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Improving Your Credit Score to Buy a Home

by Karen Picarello

It is possible to get approved for a home loan with fairly poor credit, but you won’t get a low interest rate. If your credit is below 580, you’ll also need a larger down payment. Basically, it’s better to start working on your credit now, so your score can be as high as possible when you apply for a loan and make an offer on a home.

5 Ways to Improve Your Credit Score to Buy a Home

1. Make Payments On-time

One payment made 30 days late can greatly impact your credit score, sometimes by as much as 100 points even if your other accounts are all paid on time. If you aren’t good at remembering to pay on time, you aren’t alone. But don’t let this ruin your score. Set up automatic payments or schedule payment reminders in your smartphone. The credit reporting agencies don’t care why you are late, and late payments can remain on your credit report for years. If you do make a payment late, and it is for extenuating circumstances, see if you can get it removed. Some companies won’t report to a credit agency until you are over 30 days late, but if you are late for a non-emergent reason, you may have difficulty getting a lender to remove the event. Make sure you are polite.

2. Pay the Balance on Everything Possible

If you are paying everything on-time, but your credit score isn’t improving, it could be because of your balances. Your balances should only be using a certain percentage of your available credit. Generally speaking, you only want to be using 30 percent of your available credit, so pay down some credit cards, and watch your scores rise.

3. Sign Up for a Credit Score Alerts

One of the scariest things about credit is that you don’t know what your score is unless you check. That is why it is so important to sign up for alerts. This way, you’ll see if your score drastically changes, and you can take action as soon as possible if there is an error or if someone steals your identity.

4. Check Your Bank Account Regularly

Being financially aware can help to improve your credit score by ensuring you have enough money in the bank to cover expenses. Look at your bank account daily. This way, you’ll see and understand any erroneous charges. You’ll also see any subscription services that you may not be using anymore, so you can save money.

5. Set Up a Savings Account

Lastly, keep at least three months of expenses in a savings account. If you have your identity stolen, and your checking account is hacked, you could be in a lot of hot water while you wait for it to be resolved. If it is caught early, a bank or credit card company might reverse the charges within a couple weeks, but that savings account will keep you from missing any payments or overdrawing your account.

Plants are the Perfect Home Staging Element

by Karen Picarello

A home without a plant is missing a certain je ne sais quoi that brings feelings of health, calm, and nature to the room. That is why it is so important to include plants in your home staging efforts. It brings the positive feelings that you want buyers to feel when they view their next potential home.

Why are plants the perfect home staging element?

1. Warmth

When you remove all of the personal elements and sparsely furnish a home with the bare essentials, the strategic ornamentation and neutrality of it all seems a bit sterile. You cannot fake the reality of occupation in a home, but adding plants can add life. Plants are an adequate replacement for the lack of personal elements in the home. The home is no longer a cold replication of family because the plants warm it up with life.

2. Nature

There is an ever-present need in humans to connect with nature that is probably instinctual. We cannot remove ourselves from our love of natural elements, and a home seems incomplete without it. This is likely because of some genetic memory from our days as cavemen where plant life equated to survival and food. In any case, plants reconnect your buyers with nature, and they get good feelings about the home as a result.

3. Stress-reducer

Along with the calm associated with reconnecting with nature, plant have also been proven to be stress reducers when placed in the home. Searching for a home can be a stressful process, so anything to reduce that stress could make a potential buyer choose your home over homes without plants.

4. Space-filler

It is a challenge to “fill the void” when the former occupants of a home move out. Some homeowners don’t have the disposable income to fully stage their home, but plants can add a little something extra to the space they fill. They can also be useful to gauge size in photos.

5. Color

Lastly, home staging is usually an effort in neutral colors, and whites and tans are prevalent in most displays. This is because it is pleasing to everyone. You don’t want to lose a buyer because of poor color choice. However, neutral colors and whites totally remove the personality from a home. While that is the point, no personality can feel very cold. A pop of color from a plant can remove the monotony and make the place seem more complete.

Photos Make a Difference When Selling a Home

by Karen Picarello

With real estate sites like Zillow offering run-downs of the homes for sale in your area, you need to have a competitive edge to make your house stand out in the market. One way to do that is to make sure that you have amazing photos that showcase your property before anyone ever takes a tour. In order to get those photos, you’ll need a professional photographer. Still not convinced? Photos are not only for initial wow-factor. They are also a positive reminder of your listed home when potential buyers go home to consider their options.  It’s a double-whammy, and you don’t want to miss your chance to close a sale based on something as simple as poor photography.

Why Photos Make a Difference When Selling a Home

1. Poor Photos, No Visit

If a potential home buyer is looking on a website for property and comes across poor quality photos, they may move on. The home buyer has a lot to look at, and the first elimination process is done via photos regardless of the actual appearance of your property. If you cannot spur interest in your home through photos, then you’ll have to spur it through low cost, and that isn’t the most profitable way to sell a home.

2. Photos Show Potential

Photos are not meant to fraudulently portray your home in a false light, but they can portray your home in its best light. Taking photos at the perfect time of day, when the light hits your home perfectly, allows your potential buyers to see the house in all of its glory no matter what time of day they visit. This is especially important during winter months, when many tours may be given during the night.

3. Photos Force Staging

If you have been thinking about staging your home to sell but haven’t gotten around to it, a professional photographer may be the spark you need to get going. They can recommend colors and artwork that will sell the home, and your photos will look like your home is magazine-worthy. The lighting will be perfect, and the angle will be perfect. It is easy to tell amateur photos from professional photos, as the room in a professional photograph looks like you could practically walk into it. You want your potential buyers to see themselves in the home.

Professional Photos Make a Difference

If you are serious about selling your home for top dollar, consider a professional home photographer to portray your home in a way that draws in potential buyers. It will bring people to your home, and they will look back at photos of a place where they could see themselves.

Is the Phoenix Housing Bubble About to Burst?

by Karen Picarello

What is a housing bubble?

A housing bubble occurs when homes are overvalued for no real reason, very much like the inflation of money. It is a problem because housing becomes unaffordable. Demand sparks the bubble, and as people continue to buy at higher prices, the speculation that prices will continue to grow perpetuates further escalation.

How is lending a factor?

Lending can play a huge role in a housing bubble. If lenders approve loans to people who are unable to afford them, people live beyond their means and struggle to pay their mortgage. Interest rates also play a role in home ownership, as lower interest rates increase the demand for homes. If too many people are living in homes they cannot afford, they default on their loans. This eventually pops the housing bubble, and the market crashes.

Upside down mortgages

As the housing bubble popped in 2008 and home values declined, many people ended up being upside down in their mortgages. This means you owe more than your home is worth.  People couldn’t afford their homes, and they couldn’t sell them in hopes of paying off their mortgage because their homes were no longer worth as much. This resulted in an entire economic downturn for the country, and it went into a major recession.

Somebody always wins during a bubble.

If the Phoenix area is experiencing a housing bubble, there are definitely people benefiting from it. Property investors buy property anticipating that the bubble will grow, and although this perpetuates the problem, they benefit. As far as the average homeowner goes, it’s not great. You may be able to sell your home for a greater profit, but that will just be reinvested into your next property, so it’s sort of a toss-up. If you sold for a high price, and the bubble burst, you may be able to purchase a nicer home at a lesser rate. You cannot rely on this, so it isn’t a recommended strategy.

When will property values decline in the Phoenix area?

Economist have been warning of an economic downturn for some time, but they don’t know when it will happen. Phoenix has some of the highest price growth the country, but nobody knows how big the bubble will get. You see, there is no clear definition of a housing bubble or its breaking point. All that is clear is that the price of homes in the Phoenix area is inflated, and housing bubbles don’t last forever.

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Contact Information

Photo of Team Picarello Real Estate
Team Picarello
RE/MAX Fine Properties North Scottsdale
21000 N. Pima Road, Suite 100
Scottsdale AZ 85255
Office: (480)860-8733
888-548-8713
Fax: (480)860-8755