You’d have to be living on another planet if you haven’t heard reports of subprime mortgages and their effect on the real estate industry. If you’re planning to buy a home, it’s apparent that loan qualification these days is more challenging. Sellers also feel the effect from fewer qualified buyers who can make a confident, full price offer.

In preparing a loan application, the most critical factor is usually your FICO score (developed by the Fair Isaac Corporation). You may be aware that your score can range from 300 to 850 points, and that your score affects your terms and interest rate. However, there are some details you may find interesting.

You don’t have simply one score, you have three - one from each credit-reporting bureau (Equifax, Experian and TransUnion), and each score may differ by as many as 100 points. Your score is formulated from percentages of five different factors: your payment history (35%), your debt (30%), length of your credit history (15%), your credit types (10%), and any newly issued credit (10%).

In order to qualify for a “prime” loan, you’ll need a FICO score of at least 620, but you’ll get the best terms and interest rate if your score is above 720. Your best bet is to check your scores and reported history well in advance of a planned purchase. Talk to your lender or your REALTOR® so that you get the correct score.

Call me if you need assistance with your real estate decisions. If you prefer, Email me at donkingsley@kingsleyrealestate.com. I will be happy to share my knowledge with you at no cost or obligation.

If you’re looking for a competitive edge in the sale of your home, your real estate agent may have an unexpected suggestion. Although many sellers assume that it is the responsibility of the buyers to pay for an inspection, having one performed before you even list your home can go a long way towards attracting a full price offer from confident buyers.

Think about it. If you’re aware of flaws and needed repairs before you begin marketing your home, you can correct potential problems before the buyers even have a chance to think about negotiating a lower price for repairs. Sellers can expect an offer that is two dollars less for every dollar in needed improvements, so why would you give away that money when you can save it by simply investing in a pre-listing inspection?

A pre-listing inspection also reduces time and stress before closing, because there’s no rushing around trying to get requested repairs done on the buyer’s schedule. You’re also establishing good will right off the bat, creating an atmosphere of trust and honesty up front.

All of these aspects greatly increase the chances that the buyers will offer full price and follow through to closing without any doubts, delays or picky negotiations. Like a quality used car, giving your home the “Certified Pre-Owned” label will encourage the buyer’s seal of approval!

Call me if you need assistance with your real estate decisions. If you prefer, Email me at donkingsley@kingsleyrealestate.com. I will be happy to share my knowledge with you at no cost or obligation.

Larger home inventories coupled with tougher financing requirements have made it difficult for both sellers and buyers to achieve their respective goals. In the search for creative solutions, one has recently begun catching on - Rent To Own.

The advantage for buyers is that a portion of your rent payment is put into an escrow account to be used eventually for down payment on a traditional loan. You can begin building equity before you’ve even applied for financing! If your credit is less than perfect or you simply haven’t the funds available for a significant down payment, this could be a great opportunity.

Sellers also benefit from receiving income from the tenants and the likelihood that they will eventually purchase the home outright. However, caution must be exercised, and you can protect yourself by seeking the advice and services of a REALTOR®. Many can even manage the property for you.

Consider who will maintain the property and what percentage of the rent will go towards the down payment. What will happen if one party wants to back out of the deal or if the renters don’t eventually qualify for financing?

These are just a handful of the questions and concerns associated with this otherwise mutually beneficial arrangement. If you’re facing challenges as a buyer or seller, consult with a REALTOR® today to discuss the possibilities.

Call me if you need assistance with your real estate decisions. If you prefer, Email me at donkingsley@kingsleyrealestate.com. I will be happy to share my knowledge with you at no cost or obligation.