11 Reasons Why Your Home Isn’t Selling

When you first put your house on the market, you might be hopeful for a quick sale—especially if you’ve put a lot of money into improving the house over the years and if the neighborhood is one that has historically attracted a lot of buyers. While you shouldn’t panic if the house doesn’t sell the moment you list it, you should begin to worry if months go by without any real offers. If this is the case, here are 11 reasons why your house may not be selling.

  1. You overvalued your property. If your house is overpriced, it’s simply not going to sell. Compare your property to similar properties that recently sold within your area to get a better idea of its true value. An experienced real estate agent can give you an accurate value of your home. Additionally, don’t make the mistake of tacking on the cost of any renovations you made. You can’t just assume that the cost of a renovation translates to added value.
  1. Your listing is poor. If the listing of your home includes a poorly written description without any images, a lot of buyers are going to skip over it. Make sure you and your REALTOR® put an effort into creating a listing that attracts the attention of buyers. Make sure to add high quality photographs of both the interior and exterior of your home. Don’t forget to highlight unique features as well.
  1. You’re always present at showings. Let your agent handle your showings. Buyers don’t want to have the seller lurking over their shoulder during showings, especially during an open house. It puts unwanted pressure on the buyer, which will make them uncomfortable.
  1. You’re too attached. If you refuse to negotiate even a penny off your price, then there’s a good chance that you’ve become too attached to your home. If a part of you doesn’t want to sell it, or you think your house is the best house in the world, odds are you’re going to have a lot of difficulties coming to an agreement with a potential buyer.
  1. You haven’t had your home professionally cleaned. A dirty house is going to leave a bad impression on buyers. Make sure you have a professional clean your carpeting and windows before you begin showing your house.
  1. You haven’t staged your home. If you’ve already moved out, then don’t show an empty house. This makes it difficult for buyers to imagine living in it. Stage your house with a few pieces of furniture and decor to give buyers a better idea of how big every room is and how it can be used. You want the buyer to feel at home when they are taking the tour.
  1. You kept up all of your personal décor. Buyers are going to feel uncomfortable touring your house if you keep all of your family portraits up. Take down your personal décor so that buyers can have an easier time imagining themselves living there.
  1. Your home improvements are too personalized. You might think that the comic book mural you painted for your child’s room is absolutely incredible, but that doesn’t mean potential buyers will agree. If your home improvements are too personalized, it can scare off buyers who don’t want to pay for features they don’t want.
  1. Your home is too cluttered. Even if your home is clean, clutter can still be an issue. For example, maybe you simply have too much furniture in one of your rooms. This can make the house feel smaller than it is.
  1. Your home is in need of too many repairs. The more repairs that are needed, the less likely a buyer will want your house. Many buyers simply don’t want to deal with the cost or effort of doing repair work, even if it’s just a bunch of small repairs, such as tightening a handrail or replacing a broken tile.
  1. You chose the wrong real agent. In my opinion, choosing the right real estate is simply the most important decision you make in selling your home.  A good REALTOR® makes all the difference in selling your home within a reasonable time.                                                                                                                                                                        All these things can be fixed once you realize your mistake; however, the longer your property stays on the market, the less likely it will sell at listing price.                                                                                                                                                                                                                          By Charles Muotoh, RISMedia’s Housecall
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Should I Buy a House as I’m Switching Jobs?

If you’re switching jobs or plan to in the near future, you might want to know how that impacts your ability to buy a house. After all, purchasing a home is a lengthy, stressful process once you tally up the time for mortgage approval and pounding the payment to find a home.

If you’re in the middle of considering a job change, your company has transferred you to a new area or you’re thinking of starting a new business, it’s prudent to think about how that affects any home-buying plans—because, frankly, any job switch can have major impacts on your ability and plans to buy a home.

What Lenders Review When You Buy a Home

Lenders want to know you’ll be able to make your mortgage payments on any house you purchase. To that end, they carefully review a number of factors to assess your job security.

That means following the usual advice like not making any large purchases or deposits as you apply for a loan. You also shouldn’t apply for new credit, switch banks or co-sign on another loan. They’ll explore how often you’ve changed jobs and scrutinize any period of unemployment. Most lenders also give weight to:

  • The health of your industry and company
  • Your training and qualifications
  • Whether there are other jobs that fit your pay and training
  • Your work history beyond two years
  • Any increases you’ve had in pay and responsibility

They also often ask employers to confirm that employment will continue for the first three years of the mortgage. As you can see, changing jobs or job-hopping and obtaining a mortgage can be challenging.

Loan Approvals Continue Until Closing

“But,” you say, “I’ve already been approved for a loan. The coast is clear. I can switch jobs now and purchase a house with my approved loan!”

Well, not so fast. Yes, you are approved for a loan initially. You can switch jobs, and then go out and look for a house; however, be aware that the lender will also review your materials and circumstances at closing. Lenders are cautious and keen to know that those mortgage payments will definitely be forthcoming.

If you no longer have a two-year history with a firm, can no longer confirm likely employment for three years or other circumstances develop related to your job and income stability and income, it is entirely possible a lender will reject the loan.

If you have a loan guaranteed by the United States Federal Housing Administration (FHA), for example, which allows low down payments, it can reject a loan even after approval. So it can be risky to start the home-buying process if you plan to switch jobs.

Factors to Consider: When Job-Switching Would Have No Impact

That said, there are circumstances where job-switching would not derail your plans to purchase a home. If you change jobs but are still in the same industry, the lender will review your materials, but it is not likely to stop a loan. This kind of move shows the stability lenders like to see.

If your pay and benefits increase in the same line of work and industry, that would be fine with most lenders. In fact, it can increase the size of the loan for which you are eligible. Here, too, there will be a period when lenders require documentation on the new position, and they will ask your employers about the three years of expected job stability. If you plan to switch jobs during the home-buying process, it’s a good idea to let your lender know.

Factors to Consider: When Changing Jobs Would Have a Negative Impact

If you change to a job with lower pay, however, even if it is in the same line of work and industry, it might negatively affect your chances of obtaining or keeping a mortgage. The negative effect on your income is considered a sign of instability.

Similarly, if you switch your job title significantly or move into an entirely different line of work, you may have difficulty obtaining a mortgage until you have two years of history. So if you were a teacher and become a baker, getting lender approval might be challenging.

Lenders Get Nervous When Salaries Shift

Changes in the salary structure of a job may have hurt your chances of securing a mortgage, as well. If you move from a salaried (W-2) position to one where you will receive commissions, lenders may get nervous.

Why? Because commissions are variable income rather than stable. Most lenders require a 24-month history of any position that has variable pay, even if a commission-based job is likely to give you a higher income than a salaried one.

So if you are currently a tech support person and switch to technology sales, you will likely have to wait at least 24 months before a lender will approve you for a mortgage.

Similarly, if you move to a contractor or consultant role from a salaried position, you will need 24 months of income before a lender will consider you for a mortgage. Contractor and consultant income is not as stable as salaried income.

If your job switch involves starting your own business, you also would likely not secure a mortgage. Your lender will want to see at least 24 months of results on your business before making any mortgage decisions.

Consider the Possible Drawbacks of Switching Jobs While House Hunting

Buying a home while switching jobs can be challenging, because lenders require both income and job stability to approve a mortgage. Lenders will also check with employers to see if continued employment is likely during the first three years of a loan.

Bottom line is: if you suddenly make less money, move to a different line of work, change salary structure or start your own business, you will likely need 24 months of stability before buying a home becomes feasible.

By Megan Wild, RISMedia’s Housecall

For Buyers, Credit Matters—but How Much?

Borrowers not as creditworthy as others often have higher mortgage payments; in fact, according to an analysis recently released by Zillow, the average borrower categorized with credit as “fair” can be on the hook for $21,000 more than a borrower with an “excellent” score.

Here’s how: Borrower A has a credit score that’s stellar (“excellent”), and obtains a 4.50 percent rate. Borrower B has a credit score that’s less than stellar (“fair”), and obtains a 5.10 percent rate. If both have a 30-year mortgage and a home with a median price tag, over the course of the loan, Borrower B has $21,000 more to pay than Borrower A.

Across the largest markets, the differences vary:

Zillow_Credit_Scores

“When you buy a home, your financial history determines your financial future,” says a senior economist at Zillow. “Homebuyers with weaker credit end up paying substantially higher costs over the lifetime of a home loan. Of course, homeowners do have the option to refinance their loan if their credit improves, but as mortgage rates rise, this may be a less attractive option.”

Mortgage rates have risen since the start of the year, recently hitting a point not seen since 2011, according to Freddie Mac.

For more information, please visit www.zillow.com.

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