Improving Your Credit Score Increases Buying Power

Improving Your Credit Score Increases Buying Power

To get the best interest rate for your home loan and qualify for conventional financing, you need to have a high credit score. Credit scores range from 300 for bad credit to 850 for the best credit. Good credit scores are classified as 680 and higher. 

There are several things you can do to boost your credit score. Start by checking your credit with a loan officer or log onto www.annualcreditreport.com

Federal law allows you to get a free copy of your credit report every 12 months from each of the three credit reporting companies; Equifax, Experian, and Transunion. By reviewing your credit report, you can ensure that the information on your credit reports is correct and up to date. Reviewing credit reports regularly, can help you catch signs of identity theft early.

In addition to home loans, credit reports may affect, credit card approvals, apartment requests, or even your job application.

Payment history is a significant factor to raise your credit score, so pay your bills on time. Late payments, tax liens, judgments, bankruptcy, and charge offs impact your credit score negatively. It can take years for serious delinquencies to drop from your credit report.

Keep your credit card balances below 50% of your credit limit. The credit reporting companies evaluate the amount of debt you have compared to your credit limits.

Don’t close out old credit cards. An insufficient credit history may affect your score negatively, but factors like timely payments with a long history and low balances can offset that.

Many scoring systems consider whether you have applied for credit recently by looking at “inquiries” on your credit report. Applying for new credit can have a negative effect on your score.

Limit the number of credit cards that you have. Too many credit card accounts may have a negative effect on your score. Pay off the lowest balances first, to reduce the number of open accounts with balances.

If you are thinking of buying a home in 2020, talk to a loan officer now to discuss your credit and get personal advice to improve your score. An experienced real estate agent can recommend a good loan officer.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Should You Make an Offer Contingent on the Sale of Your Home?

Should You Make an Offer Contingent on the Sale of Your Home?

Many buyers want to purchase a new home, but they have an existing home to sell first. They are apprehensive about selling their home until they know they have a place to move to. They often want to make their new purchase contingent on the sale of their existing home. This is not a good idea when we are in a seller’s market, like we are now when the housing inventory is so low.

Many sellers are receiving multiple offers and if one of the offers is contingent on the sale of the buyer’s home, it will quickly be thrown out as the seller has no assurance of when or if there will be an actual closing.

If a seller does accept an offer contingent on the sale of the buyer’s home, the listing status is changed from “Active” to “Active Contingent on the Sale of Another Property”. This means that the seller still has the right to continue to market the property to attract other buyers. There is an immediate notification to other buyers out there that someone wants this house but can’t buy it without selling their home. If another offer comes in for the property, the new buyer can bump the contingent buyer. The contingent buyer will be given notice that the seller wants to remove the contingency, within 2 business days, or whatever time period was previously negotiated. The buyer must provide a true and valid purchase agreement on the buyer’s existing home, with no contingencies other than financing, to remove the contingency and move forward with the purchase.

From a seller’s perspective, if the contingent offer is the only offer on the table, then they would most likely accept the offer as it can generate interest from other buyers, and it can keep the contingent buyer motivated to get their home sold quickly to remove the contingency before they get bumped.

I advise my clients that know they want to move, to get their home sold before they write an offer on another property so they are in a position to purchase without the contingency. As soon as there is an accepted offer accepted on their existing home, we start looking for their new home and try to time the closings for their sale and purchase on the same day. Their offer may be contingent on the successful closing for their existing home, as they need the proceeds for their down payment, but it is no longer contingent on the sale of their home.

 An experienced Real Estate Agent can help guide you with the best negotiation advice for your unique situation.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Home Prices in the County Vary by School District

Students, teachers, and parents are excited about the new school year starting. Most parents carefully select their child’s schools by rating, curriculum, sports, location, etc. Home prices can also play into the school selection decision.

The Chisago Lakes Area school district has had the most home sales this year according to the Multiple Listing Service (MLS), with 236 sales. The median sale price in the school district was $273,350. The sale prices ranged from $91,500-$796,000. Sixty-four of these homes were waterfront homes with a median sale price of $318,000.

There were 215 sales in the North Branch school district with a median sale price of $230,000. The sale prices ranged from $51,500-$825,000. There were 9 waterfront home sales with a median sale price of $242,000.

There were 63 home Chisago County home sales in the Forest Lake school district with a median sale price of $313,500. The prices ranged from $125,000-$575,000. None of these were waterfront homes.

The Rush City school district has had 48 home sales this year with a median sale price of $224,800. The prices ranged from $76,000-$450,000. Eight of these were waterfront homes with a median sale price of $296,150.

The Braham school district has had 11 sales with a median sale price of $243,900. The prices ranged from $96,200-$750,000. Three of these were waterfront homes with a median sale price of $318,000.

There were 8 Chisago County home sales in the Cambridge-Isanti school district with a median sale price of $259,900. The prices ranged from $147,000-$750,000. Two of these were waterfront homes with a median sale price of $266,000.

For buyers looking for acreage; the North Branch school district had 39 home sales with 5 or more acres with a median sale price of $324,750. The highest sale price was $825,000 with 40 acres. The Chisago Lakes Area school district also had 39 home sales with 5 or more acres with a median sale price of $315,000. The highest priced sale was $745,094 with 10 acres.

An experienced real estate agent can help you find the best value in the school district that is best for your student.

  Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

New Construction vs Pre-owned Homes

    According to the Multiple Listing Service there have been 60 new construction, single family sales so far, this year, in Chisago County. The average price of the single family, new construction sales this year is $294,000 with an average price per square foot of $198.00 During the same period in 2018 there were 70 sales with an average price of $322,000 with an average price per square foot of $189.00.

  There have been 392 pre-owned single-family homes sold this year with an average price of $278,000 and an average price per square foot of $137.00; compared to 436 sales during the same period last year with an average price of $257,000 and an average price per square foot of $130.00.

  Sales are down in both categories, but at a higher rate for new construction. Prices are up in both categories about 10% over 2018. 

  This year there have been 11 new construction townhome sales, in Chisago County, with an average sale price of $242,000 and an average price per square foot of $160.00 compared to 32 pre-owned townhome/twin-home sales in Chisago County with an average price of $203,000 and an average price per square foot of $128.00.  

  Prices are higher with new construction, but the advantage is everything is new and under warranty. New construction also offers the latest trends and customization. 

  With pre-owned homes, you tend to get established, high demand neighborhoods, larger lots, larger garages, and more finished square footage. 

  One level-living-homes are in high demand for new constructions as there are very few pre-owned homes that don’t have stairs at the entrance or garage, and most pre-owned homes have the laundry on the lower level. Many down-sizers want smaller lots and an association to take care of lawn maintenance and snow removal, and they want to customize the floor plan. There is great appeal for snow-birds to be able to feel secure leaving their home for the winter. 

  The best value homes whether new or pre-owned are split entry homes. The larger the foundation, the higher the price per square foot. Above ground square footage has higher values than finished basements. 

  An experienced real estate agent can help you find the right lot and builder to design your dream home.

  Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Lake Homes Are Selling Fast

  Chisago County waterfront homes are bringing in buyers from around the country. We have buyers coming up from Florida, Arizona, and other states to find a summer home close to their snow-bird friends that go south for the winter. With the better economy and low interest rates, more buyers can afford a second home. 

  We are also seeing families from around the metro moving to the Chisago Lakes for better schools & community, and we have local residents selling their homes and moving onto the water. There are many investors buying waterfront homes as well. When you search for Chisago County vacation rentals, there are dozens of waterfront properties available. 

    According to the Multiple Listing Service, from January to July 15th this year, there have been 45 single family, waterfront homes that have closed in Chisago County. The median price was $321,500, with the highest price at $750,000 on West Rush Lake. During the same period last year there were 35 closed sales with a median price of $367,500 and the highest sale was $675,000 on the Sunrise River.

  The lower median price, this year, is not representative of declining prices, but indicative of smaller or older homes that have sold this year compared to last. 

  Forest Lake has had 16 sales this year with a median price of $481,200, and White Bear Lake has had 6 sales with median price of $844,198. Chisago County is much more affordable and still close to the metro.

  Because of the high demand for waterfront homes and the low inventory, many homes are selling before they go on the MLS. 

  There are currently 48 Active listings on the water in Chisago County with a median price of $399,900 and the highest priced home available is $1,350,000 on Chisago Lake.

  May, June, July, and August had the highest number of sales in 2018 with each month closing 13-17 waterfront home sales. December, January, and February had the least amount sales.

  If you are thinking of buying or selling a waterfront property this year, contact a local experienced real estate agent right away, to help you navigate the real estate market in the Chisago Lakes Area.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Offering FHA Financing Brings More Buyers

    FHA financing offers lower down payment and credit requirements, but not all homes qualify for this program. FHA requires the property to meet HUD’s minimum standards for health and safety in addition to determining the current market value is at or above the purchase price.  

  Offering your home to FHA buyers increases your buyer pool which can bring a higher price.  A seller can decide to accept or decline a purchase agreement with FHA financing, but this discussion should take place with the listing agent before the property goes on the market. If the seller wants to offer the home to FHA buyers there may be additional repairs required by the FHA appraiser.

  The FHA Handbook cites the primary areas of inspection are the roof, the foundation, lot grade, ventilation, mechanical systems, heating, electricity, and crawl spaces (when present). HUD’s primary concern is the health and safety of the home buyer who will live in the house. Above all, the home must be habitable and comfortable, without any potential hazards to the occupant.

Here are some of the key inspection areas required by HUD:

  • The lot should be sloped to allow water to drain away from the house.
  • All bedrooms should have egress to the exterior, for reasons of fire safety. 
  • Many homes built before 1978 still contain lead-based paint, which is a potential health hazard. In these homes, the appraiser will check for peeling or chipping paint. 
  • All steps and stairways must have a handrail for safety. 
  • The heating system must be sufficient to create “healthful and comfortable living conditions” inside the home.
  • The roof should be in a good state of repair and must keep moisture from entering the home. It should “provide reasonable future utility, durability and economy of maintenance.”
  • The foundation should be in good repair and able to withstand “all normal loads imposed” on it. 

The appraiser can site required repairs as a condition of the loan, which means the repairs must be made and re-inspected prior to loan approval. 

An experienced real estate agent can help you decided what terms you will accept from a potential buyer, and offer repair advice before you list your home for sale. 

  Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.