Market insights • Seller's Tips • December 23, 2024

Home Equity May Help You Buy Your Next Home in Cash

by Yev Litvinov

Building home equity is one of the biggest financial advantages of homeownership. And right now, homeowners across the country are sitting on record amounts of it.

Here’s a look at how that equity could be a game changer for you, and why it’ll flip your perspective from “Why would I move right now?” to “Why wouldn’t I?”

Home Equity: What Is It?

Home equity is the difference between how much your house is worth and how much you still owe on your mortgage. For example, if your house is valued at $400,000 and you only owe $200,000 on your mortgage, your equity would be $200,000.

Why Equity Is Such a Big Deal for Homeowners Looking To Sell

Recent data from the Census and ATTOM shows how significant today’s home equity really is. In fact, more than two out of three homeowners have either completely paid off their mortgages (shown in green in the chart below) or have at least 50% equity in their homes (shown in blue in the chart below):

And that’s a big deal. Think about it: 2 out of 3 homeowners have at least 50% equity in their homes. To put a more tangible number on it so you can think about what that really means for someone like you, CoreLogic shows the average homeowner has $311,000 worth of equity built up. That kind of net worth can go a long way if you’re trying to make a move.

And that’s part of the reason why the share of all-cash buyers recently reached a new high. According to an annual report from the National Association of Realtors (NAR), 26% of buyers were able to buy without a mortgage (see graph below):

Imagine buying your next house in cash. No mortgage. No monthly payment. No interest rate to mess with. If you want to find out how much equity you have to see if that’s an option for you, connect with a real estate agent and ask for a professional equity assessment report (PEAR).

Who knows, you may find out you have enough equity to buy your next place outright– and with today’s mortgage rates, not having to take out a home loan is pretty incredible. Even if you don’t have enough equity to buy in all cash, you may still have enough to make a larger down payment, which has its own benefits too.

Bottom Line

Homeowners have an incredible amount of equity today – and that’s why the share of all-cash buyers is on the rise. To see how much equity you have and talk through how it can help fuel your next move, let’s connect.

Buyer's Tips • Market insights • Mortgage tips • December 22, 2024

When Will Mortgage Rates Come Down?

by Yev Litvinov

One of the biggest questions on everyone’s minds right now is: when will mortgage rates come down? After several years of rising rates and a lot of bouncing around in 2024, we’re all eager for some relief.

While no one can project where rates will go with complete accuracy or the exact timing, experts offer some insight into what we might see going into next year. Here’s what the latest forecasts show.

Mortgage Rates Are Expected To Ease and Stabilize in 2025

After a lot of volatility and uncertainty, the most updated forecasts suggest rates will start to stabilize over the next year, and should ease a bit compared to where they are right now (see graph below):

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“While mortgage rates remain elevated, they are expected to stabilize.”

Key Factors That’ll Impact the Future of Mortgage Rates

It’s important to note that the timing and the pace of what happens with mortgage rates is one of the most challenging forecasts to make in the housing market. That’s because these forecasts hinge on a few key factors all lining up. So don’t be fooled, because while rates are expected to come down slightly, they’re going to be a moving target. And the ups and downs of ongoing economic drivers will likely stick around. Here’s a look at just a few of the things that’ll influence where they go from here:

Inflation: If inflation cools, rates could dip a bit more. On the flip side, if inflation rises or remains stubbornly high, rates may stay elevated longer.
Unemployment Rate: The unemployment rate also plays a significant role in upcoming decisions by the Federal Reserve (the Fed). And while the Fed doesn’t set mortgage rates, their actions do reflect what’s happening in the greater economy, which can have an impact.
Government Policies: With the next administration set to take office in January, fiscal and monetary policies could also affect how financial markets respond and where rates go from here.

Remember, these forecasts are based on the best information available right now. As new economic data comes out, experts will revise their projections accordingly. So, don’t try to time the market based on these forecasts alone.

Instead, the best thing you can do is focus on what you can control right now. Work on improving your credit score, put away any extra cash for your down payment, and automate your savings. All of these things will help you reach your homeownership goals even faster.

And be sure to connect with a trusted agent and a lender, so you always have the latest updates – and an expert opinion on what that means for your move.

Bottom Line

If you’re planning to move and want to stay informed about where mortgage rates are heading, let’s connect.

Buyer's Tips • Market insights • Mortgage tips • Seller's Tips • December 18, 2024

4 Reasons To Work With a Professional Realtor For a Stress-Free Move

by Yev Litvinov

I understand how overwhelming the decision to move can feel, especially with everything going on. But here’s the truth: moving shouldn’t be scary—it should be exciting. The key to eliminating that fear is to work with professional realtor.

As a real estate agent, I’m more than just a facilitator of transactions. I’m a trusted guide, here to help you navigate the complexities of the housing market with confidence and ease. What may seem like a daunting process can become manageable, and even enjoyable, with the right expertise by your side.

That’s why, in a Bright MLS survey, respondents agreed partnering with an agent is essential and helps cut down on their stress:

Let me share just a few ways my expertise can give you peace of mind:

1. Explaining the Current Market

I know it’s easy to get swept up in misleading headlines about potential market crash, falling prices, and more. When you’re not an expert, it’s natural to feel uncertain. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

But that’s exactly why I’m here—to help you separate fact from fiction and debunk those panic-inducing headlines. With my in-depth knowledge of local market trends, home values, and inventory levels, I’ll ensure you’re making informed decisions with confidence.

2. Walking You Through the Process Step-by-Step

If this is your first time buying or selling, it can feel like you’re stepping into unfamiliar territory with a lot of confusing terms and processes. Don’t worry—I’ll walk you through every step, from the very first conversation all the way to closing day. Whether you’re unsure about terms like “pending” versus “contingent” or wondering why you need title insurance, I’m here to explain everything in simple terms. As NerdWallet explains:

“If it’s your first time buying — or selling — you’re likely to come across terms you don’t recognize and tasks that seem baffling. What’s the difference between pending and contingent? Why do you need title insurance? How thoroughly do you need to fill out disclosure forms? Your agent should be able to confidently and competently explain it all.”

Even if you’ve been through the process before, but it’s been a while, I’ll tailor my explanations to your previous experience, providing a refresher that’s as thorough as you need, but not overwhelming.

3. Advocating for Your Best Interests

The back-and-forth of negotiations can be stressful, but that’s where I come in. I’m a skilled negotiator trained to secure the best possible terms for you. Whether you’re buying or selling, I’ll work to get you the best deal.

As your advocate, I’m focused on your goals, not just the transaction. This means I’ll fight for the best price and terms, ensuring you don’t have to worry about getting a bad deal or being taken advantage of.

4. Solving Any Unexpected Problems Quickly

I know that unexpected issues can arise, and it’s natural to feel anxious about them. But rest assured, I’ve got you covered.

With years of experience, I’m a problem-solver at heart. If any challenges come up during the process, I’ll address them quickly and efficiently, often before they even become a major concern. My goal is to keep everything on track and ensure that you don’t face any deal-breaking surprises.

Bottom Line

Don’t let fear or uncertainty hold you back from moving forward. I’m here to help you achieve your goals with confidence. Let’s connect, and together, we’ll make your next move a success.

Buyer's Tips • December 18, 2024

How to Turn a Fixer Upper into Your Dream Home?

by Yev Litvinov

Looking to buy a home but feeling like almost everything is out of reach? Here’s the thing. There’s still a way to become a homeowner, even when affordability seems like a huge roadblock – and it might be with a fixer upper. Let’s dive into why buying a fixer upper and turning it into you dream home could be your ticket to homeownership and how you can make it work.

What Is a Fixer Upper?

A fixer upper is a home that’s in livable condition but needs some work. The amount of work varies by home – some may need cosmetic updates like wallpaper removal and new flooring, while others might require more extensive repairs like replacing a roof or updating plumbing.

Because they need some elbow grease, these homes typically have a lower price point, based on local market value. In fact, a survey from StorageCafe explains that fixer uppers generally cost about 29% less than move-in-ready homes.

And that’s why, according to a recent survey, more buyers are considering homes that need a little extra work right now (see below):

If you’re looking for an option to get your foot in the door, and you’re willing to roll up your sleeves and do a bit of work, a house with untapped potential may be a good option.

Tips for Buying a Home That Needs Some Work

Before you buy a home that may need a makeover, here are a few things to keep in mind:

Choose a Good Location: You can repair a house, but you can’t change where it is. Make sure the home is in a neighborhood you like or one with increasing property values and a growing number of local amenities. This way, even after you spend money fixing it up, the house will be worth more later.
Budget for Surprises: Fixing up a house can take more time and money than you might think. Make sure you save room in your budget for unexpected repairs or other unknowns that might come up while you’re working on the house.
Get a Home Inspection: Before you buy, hire an inspector to check out the house. They’ll help you determine the necessary repairs, so you don’t end up with expensive surprises later.
Plan Your Priorities: When deciding what to tackle first, it helps to categorize your goals. Think of your home in three ways: the must-haves (essential repairs), the nice-to-haves (upgrades that would make life easier), and the dream-state features (luxuries you can add later). This will help you prioritize and stick to your budget.

Remember, the perfect home is the one you perfect after buying it. By starting with a fixer upper, you have the opportunity to customize a home to your liking while saving money on the initial purchase price. With careful planning, budgeting, and a little bit of vision, you can turn a house that needs some love into your perfect home.

Real estate agents are great at finding homes with potential. They know the local market and can guide you to homes where smart upgrades can add value. With my help, you’re more likely to find a house that fits your total budget and has room for worthwhile improvements.

Bottom Line

In today’s market, where the cost of homeownership can be intimidating, finding a move-in-ready home that fits your budget can feel like a real challenge. But if you’re open to putting in a little work, you can transform a fixer upper into your ideal home over time. Let’s explore what’s possible and find a place that’ll work for you.

Buyer's Tips • Market insights • December 18, 2024

More Starter Homes Are Hitting the Market!

by Yev Litvinov

More entry-level homes – also known as starter homes – are popping up on the market. And after several years with very few homes available to buy and prices rising, there are finally some more options for first-time buyers.

Inventory Is Increasing – Especially at Lower Price Points

Over the past year, the total supply of homes for sale has improved. According to Realtor.com, in November there were 26.2% more homes for sale compared to this time last year, marking 13 months of inventory growth and the most homes available since December of 2019.

Interestingly, the growth isn’t spread evenly among all types of homes, though. According to Redfin, starter homes have seen the biggest increase (see graph below):

So, if you’re a first-time buyer who’s been sitting on the sidelines waiting because you thought you might never find a starter home in your market, this could be a game-changer. You finally have more options to choose from, and you just might be able to find one in your price range.

How an Experienced Agent Helps You Find a Starter Homes

Finding the right starter home at the right price point in your local market might feel like an unthinkable challenge, but a local real estate agent makes it easier. They stay up to date on the latest starter home listings in your area, so you don’t miss any opportunities.

As your agent, I will help you focus on homes that match your budget and your needs, making the search less stressful. I will also guide you through how to make the right offer and negotiate to get the best outcome possible.

On top of that, I handle the important details, like documentation and deadlines, so you can stay right on track. And if you have questions, your agent is there with answers and expert advice every step of the way.

Bottom Line

Starter homes are making a bit of a comeback, and this could be your chance to find one. Whether you’re ready to visit listings, need advice, or just want to see what’s out there, let’s connect.

Buyer's Tips • Market insights • December 18, 2024

The Biggest Perks of Buying a Home This Winter

by Yev Litvinov

Waiting for perfect market conditions often means missing out. Because what you may not realize is, if you’re ready and able to buy a home this winter, it could actually give you an edge. Here’s why. As the weather cools down, the housing market can too – and that works in your favor.

You Likely Won’t Feel as Rushed

Homes tend to take a little longer to sell during this time of year. Data from the National Association of Realtors (NAR) shows the average time a house sits on the market jumps up during the winter months (see the green bars in the graph below):

This is partly because fewer buyers are active at this time of year – and that decrease in buyer competition means the houses that are on the market aren’t going to be snatched up as quickly. So, if you decide to buy a home in the next couple of months, you’ll likely have more time to consider your options and negotiate a deal without feeling as pressured.

Sellers May Be More Willing To Negotiate

And since homes generally take longer to sell during the winter, sellers are often more motivated to close a deal. That can work in your favor, too. According to NAR:

“Less competition can lead to better deals. While homes are not selling as fast as during the summer, sellers may be more willing to negotiate.”

Whether it’s compromising on price, covering closing costs or repairs, or including extras like appliances, you have more room to ask for what you need.

Homes Are Less Expensive in the Winter

With less competition from other buyers and sellers who are more willing to negotiate, you may see slightly lower prices too. In fact, according to NAR, homes are typically about 5% less expensive now compared to when prices normally peak in the summer.

That might not seem like a huge difference, but on a $400,000 home, it could mean savings of $20,000 on the purchase price.

You can see this expected seasonal shift in home prices taking place this year. Take a look at the graph below showing the median sales price of existing homes (homes that were previously owned) over the past 12 months. You’ll notice in the green bars that prices were lower in the winter months last year, and it seems like that’s going to happen again this year. That gives you the chance to make your budget go further:

Bottom Line

Buying a home during the winter means less competition, motivated sellers, and potentially lower prices, too. Let’s work together to find the right one at the right price for you.

Market insights • December 12, 2024

What’s Motivating Homeowners To Move Right Now

by Yev Litvinov

Over the past few years, some homeowners have decided to delay their move because they don’t want to sell and take on a higher mortgage rate on their next home. Maybe you’re thinking the same thing. And honestly, that’s no surprise. It’s a very common roadblock and is one of the biggest factors that’s kept the number of homes on the market so low for so long.

But a growing number of homeowners are deciding they just can’t wait any longer. Often, it’s because of personal or lifestyle change. As Redfin explains:

“Some homeowners are opting to bite the bullet and give up their low rate in order to move. Many are selling because a major life event like a job change, or divorce . . .”

If you’re weighing the decision to move, take a look at some of the top reasons others are choosing to sell. You might find those are reason enough for you to move now, too.

It’s Time for a Change

A new job in a different city, a desire to be closer to family, or simply wanting a change of scenery can all spark the need to sell.

Let’s say you’ve landed a great job offer that requires relocating, listing your current home quickly may be the next logical step.

There’s Just Not Enough Space in Your Current House

Sometimes, your current home just doesn’t fit your lifestyle anymore. A growing family, the need for a home office, or more room for entertaining can all drive the decision to upgrade to a larger space.

As an example, if you live in a condo and have a baby on the way, selling might be the next best move so you can find a larger home that suits your needs.

Retirement or Wanting To Downsize

On the flip side, some homeowners are ready to downsize. This could be due to children moving out, retirement, or simply wanting less to maintain.

If you’re newly retired and dreaming of a simpler lifestyle, downsizing to a smaller home could free up both time and resources to enjoy this new chapter of life.

Changes in Relationship Status

Big changes like divorce, separation, or marriage often lead to a need for new living arrangements.

If you just went through a divorce, selling the house you once shared may allow both of you to move forward and find a living situation that works better for you now.

Health and Mobility Needs

Health concerns, especially those that affect mobility, can also drive the decision to sell. A home that once worked well might no longer suit your needs.

If this sounds like your experience right now, selling your current home to move into a more accessible space, or even using the proceeds for assisted living, could significantly improve your quality of life.

Bottom Line

Selling your home isn’t just about market conditions or mortgage rates—it’s also about making the best decision for your lifestyle and future. As Bankrate says:

“Deciding whether it’s the right time to sell your home is a very personal choice. There are numerous important questions to consider, both financial and lifestyle-based . . . Your future plans and goals should be a significant part of the equation.”

If a major life change has you thinking about moving, now might still be the right time to sell. Let’s connect so you have an expert to help you navigate the process.

Buyer's Tips • December 12, 2024

The Top 2 Reasons To Look at Newly Built Homes

by Yev Litvinov

When planning a move, a newly built home might not be the first thing that comes to mind. But with more brand-new homes on the market and builders focusing on smaller, more affordable options, this type of home may just be the key to crossing the homebuying finish line.

Here’s why a new build is worth considering – and how an agent can help you find one that meets your needs and your budget.

1. More Newly Built Homes Are Available Right Now

First, let’s break down the types of homes on the market. A newly built home is a house that was just built or is under construction. On the other hand, an existing home is one a homeowner has already lived in.

Right now, the number of existing homes for sale is still low. And, if you’re struggling to find something you like because there aren’t that many existing homes for sale, opening up your search to include brand-new homes could really expand your options. That’s because there are more newly built homes available right now than in a typical year (see graph below):

From 1983 to 2019, newly built homes made up only 13% of the total inventory of homes for sale. Today, that number has climbed to 28.8%, according to the most recent data.

And as Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes:

“Even though existing home sales have been stuck at low levels, newly constructed home sales look to mark one of its best annual performance in 15 years . . . The new home inventory has been consistently rising with homebuilders getting active and making up around 1/3 of total inventory.”

While the uptick in new home construction is encouraging, rest assured that builders aren’t overdoing it, they’re just making up for over a decade of underbuilding. There are still way more buyers than there are homes on the market. But the good news for you is this increase in newly built homes means more options for your search.

2. Newly Built Homes Are Becoming Less Expensive

Still skeptical if a new build is right for you or if they’re even in your budget? The average cost of newly built homes has actually come down from a year ago.

Why is that? Builders know affordability is top of mind for homebuyers right now. So they’re focusing their efforts on building smaller homes they can offer at lower price points and are more likely to sell. As Realtor.com says:

“Builders are increasingly bringing smaller, more affordable homes to the market, so buyers may find more newly-built homes that fit their budget.”

Something to keep in mind: buying a newly built home isn’t the same as buying an existing one. Builder contracts have different fine print. So be sure to partner with a local agent who knows the market, builder reputations, and what to look for in those contracts.

Bottom Line

Depending on your needs and budget, a new build might be the opportunity you’ve been waiting for to bring your homebuying vision to life. If you’re interested in a brand-new home, let’s connect so you can check out what builders in your area are up to.

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Seller's Tips • February 3, 2024

Maximizing Home Value: Avoid These Common Mistakes!

by Yev Litvinov

Are you preparing to sell your home in 2024? If you are, then this article is for you. Here I provide essential tips for sellers just like you. Questions like, “What repairs should I focus on?” or “Where should I invest for the best return?” are answered to guide you through the process. Let’s get started!

One big mistake when selling your house is doing only partial fixes. For example, if you repair just one wall’s siding, it might not match the others. Or you redo one bathroom, leaving the rest as they are. Even repainting just one room instead of the whole house can make things look off. I always tell my clients not to overdo these fixes. It’s important to get the house ready for sale without going overboard. This ensures a smooth process when listing, showing, and finally closing the deal. Many people think about doing only some of the repairs, like fixing just one bathroom because it’s cheaper. I advise against this. If the whole house needs work, it’s better to keep that money for the purchase of the new place instead of spending it in one area.
Now, let’s talk about redoing bathrooms. I say don’t go too far; just make sure everything is in good shape for the next family. Let them add their touch to it. The same goes for the kitchen. I rarely suggest a complete remodel. Even though kitchens and bathrooms sell houses, if most of your house is older, a full kitchen redo might not be wise. You could end up spending a lot, and the first people seeing it might like the changes but want different countertops. If you’d kept it as it was, they could have picked their own.
Okay, let’s discuss whether it’s a good idea to complete the basement, third floor, or that room over the garage that wasn’t finished when you purchased the house. Surprisingly, the answer is no, you don’t want to finish it out. I am usually guiding my clients to consider buying spaces that are unfinished because they hold significant value. These are flexible, undefined areas that can serve any purpose in the future. Leaving a bit of a window, keeping some space unfinished, can be a substantial asset for meeting various needs in a home. Having an unfinished space can address future objections like, “We love the house, everything’s perfect, but it doesn’t have [something].” An unfinished space provides the flexibility to become that missing element.
Let’s dive into the world of flooring, a crucial aspect that can sometimes lead to costly mistakes when homeowners are gearing up to sell. While it’s understandable to replace worn-out and threadbare carpets that expose the subfloor, I don’t necessarily recommend an entire overhaul unless absolutely needed. Carpet replacement is a relatively quick, cost-effective, and efficient process that can significantly enhance the overall appeal. As a bonus tip, I suggest having installers use plastic walkways to keep the new carpet pristine and protect your investment. However, the decision to swap out carpets for sand and finish hardwood floors is often unnecessary. Pursuing such upgrades may involve chasing a specific buyer preference that might not align with the ultimate occupant’s desires. Buyers might have different flooring preferences, whether it’s a gift from a friend or a personal dislike for hardwood in favor of tile or other materials. Avoiding over-improvement is key; I aim to showcase the property in its best light without investing in features that potential buyers might object to. The goal is to present the property in its optimal form without unnecessary enhancements.
A common question I often encounter is whether homeowners should replace all the doors in their house. In our area with a huge seasonal temperature fluctuations problem can come up, especially with houses facing the intense afternoon sun, storm doors can turn those little spaces into literal convection ovens. While the instinct may be to change the entire door, it’s crucial to assess the situation. Sometimes, a simple redo or hardware upgrade suffices, particularly if the existing door is of superior quality, as is the case with some older houses. For example, I have seen a front door that’s almost 2.5 inches thick—unusual for today’s doors. Even though it’s an older door, it’s better quality than what we could get now, so we’d have to make an expensive custom door. Also, take the new key you just got for the lockbox and run it through a few times. First things first, check if it works. Some folks get a fresh key but forget to make sure it actually opens the lock. Then, when the first potential buyers arrive, they realize the key isn’t cut right, and they can’t get inside the house.
For doors that got banged up, especially metal ones, you might need to fix them up or change them. But when it comes to inside doors, it’s more about how solid they feel and if they match. If your inside doors don’t match, upgrading them might be a good idea, but only if you can easily find replacements. Usually, I don’t say you should change all your doors. Instead, I suggest getting them ready, maybe with a simple thing like painting. As an extra tip, use some graphite or WD-40 on those door hinges. That’s a quick and easy way to make doors function better and leave a good impression when showing a house.
Let’s chat about landscaping. Sometimes people splash out too much cash on it, which we want to avoid. Refreshing the landscaping is crucial because the showing begins when people pull onto your street and searching for the sign and house number on the mailbox. Start with the landscaping for that curb appeal and initial impression. I emphasize this with my clients—let’s win that first approach impression. You want people getting out of their cars thinking, “I’m excited about this one!” When you’re on-site, it’s a different level of excitement compared to scrolling through pictures online and it’s crucial, especially when you’re down to the final five choices. Ensure the approach looks good, with well-maintained landscaping, a tidy mailbox, and perfect mulch. No need to break the bank on a full landscaping overhaul. Just freshen it up, bring it forward and make sure the yard is freshly cut and well-maintained.
Another critical aspect when prepping your house for sale is roofs. Roofs can be pricey, often one of the most expensive components. In Minnesota, where we experience various weather events, from severe thunderstorms with hail to heavy rain and winter snow, roofs take a beating. Our properties aren’t always designed to withstand prolonged snow coverage. Checking the roof is crucial during the preparation for selling because, let’s face it, we don’t spend much time hanging out up there. Most issues arise during buyer inspections, especially with elements like flashings that you might not routinely check. Fortunately, many roofing companies offer free or low-cost roof inspections. Consulting with a chimney sweep or roofing expert can uncover affordable fixes, providing a good return on investment compared to a full roof replacement. Occasionally, there are situations where a roof is nearing the end of its life but is still in good working order. It may be 20 years old with no storm damage. This is significant because during buyer inspections, concerns about the age of the roof might arise. Having a pre-inspection report that confirms its good condition and lack of storm damage can help address these concerns early on. Instead of jumping to a complete roof replacement, having it inspected, understanding its current state, and consulting with an expert about standards and options is a prudent approach. Take stock of your assets as you prepare to market your property.

Well, since you’ve made it this far, I’ll let you in on the two things I always suggest to my clients when they’re getting ready to sell, guaranteed to bring in a return.

The first game-changer is interior paint. Opt for neutral, light tones for a fresh look. Keep it simple; one color for all trim works wonders. Touch up walls, trim, paint ceilings, and watch as scratches, dings, and the wear of daily life vanish. It’s like hitting the reset button on your walls, providing a welcoming canvas for the next homeowner. An extra benefit is that a newly painted home has a nice smell, showing it’s been taken care of and is market ready. From the smallest details like covering a changed light fixture mount to the overall transformative effect, a paint refresh is both impactful and budget friendly. Buyers will notice the effort, giving your home that extra edge in the market.
Another smart move I advise my clients to make is getting a pre-home inspection. You might ask me, “Why bother checking the house before putting it up for sale?” Well, it’s all about being proactive and making things go smoothly for both the you and the buyer. When you’re getting a house ready to sell, there are different phases: preparing, selling, and what comes after. In the preparation phase, doing a pre-home inspection when only the homeowners, their real estate agent, and the home inspector are involved can be really helpful. Let me explain with a common situation. One of my friends was selling a house they bought directly from a builder. During the inspection, they found a floor joist cut in a way that could cause issues. The homeowner, who bought the property brand new, didn’t know about this problem. It’s a common thing in new houses. By getting a pre-home inspection, he caught the issue early, got a structural engineer to suggest the right fix, and had a carpenter do the repair properly. When the buyer’s home inspector later checked the property, they saw the good repair work. This proactive approach showed that the homeowner takes good care of the property, making the potential buyer feel confident about its condition.

Hey, if we’re meeting for the first time, my name’s Yev, a residential real estate agent based in Minneapolis, Minnesota.

I’m passionate about sharing useful tips, tactics, and strategies with my clients.

Feel free to explore more articles on my blog, and don’t hesitate to reach out if you need assistance maximizing the sale of your property or making informed decisions in your quest for the perfect home.

Sign up for my FREE neighborhood news customized for your ZIP code to stay updated on local market trends and be the first to see new listings as they hit the market.

Buyer's Tips • January 24, 2024

Path to Homeownership: What to Watch Out for Before Prequalification

by Yev Litvinov

Embarking on the journey to homeownership is an exciting venture, but the path to securing a mortgage can be laden with potential pitfalls. In this guide, we’ll explore what not to do before prequalifying for a mortgage. Let’s dive in and navigate the mortgage waters with wisdom and foresight.

Rushing the Credit Check One of the initial steps in the mortgage process is a thorough credit check. Rushing into this without assessing your credit report beforehand can be a costly mistake. Take the time to review your credit history, address any discrepancies, and enhance your credit score before the lenders take a closer look.
Job Hopping and Career Changes Stability is key when it comes to mortgage approval. Constant job hopping or making significant career changes shortly before applying for a mortgage can raise red flags. Lenders prefer to see a consistent employment history, so consider delaying major career moves until after securing your mortgage.
Incurring New Debt Opening new lines of credit or making significant purchases on credit cards before prequalifying can impact your debt-to-income ratio. Lenders assess your ability to manage debt, and a sudden increase can affect your eligibility and loan terms. Hold off on major purchases until after the mortgage is secured.
Neglecting Your Budget Understanding your financial health is paramount. Neglecting to create a detailed budget can lead to overspending and financial strain during the mortgage process. Take the time to assess your monthly expenses, factor in potential mortgage costs, and ensure you’re financially prepared for homeownership.
Keeping Existing Credit Accounts Open Closing old credit accounts may seem like a prudent move, but it can adversely affect your credit score and mortgage eligibility. Lenders consider the length of your credit history, and closing accounts may shorten this history. Keep existing credit accounts open to maintain a positive credit profile.
Ignoring Prequalification Education Prequalification is not just a formality; it’s an opportunity to educate yourself about your financial situation. Ignoring this step and relying solely on the lender’s assessment can lead to misunderstandings and missed opportunities. Use the prequalification process to ask questions, understand terms, and ensure you’re making informed decisions.
Co-Signing Loans or Credit Cards While helping a friend or family member by co-signing may seem altruistic, it can have significant consequences for your mortgage application. Co-signed debts are considered your responsibility, impacting your debt-to-income ratio and potentially affecting your eligibility. Hold off on co-signing until after your mortgage is secured.
Neglecting to Save for Closing Costs In the excitement of securing a mortgage, many forget about the additional costs associated with closing. Neglecting to save for these costs can create financial strain at a crucial stage. Be proactive and save for closing costs alongside your down payment to ensure a smooth and stress-free closing process.

Prequalifying for a mortgage is a crucial step in the homeownership journey, and avoiding common pitfalls can make the process smoother and more favorable. Take the time to assess your financial situation, understand the implications of your decisions, and navigate the mortgage waters with confidence and foresight. With careful consideration and strategic planning, your path to homeownership can be a successful and rewarding experience.