How Your Mortgage Affects Your Credit & Vice Versa

Obtaining a home loan can have a variety of consequences for your credit score, and your credit score can have a variety of consequences on your mortgage.

Here’s what you need to know about credit when shopping for a home.

The Effect of Mortgage Applications and Inquiries

When you apply for a loan or for a line of credit, your credit score usually takes a small hit. Luckily, you don’t have to be too worried about dinging your credit score when you go loan shopping.

Normally, multiple credit inquiries would indicate a problem with your credit or that you have a problem with debt. However, loans such as mortgage and auto loans have a grace period during which multiple inquiries are treated as a single inquiry, so you don’t have to worry about your credit taking a dive.

While your lender will probably pull your FICO score, which has a 30-day grace period, they may instead pull your VantageScore—which only has a 14-day grace period.

To be on the safe side, do all of your loan shopping within seven to ten days.

What Mortgage Lenders Look for in Credit Scores

Lenders are looking for good credit scores and the absence of bad credit marks, such as these:

• Defaults in payment
• Lawsuits
• Liens
• Bankruptcies
• Repossession
• Foreclosure

Payment history is the greatest factor in your FICO credit score, accounting for 35% of the score. The other FICO credit factors are amounts owed (30%), length of credit (15%), new credit (10%) and types of credit (10%).

Loan Balances and Debt-to-Income Ratios

The balance of your home loan influences your credit positively as the loan decreases. Your credit score gets better as the gap between your original loan and current balance diminishes.

Your debt-to-income ratio compares all your debts, loans and credit cards to your total income. A high debt-to-income ratio could result in the denial of a loan. A low debt-to-income ratio shows lenders you have a better ability to repay the loan and is preferred by lenders.

Some loans, like qualified mortgages, require the borrower to have less than a 43% debt-to-income ratio to be eligible as a borrower.

Managing Your Credit Score

Getting and maintaining a good credit score may not be easy, but there are steps you can take to keep a healthy score:

• Offer a higher down payment so you are borrowing less money.
• Do not apply for any new loans or lines of credit during the home-buying process.
• Lower your debt-to-income ratio by paying off as much debt as possible before applying for more credit or a mortgage.
• Make all payments on time.

Sometimes credit reports may misreport negative events—like late payments, lawsuits, liens, bankruptcies, repossessions and foreclosures—so monitor your credit report every few months. Dispute any claims that don’t look right.

Original Article From: www.Realtor.com | Written by: Craig Donofrio

9 Realities Not To Overlook When Buying A Home

In an area with good schools, the house appealed to families—but a home with no fence on a busy block can be a deal breaker.

The last thing you want after moving into your new house is buyer’s remorse.

With so many details to track when buying a home, items can slip through the cracks. Figuring out which areas you shouldn’t overlook is the first step toward mitigating remorse.

With avoiding that sinking feeling in mind, realtor.com®spoke with a couple of agents about what to pay attention to when buying a home.

1. Lifestyle vs. resale value

Marty Winefield emphasizes this concept with his clients. Buying a home is a personal choice, so make sure you know whether you’re buying for resale value or for lifestyle. Some clients buy with the bottom line at the top of mind while others care more about their quality of life.

2. Size: It matters!

REALTOR® Nina Goldsmith of @properties in Chicago cites a house that seemed perfect on paper. She showed it 102 times in about three months. The house had three bedrooms and two bathrooms in a nice area. The downside? The bedrooms were extremely small—and small enough to turn off potential buyers once they saw the place.

3. Bathrooms

Winefield says two-bedroom, two-bathroom condos abound in Chicago.

But if one of those bathrooms has a shower without a tub and the buyers have children or plan to, that bathroom becomes “almost useless”.

Don’t overlook your future needs, or the needs of every resident of the house.

4. Bedrooms

You probably have an idea of how many you want.

But are they the right kind? Something large enough for an infant now may not accommodate a desk and bunk beds later.

A funky seven-walled bedroom may delight your design sense, but will your furniture fit in there?

Don’t overlook the practicalities of rooms as you fall in love with a house.

5. Traffic

That tiny house Goldsmith showed over a hundred times sat on the corner of a busy street, which also turned off buyers.

A fence used to guard part of the yard, but it was removed by a prior owner.

6. Wall color

Goldsmith reminds buyers paint is cosmetic. Bricks aren’t.

It’s easy to repaint a kitchen if you don’t like the color—go ahead and breeze past a confusing color choice

But falling in love with a home’s brick walls or dark wood paneling may prove tricky when you try to resell and you realize most buyers don’t share your aesthetics.

7. Yard

People moving from apartments may dismiss a tiny or nonexistent yard.

But a large yard helps resale value. And some might ask, “Why buy a house at all if you don’t want any land with it?”

8. Pools

Many buyers won’t buy a home with a pool, because they don’t want to deal with the upkeep, which gets expensive, Goldsmith says. But if you really want a pool, the upkeep may be worth it.

Just know that if you buy the home, you may wind up filling in the pool—or wishing the original owners did—when it’s time to sell.

9. The little things

Does the freezer door open all the way?

Does the layout mean in order to pass from kitchen to bedroom you’ll have to go through the living room?

Does the small living room push your overstuffed couch too close to the TV?

How You Can Avoid These 9 Traps

Listen to your real estate agent. If an agent expresses concerns about a feature or perceived fault, hear them out. You might buy anyway, but at least you’ll know what you’re getting into.

Listen to your brain as well as your heart. Don’t let emotion rule your decisions.

Visit often. Kick the tires, as it were—open all the doors, latch all the windows, and visit again and again to make sure you aren’t missing anything. You might see something the second or third time you didn’t see the first time you looked at a place.

“Take your time,” Goldsmith adds. “Is this really where you want to live? Is this good for you, your family and the way you want to live?”

Remember, an extra visit or two won’t cost much—but buying the wrong house could cost you plenty.

Original Article From: www.Realtor.com | Written by: Anne Miller

How To Protect Yourself During A Move

"I can't wait to move!"

How often do you hear someone say that? What they mean is they can't wait to be in their new place, all unpacked and organized and enjoying their new surroundings.

What they don't mean is, "I can't wait to spend a month packing up everything I own and hauling it into a truck we're going to drive across country when I've never driven anything larger than a mid-sized sedan, only to have to haul it all out, and into that new house. The new house that has two flights of stairs and narrow hallways. Don't get me started on unpacking boxes."And what they REALLY don't mean is, "I can't wait for the movers to break a bunch of my things and lose a bunch of stuff." Pretty sure they also don't mean, "I can't wait for dishonest movers to delay my delivery and charge me quadruple my quote and then hold all my stuff hostage while I sit here helpless."

Think that could never happen to you?

"Last year, Massachusetts officials sued one moving company and New Jersey officials sued two for providing low-ball estimates and then grossly inflating fees after loading the trucks," said Consumer Reports. "One of the companies had threatened to auction the possessions of customers who didn't pay."

Added MarketWatch about the possibility of mover fraud: "Typically, a mover gives you an extremely low estimate over the phone or Internet without ever actually seeing what needs to be moved. You agree, they show up, load the truck with all your worldly possessions and then tell you it will actually cost a lot more. Then, they hold everything you own hostage on their truck until you cough up the extra cash."

Yes, moving can be fraught with challenge and frustration and even heartache. So how do you protect yourself? Here are some tips for a safe and fraud-free move.

Do your research

Proper preparation can help you ward off many of the issues that can turn a move into a nightmare, and that starts with a healthy dose of research. You always want to ask for a referral rather than using an unknown. And not just anyone is qualified to give a referral, according to MSN.

"Ask your real-estate agent. The general consensus among moving professionals is that word of mouth is the best way to find a good mover," they said. "Real-estate agents know the ins and outs of the housing industry and are the most reliable sources. Realtors want to make sure that your (moving) transaction is a good one."

There are also websites dedicated to moving scams. "MovingScam.com maintains a ‘black list,'" they said, as well as a "message board filled with consumer experiences, bad and good."

Verify licensing and look for complaints

MSN recommends people who are moving investigate the companies they are looking at using. Interstate movers must be licensed by the Federal Motor Carrier Safety Administration.

"Check with your area's Better Business Bureau to see if any complaints have been filed and whether there are reliable," they said.

Protect Your Move also provides info on whether a mover's license is current "and if the company has ever had a federal complaint."

Watch out for the lowball bid

"You get what you paid for" is often a dangerous reality when it comes to moving. To protect yourself against unethical movers, get several estimates and make sure to weed out any that seem too low. Yes, the desire to save money is strong. But an unusually low bid is often a red flag.

"When shopping for movers, it's best to get at least three estimates, " said MSN. "If you've got one that's really, really low compared to the other two, you're going to know something's up."

Have a contingency plan

No matter how well you prepare, the unexpected can still happen. What if the truck doesn't show up on time? Are you prepared to live without your things for a few days, or longer? Make sure you pack a bag of essentials you can have with you while the rest of your stuff is stuck on the truck.

Protect yourself

The Better Business Bureau suggests paying a little extra for peace of mind.

"Consider accepting full value protection. It may cost a few dollars more up front, but it can eliminate headaches after your move," they said. "Purchasing full (replacement) value protection from your mover means any lost or damaged articles will be repaired or replaced, or a cash settlement will be made to repair the item or to replace it at its current market value, regardless of age. The cost of full value protection must be included in the initial estimate you receive for an interstate move."

Original Article From: www.RealtyTimes.com | Written By: Jaymi Naciri

How Much Of A Down Payment Do You Really Need To Buy A House?

In the mortgage industry, 20% down is considered the benchmark down payment for looking strong on paper as a home buyer. While this a general standard for financial strength, it is by no means a requirement, nor is it necessarily expected.

Looking to get your foot in the door (of your new home)? If you’re a renter who’s tired of paying someone else’s mortgage, now may be the time to pursue the American dream of homeownership. In fact, the days of needing a 20% down payment are long gone. While you can always elect to put down the full 20% or more, there are now many alternatives available. Here’s what you want to know if buying a house is in your future.

However, keep in mind that your purchase offer amount – your buying power — drives negotiation. How strong you are on paper does help, but when you make an offer to buy a home, the seller of the property has no idea of your financial strength other than what your real estate agent tells them and what’s on your pre-approval letter. The pricedictates whether you’re in the game for the house, or whether you’ll continue to be on the search.

Down Payment Options

So let’s say you don’t have 20% down for a home. While there are many benefits to having more equity in the home you’re buying, that doesn’t mean you’re out of the running for becoming a homeowner. There are options for lower down payments.

3.5% Down

For an FHA loan, the minimum down payment you would need to buy a home is 3.5% down. Most lenders can lend up to $417,000 with the exception of Alaska, Hawaii and Guam. An FHA loan comes with a monthly mortgage insurance payment, which can make it more expensive than a conventional mortgage.

In some more affluent markets, the higher loan amounts (per county) allow someone with strong income and less cash to still get into the market.

5% Down

Another popular choice for buyers is using a conventional loan with 5% down. There are loan size amounts up to $417,000 (with the exception of Alaska, Hawaii and Guam) going as high as $417,000 with as little as 5% down. An alternative to the higher-priced FHA loan, the conventional loan allows for getting rid of the PMI after accumulating 20% equity after a minimum of 24 months.

0% Down

Two options exist for 0% down financing, one being through the U.S. Department of Veterans Affairs. The program allows a veteran to purchase a house for literally no money down. Yep, the purchase price and loan amount are equal.

The caveat? Actually, there are two: The program is for military veterans only, and the home must pass a clear pest report. This option could be optimal for brand-new construction or for property where any pest damage can be fixed in time for closing.

An alternative to this program is a loan guaranteed by the U.S. Department of Agriculture, USDA. You need not be a veteran for this particular loan, however in some areas, you may not be eligible to use the program due tighter qualifying income-to-payment ratios and location. The program also only works for homes designated rural by USDA. Additional income limitations also apply. For example: For a family of four, a household income cannot exceed $96,400 per year.

All of these options allow for the use of gift funds. Family members, cousins, relatives – these are all excellent sources to tap for possible down payment or closing costs (usually about 2% of the home price). Even if you already own a home and are looking to upgrade, all of these programs could present a viable option to bridging the gap between buying a home for the right price in the right area of vs. continuing to be on the search.

Boost Your Buying Power

Mortgage Tip: If you qualify for a smaller loan size, it could be more challenging to actually close escrow on your first home. Buying power is important, especially when negotiating in competitive markets. Pure and simple, the bigger the loan you qualify for, the more opportunity.

Conventional conforming loan — With conventional loans, you can get 95% financing up to $417,000. In counties where the maximum conforming loan limit is higher than $417,000, you can have up to 90% financing. For example: In Sonoma County, Calif., the maximum high-balance loan limit is $520,950. A loan exceeding $417,000, and up to $520,950, would require a 10% down payment.

VA loan – This type of loan allows for 100% financing all the way through the maximum conforming loan limit in the county in which the property is located. In fact, this type of loan can allow for even higher than the maximum conforming loan limit if you do have a down payment.

Here’s how: The buyer would need a 25% down payment only on the amount greater the conforming loan limit. For example, with a $520,950 loan (the maximum loan limit for Sonoma County) with a purchase price of $700,000. The difference is $179,050 – and the buyer would need to put down 25% of that difference — $44,763 – in order to get the additional VA loan financing.

USDA loan – These loans allow for financing up to $417,000, but here’s the kicker: A buyer would need an income of $95,000 to qualify for a $417,000 loan — which is getting very close to the USDA loan maximum income limitation of $96,400. More importantly, lending qualifying ratios are more stringent for this program than any other. To qualify for this loan, your proposed house payment before debts cannot be more than 29% of your gross monthly income, and the house payment plus other debts cannot be more than 31% of your gross monthly income.

FHA loans – An FHA loan will allow for as low as a 3.5% down payment up to the maximum conforming loan limit in the county in which the property is located.

Jumbos loans – These loans usually can go as high as $750,000 with as little as 10% down.

Remember: When you’re putting less than 20% down on a home, your monthly property taxes and fire insurance terms are required to be built into your monthly mortgage payment, and you’ll likely pay private mortgage insurance, too. Some lenders might offer an alternative option called lender-paid mortgage insurance — where the lender actually pays the monthly PMI, despite not using 20% down to purchase a home. Make sure to do your homework, and talk to your lender so you know what your options are.

Of course, it’s always important to have your credit in the best shape possible. Before you start your home search, give yourself time to work on your credit so that you can qualify for better rates. Check your free annual credit reports for errors or any problems that could be hurting your credit scores. Using free tools on Credit.com can also help you identify problems with your credit that you can work on in order to raise your scores — and you also get two free credit scores updated monthly, which can help you track your progress.

Original Article From: Yahoo Finance | Written By: Scott Sheldon

Must-Know Info For The Self-Employed Homebuyer

Are you a self-employed home buyer needing a mortgage? Loans can be tricky to get when something as straight-forward-seeming as what you earned last year gets bogged down in a pile of pay stubs from various clients.

In today’s work universe, we are a nation of independent employees, and it’s the “age of the freelancer,” Fortune magazine has declared.

The self-employed workforce should total 40% of the whole by 2020, says another study—that’s 60 million people!

Self-Employed Home Buyer Blues

Julie and Michael Kurtz can’t prove it, but they’re pretty sure their independent status delayed their expected home loan approval by a few weeks this summer—which called into question whether they could close on a new condo in Chicago.

Julia is a freelance editor of technical journals, and Michael is an attorney. He also referees high school and college football; she has a shop on the handmade Web portal, Etsy, as well.

Their story has a happy ending, albeit a stressful one—they ended up getting the keys a few days later than originally planned (which also caused some hiccups for the sellers), due to last-minute requests from the bank.

“It would have been better if we’d worked with a loan company where we could have had a personal relationship with the loan officer or broker,” Julia says.

Self-Employed Home Buyer Challenges

Quicken Loans Vice President Bill Banfield notes the unexpected paperwork requests can trip up the prospective self-employed home buyer.

“The challenge for those who are self-employed can be in verifying the legitimacy and stabilityof their income,” Banfield says.

And new regulations enacted earlier this year mean that the self-employed face even closer scrutiny, according to the New York Times: “Borrowers who have been self-employed for less than two years will find it difficult if not impossible to obtain financing.”

Self-Employed Home Buyer Sticking Points

These are the details that a self-employed home buyer needs to prepare for when seeking a mortgage.

• Debt-to-income ratios. If your business carries debt and you are the sole proprietor, that could impact how much of a personal loan a bank will extend.
• Earnings. Freelancers especially often have business deductions that come out of their overall pay. Banfield uses the example of someone who earned $100,000 last year but technically took home only $60,000 after all the business deductions.
• History. This is the aforementioned “two year” rule. Lenders now want to see you’ve got a somewhat reliable income history, so they know you can make your payments. One year of solopreneurship isn’t much of a history. If you just started out on your own this year, you may want to wait another one before buying.

Self-Employed Home Buyer Tips

Here are some ideas to start you off on the right path when seeking to purchase a home as a self-employed worker.

• Find good people. Use a mortgage broker and/or underwriter familiar with the challenges of securing loans for the self-employed. We all need someone who can guide us through the process with consistent communication and guide us through the potential paperwork pitfalls.
• Prepare for paper. You will likely have to submit more paperwork and proofs of income, debt rations and business expenses than someone who is more traditionally employed. Forewarned is forearmed.
• Drop your debt. That debt-to-income ratio can be a big deal with lenders. Make yours as friendly as possible.
• Get pre-approval. Yes, we suggest everyone do this. But especially for freelancers—who can struggle to understand where they stand in the mortgage world for all of the above reason—this is a vital step.

The reality is there are going to be a lot of self-employed home buyer mortgage applications as we move forward in this new economy, and the mortgage lenders have to understand this as well if they want to stay in business.

So knowing what you need to do—in advance—will go a long way towards a successful home-buying experience.

Original Article: Realtor.com | Written By: Anne Miller

Smart Financial Planning Must Come Before Home Ownership

Whether you’ve got house envy about your best friend’s new place or just want to start buildingequity instead of renting, the first time you think about becoming a homeowner is the moment you should start financial planning.

While it may be tempting to begin looking at homes for sale, you need to be financially prepared so you don’t fall into the trap of identifying your perfect home—and then realizing you can’t afford to buy it. Casual visits to open houses or random Internet searches are fine to see what homes cost where you want to live, but you will need to start working on your finances, too.

The most important elements of the financial planning you need to put in place before buying a home are developing a budget and starting to save.

Financial Planning for Homeownership

When you are ready to consult a lender to find out if you can be approved for a loan, the lender will base a decision on your credit profile, income, assets, job history and debt-to-income ratio.

Your debt-to-income ratio for the lender’s purposes is based on the minimum monthly payment for all of your credit card debt, student loans, car loans and personal loans—compared to your gross monthly income. In many cases the amount a lender will say you can borrow is higher than you may feel comfortable borrowing. It’s crucial you decide what you think you can afford for your monthly payment and work with that number when you begin searching for a home.

Your comfort level should take into consideration other financial goals you have—saving for child-raising expenses, college tuition, retirement and even things like vacations, skiing or golf. Most of those expenses won’t be part of your lender’s calculation of what you can afford to spend on a housing payment.

Most lenders allow a maximum overall debt-to-income ratio of 43%, and some allow only a 41% ratio. The housing payment portion of your income should be a maximum of 31%, so if your annual income is $60,000 and your monthly gross income is $5,000, then your housing payment should be $1,550 or less.

Housing Payment

Homeowners have extra expenses renters don’t, such as property taxes and homeowners insurance. Your mortgage payment will include those costs as well as the principal and interest on your loan. You may also pay mortgage insurance if you make a down payment of less than 20%. If you live in a condo or a community with a homeowners association (HOA), you will pay condo or HOA fees separately.

You should also budget for maintenance and repairs on your home, at least 1% of the home value.

Before you become a homeowner, you should create a budget based on your current finances and consider how you can adjust that budget to accommodate extra savings to allow you to buy a home and to afford potentially higher housing payments.

Saving Strategies

There are countless resources for living frugally and finding ways to save on everyday expenses such as your cable bill and groceries, but in order to save for a home you will need discipline to set aside money for the future.

Here are some ways to do that:

• Create a special savings account for your home purchase and have part of every paycheck automatically transferred to that account. Start with as little as $100 if you can afford it so you get used to living on less and then gradually increase the amount.
• Consider saving the difference between your rent and anticipated housing payment. This increase your savings, and you’ll also show a lender an established savings pattern and the ability to afford the housing payment.
• Work extra hours or take on a second job temporarily to increase your income. Even something simple like walking dogs each evening or babysitting can help your savings accumulate more quickly.
• If you get a bonus, a tax refund or a cash gift, deposit it into your home-buying account.

The simple process of creating a financial plan should be the beginning of a long-term plan to buy a house—and to keep it.

Article Taken From: www.realtor.com | Written by: Michele Lerner

Buying A Historic Home: What You Must Know First

Although a historic home has an appeal and charm for many buyers, there are certain restrictions and expenses you must know before sealing the deal.

If you’re a home buyer, you may have fallen in love with a historic home or with a home in a historic district.

While being the proud owner of a literally one-of-a-kind home is alluring, you may run into unexpected complications when purchasing vintage houses.

For example, older properties may have serious structural problems you wouldn’t encounter in a new house, as well as hidden problems which will only surface later.

Owners of historic homes are also required to follow strict home rehabilitation guidelines—many of which allow you to repair, but not to rebuild or to replace.

To help protect your future home investment, here is some vital information and expert advice about buying a historic home.

What constitutes a historic home?

A home is deemed historic or “architecturally significant” by the National Register of Historic Places—or by the local historic board—if it exemplifies a signature architectural style, captures the essence of a given time period, or is associated with famous people from the past.

Also included in this category are homes located in neighborhoods designated as historic districts.

Benefits of buying a historic home

The aesthetic beauty of historic homes is a magnet for many home buyers, as is the often unmatched architecture that has withstood the test of time.

If you’re thinking about buying a historic home, you’ll be happy to learn additional benefits may come with the purchase of a historic property.

Many states and local governments offer tax incentives in the form of tax credits or lower interest loans for preserving and restoring historic structures. You have to qualify for these tax abatements, and while the amounts won’t make you rich, they’re still benefits you wouldn’t otherwise receive when buying a new house.

Advice for buying a historic home

Now that you have set your sights on a vintage home, it’s time to get down to the nuts and bolts of purchasing your coveted property.

Before you sign on the dotted line, here are some tips on buying an older house:

• Have a formal home inspection conducted by a qualified home inspector who specializes in older homes and/or by a structural engineer.
• Get price estimates from contractors regarding all necessary repair work.
• Make sure the house meets safety and health standards, including passing asbestos and lead paint tests.
• If your dream house suffers from major structural problems, walk away. The long-term headaches will far outweigh your emotional attachment.
• Carefully study the Standards for Rehabilitation of Historic Buildings imposed by local/state laws on owners of historic structures. You may have remodeling/expansion plans that you will not be able to fulfill.

Historic home restrictions

Since the goal of historic home renovation is to preserve a home’s true nature and original construction, a home buyer wishing to renovate must obtain special permits and therefore is subject to restrictions aimed at protecting the character of the property or neighborhood.

Here are some of the typical restrictions and extra costs you need to know about before buying an historic home:

• Additions: Rarely are homeowners permitted to add footage to historic homes, including extra stories.
• Windows, shutters and roofs: Since house exteriors such as windows, shutters and roofsembody the original architecture or design style, they are to be preserved and can only be replaced in kind. If costly construction materials are involved, this may be an added expense you didn’t anticipate.
• Taxes: Although you may qualify for tax benefits for investing in a home or in a district where preservation and restoration are priorities, tax levies for merely living in a historic neighborhood may be higher than other neighborhoods.
• Utility bills: Before you seal the deal, study the previous year’s energy bills. It may cost you significantly more to heat and cool an older home than a new one.

If you’ve done your homework and the pros outweigh the cons for you, enjoy becoming the proud owner of a historic home.

Original Article From: www.Realtor.com | Written by: Realtor.com Team

Tips For Winning A Bidding War In A Hot Home Market

Cash isn’t always king in a bidding war. Get the home you want without blowing your budget, using these Realtor-tested strategies

With the real estate market finally recovering, some markets across the U.S. are seeing the return of the bidding war. While this is great news for sellers, it’s a source of stress for buyers who not only don’t want to overpay, but also may not have the flexibility to wait for the market to cool off. Here are some ways to win a bidding war without spending more than you’d planned.

Miller + Miller Real Estate

Put your lender on speed dial. Realtor Mary Ann Teixeira says winning a bidding war isn’t always about paying in all cash or even being the highest bidder; it’s about making your offer the most attractive one to the seller. And that starts by making sure you’re preapproved for a loan.

Teixeira says that while an agent should never push a client toward a specific lender, she does have a few trusted lenders who will gladly accompany her when she makes an offer on a property for a buyer who happens to have borrowed from them.

“This is part of the strategy, because if there are any questions about the ability to get the loan, they can be addressed right then and there,” says Teixeira.

Nathan Varney Photography

Present the offer in person. Teixeira says you should expect your agent to literally go the extra mile to present your offer in person. “This helps convince the seller and his or her agent that the people on the other side of the table are serious and willing to do whatever it takes to make that deal goes through,” she says.

Anders Lasater Architects

Consider waiving contingencies. Teixeira says that in the San Francisco Bay Area, where she works, buyers need to waive contingencies to be competitive, as high demand and low supply have created a market where many offerings result in bidding wars. Waiving contingencies speeds the closing process and calms any nagging fears the seller may have that you’ll back out at the last minute.

One contingency that often gets waived is the inspection, which can expose buyers to a significant amount of risk. This does not, however, mean that you’re going to buy the house without an inspection.

Julie Angelos of Berkshire Hathaway California Properties points out that in markets where multiple bidders abound, sellers will often hire an inspector to report on the house before it’s listed to help the house sell more quickly. They will then include both the inspection report and the disclosure agreement on the MLS so buyers’ agents can provide that information to their clients.

Teixeira says it’s important to read these documents carefully and have your agent call the inspector directly with any questions. If there’s enough time before the offer date, Teixeira suggests that you also hire your own inspector to look at the house before you make your offer. That way there’s no question about what you’re getting into.

Pauli & Uribe Architects

Tailor your offer. Tailoring your offer to the sellers can make it more attractive them. For instance, if the sellers are moving because of a job transfer on a certain date, you can put your offer together in a way that speeds closing or allows them to stay in the home until they find a place in their new city.

MILLER ARCHITECTS PC

Get personal. Adding a personal touch to your offer means you’re not just a name on a piece of paper, but a human being who loves and appreciates the home the seller has created. Consider enclosing a personal note with your offer that includes something that illustrates your common ground. For example, if you notice that the seller is a gardener, you might want to talk about your own appreciation for gardening.

Teixeira also has had clients who won bidding wars simply by being perceptive. “I had one buyer who noticed some San Francisco Giants paraphernalia in the home,” says Teixeira. “The buyer had season tickets to the Giants, so as part of their offer, they gave two tickets to the father and son.”

In the end winning a bidding war can be as simple as convincing the seller that you’re a good person who just wants the transaction to go as smoothly as possible — which is a win-win, because of course that’s what you want, too.

Original Article From: Houzz.com | Written By: Christine Tusher