Whether you are selling or buying a house, your plans are likely to be derailed by one of three factors that are tripping up thousands of real estate deals this year, according to a recent survey by the National Association of Realtors:
- Economic insecurity
- Difficulties in obtaining financing
- Problems selling current home
Here’s how to overcome each of them.
Economic insecurity. Wary of being laid off and weary of working longer for less, Americans are reluctant to take on a significant commitment like a mortgage. These tactics can help pad your monthly household budget while teeing up affordability for future buyers.
• Income potential: Can you rent out half of your garage, offer summer storage to local college students, or rent out your basement workshop to a condo-owning hobbyist?
• Lower monthly carrying costs: Yup, energy efficiency again… but also low-maintenance landscaping, petitioning for lower property taxes, and adding features that improve security (thus potentially lowering insurance costs). Anything that trims the monthly expense of owning your house makes it easier for you now and easier to sell later.
Difficulties in obtaining financing. There’s precious little wiggle room with today’s lenders. You can’t do much about potential buyers’ credit, so concentrate on your own.
• Review your credit report and clean up any dings: Good credit housekeeping means you won’t have any hurdles if you suddenly need to sell (and buy a new house) or refinance.
• Save for your next down payment: Chances are your equity is stagnant at best. These days, lenders require 20% down. Do you need to top off your equity to hit the mark for your next home purchase? If so, start saving now.
Problems selling current home. Today’s real estate ‘recovery’ can quickly become tomorrow’s slowdown. If you are considering selling in the next couple of years, start getting ready now.
• Cultivate curb appeal: Move projects that make your house look pretty to the top of your list. If you suddenly have to sell, your home will be photo-ready.
• Start spreading the word: Let neighbors and friends know that you’d be interested in selling to the right people for the right price. Chat up your interest in selling at block parties, garden clubs, and at PTA meetings. You never know when a friend-of-a-friend is looking for a house just like yours, and you can complete a private sale without having to pay a 6% commission to an agent.
For more on buying and selling real estate, consider: