Three Ways to Win in a Bidding War

With so few houses for sale today and low mortgage rates driving buyer activity, bidding wars are becoming more common. Multiple-offer scenarios are heating up, so it’s important to get pre-approved before you start your search. This way, you can put your best foot forward – quickly and efficiently – if you’re planning to buy a home this season.

Javier Vivas, Director of Economic Research at realtor.com, explains:

“COVID-19 has accelerated earlier trends, bringing even more buyers than the market can handle. In many markets, fierce competition, bidding wars, and multiple offer scenarios may be the common theme in the weeks to come.”

Here are three things you can do to make your offer a competitive one when you’re ready to make your move.

1. Be Ready

A recent survey shows that only 52% of active homebuyers obtained a pre-approval letter before they began their home search. That means about half of active buyers missed out on this key part of the process.

Buyers who are pre-approved are definitely a step ahead when it’s time to make an offer. Having a pre-approval letter indicating you’re a qualified buyer shows sellers you’re serious. It’s often a deciding factor that can tip the scale in your direction if there’s more than one offer on a home. It’s best to contact a mortgage professional to start your pre-approval process early, so you’re in the best position right from the start of your home search.

2. Present Your Best Offer

In a highly competitive market, it’s common for sellers to pick a date and time to review all offers on a house at one time. If this is the case, you may not have an opportunity to negotiate back and forth with the sellers. As a matter of fact, the National Association of Realtors (NAR) notes:

“Not only are properties selling quickly, but they are also getting more offers. On average, REALTORS® reported nearly three offers per sold property in July 2020.”

Make sure the offer you’re presenting is the best one the sellers receive. A real estate professional can help you make sure your offer is a fair and highly competitive one.

3. Act Fast

With existing homes going like hotcakes, there’s no time to waste in the process. NAR reports how the speed of home sales is ramping up:

“Properties typically remained on the market for 22 days in July, seasonally down from 24 days in June and from 29 days in July 2019. Sixty-eight percent of homes sold in July 2020 were on the market for less than a month.”

In addition, NAR notes:

Total existing-home salesjumped 24.7% from June to a seasonally adjusted annual rate of 5.86 million in July. The previous record monthly increase in sales was 20.7% in June of this year. Sales as a whole rose year-over-year, up 8.7% from a year ago (5.39 million in July 2019).”

As you can see, the market is gaining steam. For two consecutive months houses have sold very quickly. Essentially, you may not have time to sleep on it or shop around when you find a home you love. Chances are, someone else loves it too. If you take your time, it may not be available when you’re ready to commit.

Bottom Line

The housing market is very strong right now, and buyers are scooping up available homes faster than they’re coming to market. If you’re planning to purchase a home this year, let’s connect to discuss the trends in our current area, so you’re ready to compete – and win.

Prioritizing Your Debt Payments

If you’re in debt up to your eyeballs, or at least up to your waist, it can be hard to see which debts should be paid first. The creditor that screams the loudest may not be the best one to repay first.Some debts should take precedence over others because they can have worse consequences. Here are bills you should pay off first:Back Child Support PaymentsIf you don’t pay child support, you could be found in contempt of court. That could land you in jail, have half your net wages garnished, and driver’s and professional licenses revoked.A lien could be placed on your property, tax refund intercepted, and your car could be booted, among other things you don’t want.Income TaxesOwing the federal government money can leave you with high interest and fees, in addition to the original amount owed.To resolve this, the feds may put a tax lien on your property-which will be listed on your credit reports-and they could seize your property and garnish wages. Money in retirement accounts and other bank accounts you have may be claimed, and your home or vehicle may be sold to pay the debt.Car Title LoansThese loans use your vehicle as collateral, usually providing 30 days to repay the loan. They have high interest rates of 25 percent or more per month, equaling an annual rate of 300 percent.Miss a payment and the lender can repossess the car. If you need your car to get to work, then getting the money for the loan will be that much harder.The car may be sold at auction. You may also be required to pay the difference between what the car is sold for and how much is left on the loan.Vehicle PaymentsIf you don’t have a title loan but are financing your car with an auto loan, paying late or missing a payment or two could cause the vehicle to be repossessed. You’d have to make the payments, along with late fees, to get it back.Mortgage PaymentsMissing a mortgage payment is only behind missing a car payment because it takes longer to foreclose on a home than it does to repossess a car. A foreclosure takes an average of 19 months to process, giving you a longer span of time to work out the problem.That can be enough time to pay the missed payments and late fees, or at least find another place to live. Your credit score will be extremely low, making it hard to rent or obtain another home loan.

Published with permission from RISMedia.

How to Freeze Your Credit for Free

To stop a criminal from using your personal information to open a credit card in your name, start by preventing lenders from checking your credit unless you first unfreeze your information.Even if you have poor credit-or are low on savings-protecting your credit from identity theft by taking advantage of a free credit freeze is a good idea.Thieves can steal your personal information (i.e., Social Security number, driver’s license number and birth date) and create new identities to fraudulently get loans and open credit card accounts in your name.A credit freeze prevents lenders from checking your credit in order to open a new account. So, if a criminal has your personal information and tries to open a credit card in your name, a credit freeze will stop the lender from checking your credit. If you have a credit freeze in place, you must remove it to apply for credit.Also called security freezes, free credit freezes were required under federal law in May 2018. The three major credit reporting bureaus-Equifax, TransUnion and Experian-now allow free freezes of consumers’ credit files. The freezes prevent information from being provided to lenders unless you “thaw” the freeze with a personal identification number.While identity thieves can steal personal information through data breaches such as the one that occurred at Equifax in September 2017 that compromised sensitive information for nearly half the population of the United States, it’s important to remember that consumers are responsible for initiating the freeze.In addition, consumers must also keep track of the necessary PINs in order to lift the freeze before applying for any new credit. It’s also important to note that credit freezes will need to be thawed at all three credit bureaus since it’s impossible to know in advance which credit bureau a lender will use.The new law also allows parents to create and freeze credit files for children under the age of 16 so that their identities aren’t misused.If you’re looking to protect yourself by setting up a credit freeze, make sure you freeze your information at the three major credit reporting bureaus, as well as at the National Consumer Telecom & Utilities Exchange (NCTUE). With the NCTUE, a consumer reporting agency that provides data to some cellphone, subscription-based television services and utility companies, a freeze is free. Bear in mind that freezing your credit reports at the main credit bureaus isn’t always enough, as identity thieves can still steal your information by hacking cellphone companies and other utilities.Setting up a security freeze is a good start when it comes to protecting your credit from identity thieves, but it won’t protect you from other types of fraud that involve someone using the credit card number you already have or impersonating you to claim your Social Security benefits.To prevent these types of fraud, check your credit card statements for suspicious charges, check your credit reports periodically and monitor your online Social Security account.This article is intended for informational purposes only and should not be construed as professional or legal advice.

Published with permission from RISMedia.

The Cost of Renting Vs. Buying a Home [INFOGRAPHIC]

The Cost of Renting Vs. Buying a Home [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • The percentage of income needed to afford a median-priced home today is declining, while that for renting is on the rise.
  • This is making buying a home an increasingly attractive option for many people, especially with low mortgage rates driving purchasing power.
  • Let’s connect if you’d like expert guidance on exploring your homebuying options while affordability is high.