This article is designed to address what I consider the really “big ticket” items that simply cannot be ignored by either buyers or sellers. These are things that, in my opinion, simply must be done to even start the process of putting a house on the market to sell or to initiate the purchase of a home.
For most of us our homes are the biggest asset we will ever have. Increasingly, it is the one asset by which we have accumulated equity or “wealth” of any significance and by which we can borrow against to restructure debt, use as collateral for lines of credit and even draw on for a retirement fund. Consequently, when we purchase or sell our home it is often now much more than just providing for, or changing the roof over our heads.
Throw into the mix the emotional component of the “home is where the heart is” and you have an extremely complex and layered investment. It is rare the individual that sees the rooms of a house only as a structure rather than the nursery they will bring home their first born, the first place they can call their own where they will entertain friends and family, the “nest” where they will begin a marriage, the room where grandmother will have her own space and be close by to care for, the place where a son or daughter will remember a childhood and yes, the place where sometimes people gather around a bedside to say good bye.
When faced with the sometimes daunting, sometimes exhilarating, sometimes scary, sometimes frustrating task of a home purchase or sale it is often helpful to have a plan of action; a set of goals; a blue print (no pun intended) as it were for navigating the process of purchasing or selling a home. To that end, the following attempts to provide knowledge, advice and guidance gathered and compiled from many professionals, with years of experience.
So, let us begin. Some of it may be repetitious to you as you may already be aware of, or have the knowledge of, the information provided. But, taken as a whole, the intent is to provide a complete picture for a fairly wide spectrum of individual experiences that addresses, at some point, an issue or point of view not only relevant to the reader, but valuable to them as well. It is quite possible, actually probable, that just one point, of and by itself from the list provided here will save you thousands of dollars and/or momentous heartache.
Number 4 – Arrange Your Personal Financial Information in Advance
Raise your hand if you have had to qualify for a home loan before. For those who have their hands raised, you already know the drill and how impersonal, probing and detailed it can become. You have found your dream home, you envision holidays, birthdays, weddings, hopes, dreams, family, friends, love and happiness. Then the screech and collision of qualifying for a home loan meets the dream. A little advance preparation will do wonders for getting one ready for the reality of what to face as well as smooth the process for all parties concerned.
The list provided below is what I recommend first time or anytime buyers to prepare in advance of looking for a home and certainly in advance of talking to a mortgage broker. This information combined with your credit scores and reports, puts you in a distinct advantage when discussing loan packages available, requirements necessary to complete a loan package and time savings if critical to the completion of the purchase. In addition, and maybe even most importantly, having prepared all of this in advance creates the accurate perception by your team of professionals representing you, that you are serious about purchasing a home. I will assure you, commissioned professionals get real serious with people that make their jobs easier and don’t waste their time.
o Last two years of tax returns.
o Financial statement prepared by an accountant if possible.
o If renting, copy of lease and twelve months of cancelled checks showing rent payments on time.
o Copies of last two months utility bills.
o Photocopies of drivers license and social security card.
o The final purchase contract for the house (if applicable).
o If you’re self-employed, the mortgage company may require your personal and business tax returns for the previous two years and your company’s year-to-date Profit and Loss statement.
o Divorce settlement papers, if applicable.
o Updated account statements for listed assets in the application that may have changed in value.
o Information about debts or credit report items that may have been delinquent or not accurate.
o Evidence of your mortgage payments, such as canceled checks.
o An irrevocable gift letter if you are receiving a monetary gift from a relative.
o Your bank account numbers and the address of your bank branch, along with checking and savings account statements for the previous 2-3 months.
o Last two pay stubs, W2 withholding forms, tax returns for two years, or other proof of employment and income verification.
o Credit card bills for the past few billing periods, or canceled checks for rent or utility bill payments, to show payment history and amount of revolving debt.
o Information on other consumer debt such as car loans, furniture loans, student loans and retail credit cards.
Organize and place all of this information in a three ring binder with labeled dividers. Make three copies, one for your mortgage broker and two additional copies, one for yourself and one extra in case it is needed (which more than likely will happen).
Number 5 – Common Sense Do’s and Don’ts For Both Buyers and Sellers
Often, common sense is just not that common. It seems to me, one would want to make the best impression on strangers coming into your home even if they aren’t coming to give you thousands of dollars in exchange for it. I guess sometimes life gets us going round and round so fast, we forget the obvious. To that end, the following is a compilation of good sound advice to spruce up your home when putting it on the market. You can use some of it before Aunt Ethel comes over as well.
o If you are buying a house, for goodness sakes don’t go out and purchase a car or any other big ticket item right before after applying for a loan. This includes applying for credit cards and making credit card purchases. If you have to buy something on a credit card make sure it is less than 30% of the available credit.
o If you are selling a home do clean it up. Slap a coat of off-white paint on the walls, shine the bathroom fixtures, clean the carpet, replace a cat box so that it doesn’t smell, oil the windows and doors so they open easily without creaking, clean the windows, polish the door knobs. Do remove all the appliances and anything else from the kitchen counter to show off the counter space. Do remove all clutter from shelves, closets and store rooms.
o When pricing your house for sale, don’t price it too high. Yes, you can always come down but by that time your buyers may have bought something else. Besides, lowering the price significantly signals desperation or that something is keeping this property from selling.
o Do plant some flowers in the front if at all possible or get potted flowering plants to spruce of the front when selling. Make the front door look as fresh and new as possible. If need be, paint the front door, definitely shine up the door hardware, clean the back yard and do anything possible to make the yard look neat and clean like racking leaves and mowing the grass. Put a plush new door mat at the front door. You can always take it with you but it helps give a good first impression. And, put the toilet seat down!
Russell J. Montjoy
Exit Deluxe reality
4600 N Park Ave.
Chevy Chase, Md. 20815