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How to get a mortgage without a regular job

Today, many workers are employed in the “gig economy” such as Uber drivers or TaskRabbit workers. Additionally, there are a rising number of employees who work short-term contracts, jumping around from job to job, or freelance work, rather than having a steady, contracted job.

This means that even if those who make good money could find it more difficult to get a mortgage for a new home. Right now, lenders typically look at credit score, history of employment, and the likelihood of continued employment. In today’s changing economy, it’s getting less possible to check every necessary box.

Here are some tips to help make sure you have a better chance of getting that loan for your dream home, even if you don’t have a full-time, regular job.

Paperwork, paperwork, paperwork

You’ll need to make sure you have paperwork with each of your clients, even if it was just for a short amount of time. This includes proof of employment and income, phone numbers and email addresses of references, any previous employers, landlords and more.

It’s also helpful to know what your credit score is. I recommend CreditKarma for this because it’s free, although you could use any reputable site.

If you have all of your records, information, and documents of previous or ongoing clients, your lender will have more confidence in your ability to pay because they can see exactly how much money you have and where it’s coming from.

Explain your industry

Your lender might be a little behind on the times and need to better understand exactly what you do so they can feel comfortable knowing this work will still exist in the future. For example, if you are a freelance writer for magazines, the lender probably understands what this is as this job has been around for a while.

However, if you perform chores for people around your area on one of the numerous task apps, you might need to show the lender exactly what it is and how it works. Essentially, even though you don’t have a typical job with a contract, you can show that it’s likely that these jobs will continue at a steady rate for years to come.

Show that you have been performing your job regularly, even if it was with many different short-term clients, and the lender will better understand.

Careful with your deductions

Most self-employed people write off the expenses tied to their job when they report their income tax. You have to keep in mind, though, that these deductions, including things like your Internet service, travel bills, dinner bills and more, show your lower net income.

This net income then is used to help decide if you qualify for a mortgage. So, it might balance out in your favor to take off a little bit fewer deductions that you legally can in order to get the mortgage you’re after.

Talk to someone who knows

You can first talk to a mortgage lender, tell him about how much you’re planning to spend on a house, and see if that is possible given your line of work and income. They will then be able to tell if this is feasible and if not how much more you’ll need to make.

You’ll also learn what you are able to qualify now to potentially look for homes in that price range. Before you start looking at homes, it’s the best advice for everyone, but particularly self-employed individuals, to get pre-qualified for a certain amount by a trusted lender.

After this, you can either take on more clients to make more in the given year or find a home in your current budget.

If you need help finding a good lender, contact Priority Real Estate for local advice. We work with many great lenders in the area and will give you at least three people who you can call.

Have as little debt as possible

This one is important for everyone looking to buy a home but especially important for those who don’t have a regular job. The lender is going to be looking at each piece of your puzzle a little differently than they’d look at someone with a steady paycheck because there’s less security that you will pay your loan back.

Because you’re riskier, you want to prove that you handle your money well. That means that you want to make sure all debt you have is as close to zero as possible and your credit score is in great standing.

Unfortunately, you can’t get past the fact that you are held to a higher standard than other buyers. But, your risk greatly lowers as your debt does.

Ask about a ‘Bank Statement’ Mortgage

Some lenders are allowing the self-employed or gig economy workers to use a “bank statement” mortgage program. This works by reviewing 12 to 24 months’ worth of deposits to your bank account, as well as a profit and loss statement for your business.

Using this instead, you may not have to show two years of tax returns, W-2s, and payroll checks. This is geared specifically for those employees working in the new gig economy that don’t fit into the typical boxes created by mortgage lenders.

Just ask

Overall, if you don’t have a typical full-time job, the sad fact is that you will have a more difficult time getting a mortgage. However, following these tips can still help you get the house you’re after.

The top recommendation, after you pay down your debt and make sure your credit score is as high as you can get it, is to go talk to a good lender. They can help you understand all the ins-and-outs of this potentially difficult process.

After you know what price range you’ve been approved for, give me at Priority Real Estate a call and we’ll help you find the perfect home.

Michele Karl is the Owner/Broker of Priority Real Estate. She can be reached at her email at [email protected] or give her a call at her office at 865-577-6600.

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Top Tips for Your Open House

Getting visitors to your open house can sometimes prove a real challenge. And once the day finally arrives, how do you guarantee everything will go according to plan?

Don’t worry; we’ve got some tips that’ll help you get all those potential home-buyers to your open house, as well as make sure the house is looking it’s best once they arrive.

Advertise online AND local papers (even very small ones)

Many agents are beginning to switch to exclusively online advertising. After all, they want to get the best bang for their buck and studies show the majority of people today search for homes to buy or rent online.

In fact, I recommend that you advertise your site everywhere you can online, including sites like Zillow, Trulia, Craigslist, Facebook, Twitter, and Instagram.

In addition to that, though, don’t forget print advertising. Large magazines such as Homes & Land are great to get the word of your available properties out to a large audience, but don’t underestimate the local newspapers. This is particularly true in small towns.

With these strategically placed ads in both online and print locations, people are sure to know about your open house.

Make sure you have great pictures

This partially fits with the advertising tip, but it’s so important it needs its own section.

If you post the open house on Facebook (or any other site), it’s absolutely necessary to include pictures with the post. Your ad will get much more engagement with pictures and help draw people to the house.

Consider hiring a professional photographer to take pictures of every room of the house, the outside, and any property that is included. Depending on the house, you should also look into getting a video filmed by a drone of the home and the surrounding area.

Don’t underestimate the potential for great photos and videos to help your home get shared around social media and bring many more people out to the open house.

Offer free food

Honestly, who can say no to free food? You’re pretty much guaranteed to get a larger number of guests at an open house that advertises free food than one that doesn’t.

While it’s true that some of these people might just be stopping in to check out the free snacks, the majority are genuinely interested drawn out by the extra incentive of free food.

Of course, you don’t need to buy a 5 star, eight-course meal, but some finger foods picked up at your local grocery store will go a long way in getting guests to your open house.

Strategically place signs in advance

While knocking on the neighbors’ doors could be seen as intrusive (and even against the rules of certain neighborhoods), you have to let them know about the open house somehow.

Chances are, neighbors aren’t actively searching for available homes around them on the internet or in the newspaper, but they often know of friends or family members who are very interested in the neighborhood.

Because of this, it’s very important that these neighbors know about the open house. Rather than being a nuisance, place a sign in the yard detailing the date and time of the open house, as well as several pointer signs with “Open House” written on them.

With this, you’ll certainly catch the attention of those who are living nearby the home who could suggest your potential future buyer.

Always follow up

Keep track of everyone that enters with a sign-in sheet that includes their name, email, and phone number. Then, input this information into whatever you use to keep track of leads, whether this is an application or a simple Excel sheet.

Afterwards, make sure to follow up with every person that came to your open house. Even if they weren’t interested in that particular house, you can help them search for one that fits their needs better.

The art of following up is important for almost every aspect of real estate, open houses included.

Depersonalize the home

This one should be done not only during an open house but anytime potential buyers are viewing the house.

Make sure you put away all pictures of the family that is currently living in the house and any odd design features. This includes anything religious in nature, awards or other items with the owners’ names on them, and anything else particular to the owners.

Buyers like to envision themselves in the house and this is much more difficult if there are pictures or specific details of the current owners throughout it. However, don’t go through too much trouble getting this done, as there’s no actual data that proves it leads to more sales.

Last minute checklist (temperature, valuables, cleanliness, pets, lights on, etc)

Print yourself out a last-minute checklist and take it with you while you’re setting up for the event. Is the temperature set to a comfortable degree? Check. Are all the loose valuables put away? Check. Is the house clean, particularly the small details that buyers tend to notice such as clean windows and organized closets? Check.

Another thing to put on your to-do list is to make sure all the lights are on to make the home look more open and welcoming.

Also, all pets should be put away, preferably outside if possible. This helps you avoid trouble with guests who could have allergies or simply don’t like pets, as well as the off-chance that the pet could have an accident inside during the open house.

Having this checklist will help you feel much more comfortable knowing that you aren’t forgetting anything important so you can focus your attention on the open house guests.

Michele Karl is the Owner/Broker of Priority Real Estate. She can be reached at her website www.MicheleKarl.com, her email at [email protected] or give her a call at her office at 865-577-6600.

 

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To remodel or not to remodel?

You know the old saying: you have to spend money to make money. This potentially applies to houses too. There are certain aspects of a home that, if remodeled, could help you get a much higher offer. Although, if you don’t have much excess cash to spare but still want top dollar for your home, there are plenty of budget-friendly options, too.

Keep in mind, though, that remodeling might not be your best option. Large projects can take much more time and money than they are actually worth it, so make sure you read this article carefully before unnecessarily remodel something.

Major Remodels

Probably a bad idea

First, let’s start with the simple one. If you’re thinking about doing a major remodel on a home that you’re planning to sell soon, the solution in this situation is almost always NOT to do the major remodel.

These large renovations include things like adding an in-ground swimming pool, finishing a basement, or doing a major kitchen remodel.

Let’s say you already have the entire changes planned out, including exactly what materials you want, who you’re going to hire to do it, and the exact timeline. Let me just tell you from experience that the details you choose in the beginning will almost always change.

The timeline will, 99% of the time, be longer than expected. Contractors sometimes have issues with their staff, the store might be sold out of the material you need for week, and many more problems that are simply out of your control will inevitably happen.

So, with these very common issues alone, it is usually not the smartest decision to undertake a major remodel if you’d like to sell your home in a relatively short timeline.

If you don’t have a specific date in mind but know that you’ll be selling your house in the future, there are still some aspects to consider about major remodels.

First, realize that large renovations almost never give you a high ROI. In fact, according to Remodeling magazine, these projects offer an average 62% return on investment. When they do, it’s typically because it’s a seller’s market or you’re located in a good area. So, with all of the potential problems and the small return on your investment, it doesn’t make much sense.

If you’d like to put a pool in your backyard for your family because you don’t plan on selling for another 5 years, of course that’s fine. Just don’t expect to get your money back when it comes time to sell.

Second, don’t forget that not everyone has the same taste as you. If you spend a lot of money on a renovation that you think it absolutely beautiful, understand that buyers might not think the same.

Which major remodels are worth it?

The only time when a major project is worth taking on is when your house has odd features that need to be fixed. For example, let’s say you have a two-story house with the master bedroom located downstairs, but only one bathroom and it’s located upstairs.

In an odd event like this, it could be worth the cost to put a bathroom on a main level. This would greatly increase the number potential buyers, leaving you with more competition and a higher offer price.

Another expensive remodel that might be worth it is repairing the roof. If it hasn’t been updated in many years, this might be called out in the inspection anyway. So, if you repair it at the beginning, you could get a better offer and not have to worry about it when the home inspection rolls around.

One more sometimes costly change is replacing your home’s vinyl siding. The curbside appeal is very important to potential buyers. Make sure you don’t replace the vinyl before first hiring someone to pressure wash it to see if it even needs to be replaced! Getting rid of all that dirt and grime can really do wonders.

Smaller renovations

Here is where the discussion really begins. Smaller renovations, especially those you can do yourself, are usually a great plan to help you get more money for your house.

One of the first changes you can make to your house is to paint all of the walls in a nice, neutral color (gray is in right now). Additionally, touching up the molding with a bright, shiny white will help more than you can imagine. These changes will automatically cover up a lot of wear-and-tear the house has gone through over the years, making it look cleaner and newer without much cost.

Don’t forget to make sure all holes or dents in the walls are filled in before you paint everything! Trust me, you might think that big hole from when your doorstop broke isn’t noticeable behind the door, but it is.

Another simple update to make your home look newer is changing the light fixtures. If your fixtures are from the 70s, it’s pretty obvious. Not only is the material chipping, but the design is very old-fashioned.

Low-cost but simple, elegant light fixtures can be found at most home improvement stores, and they’re a nice small touch to make the house look more modern.

Of course, some obvious renovations that will be worth your time and money are things like fixing any leaking pipes or faucets and repairing any nonworking appliances.

If your stove is covered in grease and won’t come clean after years of use, it might be worth buying a new one. Many wholesale stores sell these for great prices, and don’t forget sites like Craigslist if you aren’t looking for a brand-new appliance.

The last simple, but important, update is to swap out your old-looking doorknobs, especially the one on the front door. You don’t notice how dated and dirty it looks when you use it every day, but new buyers certainly will.

So, a simple recap: these small renovations can usually work wonders with getting you a good ROI, but you should almost always skip the larger ones.

Michele Karl is the Owner/Broker of Priority Real Estate. She can be reached at her email at [email protected] or give her a call at her office at 865-577-6600.

 

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Have you considered your commute?

When hunting for homes, it’s easy to feel overwhelmed sometimes. One house might be absolutely perfect but a 20-minute drive to the closest grocery store, while another has all of its bedrooms on the second floor.

While all of these considerations will certainly be thought about and taken into account when you’re looking at a home, one thing you might not always consider with as much importance as it requires is your commute time.

Surveys show that in the 50 largest U.S. cities, commute times have been steadily growing since 2009 with no sign that they’ll be slowing down anytime soon. Also, the U.S. Census Bureau shows that almost 11 million people drive at least an hour to work each way!

The reason behind this could be an article in itself, including factors such as the rising costs of living inside of a major city or the desire to have a larger home regardless of a long commute.

Regardless of your particular needs when home buying, considering your commute should rank at the top of your checklist.

Test out the drive

The very first thing you should do when you find a house you would really like to buy is put the address of your home and your office into a map for directions.

Before you hit “Go” change the time that you will be leaving (for example, 8:30 am and 5:00 pm). This part is particularly important because traffic is, of course, much busier at these times than, say, 2 am.

See how long the map calculates it’ll take you. Then, if possible, go ahead and test it out yourself. If you can’t go during the normal time you’d be driving to work, try to factor in the extra minutes traffic will add.

After you’ve successfully completed the commute, decide if it’s too much for you or not. Don’t forget to do this for both spouses if you are buying a house with your partner who has a job that isn’t located near yours.

Will you still have family and friend time?

If you have an exceptionally long commute, consider what you’re missing out on. Maybe buying a house farther from the city will help you afford that pool in your backyard that you’ve always wanted, but would your long drive make you too tired to do anything besides eating and sleeping when you finally arrive at home?

Of course, there’s always the weekends, though! Deciding on a commute is really a personal choice. You truly have to consider if the positive of living in the suburbs, closer to family, or whatever your reason, outweighs the negative of driving for a long time and being away from home more.

One thing that most people often don’t think about is their own emotions. After sitting in traffic for an hour (or more) one-way, will you arrive both at work and home in a terrible mood? Make sure to think it through before making this decision.

If you are someone who hates traffic so much you start to see red, ask your employer if they can offer flexibility when you arrive and leave to skip that hectic rush hour.

Does your family need room to grow?

If you have children and are planning on having more, a commute might not be the worst thing in your mind. Living in a nice neighborhood with a great school system could make those extra minutes of driving worth it.

Additionally, it’s typical that you can buy a bigger home in the suburbs for the same price as a smaller home in the city. This means that you have room for that extra bedroom if a little one is in your future plans.

If your family and job are changing a lot at this stage in your life, it is not a good idea to plan a home purchase around your job, either. Before taking time to consider the commute, make sure that you will be working at this job, or at least in the same area, for quite a while.

Do the costs balance out?

If you buy a less expensive home farther from your job, you will save money on your monthly mortgage payments, of course. But will those savings be worth it?

It’s important not to forget all the extra costs of a long commute. This includes gas, tolls, parking, extra hours of daycare (if necessary), and anything else that might be related to your commute.

In addition, don’t forget to consider the emotional cost that I noted above of extra hours away from home sitting in traffic. You might enjoy the alone time to catch up on your podcasts or listen to your favorite songs, but make sure to think about the psychological costs of a long commute before you make your decision.

Can you find a different route?

If your drive is littered with non-stop traffic, slow-driving tourists, or way too many stoplights, try to find a different route. Maps typically automatically route you to the shortest option, but the traffic could make this “short” route way too long.

Tell your map to find alternative routes and try them out to see if your travel time can be shortened. Also, consider going to a gym or grocery shopping nearby after work to avoid this rush hour. You will end up getting home a little later, but that time would have mostly been spent being productive rather than waiting in traffic.

How can you choose?

This personal decision is best made by determining exactly how long your commute will being during the time you need to go and leave work, understanding how much you will spend with the added driving time, then considering the emotional cost.

Determining if a long commute is acceptable is really up to you. Do you love the personal time when you can listen to your favorite audiobook in peace? Or would you prefer more time enjoying your brand new home and neighborhood?

Following these tips will help you make this important decision more simply.

Michele Karl is the Owner/Broker of Priority Real Estate. She can be reached at her email at [email protected] or give her a call at her office at 865-577-6600.

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How to tell if your agent is right for you

I hate to say it, but you need to know the truth: all agents aren’t created equally. Some truly enjoy helping you buy the home of your dreams or sell your house and start a new phase in your life, while others simply don’t.

Additionally, certain agents are just more experienced or have better negotiation skills. So, how do you find the right real estate agent who will fight for you while you’re navigating the complicated (and expensive) streets of home buying and selling?

Ask previous clients

One simple way to discover if your agent will be great for you is to talk to his or her previous clients. First, you should ask your agent if there are any particular people they’ve worked with recently that will be disappointed. Then, give your agent a chance to explain themselves.

Agents aren’t perfect, but sometimes they’re expected to be and are blamed for circumstances that are out of their control. For example, if an appraisal comes back very low or high and the sale is unable to close at the accepted price, this could be something completely unpredictable.

After you’ve asked about exceptions, you can get a list of past clients and their contact information (as long as the previous clients agree to be called). This will generally help you understand how the agent has performed in the past.

If you don’t want to give anybody a call, there are often review sites online that you can look at, such as your agent’s Facebook page. It’s important to keep in mind that you should disregard the few exceptionally low or high reviews and instead choose to focus on the average.

How long have they been in the business?

This one isn’t always a great way to tell if the agent will be right for you, but it can usually help.

It is true that new agents are still learning and won’t know as much as an experienced agent. However, this could mean that they will bend over backward for you to prove themselves and help you as much as possible.

Another thing to consider is that every agent has a more experienced broker they must work under who they can usually go to for questions. If the business is smaller and the agent can go to the broker for every question they have, you might not even realize they’re new. However, there is the risk that the broker will not be able to help on a regular basis, leaving you with an agent who doesn’t know much about the market or the business.

This comes down to you. If you trust the new agent to work extra hard to compensate or you know through previous customers that agent’s lack of experience doesn’t affect the process, hire them. Otherwise, search for a more experienced agent in your area.

Ask about their previous listings

This accomplishes a couple different things if you’re looking to sell your house. First, you should look at how long the listings were on the market.

If it’s a very slow market period, it isn’t the agent’s fault if they don’t sell quickly. If you’re unsure about the current market, you can see how long it took similar houses during the same time to sell.

Additionally, sometimes people will not lower the price of their home or stage it how the realtor recommends, so nothing can be done to help the house sell.

However, if there is a constant pattern of houses taking an extensive amount of time to sell, there is probably a reason for this. Perhaps your agent doesn’t advertise the home well, doesn’t answer or return phone calls, or doesn’t know the market well enough to help choose a good price for the home.

Another reason for checking their previous listings is to see if they are similar to yours. If you’re looking to buy or sell a piece of land in the country, but the agent only has experience buying and selling apartments in the city center, they might not be the right agent for you.

They communicate well

Does the agent you’re considering answer the phone (within reasonable hours) and return missed calls quickly? Do they always call you or send you an email when they say they’re going to? Are they on time for your showing appointments or meetings? If not, consider not hiring this agent.

If they aren’t communicating with you in the beginning when they are attempting to sell your house or help you find one to buy, they certainly won’t communicate better later.

For example, if an agent wants to list your house but doesn’t communicate well with you, it is almost a guarantee that they will not answer the phone or regularly return missed calls when future agents or potential home-buyers call them. This means that your only chance of selling your house is if the buyer’s agent is determined for his or her clients.

Of course, agents do not have to be on-call 24/7. They are human beings with personal lives as well. However, being an agent usually does mean taking calls on the weekends and after the typical 5 pm (or setting up an answering service if the agent wishes).

If an agent never answers their phone or returns phone calls, it is extremely frustrating both for you and the person on the other end of this process. It’s a simple fact that along with being a realtor comes regular communication. So, make sure you only choose an agent who takes this into consideration.

How to choose?

There are some incredible real estate agents who love helping you find a new home or sell your existing one. However, there are also agents who don’t do as much as they could for their clients.

Following this list will help you recognize if your potential agent will be the former or the later because everyone deserves someone who cares when going through such an expensive and emotional process.

Michele Karl is the Owner/Broker of Priority Real Estate. She can be reached at her email at [email protected] or give her a call at her office at 865-577-6600.

 

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How to increase your credit score

Perhaps you’ve just started learning how to budget properly or may have been unlucky in the past. Now, your credit score is not where you want it to be. While you can’t get a loan very a very low number, having a high credit score is not a necessity in buying a house. Yet, it certainly helps.

Lower interest rates are something everyone wants. Regardless of the reason that your credit score is lower than you would like, check out these tips for increasing it so you can better afford your new home.

First, pull your credit report. If your score is above 760, don’t worry about trying to get it any higher. You already have a great score. Otherwise, read on.

Follow three simple rules

Jeffrey Scott, a spokesman for FICO, claimed that all you have to do to raise your score is “Pay all your bills on time, every time, keep your credit card balances low, and only open new credit when you need it.”

While this advice seems obvious and you might not have been successful in the past, starting right now is important. Don’t lament about what happened before; start immediately paying your upcoming bills on time. This will greatly improve your credit score.

Also, if you can afford to, pay more than the required minimum payment each month to increase your number more quickly. A history of minimum-only payments can be a detriment to those viewing your report. Even if you’re only paying a little bit over the minimum, it will help (as well as save you money on interest).

Understand (and fix) your credit ratio

The way that your FICO score works is by comparing the amount of debt you have to your available credit. This means that some people’s advice of closing out your credit cards after they’re paid off is not a good idea.

Closing the credit card would mean that the amount of available credit you have will greatly fall. If you consider the credit ratio, you’ll see that this will negatively affect your FICO score, which is clearly the opposite effect of what you want.

If you don’t trust yourself not to overspend with the credit card, lock it away or give it to someone you can rely on.

While you should not only pay off your credit card bill as quickly as possible, you should also ask for a limit increase. Raising this will help improve your debt-to-credit ratio, helping your FICO score. The smaller percentage of debt will help you get closer to the interest rates you really want.

Don’t open new cards

When you understand credit ratio, you might think it will be a good idea to open numerous, new credit cards. Well, this type of behavior appears very risky to lenders and can hurt your score.

If you’re looking for one new credit card, this is acceptable. Just make sure you don’t open multiple accounts hoping for a better number.

On this note, older cards are actually better for your credit score. The length of your credit history factors in, so a long-term credit card account is better than a brand new one.

If the interest rate on your oldest card is very high or you don’t like the rewards it comes with, just put it in a drawer and don’t use it. This is a much smarter option than canceling it when it comes to thinking about your credit score.

Pay outstanding debt ASAP

Paying off any late accounts does not make them disappear from your record, but it does help. The longer these outstanding debts have been paid off, the more your credit score will grow.

It can be quite difficult to pay all current balances while also focusing on outstanding debt, but to improve your credit score, it’s a must.

Any errors in your report?

Do you feel like you should have a higher credit score than you do? Errors are not that uncommon. Check your report with a fine-toothed comb for things like balances that seem off or accounts that you didn’t create. Also, double check that every lender has accurately reported your credit limits.

It might seem crazy, but according to Forbes, “a whopping 25% of people who get declined for a mortgage had errors in their credit report.” These inaccuracies must be spotted and fixed by you by following the instructions on any of the credit bureau websites or your report.

Make sure you keep a record of everything involving your dispute. You can expect a response within thirty to sixty days of making the claim.

Don’t make any big purchases

This one is extremely important, especially if your credit has already been pre-approved and you’re waiting to close on a new house. Making any large purchase will affect your ability to get a loan.

If you’re trying to buy a car, take a nice vacation, or even purchase some appliances for your potential new house, just wait. These decisions can have very detrimental consequences, leaving you without a loan for your dream home.

Big purchases can also greatly impact your credit score because of the ratio explained above. Simply put, if you have more debt, your number will be lower.

Short and long-term changes

A fairly immediate change to your credit report will happen if you found any irregularities or errors in it. As soon as these are corrected, you should see your score go up.

It could take weeks or months of paying down balances to see a difference in your score. This entirely depends on you. For example, if you continue making minimum payments that are always on time, this will gradually help you score.

Instead, if you regularly make very large payments to the point where you have no or almost no debt left, your score will increase more quickly.

Paying off those outstanding debts could help you negotiate with lenders. However, you have to be patient about your credit score changes with this tactic as it takes from months to years to see large differences.

Follow the tips outlined above and your credit score will undoubtedly increase, potentially saving you tens of thousands of dollars in interest on your loan.

Michele Karl is the Owner/Broker of Priority Real Estate. She can be reached at her email at [email protected] or give her a call at her office at 865-577-6600.

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Questions you need to ask while searching for your new home

When you’re house hunting, there are certain things you know you need to look for. For example, if you’re a family of five, two bedrooms probably isn’t going to cut it. If you’re an elderly couple or disabled, you need to make sure there is at least one bedroom on the main level.

However, there are some questions that might seem obvious that you simply forget to ask in the sometimes overwhelming process of buying a new home.

Tell me about the neighborhood/area

Things that are important to consider here are the growth of the particular area that you’re looking at. If you absolutely cannot stand traffic and don’t mind driving 20 or more minutes to reach your local grocery store, make sure you aren’t moving to a town that has an extremely high growth rate. You might end up moving sooner than you anticipated.

Another consideration is the local amenities, including restaurants, business, and shopping. This is completely up to personal preference, but make sure you consider how much is around the home and how far it is.

Public transportation is also important to certain people, especially those who don’t own a car. Rural America is certainly not a world leader in public transportation, so you’ll have to carefully look into this to make sure you’re looking at homes in the areas you really need.

One thing that probably every parent considers when shopping for a new home is the crime rate. Your agent will probably be experienced with the area, but a way to be certain about the crime rate is a simple Google search or call to the local police station.

Don’t forget about taxes! The property tax rate can vary by area, and your realtor is able to get all necessary tax information for you so you aren’t taken aback when you finally discover it.

One last thing to consider is the school district if you have or are planning to have children. Take a look at the statistics offered online or call or email the school district to learn about that particular school.

There are a lot of things to consider when choosing a neighborhood, so don’t forget these important questions.

What does it sound like?

If you’re a light sleeper that can wake up at the sound of a pin dropping, you should pay extra attention to this question. If the house is located on a busy street, are you okay with the noises? If not, tell this to your agent at the very beginning so you don’t have to waste time looking at houses you know won’t fit your needs.

It is also a good idea to drive by the potential home on weekend nights to see if it’s too loud for your tastes.

How old is the…

If you don’t have a very big budget for repairs, it’s important to ask the age of certain features of the house. It’s even possible to put repairs of old items in the offer contract, although this should be reasonable in regards to your asking price. An experienced realtor can help you understand the market value and determine your offer.

Unless it’s immediately apparent, it’s a good idea to ask about the age of appliances, the HVAC, the roof, water heater, heater or furnace, and air conditioning.

Keep in mind, some of these, such as a roof, can last many years are aren’t in need of a replacement unless there are specific aspects that look degraded. Typically, a home inspector will point out things such as a faulty roof, but it’s still a good idea to know the age.

Any warranties?

On the note of appliances, find out if anything has a warranty and if the current owner can provide that for you if you end up buying the house. This is especially pertinent if the owner just remodeled or bought something new for the home.

This could be applicable for many things, such as the garage door, HVAC, appliances, and more. This simple question could potentially save you a lot of money!

How is the home’s insulation?

Insulation is extremely important in keeping the home warm without overspending on your utility bill. Make sure that the home is well insulated in the walls and attic, particularly in colder climates.

How much are utilities and HOA fees?

When you’re calculating how much you’ll be spending on your home loan, don’t forget that you’ll need to take these additional costs into consideration (as well as taxes, which are mentioned above).

The majority of the homes in our area don’t come with an HOA fee, but it’s still an important question to ask in case they do. An experienced agent would likely tell you right away about this additional cost if it exists.

When determining the utility costs, sometimes you can just ask the current owner the average amount that they spend. Keep in mind, this will be different for different people as everyone has their own temperature preference.

Make sure you learn if the home uses gas, electric, propane, or a combination, and ask how much each bill is, as well as water or any other utility costs. Don’t forget that this includes waste removal if you live in certain areas.

What about parking?

This could be obvious depending on the house, such as if it has a two-car garage and you have two cars. But, if you have more than two cars, it’s important to find out if it is illegal to park on the street or not.

Don’t forget that if you have a very high truck, it might not fit comfortably in the garage. Make sure you’ll have room to legally fit each car you own.

Michele Karl is the Owner/Broker of Priority Real Estate. She can be reached at her email at [email protected] or give her a call at her office at 865-577-6600.

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When is the best time to buy or sell your home?

On the second night under a full moon on Sunday when Jupiter is aligned–this is the day that you should buy or sell your home. Just kidding! It’s not actually that complicated. Yet, there are quite a few things to consider.

Of course, as a seller, you want the highest price you can get for you home. And, as a buyer, you usually want the opposite. So, the advice is different for buyers and sellers. Below, I’ve included tips for both so you can be as prepared as possible.

If you’re a seller…

As the smell of flowers fill the air, get ready to list your house because spring is the season of selling houses. There are many buyers out looking for new homes to move into during the summer during spring and early summer. According to a study by Zillow, May 1 – May 15 are the perfect days to list your house.

If you wait a bit to list your house, this could be okay as long as it’s not too late in the summer season. But, if you have the ability to fully control when you list your house, choose the days above.

School will be letting out for the summer soon and parents want to get a jump start on finding a house to move into during those warm months. It is incredibly popular for families with school-aged children to move during this season in order to not force a child to change schools in the middle of the year.

For those families that want to move in the summer, they often begin their search in the spring. As the air warms, people start to feel more encouraged and enthusiastic.

This is a smart move, as finding the perfect home, getting an accepted contract, and making it to closing, can take a few months at time. Also, if you wait until the late months of summer to list your house, not only will you miss out on a lot of families with young children, but also on those who are taking this time for vacation.

One of the reasons that you should sell your house during this time is because there are many more buyers looking, which means more competition. And as we know, this means you will likely get a better price for your home during this time.

However, it’s important to consider that this is also a popular time to sell homes, so there isn’t just competition from buyers finding their new home, but from sellers attempting to sell theirs at the same time.

Don’t worry though; the research shows that you are still more likely to get more for your home in the spring.

If you are unable to list your property during the spring or early summer months, it might be best to wait for fall. During early autumn, there is a new (although smaller) rush to find a new home before Christmas.

If you are unable to control the circumstances of when you list your house, or you’re simply very eager to sell it, don’t worry about listing it in the times not shown here.

While you are statistically more likely to get a better price for your home in spring and early summer, consider that there will be less competition from other sellers during off-times. There are still very serious buyers year-round.

If you’re a buyer…

While that bright sun peaks your optimism, it also peaks prices. About half of all homes are sold in the summertime, but most sellers and realtors know this. With the large amount of buyers competing over the homes, the price immediately goes up.

If you don’t have to worry about moving a child between schools or other worries, it’s best to avoid buying in these summer months. As winter is beginning, about late November through January, prices fall.

As reported by Time Magazine, median home prices in the summer of 2014 were $220,000. By the following January the median price had already dropped below $200,000. While this data is not related to the median size, age, or quality of the house, this is a continuous trend.

However, as mentioned in the previous section for sellers, competition matters. While there is less competition from buyers leading to you often achieving a better deal for the same home, it’s also true that many sellers wait until the off-season is over to list their homes.

This means that there is less of a selection of homes to buy in late fall or winter months. The number of homes on the market begins to decline in about September, moving pretty steadily downwards until after the holidays.

As expected, spring and summer months bring the highest number of options for buying a home. Although, condos aren’t bound by this rule, as typically condo owners don’t have to wait for the summer because of children in school.

With that said, it’s important to realize that you shouldn’t put your plans on hold for a certain season if it is difficult. The trade-off between achieving a cheaper price or having more selection is also an important consideration.

While these months, statistically, will help you get the best price for a home, many other things come into consideration, such as the amount of down payment you’re able to make and the current interest rate.

Finding an experienced real estate agent who will have expertise with the quarks of the market in your area is invaluable. If you are looking to buy in the East Tennessee area, I’d be happy to discuss the best times for you particularly, considering your circumstances and this specific area.

Michele Karl is the Owner/Broker of Priority Real Estate. She can be reached at her email at [email protected] or give her a call at her office at 865-577-6600.

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The price is right..or is it?

If you’re a seller, your dream is to immediately get a full market value offer. But, how do you know if the price you set for your house is too high? There are so many things to consider when establishing a price, such as the neighborhood, market climate, and (of course) the house itself.

Follow these tips to make sure the price for your home is right.

Don’t let your emotions get in the way

It’s normal that you have a strong emotional attachment to the home where you raised your children, but, unfortunately, the buyers don’t.

While you might believe that it’s justified to have a higher price tag on your home, if your agent is telling you that the price is simply too high to sell, take the advice and lower it. Letting go of an emotional attachment to a house is hard, but if you decide to sell, a must.

Perhaps, instead, you think your real estate agent was simply wrong in the price they suggested. While this can happen occasionally, particularly if you have an inexperienced agent that does not know the area or market well, they probably have a good idea about what the price should be.

If you decide to set the price higher than your agent’s recommendation, read on for some more ways to tell if the price is actually too high.

Where are all the people?

If your home has been on the market for a while and hasn’t had many showing or any offers, there’s a very good chance the price is too high.

Consider that your home will almost always have more showings in June than in January, following the market pattern, and that the market will affect how many potential buyers and offers you will receive.

If you aren’t in any rush to sell and it’s a buyer’s market, consider waiting to list your property until a later date. However, if you need to sell now, the market might dictate that you drop your asking price to what potential buyers will realistically pay.

However, generally speaking, if you don’t have many showings or offers on your home after it’s been on the market a couple of months, it’s priced too high.

Priced higher than neighboring properties

This one is pretty simple. Either you or your agent should check out all the homes with similar square footage and amenities that have sold recently in your area. See what price they sold for and how long they were on the market before they sold.

Additionally, check active listings in your area, but remember that these homes aren’t guaranteed to sell for this price. If you want to price your home much higher than these comparables, it’s almost certainly a bad idea.

Your renovations might not be relevant

You may have very expensive taste and want only golden handles, but the potential buyers probably won’t share this particular fascination.

Of course, even more ‘normal’ renovations, such as putting a pool or deck in the backyard, might not earn you as much as you’d expect. According to Remodeling magazine, these projects offer an average 62% return on investment.

So the advice? Skip the remodeling project if you’re doing it for potential buyers (unless it’s something for staging, like painting the walls a neutral color). If you’re doing it just for the enjoyment of you and your family, go for it, but don’t expect to get reimbursed when you sell.

This is also true if you attempt to consider how much you paid for your house into the price now. Buyers aren’t interested in you making a profit, and the cost that you paid for the house is irrelevant to them and the current market.

So, make sure you price your home thinking rationally of the current market, not of your previous costs.

Don’t overprice to leave negotiation room

This might seem like a smart tactic, but in the days of Internet searches, it’s shooting yourself in the foot. The time of driving around neighborhoods you would like to live in and looking for “For Sale” signs are long gone.

While it’s true that some people still do this, the large majority use online searches. Additionally, every real estate agent uses an online search to scour the MLS for the perfect match.

This means that both potential buyers and their agents are entering a max price in the search engine. If your home falls outside of that price, even if you would easily negotiate down, there will be no one to negotiate with.

Also, even if the potential buyer does see your property, you might be priced too high to even get a lower, negotiable offer.

Price your home reasonably for maximum possibilities of showings and offers.

Will the appraiser agree?

This doesn’t happen until after the home is under contract, but don’t think that it’s not important.

An appraisal is a valuation of your property done by the buyer’s lender to understand the value of your home. This is to protect its financial interests on the small chance that they must foreclose on your home.

If the appraised price is far below the accepted price on your contract, there’s a chance the lender may not allow the buyer to purchase the home unless the price is lowered.

This is one reason to price your home fairly from the beginning, as a much lower appraisal amount can cause a lot of stress for both the buyer and seller.

Sometimes the appraisal will come back with an unpredictable amount that you, your agent, the buyer, and their agent won’t agree with. However, in general, you can trust your experienced agent to set a price that will help you sell your home as simply as possible.

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What to look for when buying a house

What should you look for when you’re deciding on a house to buy?

Of course, there are the obvious choices you make before you even see the house, like what price range you can afford and exactly how many bedrooms you need. Then, there are the important aspects of a home like a solid foundation and sturdy pipes that are taken care of during the home inspection.

So, besides these basics, what are the things you should search for when you’re considering making such a large investment?

Decide your must-haves

Beyond a certain number of bedrooms, many buyers have requests that are absolutely necessary to them. Do you have a large dog that needs a space to run around? You know you need a house that includes a fenced-in yard.

Perhaps, instead, your summer revolves around grilling out with friends, so a house without a back deck is impossible to even imagine. There are any number of must-haves that could break the possibility of your purchasing that house.

Make sure you tell your agent any specifics before they find houses for you. There are advanced search options that help us find your perfect home with the right amount of acreage, views, and more.

Go ahead and bring that measuring tape

You already have beautiful furniture, so you surely don’t want to buy a brand new living room or bedroom set for your new house. Take down measurements of all necessary furniture before you visit your possible dream house.

Different from what you might expect, rooms can often seem much smaller without furniture inside. So, if you’re worried your king-size bed might not fit in this master bedroom, go ahead and measure.

Sometimes, room measurements are already provided with the listing, but keep that measuring tape with you just in case. Before writing off what could be a perfect house because a room seems too small, make sure you measure it first.

Can your cars fit?

This is something people surprisingly overlook. Typically, when you go to visit a property with the intention to buy it, you’re all in one car. Don’t forget to consider that your big family has four cars.

Can you all fit on the driveway without blocking each other in? Maybe there’s room to pull off to the side of the yard without infringing on the neighbor’s property. Or, instead, you can park on the street (but make sure this is allowed first!).

Whatever the case, don’t forget to think about this little fact.

So. Many. Stairs.

Maybe you’re a fit couple in your 40s, but if this is the house you plan to stay in for the rest of your life, make sure you consider this. This is a personal decision, but an important one. Would you prefer a ranch house with everything on one level?

Maybe people find that having multiple rooms on a second level is just fine as long as the kitchen and master bathroom are both downstairs. If you plan to live at this house for many years, think about what you like now and what you’d prefer in the future.

Is it hot in here?

Most homes today come with central heat and air, but not always. Living in the south, summers without air conditioning can be downright dreadful, and replacing a unit is extremely costly. Ask questions about the heat and air if you don’t live in a particularly mild climate.

Neighborhood

This is another clarification that is usually best to tell your agent at the very beginning so you can immediately start looking at homes that fit your needs. If you have children, do some research on school districts around the area to determine if there are any you would prefer.

Another important factor to consider is the crime rate in the neighborhood. Of course, you want your children to feel safe walking around the neighborhood with their friends or know that your home has a small chance of being robbed. Check out these rates before deciding on an area to live.

Also, determine if you prefer a rural, private area. Do you like being able to drink coffee on your front porch in your pajamas, even if this means you have to drive longer to reach the grocery store?

Otherwise, let your agent know you don’t mind losing a little bit of privacy for a neighborhood that has sidewalks and bike paths, allowing you to walk to ride your bike to the library. Before you decide to buy a home, make sure you think about all the neighborhood options, both for short-term and long-term happiness.

Storage space

Don’t trick yourself. Everyone thinks they can be incredibly organized if they start fresh in a new house, and while that may be true for a month or two, eventually you’re going to reclaim a ‘junk drawer’ and lose that organization.

If you found your ‘dream house’ that is perfect except for not having any storage space, it probably isn’t your dream house. As much as you want to believe just a few cabinets in the kitchen will be okay even though you’re moving from a house with 15 cabinets and a large pantry, it probably won’t be.

Check out how many closets are in the house and how large they are, if there’s any attic storage space, or if you can forgo putting your car in the garage in exchange for keeping all those Christmas decorations in there.

Of course, if finding a place to store boxes of childhood memorabilia (rather than the fact that there isn’t anywhere to put towels in the bathroom) is the problem, you can always consider renting a storage unit.

If you are not choosing a smaller house because of budgetary concerns, be realistic about how much storage space you truly will need.