the local online real estate sites. More eyes on the listing means more opportunities for things to work out.

Your Staging is Off-Target

Staging matters. It helps your buyer picture their own stuff in your house, and the better they are able to do that, the more likely they are to buy from you. Un-staged or badly staged homes can come off as cluttered, small, dark, and as if the potential buyer is invading someone else’s space. Typically, a properly staged home sells for more money and in a shorter amount of time. Staged homes sell 87% faster than un-staged homes, for example, and for 17% more. 96% of surveyed realtors agreed that staging has a noticeable effect on potential buyers, and that they are a lot more likely to favor the house in that case. Remember too that staging is not only about making your house look clean, orderly, and neutral. It is also about fixing up the small things that can distract people from your house as a whole – scuffed paint, floors in need of a polish, or highly outdated fixtures. Buyers have a lot of trouble seeing past those things to focus on the potential of the house. Incorrect staging could fail to show off your home’s assets or highlight flaws that you don’t want your buyers to notice.

Your Curb Appeal is Non-Existent

You stage the inside of your home, and you should stage the outside, too. After all, the first thing your buyer sees of your house is the outside of it. If your yard is littered with children’s toys, dead landscaping or grass, trash, or yard decorations, it’s likely to turn off a potential buyer. You don’t want to turn off a buyer before they even reach the front door! Of course, the planting of a few flowers in the front garden aren’t going to net you an additional 50K on your house, but it is proven that lawn care gets an average of 303% ROI and general landscaping gets an average of 100% ROI. Upgrade your curb appeal – clean things up, grow some grass, plant those flowers, and repaint the shutters. If you don’t know where to start with this (or don’t have the time to do it), hire a professional landscaper. They can help tell you the easiest and cheapest ways to make your yard look amazing in the smallest amount of time. Don’t forget the backyard, either – touch up the stain or the paint on your fence, and if you don’t have a fence, install one! Make sure the trees in the yard are living and attractive, and not fall-risks.

Your Listing Photos Are Bad Quality

Over half of buyers look online before they even consider visiting a house they’re interested in, and photos you took on your flip phone aren’t going to make them want to come take a tour. If your listing photos don’t show how amazing your house is in crystal clear quality, no one is going to come tour it. If your house has been on the market for a long time with no tours or offers, consider updating your listing photos. Take the photos with a real camera – it’s worth the extra effort. Listing photos taken with professional cameras typically get around 60% more page views than listing photos taken on cell phones. In fact, good photos can increase the selling price of your home starting at around $1,000. If you don’t have your own camera, hire a professional. Your agent should be able to help you arrange this or arrange it for you. It’s one of the things your commission to them is supposed to pay for. If they don’t provide the photographer, find someone yourself. A little investment will deliver massive returns.

There’s a Specific Issue

Every potential buyer in the world will ask their agent – is there anything wrong with this house? If you have a glaring issue, it could be driving people away in droves. Have your agent ask tourers what would have to change for the house to be their dream house. If you get a lot of similar answers, you know what has to be changed. Once you know that there is an issue and have identified what it is, you can work to fix it. If you hear that multiple buyers are having trouble envisioning their furniture placement in your house, tighten up your staging efforts. If they want more light, paint the walls whiter, open the windows, and declutter. If it’s a bigger issue that you can’t afford to fix right now, knock a little off of your asking price. Some things can’t be changed, such as your proximity to busy roads, construction, or a “bad neighborhood”, so make sure your asking price reflects any specific issues your home has.

It isn’t too late to sell your home. No matter how long it’s been sitting on the market, there is a reason why. With the right adjustments to your home’s price, listing, staging, curb appeal, condition, and photos, it will sell. There is a happy buyer for every unique home! The worst case scenario? You take your house off the market for a while, fix it up, then relist it. If you need to or want to, you can start over with a new agent, too.

Good Habits for a New Home Owner

Are you a new home owner? Congratulations! You got through the mortgage process in one piece. Thankfully, you’re out on the other side – with a new house to boot! You probably want to do everything that you can to make sure that your new house is taken care of so it will last far into the future, don’t you? If that’s the case, then you’ve found the right place. Here are all of the habits you should start today as a new home owner.

Change the Filters

Whether it’s your air conditioner, furnace, drinking water faucet, or even your ice dispenser, make sure you’re changing all of those filters as required. Not only does this keep dust, germs, and bacteria at a minimum, you will also improve energy efficiency, which is good for your home’s long term health.

Save Energy

Speaking of being energy efficient, keep an eye on your home’s energy output and look for ways to reduce it as much as you possibly can. This can be as big of a deal as installing all new appliances or a small thing like swapping incandescent bulbs for LEDs or CFLs. It also includes regular maintenance of energy based appliances such as your HVAC system.

Clean the Gutters

Just because you can’t see the leaves doesn’t mean they don’t exist. One of the most common causes of basement flooding is overstuffed gutters that keep rainwater from exiting the rooftop. You should be sweeping out your gutters once a month and perhaps twice a month from August to April, when the leaves fall and it gets particularly grim outside.

Maintain Curb Appeal

Just because you spend most of your time on the inside doesn’t mean that you don’t have to keep up with the outside. The outside of your house is an extension of the inside, so you should take pride in it. It helps with your resale value, too! Trim your hedges and bushes, add flowers and trees, and keep the grass cut and the weeds pulled.

Check Home Safety Equipment

Check your smoke detectors and carbon monoxide alarms every month without fail. Change their batteries every six months whether you think they need it or not. Make sure the gauge on the side of your fire extinguisher is in the green. If not, it needs to be replaced. Always replace a fire extinguisher once it’s been used, even if you haven’t used all of the spray.

Change the Locks Every 5 Years

It’s likely that someone out there will have a key to your house if you don’t. Sure, the old owners surrendered their keys to you, but it’s not uncommon for people to make copies of their house keys for the neighbors or their parents. Keep your family safe by re-keying the entire house. Now is also a good time to make sure the locks on all the windows are sturdy. Don’t forget the garage door keypad. Change the keycode on that as well.

Check for Leaks

Ideally your home inspector checked to make sure your house was leak free, but you deserve the peace of mind. Check again. On a weekend that everyone is otherwise busy, turn off the water to the home and after a few hours, check the water meter. If it has changed at all from the time you turned the water off, there’s a leak somewhere. You should do this at least twice a year.

Check Your Water Heater

Look at the temperature on your water heater, especially if you have kids. You don’t want to accidentally scald them. Manufacturers tend to set them way too high for young ones baths, so you can turn it down if you need to. The generally accepted best temperature setting is around 120 degrees.

Clean Your Dryer Hose

You should do this yearly. It doesn’t take long and it isn’t a lot of work. Not doing it can end with your house burnt down. It happens all the time! You don’t know the last time the previous owners did it, so make sure it’s one of the very first things you do. Start your schedule from there.

Clean Your Fridge Coils

Many people don’t even know you have to do this, but it’s an integral part of refrigerator maintenance. Changing the coils makes your fridge run better and last much longer. However, some newer fridges don’t have coils, but you should still check. If you certainly don’t, there’s no need for an annual cleaning.

Emergency Preparedness

Make a plan and update it twice a year. Locate your main water shut off valve (busted pipes are practically a new homeowner initiation rite – it happens to everyone). Find the circuit box, and label all of the breakers. Find the gas shut off valve and show your family where it is. If you have one, test the sump pump, preferably before the rainy season starts. List your emergency contacts and update their information. You should also have and keep updated an emergency supply kit.

Go Through Important Documents

You never know when you’ll have a dispute with your neighbor over property lines. Store copies of all of your important papers relating to your house in a fireproof and waterproof lockbox and hide it like you would a safe. Every six months, drag it out, and go through each paper. If there’s something you don’t need anymore, get rid of it. Add papers that you’ve come into ownership of but haven’t filed yet.

Fertilize or Plant New Grass

This one is great for the spring time. When the nights are still a little chilly, grass will still grow, but weeds won’t. The more grass you have, the less space there is for weeds, crabgrass, and dandelions. You can’t use chemicals such as weed blockers or killers with brand new grass seed, so get started on this each spring as soon as the snow melts.

Sweep Out the Chimney

If you have a fireplace, you have to do maintenance care for it. Every year or so, you should have your chimney swept out. Otherwise, the buildup can start a fire. If you have a wood burning fireplace, get that swept out every time you go through a cord of wood (or every few years, whichever comes first). Don’t wait until the dead of winter to do this, either – schedule it for early Fall.

Boiler and Furnace Clean Out

Before it becomes time to turn on the heat, you should get these two things inspected professionally. Then, handle the regular maintenance on them. If you get oil delivery, your oil company should take care of this for you. With gas, you will have to call your own plumber or heating technician. They will flush out the water in it and then fill it back up a few times. That’s it!

Check for High Water Pressure

There is a line on how high your water pressure should get. Anything over around 75 lbs psi is too much. High water pressure can harm pipes, connections, and appliances alike. It also creates water hammer and wastes massive amounts of water. You can easily check this will a pressure gauge and if needed, fix it with a new pressure reducing valve. They are available at any home center.

Clean Window Weep Holes

Many sliding windows and vinyl replacement windows have weep holes on the outside bottom frame. These holes are meant to drain away rainwater that collects in the frame’s bottom channel. They tend to get plugged up with bugs and debris, which can cause the rainwater to flood over into your house because it has nowhere else to go. You can clean out these holes with a wire hanger or a paperclip.

Clean Out Window Wells

If you have a basement, make sure you do this. A clogged gutter can dump rain water into your window well, causing the leaves to act like a pool liner, preventing drainage. The water level will rise higher and higher until the pressure breaks the basement windows, flooding the basement. There is typically not insurance for this type of flood. You can also buy window well covers to take this job away.

Lube Garage Door Springs

Otherwise, they’ll need replaced a lot sooner. Coat the overhead torsion springs mounted above roller tracks with a garage door lubricant. Obviously, all springs will eventually go bad thanks to corrosion and metal fatigue, but doing this will make them last a lot longer. While you’re at it, lube the rollers, hinges, and track, too.

Check Garage Door Balance

Speaking of garage doors, a properly balanced door is less likely to injure someone and keeps the door opener from working too hard, shortening it’s lifespan. You can check the balance by closing the door then disengaging the opener by pulling the release handle. Manually lift the door about halfway and let go. A properly balanced door will not move. If it falls, the tension needs increased. If it rises, it has too much tension.

How to Buy a Home With Down Payment Assistance

When an expected down payment amount is 20% of the total cost of your house, it can seem daunting and like you’ll never be able to save enough money up. Buying a $200,000 house at only 3% down would take you two years if you were only able to save around $200 per month, which is what most people say they are able to save. That’s a lot of years of saving up before you can even get close to 20%! But have no fear – most first time home buyers can apply for down payment assistance programs through their state and local municipalities. Grants and forgivable loans are typically available. You can receive help with getting your mortgage. It’s easier than you think.

How do these programs work? The help comes to you through state housing finance agencies as well as city and county government programs that are aimed at meeting affordable housing needs. The types of closing costs and down payment assistances can vary depending on which program you’re using. There are more than 2,000 down payment assistance programs in the United States alone that are nationwide – and that’s not even accounting for the thousands that work at local, city, or county levels. It has been calculated that those who use down payment assistance programs have saved, on average, $17,776 more over the lifetime of their mortgage than those who didn’t – and nine out of ten properties in the country qualify for assistance as long as the home buyer is eligible to receive it.

You’re more likely to qualify for down payment assistance (and then to get more money) if you buy in a so-called target area.  The legal word for this is a “qualified census tract”, or QCT. These tracts are designated by the US Department of Housing and Urban Development, based on household income data of the areas in question. Your state or local authority can also designate certain areas. The areas chosen are usually places that have experienced chronic and unusual economic issues, or need help financially regenerating themselves.

Typical types of assistance include:

Low Interest Loans: These loans must be repaid over a designated period of time, usually about ten years from the day the loan is paid out to you. The purpose of this type of loan is to spread the down payment and closing costs over multiple years instead of you having to pay it all at once up front.

Zero Interest / Deferred Payment Loans: Generally, no payments on the down payment or closing cost loans are due until  the home is sold, the mortgage term ends, or the mortgage is refinanced.

Zero Interest / Forgivable Loans: These loans are forgiven over an agreed upon period, such as five years. The money doesn’t have to be repaid under the condition that the borrower still owns and lives in the home after the period is over.

Grants: Grants are the outright gift of monetary assistance. They are not required to be repaid under any circumstance.

Who can get down payment assistance? Most down payment assistance programs are only for first time buyers, but don’t count yourself out just because you’ve owned a home before. The legal speak in the fine print of the program’s terms typically state that they consider a homebuyer to be a person who has not owned a home for the past three years. You also will likely qualify if you are a teacher, police officer, emergency responder, or government employee. Some programs, but far fewer, are open to qualified repeat buyers, too, so it’s worth asking about if you need the help.

Besides being a first time home buyer, a person can qualify for a down payment assistance program by taking a home buyer education course online, meeting income limits (most programs are geared towards low or moderate income folks, so a potential borrower’s income must be below a certain threshold), purchase in an approved location, stay below the maximum home purchase price (typically a percentage of an area’s median home purchase price), or contribute some of your own money towards the purchase.

How do you apply for mortgage down payment assistance? You can start by talking with your mortgage lender. They will be able to direct you to assistance programs offered by your area’s housing finance agencies. They will also be able to quickly run over each program with you, explain which you have the chance to apply for, and explain how they work. You can then check with your city and county to get the ball rolling on the programs you wish to apply for. Do this by visiting the website of the local government agency or organization administering the program to learn more about their requirements – for example, they may only work with certain mortgage lenders. Then, you’ll apply for the mortgage with a lender who is approved to work with the grant program. The local agencies can direct you to a mortgage lender that they work with, if you need them to.

Some common examples of homebuyer down payment assistance programs are…

HUD’s Good Neighbor Next Door: This program is run by the US Department of Housing and Urban Development, and it’s not strictly limited to those who are first time buyers. To be eligible, you must be purchasing a property that is in a designated area, and you must be of a certain profession – either a law enforcement officer, a firefighter, an emergency medical technician, or a teacher. If you commit to living at the home for at least 36 months, you can receive up to half off of the list price of the home, which sounds wonderful – but the designated areas can often be in places that others are reluctant to live in, so weigh your options before you go with this program.

National Home Buyer’s Fund: This one is pretty straight forward – after you find a participating lender, this program provides up to 5% of your loan amount. It’s a non-repayable grant, which means you don’t have to pay it back. Check with your mortgage lender to get more information on how you can qualify for this grant – it differs by state.

Veteran’s Administration Loans: If you are a United States veteran or active duty, you should qualify for a Veteran’s Administration loan. With this type of loan, you don’t have to make a down payment at all. You can typically get a competitive mortgage rate with this type of loan. They are backed by the government and offered through participating lenders, so as long as you meet the service requirements, you can qualify for one of these loans.

Veteran’s Administration Adapted Housing Grants: If you are a disabled United States veteran, you likely qualify for this. This type of grant helps you purchase a home that is adapted to your service-related disability. This type of grant applies if you need to make changes to a home in order to make it accessible for your disability.

USDA Loans: If you like the idea of living out in the country, look into a USDA Loan. You can get a home loan using the Department of Agriculture program, which is meant to help those with lower and moderate incomes buy homes in more rural areas. You don’t need a down payment, but you do need to meet certain income requirements. If you don’t like the idea of living in the country, this type of loan is not for you, as it requires you to live somewhere rural.

First Home Club from Quontic Bank: This club offers the chance for potential home buyers to receive matching funds towards a down payment in the state of New York. When you team up with the First Home Club, you make monthly deposits into a Quontic savings account. For each dollar you save, you get four dollars in matching funds up to $7,500 to go toward your new home. You must have your mortgage funded through Quontic if you want to take advantage of this program.

Local First-Time Homebuyer Grants: Most of these grants are extremely specific in what type of situation they will serve. These grants are income dependent and location specific. There are very few of these programs at a national level and they are typically distributed by state. Some of the programs require you to repay them if you only live in the house for a short period of time. They are, however, usually forgivable, typically forgiving 20% of the grant each year for five years. Some programs can also levy a tax recapture if you sell your home for a profit before a certain number of years have passed. This means that some gains you will get for your home’s increased value when you sell might get taxed in order to make up for the break you got earlier.

All The Forms You Need to Buy a House

In 2000, less forms were required to obtain a mortgage than now, in 2020 – by far. It seems that in the years before the great recession, it was pretty simple to get approved for a mortgage, which led to borrowers not being thoroughly vetted, which was a huge factor in the recession. Mortgage lenders certainly learned their lesson, and now, creditors will much more thoroughly assess a potential borrower’s ability to repay their loans. This means, to the stress and dismay of many wishful mortgagees, more paperwork to be done.

What forms you will be required to give are half standard, and half dependent on your situation. For example, every mortgage applicant will be required to offer proof of identity, but not everyone will be required to show proof of self employment (as not everyone is self employed). Your mortgage lender or mortgage broker will be able to give you a much better idea of what documents you’ll be asked to provide. Here are the documents you’ll certainly need, as well as some you may or may not need.

Tax Paperwork

To get all the details on your financial situation, your mortgage lender is going to want a copy of all of your tax paperwork. You’ll almost certainly be required to sign a form called “Form 4506-T”, which lets the IRS know that you have permitted your mortgage lender to request a copy of your tax returns. You’ll likely be asked to show at least two years of tax returns, or more if your financial history is considered a “special case”. Having your tax paperwork allows your mortgage lender to make sure your annual income is consistent with your pay stubs. In their mind, if you can’t pay your taxes, how do they know you’ll pay your mortgage loan back?

Pay Stubs (or Other Proof of Income)

If you are employed, you’ll be asked to provide your pay stubs from the last few months. Your pay stubs will be compared to your tax paperwork in order to make sure everything makes sense in that department. Then your pay stubs will be used to gauge your current earnings. Knowing what you make allows your mortgage lender to make an educated decision on how much money they’re going to lend to you. They don’t want to give you more than you can pay back within reason. Your pay stubs also act as proof of employment, and reassures the mortgage lender that you’ll be able to repay your mortgage.

Self Employment Proof of Income

If you don’t get pay stubs or you are self employed, you’ll have more documents to produce – and even more if you are “paid under the table”. Other sources of income such as child support will also be submitted here. You will need to offer your lender proof of these incomes with 1099 forms, direct deposits, bank statements, or other means. It’s the mortgage lender’s job to do their due diligence on you – and if your employment or income situation is unique, they will have a little more work on their hands in order to perform their job properly.

Credit History

They’ll ask for your permission first (as is law), but your credit report is going to be checked out by your mortgage lender, too. You’ll have to explain any blemishes, such as a foreclosure or a bill sent to collections. Typically this is done by way of you writing up a report with an explanation of why the ding on your credit is there. It can work in your favor, because lenders may be willing to look over a one-time screw up or unavoidable circumstance if you explain things to them. Otherwise, they are forced to assume that any ding on your credit is due to habitual delinquency.

Bank Statements

It’s almost certain that lenders will also want to check out your bank statements. They don’t care that you spent $50 at the grocery last Tuesday – what they’re looking for is whether or not you have enough cash stuffed away to cover a few months of the mortgage payment if you lose your job or get laid off. They also want to make sure that your down payment money didn’t just mysteriously show up in your bank account yesterday – they want to see the history of it’s buildup, and that it has been in your account for at least a few weeks, if not a few months. You will likely be asked to provide five to six months of bank statements, with nothing blacked out.

Assets (If Any)

Have a car? What about an insurance policy? Do you have a stash of cold hard cash under your mattress, or stocks, or gold in your safety deposit box? Your mortgage lender wants to know about that, and will ask you to write up a report naming all of your assets and what they’re worth in today’s terms (not when you bought or obtained them). This is because your mortgage lender wants to know you have other ways to pay for your mortgage if your source of income falls through. Could you sell off your stocks and support yourself for a few months while you got back on your feet? That’s an asset. Report it to your mortgage lender – it will benefit your mortgage application.

Bankruptcy and Foreclosure

Have you been an unfortunate victim of bankruptcy or foreclosure? If so, you should first ask your lender how long you should wait to re-enter the mortgage market. If you have had a bankruptcy, your lender will want proof that your debts have been discharged and are no longer outstanding. If you have had a foreclosure, you might have to wait seven years before you’re eligible for a new mortgage, and you will likely have to show proof that the property deed was transferred.

Gift Letters

Have your friends or family given you any monetary donations toward your new house? You’ll have to report that to your mortgage lender. All you need is a letter, preferably signed by both you and the gift giver(s), stating their relationship to you, that they gave you money for use on your home purchase, how much they gave you, and that it was, in fact, just a gift, and not payment of any kind for services or jobs you performed for them. Your mortgage lender wants to make sure you can focus entirely on repaying the loan you took out from them, and that you aren’t trying to balance your mortgage payment with paying back mom and dad in addition.

Photo Identification

This one is probably the most obvious, but you’ll be required to show a government issued photo ID when you apply to buy a house. You can use a passport, a driver’s license, an ID card, or more. This just proves that you are who you’re claiming to be, and gives your mortgage lender a little peace of mind. If you’re in the process of getting your identification, you can ask your mortgage lender what he or she thinks is the best way to go about things. You may be able to offer up the paper temporary copies of your ID, or you may be asked to wait until the official copies come in.

Rental History Documentation

If you don’t already own a home, your mortgage lender will want to see copies of your rental history. It shows them proof that you can pay a monthly housing cost on time. This will likely be asked for in the form of at least a year’s worth of rent check copies. Your mortgage lender may also just ask for contact information for your old landlords – then ask them directly to provide the documentation they need to show you paid your rent on time. If you don’t have an extensive credit history, it’s almost certain that your rental history will be looked into, as it’s then the only way your mortgage lender can prove you’ll pay them back for their loan.

Retirement and Investment Accounts

Do you have any retirement or investment accounts? You’ll have to supply two to three month’s worth of statements from any of these accounts that you listed on the loan application. That includes retirement accounts, 401(k)s, stock investments, and certificates of deposit. Even if the page is blank, submit it anyway!

Divorce

Divorce can be a big factor in huge financial life changes, so if you’ve been through one, you’ll need to provide paperwork on it. Obtain a copy of your divorce decree, which shows whether or not you have to make child support or alimony payments. If you do, you’ll have to provide paperwork on those things, as well, including how much per month you must pay and to whom.

It is the job of your lender to assess you as a borrower. Because of that, you’ll have to provide them with the necessary documents to paint the accurate picture of your creditworthiness.

Questions to Ask Yourself Before You Start the Home Buying Process

Buying a new house is a really big deal. You want to make sure you’re ready, and to do that, you have to ask yourself some hard hitting questions.

Why do I want to buy a house?

Ask yourself – why DO you want to buy a house? Is it because your high school rival just bought one, or your significant other is wanting one? Many first time buyers rush into buying impulsively or because friends, family, and/or spouses pressure them into doing it. Sure, if prices are low, it can be a good time to buy a house – if you can afford it. You should want to own a home so you can have a stable place to live, a set monthly house payment, a property to call your own, and something to invest in – not because you’re convinced you can “flip” it for triple the original selling price in six months.

Is my life stable enough for me to own a home?

Is your employment stable enough for you to commit to a 30 year mortgage? Do you have enough money in savings to cover the cost of your mortgage for a year (at least) if not? If the answer to both of those questions is no, you are not ready to buy a house. If you’re married, is your spouse going to be around for the long term? Divorce can really screw up homeownership, and have often lead to foreclosure. Your job and your relationship need to be rock solid before you commit to buying a home.

Can I really afford to own a home?

There are a ton of unexpected expenses that come with buying a home, and there is simply no way around them. At some point, your roof will need repairs. Your closing costs might end up amounting to more than you thought they would. Your homeowner’s association might as for way more in fees than you originally anticipated. You have to budget for those things – and for the down payment. Typically, you are required to put up at least 20% of the home’s value in cash if you want to qualify for a mortgage loan. Your monthly mortgage payment needs to sit in a range that is comfortable for you, and while your lender may approve a huge loan for you, that doesn’t mean you should take it. If taking a big loan means your monthly payments are going to be difficult to make, don’t sign your name on the dotted line – not even if you love the house that’s, sadly, out of your price range for now. Want to be sure you can afford the loan you intend to take out? Use a mortgage calculator to make sure you’re staying within your price range. Don’t forget to factor in upkeep, repairs, maintenance, taxes, insurance, escrow fees, and more.

Will I want to live here five years from now?

This is less of a “make it or break it” question, but you should decide what your intentions are before you move into your new house. Do you intend to stay in your house forever, or will you move again? What are the things that would cause you to move (the addition of children or elderly parents, etc). As you’re looking at homes and neighborhoods, imagine staying there for one, five, ten, twenty, and fifty years. Does the home have what you need to be happy in all of your future stages of life? Will it have room for all of your family members, and is the neighborhood safe for your loved ones? Are the neighbors good neighbors? Will you be living near a large factory or construction site that can plague your new home with loud noises and construction cones in the road for years? Is the home situated close enough to the nearest grocery store, doctor, vet, and dentist that you won’t need to spend 45 minutes in the car to go get milk?

Is the house I want appropriate for me?

Heart-eyes for a specific house is great – you’ve found your dream home, and now you want the keys. You’ve daydreamed about how you’d decorate it, too. But be realistic. Sure, one person could live in a three story mansion if they could afford it, but would you want to pay all that money for a house so big when you can only enjoy one room at a time? Don’t fall for a house that’s too much for you in some way or another (financially, size-wise, or otherwise) just because it’s easy on the eyes or spacious. A second story is not the mark of adulthood, and a bunch of rooms you don’t need become even more money wasted when you have to buy furniture to fill those empty rooms. Sure, it’s a good idea to have a few extra rooms on hand if you know you want to expand your family or that guests visit from out of town a lot, but you don’t need five extra bedrooms. Instead, focus more on layout, structure, “green” capabilities, foundation, craftsmanship, location, and neighbors. You can add onto a small house later – it’s much more expensive to go big and then have to figure out what you’re going to do with all the extra space!

Does it meet the 85% rule?

This sounds silly, but it’s a fantastic way to gauge whether or not a home is right for you. 85% of the home should be acceptable to you, if not something you love. 10% of the home can be slated for changes in the future, and only up to 5% can be filed under “I don’t like it, but I can’t do anything about it, so I’ll live with it”. If a prospective house fits this criteria, it’s probably a great house for you, as long as the financials line up. Unless you’re building your home to your exact specifications from the ground up, there’s probably going to be something about it that you aren’t going to be the biggest fan of – and that’s okay! You just don’t want the dislikes to outnumber the likes – then you’ll realize that you’ve just made the biggest purchase of your life on a house that… you’re not really a fan of. There are certain things with every house that you won’t like, but won’t be able to change – things relating to HOA rules, property lines, trash pickup day, etc, but a few things like that are okay too. Just make sure that at absolute minimum, you really love at least half of the house.

Does the area I want to live in and the home I want to buy translate to a high resale value?

Considering this is the biggest purchase of your life, you want to make sure of a few things relating to the long term, and this is one of them. Unless you know for a fact that you don’t intend to  move again (and we mean ever),  you need to consider resale value. Do factors like good school districts, easy access to the nearest town, and easy access to freeways  apply to your new house? They will be more important in the long term than just about anything else. Will you be able to sell the home at all? Avoid poor locations, road noise, airport noise, neighborhood nuisances, and other factors. They, obviously, also make a property incredibly hard to sell. While it may be tempting to buy a lower priced home that’s discounted because of bad location or other nuisances, most people will pass them up.

Do I trust my mortgage agents?

Your mortgage broker, your mortgage loan official, your real estate agent, and more… do you trust who you’re working with, or are they the first folks you could find to work with you? There are a ton of reasons why you should trust your agents, and if you can’t, you shouldn’t be working with them. The biggest expense of your entire lives is on their desk, and while it’s understandable that the mortgage loan officer is, honestly, mostly in this deal to make money, it’s the job description of your real estate agent to help you find your perfect home with very few to no hitches in the process  – so you should trust them the most. They’re supposed to be on your side. It’s within your rights to ask about their experience, their education, and to interview them before agreeing to anything or signing any paperwork that ties you to them.

Financial Tips After Buying a Home

So you’ve finally, finally got the keys. Congratulations! With this recent purchase out of the way, there’s no better time to take another look at your finances and see where you should aim for the future. Here are some financial tips for after you buy a new house.

Be Prepared for Emergencies

Are you prepared for an emergency? If a natural disaster happened right now, would you have supplies? If your sink flooded your house while you were gone for the weekend, would you have money to stay in a hotel for a few days? If your car broke down, could you afford to fix it? You have to ask these questions, even when your pockets are feeling a little empty after buying your new house. It’s not fun, but it pays to be prepared. Start an emergency savings fund right now, and track your progress towards whatever goal you want to set. You should aim for three to six months of living expenses at the very least.

Stop Spending Money

Yes, you read that right. Commit to a spending freeze. This is where you commit to a specific amount of time (typically a few months) where you and your family will not purchase anything beyond necessities. Snack foods? Nope. A new sweater? Sorry. A weekend trip to the Bahamas? Certainly not. The money that you would usually dedicate to “extras”? Save it. Put it in your emergency fund. Having a house is like having a child – at some point, something is going to go wrong, and it’s on you to fix it. Save yourself from being stranded up the river without a paddle by adding a little more than usual to your emergency fund for a few months. You may discover that you can live without your morning coffee after all.

Shop With Money, Not Emotion

Even if you’re on a spending freeze, you still have to eat and feed your kids. For most households, the grocery budget is a whopping 20-30% of the total family income. Keeping that in mind, you could probably afford to cut that down a little – and your new best money saving strategy is as easy as eating a sandwich. Yes, all you have to do is eat something before you go to the grocery store. This sounds bizarre to include in a series of financial tips, but in studies, it can make a HUGE difference in a family’s grocery spending. It has been proven that families who routinely make sure they’ve eaten before they visit the grocery store only spend between 10-15% of their total family income on groceries. That’s a lot less than those who go hungry! To stretch your grocery money even further, walk through the aisles with a shopping list – and do not deviate from that list! Take all the money you saved and put it in your emergency savings. (By now, you should have a pretty good amount of money in that thing!)

Keep it Simple

Okay, so you’ve successfully saved up $1,000 in your emergency fund and you want to go celebrate. So you take the family out for dinner and a movie – but wait, lets do a little math here. Say you have two kids. Dinner would likely total to around $70, and the movie (plus popcorn) for four will be another $50 or more. That’s at least $120 that could have gone in your emergency fund! Instead of going out on the town, see if you can recreate your celebratory night out at home. Simple pleasures are the best when you’ve just bought a house, and the best thing you can do during that new-homeowner period is to stay in your new home and enjoy it – not to run all over town spending all your hard earned money. Instead of ordering out, make pizza at home. Watch a movie on Netflix instead of going to the theater. Make coffee at home instead of going to the Starbucks. It can make a huge difference!

Say No to New Debt

We know that buying a new home can put folks on a financial high, thinking they’re so much better off than they originally thought – but don’t go crazy. You don’t need a new car to accompany your new house. No, you should not finance another loan, and you don’t need another credit card. If debt knocks on your door while you’re celebrating your new house, don’t answer! Only take on new debt when you’ve lived in your new house for at least a year, if not more. You need to know what to expect from your house in each season before you take on more debt. You don’t want to finance a new vehicle and then find out two weeks later that your garage floods every time it rains, or that your pipes freeze at the slightest hint of snow. Go through a full calendar year with your house, so you know all of it’s seasonal quirks, and you’ll be more financially comfortable if you decide you really do need another car.

You Don’t Need New Furniture

While we’re on the topic of new homeowner financial highs… Your home may be new and shiny, but your regular old comfortable furniture is just fine. You have years to live in your home – don’t spend $20,000 the week after you move in on new kitchen appliances, a new bedroom set, and an entirely new living room set. Buy new furniture over time, not right away. It’s understandable to want to create a space that’s truly yours, and to abide by the philosophy “out with the old, in with the new”, but it’s not a good idea as a new homeowner. If you really want to upgrade your furniture, consider reupholstering or repainting the furniture you already have. It will feel new and scratch that itch for new furniture without breaking the bank.

Repairs? Fork Out the Cash.

Now that we’ve told you everything you shouldn’t spend money on as a new homeowner, here’s something you absolutely should spend money on – needed home repairs. No, we don’t mean updating the lighting in the bathroom to something that matches better or putting in a new microwave that has more features . We mean true repairs, such as electrical wiring issues, water heater updates, replacing broken appliances, and replacing unsafe systems. These are the scenarios you’ve been hoarding all of your money for! If the roof is leaking, fix it. Don’t let your drive to avoid spending go too far. You’ve spent thousands, if not tens of thousands of dollars already to get into this house – don’t let that money go to waste by putting off needed repairs in your new home. Don’t know how much to save? Aim to put away about 1% of your home’s principal value in savings for repairs every year. That sounds like a lot, but with how much money you’ve saved so far, it should be no problem for you!

Revisit Your Budget

We assume that before you got the keys, you made a budget for your new mortgage payment. At least, we hope you did! Now that you have the keys and you’re in the home, revisit that plan. Some things may be different than you thought. You may have estimated too high on the monthly electric bill. It’s worth looking at one more time – you might be able to pocket a little bit more money into your savings account. It can be stressful to keep thinking about finances after you’ve finally closed up the process of making the biggest purchase of your life, but do it anyway. It’s essential and you can’t afford to skip it. Remember to leave room in your monthly budget for regular, scheduled additions to your emergency fund – that shouldn’t just be added to when you find some extra money here and there. The coins under your couch cushions won’t replace your roof!

Review Your Retirement Plan

If your budget changes at all from how it was before you bought the house, you need to review your retirement plan. 64% of Americans are on track to retire with no money. Don’t join their ranks. Compare your 401(K) to your new budget and make sure the amount is sustainable (or if you could increase it at all). If you don’t have a 401(K), look into getting a traditional IRA or a Roth IRA. If you don’t want to work for the rest of your life, now is the time to get on top of your retirement plan, and there’s no better time to do that than after you purchase your new home.

Home Staging Rules to Appeal to Today’s Buyers

Are you selling your home? Congratulations! This is an exciting time for your family. If you want to sell your house a little faster, staging it can help. Surely you’ve heard some tips from your agents – make sure everything is clean, the home looks well kept and tidy, and that everything is generally picture-perfect… But what else can you do to properly stage your home?

It’s important to make sure your home is properly staged because it prompts potential buyers who are touring your available house to imagine themselves living there. Think about it – which house is easier to imagine yourself in: one that is white, clean, and minimalistic, or one that is colorful, crowded with another family’s furniture and décor, and perhaps a little messy? You must arrange your furnishings and décor to make your home look it’s best, as well as thoroughly clean (and probably repaint) your home, too. This may involve a few trips to Goodwill as you pare down your belongings, or even moving everything you own out of the home so the potential buyers can tour the home while it is empty.

Why else might you want to stage a house? Well, it’s simply strategic. In 2017, the National Association of Realtors (NAR) took a survey that showed almost half of all buyer’s agents believe that staging affects most potential buyer’s view of a home. Almost 80% of the buyer’s agents said it was easier for people to visualize a staged home as your own. It can also increase the sales price. The same survey by the National Association of Realtors proved that the sales price for staged homes was one to five percent higher than the sales price of unstaged homes. They sell faster, too – 39% of seller’s agents reported that staging a home reduces days on the market.

Understanding the benefits of home staging is one thing, but how can you pull it off properly and easily? You are already stressed enough while preparing to sell your home, buy a new one, and relocate your family – there is a way to do this that is stress free and enjoyable!  Here are our best tips for staging your home.

Get Rid of Clutter

It’s hard for a potential buyer to see themselves living in your home if they can’t see around YOU living in your home. This is possibly the most essential task when staging – purging. It is a simple fact that a clean, empty as possible house looks bigger and tidier. You can integrate this process into your packing system. Remove knick-knacks and personal items first when you begin packing, and get those boxes out of the house as soon as you can. Don’t put them in closets – the potential buyers will be looking in those too! If it’s not an essential, pack it up.

Clean, Clean, Clean!

Now that the clutter is gone (and some of your packing is done – hooray!), get to work cleaning. It may be in your seller’s agreement that you must have the home clean to some degree the day you surrender the keys. Now is the time to get on top of all of the “little” things, like the baseboards, the windows, a good carpet shampoo, and under the kitchen sink. Make your kitchens and bathrooms sparkle. Open the windows to air your family’s natural scent out of the home instead of using candles or air fresheners. You never know when a potential buyer may be sensitive to artificial smells and scents. If you have pets, scrub everything they regularly interact with. No one wants to buy a home that smells like a litter box or wet puppy. If it is within your means and you don’t have the time to do this yourself, consider hiring a professional cleaning service to get the worst of the scrubbing done for you.

Your Ultimate Goal? Light and Bright.

Buyers tend to respond most positively to bright rooms with lots of natural light. Don’t have enough windows around the house to give that great naturally lit look? That’s okay. What you can do is replace your lightbulbs to those with a bright output. The whiter the light, the more it looks like daylight. The yellower the light, the darker it will seem. If you do have a lot of windows, great! Open your blinds and pull back the curtains. Want to make things even brighter? Paint your walls white. Yep – white. Remove any funky wallpaper that potential buyers may disagree with, paint over your kid’s red and blue racecar themed walls, and cover up all of your dents and dings in the drywall with some good old white paint. Your buyers can add an accent wall if they wish to, once they’re moved in.

Stage Big Rooms First

What rooms do you look at first when you are intending to buy a house? Bedrooms, bathrooms, and the kitchen. The living room and extra rooms (dining room, family room, kids rooms) become less important compared to the rooms you and your loved ones will spend the most time in. That is exactly why you want to make sure you make those rooms the most beautiful, the quickest! You can also save money by doing this. Removing furniture and boxes from your home will likely require a storage unit, unless you already have the keys to your new home. This can be a big cost when you’re selling, so shorten the time you have to rent a unit by staging the best rooms in the house first – then the house will sell faster.

Rent Furniture If Needed

Don’t feel comfortable with your furniture being looked over by strangers? Is your old house empty because you’ve already moved to your new place? You can rent furniture for staging if you want to and can afford it. An option here is pop-up furniture, which is typically made from plastic or cardboard, but doesn’t look like it is. It looks nice but minimalist enough to give sellers the ability to visualize their family in the home. If you plan to leave your own furniture in the home for staging, the best rule of thumb is to leave about half of what you own in the home. This can be tricky if you are still living in the home while showings are being scheduled, but it will look bigger and tidier to potential buyers with less in it. If anything else, it might help you decide what you can live without and donate or sell.

Arrange Your Furniture – Owned or Rented

Whether you own or rented your furniture, it must be arranged in a certain way. Position couches and chairs a few feet away from the walls if you can. This is called furniture floating, and it makes the room look bigger. Set up the sitting area so that all those who were seated could easily see the tv and each other. Set the table so that your potential buyers could imagine their family having dinner in the dining room. Put away all of your gym equipment and children’s toys – this can seem like clutter if the potential buyer is not a gym-goer or a parent.

Don’t Forget Curb Appeal

You want to start your home off on the right foot with the people that are touring it. Make sure the outside is neat and tidy, too – it’s the first thing your potential buyers will see. Power wash your driveway and siding,  clean the windows, tidy the landscaping, mow the lawn, hide the dumpsters, and make sure your house number is easy to read from the street. Remove all personal belongings from the yard – garden statues, flags that are not of your country, bird feeders and fountains, or porch furniture. Most important, make sure that any damages to the outside of the home are remedied – you don’t want your potential buyers to see hanging shingles, broken siding slats, shattered windows, or creaky doors.

Don’t Forget the Extras…

Finishing touches can mean the world when you’re staging a house. Put some fresh flowers out on the kitchen counter, as well as a bowl of fresh fruit. Plant new flowers in the yard. If the holidays are near, keep your Christmas tree up and decorated. Run the vacuum right before every scheduled touring. Make sure the towels in the bathroom are folded and clean, and hide your dirty laundry hampers. Keep dishes out of the sink, and be sure to stay on top of picking up after your pets and kids. This can be stressful if you are still living in the home, but it will pay off tremendously.

When your home is properly staged, it will sell in no time. It can seem like another huge to-do on your list of selling and moving tasks, but it can be one of the most important. Homes that are properly staged sell faster and for more money than homes that are not staged properly, so make sure you stay on top of this if your house is on the market!

Mistakes that Home Sellers Can Make

You want the home selling process to be as smooth and painless as possible. Thinking about all the things that can go wrong might be overwhelming, but remember that knowledge is power. Here are some common mistakes to avoid when selling your home.

  1. Underestimating the cost of selling. Wait, aren’t you supposed to make money if you’re the seller? Well, yes, but the total cost to sell a home can amount to much more than the 5-6% in agent commissions most people are expecting to pay. As a seller, you must also account for closing costs, repairs, and other concessions to the buyer. The true cost of selling can often be closer to 10% of the sale price of the home.
  2. Setting an unrealistic price can be a huge mistake. What you want from your home can be very different than what the market will pay. Sure, you don’t want to price your home too low and leave money on the table for the sake of a quick sale, but you also don’t want your over-priced house to be listed on the market for months – or worse, years.
  3. You must provide the buyer with legally required disclosures. You, the seller, are legally required to disclose to the potential buyer anything that may affect the value of the property. For example if your home is sitting on a sinkhole, you must disclose this to the buyer. It is considered illegal in most places to deliberately conceal major property defects, so you must put your real estate disclosures in writing.
  4. After you deliver your written real estate disclosures, you must make sure that you receive from them acknowledgement of receipt of these disclosures, also in writing. What good is it that you delivered your disclosures to the buyer if you can’t prove it later? Your agent should handle this for you, but it doesn’t hurt to double check and make sure it’s been done.
  5. Do not accept the buyer with the highest offer without regarding the other contractual terms. Sure, the potential buyer you have your eye on is offering ten thousand dollars more than his counterpart, potential buyer number two, but they also require that you cover all closing costs. That can eat up that ten thousand dollars extra, and fast!
  6. Ignoring necessary major repairs in favor of costly cosmetic renovations is going to be a big mistake. A long list of maintenance issues can mean trouble for you as a seller, and it means nothing that you have a lovely new staircase if no one will buy your home because the wiring in the walls is not up to code. Assert your priorities!
  7. Not preparing your home for sale is another common mistake made by sellers. Potential buyers are almost certainly going to want to tour your home, and generally speaking, the cleaner and less cluttered your home is, the more appeal it will have. Clutter can make your home feel smaller, and the less staged your house is, the harder it is for potential buyers to see themselves living there. Make sure you don’t forget about curb appeal, either!
  8. Choosing the wrong agent can spell disaster for you as the seller! Make sure you select an agent who has good reviews and is properly licensed to do their job. You can interview multiple agents at once to check their credentials and customer satisfaction history, and when you do so, make sure that they have experience buying and selling homes in your neighborhood and at your price point.
  9. Choosing an agent you don’t get along well with is less of a disaster than choosing one who is unlicensed, but it can also be much more stressful for you! Make sure that you talk to your agent about your expectations. Discuss their marketing plan for your home, their negotiation style, how often they plan to communicate with you and how they plan to do it, if they have any current listings that might compete with yours, and whether or not they will require you to sign a contract with them.
  10. Showing your home to potential buyers can feel invasive and troublesome, but limiting these showings can make sure your house never gets off the market. The goal is to accommodate as many buyers as possible, even if their timing is inconvenient. This means you may have to vacate on short notice or during a time that is usually scheduled to be spent in your home.
  11. Do not fail to consider your broader financial situation. Many sellers don’t have a clear idea of their financial health before they decide to sell their home. This can mean some painful surprises! Before you make the decision to sell, assess your income and debts, as well as any upcoming expenses during your move. You can contact your bank or mortgage advisor to find out how much you owe on your current home.
  12. You must get everything in writing from everyone, from your agent to the buyer of your home. No negotiations about the purchase of your house should happen verbally. Anyone who is serious about buying your house will have no problem putting an offer in writing and sending it to you. You should also consult with your agent to make sure that all offers and counter offers you receive are legally binding documents.
  13. Do not agree to a reduced earnest money deposit. There is a lot of uncertainty about what the right amount of earnest money is, and many consider it 3-5%. No matter what you ask for, you want to make sure it is fair for all parties. Of course you want to please your potential buyer, but you should not short-change yourself, either.
  14. Make sure your sales agreement is complete. Use the complete legal description of your home in any sales paperwork. A real estate attorney can assist you with this. It is this description, not your home address, that is recognized by the government and by lenders, so make sure that all of your sales paperwork reflects the exact verbiage of the description of your home as stated on your property taxes.
  15. Not asking for help can cost you tens of thousands of dollars when selling your house. You must have help from a real estate agent and attorney. A real estate attorney can help you ensure that your entire sales transaction, from start to finish, is legally enforceable and is as efficient as possible.
  16. Do not use a template contract that was purchased online for any part of the home selling process. Not all template contracts reflect the laws in your area, and do not have the required provisions or addenda. The failure to include these provisions or addenda can make your contract voidable at the buyer’s option.
  17. You must screen your potential buyer before signing a contract with them. If a buyer has a 30 day finance period and then a 45 day home inspection contingency and then 60 days to close, and they are not qualified from the beginning to purchase your home, they have just wasted four months of your time. You should always require a pre-qualification letter from anyone who is even remotely interested in buying your home from you!
  18. Do you have a contingency plan if you aren’t able to find a new home? You should. As a seller, what are your plans with regard to finding your new home? Do you need to include a provision in the contracts allowing you to remain in your house after the sale for a certain period of time? Do you need a contingency providing that the contract to sell your current house is not valid until you find a new house? Make sure you consider all of this when selling!
  19. Don’t set an unrealistic timeline. You will not have cash in hand for your home in two days. Unless you live in a zip code with highly desirable real estate, it is almost impossible to say how fast the house will sell, so don’t rely on it selling quickly. You should prepare financially for both situations – that your home sells quickly, and that it does not. Budget for both a few more months in your old home as well as being ready to move into your new home immediately and quickly.
  20. Make sure you know the real value of your home. Use recent sales in your area as comparisons, consider a second or third option from other agents, and consider how much you have invested into renovations and maintenance over the years – you may know your home’s value better than a professional realtor thanks to your firsthand experience living there.

Now that you’re aware of some common mistakes to avoid when selling your home, you can be more confident when something doesn’t go as planned.

How to Negotiate Home Price – The Definitive Guide

Have you found your dream home, but the price is a little too high for you? Consider negotiating. Even if you’re comfortable paying what the seller is asking for, negotiate anyway – you never know how low you could get that price tag! Here are some things to consider when negotiating the cost of your new home.

Don’t Negotiate Just About the Money

Perhaps you are the buyer and you want the seller to cover half of the closing costs. Perhaps you, the buyer, want the seller to pay for a kitchen remodel by way of knocking some money off of their asking price. If you are the seller, perhaps you want the buyer to cover the title transfer fee as an exchange for wanting to expedite the closing process. It’s not just about the principal cost of the house – it’s also about each party’s wants and wishes from the other party, and there are a million different things that could qualify for “wants and wishes” in this sense.

Don’t Negotiate on the Basis of Asking Price

This can sound confusing, but once you understand it, you’ll be certain it’s the best way to go – do not negotiate the asking price of the house only. You must negotiate based on the total cost of the transaction and the total cost of owning the home. What does this mean? Getting the house of your dreams for less than it’s asking price sounds like a huge victory, but it can sell out if the house ends up being incredibly expensive to maintain or fix up. Yes, you must consider principal cost, closing fees, points, and other fees, but you must also consider how much it will cost monthly to own the house and negotiate with that number in mind as well.

Don’t Talk Numbers with Anyone But Your Agent

Any agent that is not your own is working for the seller, and is obligated to tell the seller anything that you share with them. If you are toured through the house by the seller’s agent, and tell them about your budget and your home wishes, it can undermine your negotiating power because now the seller knows all the cards in your hand. You must only talk numbers or wishes with your own agent, who will then help you deliver a negotiation to the seller in such a way that it does not undermine your negotiating power. This is especially important as you work through the negotiation process.

There is another side to this that you can consider accessing if you think you’re able to pull it off. Consider this: It’s in the seller’s agent’s best interest to close this home sale deal quickly so they can move on to their next client. If you can subtly convince them that you’re ready to buy, with the deposit prepared, the mortgage hypothetically ready to go with the bank, and the lawyer on-call, the seller’s agent will be highly likely to suggest you as a great option to the seller, even if your offer is lower than the seller had hoped. This removes any need for actual negotiating, but you must play it safe and must remember not to lie or intentionally dupe the seller’s agent – you just want to subtly imply that you’re ready to go.

Ask your Agent to Do it For You

Does the concept of haggling with someone about a large purchase make you sick to your stomach with anxiety? No worries – typically, your agent will be happy to negotiate on your behalf, only requiring you to sign your name to documents and confirm information with them. You should only speak to the seller or the seller’s agent to negotiate if you want to, and an agent who refuses to negotiate on your behalf is not one you should partner with! Be aware, though, that your agent’s job is not to get you the best deal, it’s to have the deal go through in the first place. You must outright ask them to help you negotiate and tell them what your ramifications are, and should not assume they will just do it for you by default. Sure, they will communicate with the seller, but you should ask them if you want them to push for a different or lower price!

Sell Before You Buy

This can be risky and stressful, but can have a huge payoff if it’s done correctly. If you sell your current house before you buy a new one, you are what seller’s agents refer to as “chain free”. This means that the seller will not have to wait for you to sell your current home before you buy their home, and that the process will be much quicker. Sellers will always prefer this, so you may be able to avoid negotiation all-together if you are able to get across to the seller’s agent that you’re a good prospect due to the speed in which the transaction can be completed.

Be Kind, But Firm

You don’t want to insult the seller by telling them they should lower the price due to all the flaws in their beloved family home. They may not be so inclined to sell their precious house to someone who is unkind to them about it. Instead, be kind but firm. If there is something about the house that is structurally unsound, unsafe, or not livable, you have every right not to budge. If one of your issues is largely or completely cosmetic, phrase your negotiation as less of a demand. And certainly don’t go overboard and tell the seller every single scratch and dent in the home to “nickel and dime” them into a lower price – they’ll almost surely pass you up for another seller that is less trouble to them.

Put Your Offer in Writing

Sellers and their agents both like this, and it shows them that you’re serious, especially if the letter is accompanied by proof of your mortgage offer or pre-approval. You may also find it to your benefit to indicate to the seller and their agent that you can be flexible to suit their schedule and that you’re willing to work with them. The easier you make selling to you sound, the more likely you will be sold to!

A Refusal is Not The End of the Conversation

If your negotiation offer is refused, it isn’t the end of the conversation. The seller simply replied to your offer. You can make another one! The seller may simply be playing a mind game with you to see how high they can get your offer with repeated refusals. Be sure t communicate to your own agent the absolute highest you will go, and then do not offer higher than that number under any circumstances. If your highest offer receives a refusal in return, communicate to both agents (yours and the seller’s) that you remain interested and will be available to talk again if the seller would like to return to you as a potential buyer.

Consider Negotiating Up

Do you really want to get your name in with the seller? Offer more than what they’re asking for. Don’t do this unless you really love the house and if you know that you’ll be able to afford it’s monthly upkeep less what you’ve paid over the original asking price. Make sure your finances offer that sort of flexibility. Be careful, though, because any counter offers should be made in descending order, so the seller knows there is a limit to how much you’ll spend and how long you’re willing to negotiate. Don’t let them talk you into paying even more than your original offer of more than they asked for!

Always Ask for a Home Warranty

No matter what, make sure you do this. It’s common for a seller to pay this expense up front, so do your due diligence to make sure they do. The seller pays the premium for the home warranty, usually between $400 and $600, and then the new homeowner is responsible for the deductible with any claim they make. The home warranty covers the repair of key items that come with the house, such as plumbing systems, appliances, air systems, or heating.

Renting? Ask the Seller to Buy You Out of Your Lease

You don’t have to wait until your current lease is up on your rental home or apartment before you can buy a house. In fact, you can negotiate with your seller to pay to buy you out of your lease. Many times, the seller has no issues with adjusting the price for this, as it’s usually only a few thousand dollars. This works the other way around as well – if a seller needs extra time to vacate due to another home purchase or construction, the buyers can grant them the extra time in exchange for a lower price on the home.