As you prepare to buy or sell a home in the next year, the list can be daunting of all the things you need to accomplish. Here’s a list of 7 important things you’ll want to do to get ready for that next step:
1. Handle your credit horrors. If you count yourself among the number of 2013 wanna-be buyers who experienced a financial glitch of any degree during the recession, now is the right time to start pulling your credit reports and doing a damage assessement and control campaign.
- Visit AnnualCreditReport.com (the only website through which you can access your government-mandated free reports) and order your own credit reports from all three reporting bureaus.
2. Purge. It’s time. Time to get rid of all that things you know qualify as clutter – all of the stuff you know buyers won’t want to see when they tour your home, and all the stuff that you won’t want to move to your next place. If you donate your junk before the end of the year, you might be able to get a receipt and deduction for the taxes you file in 2013.
3. Plan your prep. If you’re thinking of selling your home in 2013, now is a great time to start organizing your list of home preparation tasks that need to get done before you put the place on the market. Talk with your agent before you put a plan in place; they can help you make good decisions which projects to do (and which to forego), as well as choosing finish materials and colors that will appeal to the broadest segment of buyers – to boot, they often can refer you to the most cost-effective contractors in your area for these sorts of pre-listing projects.
4. Save. More. There’s no such thing as saving too much cash up for your down payment. If you have a home to sell, you have no idea how much you’ll take away from that transaction until it closes. And even if you’re currently renting, having maximum savings set aside allows you maximum flexibility in terms of selecting homes, competing with other buyers, covering closing costs and even handling post-closing repairs, appliances and property personalization.
5. Collect your gift money. Buyers who get gift money from a relative to apply toward their down payments are often subject to seemingly strange and definitely invasive documentation requirements – the most onerous of which is to produce copies of the gift GIVER’s bank accounts proving the source of the funds. If you know Mom, Dad, Granny or Aunt Bernie is going to chip in some cash toward your down payment in the Spring, consider asking them to go ahead and give it to you now, so you can put it in your own accounts and begin “seasoning” it as yours, which will help you avoid all those documentation demands.
6. Connect with an agent and a mortgage broker – stat. Don’t wait until the month before you want to buy or sell to ring up your trusty agent and initiate the conversation. We have two fantastic mortgage brokers we work with in our transactions. Contact us today to get started on the mortgage process!
7. Go Open House hunting. If you’re selling next year, it’s essential to get a real-life read on what the competition’s like, everything from what sorts of houses in your area are listed at various price points to what your target buyers are going to be seeing on their way into or out of your house. There’s no reality check on your own home’s preparation and staging – its overall readiness for listing – like putting on a buyer’s shoes and taking a tour through similar homes in your area. And there’s no time for this reality check like right now: when Open Houses are still a-plenty, you have more time to attend them, and you still have plenty of time to process your takeaways and incorporate them into your own property preparations. Open House hunting is also helpful for those who have home buying on their 2013 to-do lists. It’s the only way you can start understanding how to decipher the listings you see online into a reality-based set of expectations about a property. It’s also the best way to get indoctrinated deeply into the realities of what you get on your local market at various price points, and it’s the most impactful strategy for starting the process of negotiating compromises with your co-buyers.
8. Think hard about your deductions, if you’re self-employed. In the wake of the recession, most mortgage guidelines for self-employed borrowers changed, so that your income for purposes of qualifying is assumed to be the average of your last two years’ Adjusted Gross Income, as reported on your federal income tax returns. That means lenders calculate your income after all your business-related and other deductions, not before. So, yes, this does mean that maximizing your deductions may impact your ability to qualify for a home loan in 2013. But them’s the breaks – better to know this before you file your tax return, in the event it might change something about how you file. Loop your tax advisor, business bookkeeper and mortgage broker into your decision-making process about your 2012 taxes before filing, if you’re self-employed and plan to buy or refinance your home next year.
Whenever it’s the ‘right time’ to buy a home, we’d love to meet with you to go over our home-buying strategy! 2013 is going to be a fantastic year of home sales in the U.S., so let us help you take that step to home ownership!
