Q & A with Dottie Herman

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Q1 - My wife and I are looking to purchase our first home. We have decent credit, but it has definitely declined over the past few years. What are some tips to improve our score before we begin to search for a home?  

A - Maintaining a good credit score is important and keeping it above 700 will benefit you when applying for a mortgage.  Based on how credit scores are calculated, here is my advice:

• Do not let just anyone run your credit. Each time this occurs it's an "inquiry" on your profile and will decrease your score.  You may get your score free once a year from any one of the credit reporting agencies.
• Do not close any accounts since that also can lower your score.
• Do not go over 50% of your available credit limits
• Do NOT open new credit accounts
• Keep in mind the older a credit account is the better for your credit profile.

Good Luck

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Q2 - What is the difference between a foreclosure and a short sale?  

A - When you buy a foreclosure the bank is the owner of the property, when you buy in a short sale the homeowner is still the legal owner. A short sale is where the bank agrees to accept less than the amount owed on the mortgage to allow the owner to sell the property. This is often better for the bank since they save the cost of the foreclosure process.  A foreclosure is a property that the bank has taken ownership of after an owner failed to pay their mortgage. 

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Q3 - What are some pros for using a real estate agent? I really wanted to avoid the fee but some people say their experience is needed.

A - As a seller you want to receive the highest possible return on your home.  In order to achieve that goal it is best to work with an experienced agent in your community.  Without an agent you will have great difficulty marketing your home and qualifying potential buyers.  This means that fewer qualified buyers will discover your home is on the market.  You need the exact opposite to occur.  You need lots of people finding out about your home and visiting it in person.  This will increase the likelihood of getting the price you want for the home.  If your home languishes on the market, at the wrong price or with the wrong marketing, you will have no choice but to lower your price.  A great agent is worth every penny in a real estate transaction.  

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Q4 - I am about to put my apartment in New Jersey on the market. There is another apartment that just came on the market for the second time in my building and is now listed for more than the original price. My apartment is basically comparable but they have a better view. What can I do to ensure my apartment gets more traffic and sells as I am eager to sell.

A - Your thinking is very appropriate.  The best way to get traffic and to ensure you sell your home is to price it lower than the other unit.  I would urge you to work with an agent in your neighborhood that is familiar with the building and to get pricing recommendations from that agent.  By pricing this apartment appropriately, it will attract buyers who are considering both units, and if you are priced right, you will have no trouble selling.

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If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com.
 
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best.

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