Thursday, September 29, 2011

I hate Zillow and they know nothing about my house. What can I do?

Dear Sunnyview,
We just bought our house about a year ago and I used Zillow to look at houses before that. When I went back to see what our new house looked like, I was furious to find that a lot of information was wrong. I know I can edit my house, but the sales price is wrong and the Zestimate it totally off. This is my house now, everything is wrong and I am so mad I could scream. What can I do?
-Ticked in Tulsa

Dear Ticked,
I can understand your frustration and your desire to correct your home information. Some of the issues you mentioned are definitely fixable by you as an owner. I think that it is important for owners to do what they can to make their home page as accurate as possible. First things first. You need to claim your house by using the yellow "Edit" pencil under the main house photo. Then you will be able to edit the facts with a link in that same "Edit" menu. Your home facts do get figured into the larger numbers like the Zestimate, so you want to make sure that they are totally correct to make the Zillow estimate as accurate as possible.

Owners can edit home facts on their home page, but they can also get other corrections made with Zillow's help. If the recorded sales price is wrong, you can use the small white flag next to the transaction to alert Zillow and ask them to update the information. It is helpful if you can include a link to your local recorder or assessor's office to make the process of checking faster. Your recorded sales price also is used in the larger numbers like the Zestimate so it is definitely worth getting that updated especially if it is low. The changes that you make in your home page will take time usually a couple weeks to start showing up in the larger Zestimate number. Not all changes you make will affect your Zestimate, but many like square footage and bed/bath count do have an effect. Incorrect information often leads to wonky Zestimates.

I think that owners need to take control of their home page as much as possible. Making sure all information is correct including the sales price is one way to do that. You also need to consider adding an owner's description and house photo that you choose yourself. The first thing that anyone looking at your house will key on is the photo even before the Zestimate. Adding your own adds personality to your home page and shows your pride of ownership. Nothing that an owner can do besides editing the home facts and providing the correct information will affect Zillow's opinion of value, but making your page accurate is something that you can do as an owner. Congratulations on your new house and I hope that you can at least make peace with your Zillow home page.

All the best,

Monday, September 26, 2011

Got lender? 5 Mortgage Shopping Tips

The whole process of shopping for a mortgage can be intimidating, but if you follow a few simple guidelines you will be able to choose the best lender and loan for your needs.

Know what you can affordLook at your budget to see where your money is going now.  The best online calculator that I have found is this Suze Orman Budget Calculator. Plug in all your numbers and then see how much you have available for a house every month. You also need to start thinking about your down payment Dinkytown has lots of good calculators available to help you create a savings plan and also has many different mortgage calculators for you to see how much you can afford with your current budget. 

Compare mortgage rates. Not all loans or brokers are created equal. A common term you will hear while shopping for a mortgage is APR Annual Percentage Rate. APR is the rate that you will be quoted on your mortgage, but that number does not include fees charged by the lender that may be included or intra-year compounding. The measure that does consider those is called APY or Annual Percentage Yield. There is an excellent explanation of the APR and APY in Investopedia. Buyers looking for a loan need to consider comparing the APY's of different loans instead of just the APR. 

Understand mortgage pricing and fees. Mortgages are priced depending on the borrower's credit, the amount of loan and the overall risk of the mortgage. MyFICO has a chart that shows the affect of different credit scores on the mortgage rate offered. Today, a borrower with a 760 score might be offered a rate of 3.79% while a borrower with a challenged credit score at 620 might be offered 5.38%. That amounts to a difference of over $285 per month on the cost of your mortgage. Buyers also need to look at lender fees like processing fees and points. Each point on a mortgage represents 1% of the total loan amount. A lender with a lower rate may have much higher fees or may be charging more points to lower the mortgage rate. The Federal Reserve has information on comparing mortgages from different lenders including a mortgage shopping worksheet that buyer can use to ask prospective lenders for the information that will allow a fair comparison of different loans.

Know the risks and benefits of the mortgage typesMortgage loans are designed to fit borrowers with different financial needs and timetables. Many buyers in the last few years chose a mortgages that adjust to a higher rate after a short time called ARM's or Adjustable Rate Mortgages. Payments start at a low rate and were scheduled to increase to a higher mortgage rate commonly in 3, 5 or 7 years. When the payment increased on those ARM's, owners were unable to pay the higher payment. Some borrowers still choose ARM's as a way to stretch to buy a home that would otherwise be unaffordable, others choose ARM's because they only intend to stay in the house for a short term. All buyers need to think about what will happen if they cannot afford the new payment or are unable to sell when the mortgage adjusts. Fixed mortgages offer more stability and come most commonly in terms of 15 or 30 years. The payment for a fixed rate mortgage does not change over the term of the loan. They are safer and are more resistant to inflation, but the loan payment can be higher than the initial payment on an ARM. Buyers should choose a mortgage option that will fit them no matter what future rates or markets do. 

Ask until you feel comfortable with the answer. You can find mortgage information like on sites like Mortgage Professor or ask lending professionals your specific mortgage question on sites like Zillow Advice. Do not be intimidated to ask questions or pressed into choosing a specific lender. You need to choose a lender with a competitive rate who is knowledgeable and professional. That will make all the difference when you find the house you want to buy. 

Thursday, September 22, 2011

Should I dump my agent or hang on?

Dear Sunnyview,
I am preapproved and have been looking for a house with an agent for about 2 months. When I first signed up with her, she was very responsive. I could get in touch with her easily, but now she's like a ghost. There is a house that I want to make an offer on, but I don't know if I should use her or not. She hasn't returned my phone calls after 2 days. I'm afraid that I'll lose out on the house. Should I make the offer with another agent?
-Unsure in UT

Dear Unsure,
First of all, I have to say that your agent may have a legitimate reason for being out of contact. Agents are people too. If your agent has been responsive in the past, but is not now I would contact her broker directly and tell him or her that you have not been able to contact your agent. Include details of your attempted contact times and dates in the email. Just make sure that when you send the request to send yourself a bcc so that you have a record of it. A good broker will contact the agent for you or assign another agent in the same office to immediately take you on as a client. That new agent will be able to help you make an offer on the house you are looking at.

If you signed a buyers representation agreement and you do not want to use another agent in that office, you would need to get a signed release from the agent or their broker to terminate the contract before you proceed with another agent. The agent not contacting you in a reasonable time frame would be the reason for terminating the agreement.   Making an offer with another agent without a signed release could mean you wold be liable for paying your old agent a commission even if they do not represent you in the deal. Read your contract and be sure to legally cut ties with your old agent before you find another. If you have another agent in mind, sometimes the new agent's broker can also help you get a release from the agreement with old broker.

As a client, you hired your agent to represent and assist you in your real estate transaction. If she is not doing what you hired her to do, you may need to cut ties and use another agent. Just make sure to get your ducks in a row before you do to avoid trouble later on.

All the best,

Monday, September 19, 2011

Credit Stink? 10 Tips To Repair Your Credit For Free

Lisa Kyle Young, Getty Images
If your credit is bad, there are things you can to to improve it for free. Nobody's perfect, but when you go to get a mortgage loan, you feel all eyes upon your one shining credit score. Suddenly, your whole life seems to be distilled down to one number. I have gotten several questions about how people can raise their score before they apply for a mortgage. Here are 10 easy things you can do to raise your credit score.

1.     Pay your bills on time -- One late payment in a 30 days period can drop your score by as much as 90 points. Keep all accounts current and consider using auto bill pay to make sure they are paid on schedule.

2.     Use less than 30% of your credit limit -- Using credit wisely and staying within limits makes companies feel that you are creditworthy. It also leaves room for you to make another payment like a mortgage.

3.     Raise your credit limits -- A higher credit limit may mean a lower percentage of credit utilization. Calling credit card companies quarterly and asking for a limit increase can make your percentages look better overall.

4.     Make peace with bill collectors --Ask collectors to report accounts as "paid as agreed" or "paid in full". Some collectors will even agree to take old accounts off your report, but do not be tempted to pay expired collections. They have already been reported on your credit and paying them may actually lower your score

5.     Pay down balances -- Use your credit, but pay down the amount you owe. If you are looking to buy a house or other large purchase, pay down your balances to 10-15% of your credit limit if possible before you apply.

6.     Use an old credit account -- Old credit is your friend. Keep your oldest account and use it to boost your score. Part of your credit score is based on the length of your credit history, so in this case older is better.

7.     Remove all errors from your report -- Make sure all information like accounts, addresses and past names are correct. Leaving expired or incorrect information on your credit report makes it more likely that accounts that do not belong to you will be reported. Dispute any errors in your credit report to make is as accurate as possible.

8.     Limit credit inquiries -- Make all credit inquiries within a period of 45 days or less and do not open new accounts during that period. Limiting credit checks will help raise your score.

9.     Keep 4-6 accounts in good standing -- Banks and lenders want to see that you have a track record of doing solid business with more than one company. Keeping 4-6 revolving accounts in good standing demonstrates your financial stability. Utilities bills often do not count, but car loans, regular installment payments like student loans and credit cards do.

10.    Ask for a "goodwill adjustment" -- If you do have a late payment on an account that is now paid on time, ask the company to remove the old late as a goodwill gesture. Send them a goodwill adjustment letter. Many banks and credit card companies will remove one per 2 years or so if your account is in good standing.

Doing those 10 things can raise your score in just a 30-60 day period and make it easier for you to get the loan you want at the rate you want. Better credit is the key to stable homeownership.

Thursday, September 15, 2011

First Time Buyers -- 5 things to do before calling an agent

Everyone remembers their first time...butterflies in your stomach, a million questions, thinking about your future together and wondering how long it will take before you get the keys. Actually, the path to buying a home start with a few simple steps long before you ever sign your first offer. Buying to keep up with your friends, to stop the nagging of your family to settle down or because that's what you think you should do are all the wrong reasons to buy. Buying is a commitment so you want to make sure that you are prepared before you dive in.

  • Look at your budget to see where your money is going now. Owning a home costs money every month and you also have to think about the additional costs of repairs and maintenance. Being a happy homeowner means making sure that you can comfortably afford the house you buy upfront. The best online calculator that I have found is this Suze Orman Budget Calculator. Plug in all your numbers, see how much you spend on housing cost now and then see how much you have available every month. 
  • Make a plan to save for a down payment before you start to look for a house, look at your budget to see how much you can save every month toward your down payment. While you can get a 0% down for a VA or qualifying USDA loan, an FHA loan requires a minimum down payment of 3.5% of the purchase price of the home. Dinkytown has lots of good calculators available to help you create a savings plan. Saving a little bit at a time is easy to do and you can schedule monthly transfers into your savings account automatically through a company like ING Direct for free at 5x the interest available at most brick and mortar banks. Saving automatically means you can set money aside and not be tempted to spend it until you are ready to buy.
  • Run a mortgage calculator to get a rough estimate of how much you can qualify for. Although you will need to be pre-qualified in most cases before you start to look for houses with an agent, there are lots of great mortgage calculators online to run your own ballpark numbers before that point. Dinkytown has lots of mortgage calculators, but this one on includes place for you to enter your monthly salary, debt, child support, savings etc. Then it will show you your qualifying ratios along with the amounts you can qualify for with different loan terms. Just remember that how much you can qualify for is only a guideline and may not be the same as what you can actually afford in your monthly budget.
  • Improve your credit before you buy to reduce the cost of your mortgage and to give yourself more choices when you go look for a loan. Pull a free copy of your credit report from to check for any incorrect or dated items. You can dispute incorrect items on the report, remove any account history or information that wrong or even ask companies that you still do business with to remove a past late payment from your report if your account is in good standing. Keeping your credit card balances no more than 30% of your limit to help your score and do not close old accounts or pay old collections as that could actually lower your score.
  • Consider the cost of houses in your area to check out the monthly costs. Look at all the costs of ownership including the mortgage, taxes, homeowners insurance and any HOA dues or condo fees. If this is your first house, your PITI should be something that you can afford easily every month because if you have never owned before you will need to budget a little extra every month for maintenance and repairs. You can find out how much houses are being listed for on a site like, but you also need to choose the type of area or neighborhood that you want to live in. Do your own research for that on sites like Zip Skinny and City-Data so you have some idea about what type of house and area you want and how much it will cost.
Doing those 5 things before you call an agent will help you feel more comfortable, let you focus on choosing a good agent and put you on a solid path to responsible homeownership and getting approved for a loan. There's a first time for everything. With a little planning before you buy, your first time can be great!

Monday, September 12, 2011

5 Easy Steps to Sell Your House FSBO

Selling your house in this market can be difficult, but these tips to sell your house can help. Homeowners sometimes feel about their houses like parents feel about their children. They tend to turn a soft eye to things that buyers key on when they view your house. When you go to sell, you have to think from a buyers perspective.

1.  Price your house right. If you are selling your own house, you need to get as much information about listing prices for houses like yours and more important actual sales prices for similar houses. Find out how long it takes to sell a house in your market commonly known as the Days On Market (DOM). The DOM is a good indictor of how long on average houses are taking to sell. If your DOM is higher than the current average, that generally means that your price is too high or your house is not competitive for other reasons. A dropping DOM tells you your market may be stabilizing or moving up while a rising DOM may indicate more price drops or higher market times in the near future. It is very important in a market with rising DOM to price your house a bit lower than the last comparable sale for your best chance to sell. Do not wait for a lower sale to happen, instead price your house a bit lower than the last house sold. That is the best way to get an appraisal and close before lower priced sales drive your price down farther. Be the cutting edge of pricing not under the knife of repeated price drops.

2.  Think like a professional. Check sites like Realty Times for market condition reports or ask a local agent if you can get a Comparative Market Report (CMA) for a fee. Pay attention to the the trend up or down. You need to get exposure for your house and that may include paying for a flat fee MLS listing that offers a partial commission to agents who bring you buyers. Do not pass up the chance as a FSBO to snag buyers that are already represented by an agent. Instead offer the agent a partial commission upfront so they have an incentive to show your home and make the showings easy for them. Doing both those things will encourage agents to show your house and get a buyer interested.

3.  Make sure your house is ready to show. Small repair issues can signal trouble to buyers deeper than the actual issue itself. Although you need to focus on the aesthetic look of the house along the lines of traditional staging, inexpensive and simple repair items can become major turn offs for buyers. Missing switch plates, dripping faucets, old water stains in paint or simple surface cracks in drywall that an owner might ignore read to a skittish buyer as electrical problems, defective plumbing, active leaks in the roof and major foundation problems. In fact, each of those small issues is inexpensive to address, so make the small repairs and take them out of the mix before the buyer ever sees them. The better kept and better looking your house is the faster it will sell.

4.  Buyers are visual so photos and websites for your house must be top rate. Shooting excellent house photos and placing them on multiple sites will give your buyers the best impression of your house and lead to more showings. If buyers don't like your photos, they will pass by your listing without ever seeing it in person. Too many houses go to market without good photos. Houses are like models for buyers. Your house should look better in pictures not worse than it actually is. Shoot exterior photos early in the morning on a clear or high overcast day when the soft sun makes everything look better. Photos shot at that time have colors more true to life and lend a pleasant softness to your exterior shots. Using a wide angle lens for house portrait shots also makes the house scale look more pleasing to buyers. Interior photos should be taken when rooms look their best and are brightest.

5.  Give buyers something new to look at. Fresh flowers along the walk, a potted azalea on the back deck, a new faucet in the kitchen or a freshly painted front door lend interest and suggest to buyers that you care for your house. Before spending significant money, be sure to consider the cost vs. value report to see the average return on improvement projects in your area. Spend your energy neutralizing the house, but add some new focus features to existing rooms to make them pop. Top returns come from small changes like paint, front door refurbishment, a minor kitchen reface or that addition of a outside deck. If your house is dated, think about replacing a strong element in one room. My last house had almond tub tile with a dark green border and green laminate counters. When I sold, I left the green tile border alone, but replaced the countertop with a more neutral almond color and added a new faucet. Total cost was less than $200, but it made the 1980's bathroom look great. The lighter counter also made the room look bigger. Keep your eye on value and give your buyers a fresh improvement to set your house apart.

Keeping these five things in mind when you sell your house will help you sell your house in any market. Remember, buyers have a lot of choices, so you want to take the time to make your house stand out. If you price for the market, have a solid marketing strategy, polish your house so it looks it's best and give buyers something new to peak their interest your house will sell in no time.

Thursday, September 8, 2011

Just married! Should I stretch to buy now?

Many are wondering if they should buy a house now or rent in this uncertain market. There are some things to consider before you make your decision to see what might be best and fit with your overall financial plan.
Dear Sunnyview,
I am newly married. My wife is working right now, but we plan to start a family soon. My wife's credit is pretty good about 720, but mine is around 670. Jobs are stable, but we don't have much saved up yet. My family says that we should do whatever we can to buy, but we would have to pay about $300 more every month for a mortgage. Should we buy now before prices go up?
-Confused Newlywed

Dear Confused Newlywed,
First of all congratulations! It sounds like you are at an exciting crossroad, but you need a solid plan before you buy. I think that taking time to improve your credit, deciding what you can afford in your monthly budget and then looking for a house with a payment close to rent would give you good financial flexibility moving forward.

You would be wise to work on your credit before you buy. Both you and your wife would be able to qualify with your current scores, but the cost of getting a mortgage drops when you improve your score. Each mortgage company has "cut offs" for scores and being just above or just below that line can affect the rate you get and in turn the overall cost of the mortgage Improving your credit score gives you the most mortgage options at the lowest cost. Credit is not a mystery. There is a lot you can do to raise your score like keeping balances below 30% of the limit, paying on time and disputing incorrect information on your report. You can also ask some companies for a removal of a single late payments from your report if your account is current so be sure to ask them.

Next, run a calculator like this on the Dinkytown Mortgage Qualifier to see the monthly ownership costs including taxes and insurance on a home would be. Many lenders are happy to help you make a plan and see what you might qualify for, but it is a good idea to run the basic numbers for yourself to see what you can comfortably afford not just the maximum you can qualify for. It is a good idea to make a budget and see where your money is going before you buy. The best one that I have found online is Suze Orman's Budget Calculator. You can use it to find your own budget and you can also rerun the numbers without your wife's income to see what they would look like if she plans to take time off work when you have children. The amount of house you can afford should be dictated by your own budget not just the maximum in the standard mortgage ratios.

I do not know what your local market is like, but most markets are still finding their way to more stable values. The good news is that over time many markets are correcting so that the cost of owning is dropping to be more in line with local rents. Buying a house with combined mortgage, taxes and insurance costs (PITI) that is close to or less than rent is a good way to build equity over time. It does not provide you perfect protection from drops in the market, but it means that it is unlikely that you would ever be forced to sell due in a down market since you could cover the basic house expenses with rent alone. You can find Fair Market Rents (FMR) for your area on the HUD website and compare that to what you are paying every month now to see how the cost of buying compares to renting in your area.

My advice is to learn all you can, get your finances in order and do not rush to buy now. A prepared buyer is a happy buyer. Focus on your new family, improve your credit, save for a down payment and keep your eye on your larger plan as you move toward buying a home when the time is right.

All the best,

Monday, September 5, 2011

Celebrate Labor Day The American Way

Happy Labor Day! Even passionate real estate people need an occasional holiday. One of my kids recently asked me why we celebrate Labor Day. I proudly said that Labor Day was a joint celebration to remember the hard working people of America and the ancient rite of summer BBQing. Ok, so I may have stretched the truth a little, but Wikipedia was unavailable. Labor Day is the last hurrah of summer: A time for kids to think about going back to school, enjoy the last of the high summer sun and to talk real estate while gathering around the BBQ.

Labor Day is a great time to grill hamburgers. One of my favorites is stuffed cheeseburger with plenty of fresh lettuce, tomato and bacon. You can use any type of cheese inside. Cheddar, Blue Cheese or Swiss are all delicious, but if cheese isn't your thing, try stuffing burgers with sauteed mushrooms,  caramelized onions or roasted jalapenos. In this video, Guy Fieri shows you the basic technique for stuffing burgers with anything you like.

Labor Day is also a great time to pull out your favorite macaroni salad recipe for one last summer fling. I like this Classic Macaroni Salad recipe. I cut the amount of sugar and onion down and add 1 tablespoon of brown mustard for a little extra zing. Let it sit in the fridge overnight and in the morning...Voila! Delicious! The last time I this for a potluck, I went home with an empty bowl. A promising sign for any recipe.

Finally, nothing says summer like corn on the cob and even most picky veggie-phobes love it. You can cook corn inside the husk or out, but as long as you have that BBQ going, you might as well keep the house cool and throw them on the grill. Soaking the corn in the husk for 15 minutes before grilling steams them or you can try roasting them with husks off like Stephen Raichlen does for a new twist on an old favorite. 

Labor Day is a time to enjoy your friends, family and neighbors. The open houses are closed, the multiple listings won't be refreshed until Tuesday and even most agents are forwarding messages to voice mail, so preheat the grill, grab a nice cold drink and enjoy the day off!

Thursday, September 1, 2011

Good Websites, Make Good Neighbors -- Top 5 Neighborhood Websites

Buyers often ask how they can choose a good neighborhood when they look to buy a house. If a house is your castle, the neighborhood is your kingdom. Choosing a neighborhood is as personal as choosing a house or a spouse. People often have specific ideas about what makes a neighborhood feel like home. Your agent can help direct you to resources, but will be unable to answer questions about some subjects due to restrictions in the Fair Housing Law. I love doing online neighborhood research and have a system that works well for me.

It is helpful to start by making a list of things that are most important to you like commute time, schools, nearby services, community resources, age of the houses, topography, walkscore and anything else that you feel is important. Organize these into two columns: non negotiable and like to have. Then, look for specific information for each neighborhood you are considering. Some of my favorite sites for neighborhood research are:

1. Zillow local pages are available by zip, city/state and neighborhood are well organized and have detailed information about neighborhood residents, housing types and appreciation. 

2. City-Data has an excellent street level forum that is a great place to ask for uncensored street level information about the feel of neighborhoods, commutes and local schools by zip.

3. Zip Skinny will allow you to compare neighborhoods side by side in many categories like income, unemployment level, education level and demographics by zip code.

4.  Crime Reports and Spot Crime are two helpful sites for mapping recent police calls in local neighborhoods. Many police departments also have their own sites available.

5. Walk Score will map your commute, walking distances to schools and grocery stores and will show you what local services are nearby the area that you are considering.

You should also consider the less tangible things that you are looking for in a neighborhood. What kind of neighbors you would like to live near? How is the neighborhood for walking? Are there safe areas to play nearby in either a park or for a pick up game of street football? Is the area quiet? How are the local schools? How is parking?

Get all the information you can, talk with local residents and then you can choose a neighborhood that makes your new castle feel like home.