Karen Miglin
REALTOR® /Sales Associate
Realty Executives Exceptional Realtors®
Realty Executives International - Jan 3, 2022
Going bankrupt is one of the most distressing things that can happen to a person. Some of the common causes of bankruptcy include burdening medical expenses, job losses, excessive spending on credit, divorce or separation, and heavy expenses due to unforeseen events.
All of these can be quite taxing on your mental and physical health, as well as your financial outlook. On top of that, you may also be worried that you won’t be able to buy a home for yourself and your family anymore, which is an added burden. This article covers everything you need to know about buying a home after filing for bankruptcy.
Let us put your mind at ease by telling you that it isn’t impossible for you to buy a home after bankruptcy. When you file for bankruptcy, there is no restriction or law that prohibits you from buying a house, but it will make the process much more difficult. Not only will you have to follow certain steps, but you will also have to wait for some time before you can apply for a loan or mortgage.
Once you are cleared from bankruptcy, you will be able to qualify for a home loan and apply for it. However, it won’t be as easy as applying for a loan if you hadn’t filed for bankruptcy.
When you are planning to buy a home after the bankruptcy status has been cleared, there are some issues that you will need to address before you can go about it. Let’s have a look at the post-bankruptcy issues that you will have to go through.
First and foremost, there is a certain mandated waiting period that you need to complete after you have been discharged from bankruptcy before you can apply for a loan. The waiting period can differ according to several factors, such as the lenders and creditors you have approached, the laws of the state, etc.
Bankruptcy can damage your credit score and credit report significantly, and this hampers your ability to secure a loan to buy a home. When you file for bankruptcy, it may cause your very good credit score to drop by as much as 200 points. Moreover, if you have a fairly good credit score, it may even drop by 150-160 points. Therefore, you will have to repair your credit score before you can even qualify for a mortgage.
Another issue that you need to address is the requirement of finding a mortgage that is fair and represents your circumstances, financial condition, and requirements. There are several companies and financial institutions that provide you with mortgage loans with different types of interest rates and conditions, and you will have to review all of them before you make a decision.
Lastly, you will also have to recognize the filing rules that apply to your situation, and these depend on where you live, the amount of loan that you need, your credit score, and several other factors.
The waiting period that you must spend before applying for a loan depends on several factors, including the type of loan you want and the type of bankruptcy that you have filed for. Some of the types include Chapter 7 and Chapter 13 bankruptcy. Let’s have a look at both scenarios in greater detail.
Chapter 7 bankruptcy, or liquidation bankruptcy, is the most common type of bankruptcy, and it causes most of your debts to be wiped away. However, it has a more severe impact on your credit report, and it reflects in the report for up to 10 years.
Once your bankruptcy case is discharged, the lenders have a mandatory waiting period between two to four years, after which you can apply for a mortgage. More specifically, VA or FHA mortgage programs require two years, whereas a USDA loan requires a three-year waiting period. Any conventional loan can be applied for after a waiting period of four years.
This type of bankruptcy filing is also known as reorganization bankruptcy, and it involves periodic payments to clear the debt. Since you are paying the debt eventually, this doesn’t harm your credit score as much as Chapter 7 bankruptcy does. Also, the waiting period to apply for loans is also lower in this type of bankruptcy.
If the bankruptcy court rules against you, you will have to wait four years from the date at which the judgment was announced. On the other hand, if your case is discharged, you must wait four years from the filing date and two years from the discharge date before you can apply for a conventional loan. Otherwise, you can apply for a USDA loan within one year, and the FHA and VA loan programs have no waiting period.
In a nutshell, you can buy a home after filing for bankruptcy, and you can do it through a home loan or mortgage. However, there might be several hurdles along the way, especially regarding the bad credit score and the long waiting period. Therefore, it is best if you consult with a professional who can provide you with sound bankruptcy advice before you make this decision.
About the Author: Lyle Solomon has considerable litigation experience as well as substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in California. He has contributed to publications such as Entrepreneur, All Business, US Chamber, Finance Magnates, Next Avenue, and many more.
If you’ve decided that you want to rent out your home or investment property, you may think that all you need to do is publish a listing and, voila! You’ve got a new tenant! Well… renting out your property may not be as simple as it seems. Before creating a listing online, there are a few things you need to consider.
Choosing an amount of rent that is both fair and competitive is important to securing a tenant. First, make sure to research how much landlords are charging per square foot in your area. This will help you get a rough estimate of what you should charge for your property based on its size and the number of rooms.
Next, consider the advantages and disadvantages of your property to adjust the rental price. Some key aspects to review include:
1. The condition of your rental. Are there any rooms that require renovation? Are there urgent repairs to be made?
The general condition of the property determines the overall opinion of the potential tenants. Therefore, rental units with improvements or those that have undergone repairs are more attractive and have significantly higher prices.
Often times, newly constructed rental properties are preferred by the tenants. Modern housing construction is distinguished by high quality, use of selected materials, and better functionality.
2. The location. Is the property near the city center or is it located on the outskirts? Is it close to schools or shopping? In the current market, the location has the most influence on a residential property’s market attractiveness and price.
Location is becoming more and more important for tenants. Being in proximity to reliable public transportation, parks, and public institutions like schools and universities make a property more desirable and are an incredible advantage when it comes to finding tenants.
3. The elevation of the property. Is your rental unit a top-floor apartment with a great view, or is it located on the lower floors where it is easier to access? Does your home have stairs? Tenants have different requirements and preferences, but make sure to accurately describe your property while emphasizing the perks.
By taking all these factors into account, you will be able to come up with a rent amount that is both competitive and fair.
As a landlord, you must put yourself in the shoes of a potential tenant and think about what would make you want to pay a certain price for a rental, and what would cause you to pass. Consider investing money in improving the aspects of your rental unit that most tenants value. Focusing on improvements that appeal to a small demographic will likely not raise the value of your rental.
After you’ve carefully analyzed the condition of your property, you may want to address some of the disadvantages that it has or enhance some of its key selling points. For example, you may decide that the kitchen is in desperate need of improvement or the bathroom should be retiled. Research the investment to estimate the return on investment that you can expect- some renovations may not make financial sense to undertake.
You wouldn’t invite a complete stranger to your house, would you? You can (and should) apply the same logic when it comes to renting out your rental unit. The more you know about your tenants, the better. Proper tenant screening lets you learn about your applicants’ financial, criminal, and rental history, helping you make a more informed decision and thus greatly increasing your chance of rental success.
Tenant screening reports will often help you notice any red flags in the applicant’s application. For example, you will know if they have been sued in the past by their landlord for past-due payments or if they have a long criminal record. Additional red flags could include a long track record of evictions, a low credit score, legal problems with previous landlords, damages, etc.
Having more information about your potential tenants lets you objectively evaluate and compare applicants. In addition, it guarantees that you are handing over legal possession of your property to qualified tenants that are likely to pay their rent on time and keep your property in good condition.
Before renting out your property, you need to ensure that the lease you will sign with your new tenants covers everything that might come under dispute later down the line. In addition, you need to consider that as a landlord, you can be held accountable for everything not strictly outlined in the lease. Here are some things you should add to your lease:
1. Document the state of the furniture and the rooms of your rental thoroughly. This will ensure that you will be compensated if your tenants happen to leave your property in poor condition.
2. Include areas for the names of all of the occupants as well as an occupancy limit. This will help you prevent any unauthorized visitors from staying on your property.
3. Specify the amount of rent, acceptable payment methods, due dates, and late fees. For example, you likely do not want to receive rent payment in cryptocurrency.
4. Clearly state if you allow pets on the property and if you do, what types and sizes. For example, for smaller rentals, you may allow small pets like parrots, turtles, and fish that aren’t capable of damaging your furniture.
5. Make sure to specify who pays the utility bills as well as the repercussions for late payments.
After you have drafted the lease, make sure that it is signed by all parties.
Deciding to rent out a property is a major choice, and there are several factors that you should consider before finalizing your decision. Take the time to research the local rental market, potential improvements, and the return on the investment. While leasing out properties can be a great opportunity for some owners, it may not make sense for everyone.
According to the 2021 National Cost vs Value Report, garage door replacement ranks as the number one most important home improvement project for return on investment. In fact, homeowners that replaced their garage door recouped 94.5% of the cost of the new door in home value. That’s why it’s a good idea to move the garage door near the top of your home improvement list, especially if you want to sell your home within the next several years.
When it comes to upgrading your garage door for increased home value, you need to maximize three factors. These include curb appeal, safety and security, and energy efficiency. If you work to develop these three areas when replacing your garage door, you will see a return on investment with the sale of your home.
Garage doors are an important element of curb appeal for two reasons. First, garage doors can take up 30-40% of a home’s exterior. This means that garage door design shapes a tremendous amount of your curb appeal. Second, in the last several decades, people have been calling garage doors the “new front door.” They have earned this title because a significant number of homeowners use the garage door as their primary entrance. For these reasons, you need to carefully consider design before choosing which will best suit your home.
Modern Aluminum and Glass Garage Doors – Full view glass garage doors with an aluminum frame are one of the most striking options for a new modern door. Each section of the door is fitted with glass panes available in dozens of texture, thickness, and color options. A glass garage door will create stunning visual interest for the exterior of a mid-century, contemporary, or industrial style home.
Carriage House Garage Door in Real or Faux Wood – Carriage house garage doors are a classically elegant option styled after 19th century carriage houses. They feature long panels, decorative hardware, and multi-paned windows. For the material of the door, you also have the option between a custom-built, real wood door or a steel door with a faux wood overlay. Depending on your budget and the style of your home, real wood or faux wood can be customized to enhance your curb appeal.
Steel Garage Doors with Windows – Steel garage doors are a reliable choice for replacement. The metal construction resists water and pest damage and is available in up to three layers of insulation. To upgrade the look of a steel door, adding windows is a great option that improves curb appeal. Windows let in natural light, but also come in frosted or etched glass to maintain privacy and security.
When it comes to home security and family safety, buyers want to see a garage door that protects. That is why upgrading your garage door system with a smart garage door opener increases your home’s value. Manufacturers outfit these smart systems with the latest technology to ensure that your garage door remains secure. Security measures include automatic garage door locks, a live and recorded video feed, and even two-way audio. With these additions, you can monitor your garage door at all times, confident that it is defending your home.
The best part of a smart garage door opener is the convenience it provides for door operation. Through an app on your phone, you will be able to open and close the door remotely and keep a log of activity. For safety mechanisms, there are ultra-sensitive eye sensors connected to an automatic reversal system. This will ensure that the garage door never injures you or a family member.
Energy efficiency is another important factor that buyers are considering when viewing new homes. They want lower utility bills and a home that stays at a comfortable temperature all year. That is why insulated garage doors have become a popular option for increasing home value. In fact, an insulated garage door can increase your home’s value by saving on energy costs and utilizing durable materials.
Both steel and aluminum constructed garage doors are available in two or three layers of insulation. A two-layered door will include a steel front and exposed insulation on the interior, while a three-layer insulated door will have a layer of insulation between the steel exterior and interior. With insulation layers, more is better. These layers work to maintain temperature control for your garage and home while also acting to mediate noise level. With an insulated door, your garage will be comfortable and quiet all year round.
In conclusion, if you are looking for ways to add value to your home, a new garage door is an excellent option to consider. Take the time to find the look and functionality that best fits your home and your needs!
Dark and dreary winters can often lead to higher energy costs as families try to make their living environments more enjoyable. Common culprits include lights flipped on all day to accommodate fewer daylight hours and increased use of the heater, thanks to freezing temperatures. Energy expenses also build up with seemingly small gestures like humidifiers, running taps, and hot water heater usage as you try to find the perfect way to defrost when winter blues take hold. Luckily, there are plenty of ways to lower your energy costs, which means big winter savings.
Though sunlight won’t quite warm you up in wintertime like it does in summer (or like your heater will), it helps. When waking up, be sure to open your drapes so that the sun can filter in naturally and warm the space, even if just in the slightest. When the sun goes down and the day grows colder, be sure to close your drapes to create an additional barrier to protect against the winter weather.
Following the last tip, be sure to use weatherproof features where possible. This can be something as simple as buying special drapes or thicker curtains that are designed to shield your home from the elements. It can also mean sealing up trims around the exterior that are allowing additional cold air to flood the home. For example, if your door does not lie flush with the frame when closed, a tremendous amount of cold air can enter the space. Check out all windows and doors, especially in unused rooms where cold air could seep in without notice. Properly weatherizing your home can ensure that any efforts you use to warm up stay within the walls of your home while adverse weather stays out.
Smart home technology may seem counterintuitive when viewing cost-effectiveness at the surface level. However, the addition can make a major difference in the long run. Smart home technology can detect and adjust things like temperatures and lighting to optimize energy usage in your home. A major benefit of smart home tech is that it can auto-adjust when you are away and adjust again upon return. Depending on the manufacturer, you may also be able to control the system from your phone.
This one may seem like an obvious solution, but it’s surprising how many people do not choose to layer themselves as the first mode for warming up. Taking some time to throw on a sweater and a pair of socks may be just what you need to negate your thermostat on some days. You may even encourage family bonding by squishing together on the couch for movie night or swaying your pets to snuggle up. Extra body heat is a great way to find some comfort on the coldest of days.
While it may seem like the best option for lowering energy costs is to simply keep lights off, it’s not always possible. When in use, it’s important that you have the best energy-efficient tech. Consider overhauling your lighting and appliances for ones that rank highly according to ENERGY STAR. Energy-efficient bulbs and appliances will help to lower your energy bills, even if rarely in use. To take it a step further, opt for LED bulbs. Replacing your light bulbs with energy-efficient options can equate to $50 savings over the course of the light bulb’s life.
When it comes to warming up, sometimes an energy-fueled source is necessary. Choosing to use smaller methods to warm up rather than using the thermostat for the entire home 24/7 can mean thousands of dollars in savings every winter season. Rather than warming up the entire house with the HVAC system, make a fire in the living room and huddle around it. Consider purchasing a heating blanket and space heater for bedrooms at night. These heating methods may not make the entire home toasty, but they’re affordable solutions that warm on a small scale. Take extra care to follow the directions for safe usage of small heating sources.
This tip is perfect for tying up all your options for saving money during winter. If you’re looking to save money, it’s important that you work your way up in solutions rather than diving full-fledged into expensive ones. While it’s important that you’re comfortable during the winter months, affordability should not go out the window. Try to implement energy-saving tips on the smallest scales (meaning least expensive) and weigh it against the comfort level of your home.
Keeping warm during winter can be costly but, luckily, there are multiple ways to maximize efficiency and, in turn, lower costs. Whether it be small changes or drastic overhauls, every bit will help to make winter more affordable. Any of these tips can be modified and adjusted to fit your specific needs! Over time, you will learn what works best based on the size of the home, number of occupants, and your preferences.
For more tips on saving energy year-round, check out Energy.gov’s ultimate guide.
Can you believe that it is possible to live in California today, make an offer on your dream home in Springfield, Missouri tomorrow, and close within a month? The prevalence of remote work and state-of-the-art real estate technology has made it easier than ever to search for homes without concern for geographical limits.
Millions of Americans now work remotely, far from corporate HQ, and sometimes from the flurry and fuss of city life. In fact, during the 2020 Covid-19 pandemic, one in five Americans moved or know someone who moved, especially from big cities. One of the primary reasons for this exodus was affordable housing. People relocated to suburbs and vacation hotspots in search of larger, less expensive homes as more companies became remote-work-friendly.
Buying a home in one state while living in another, whether it be for more affordable living, work reasons, or as a second home, might not be as straightforward as buying in your current state. It can be challenging to purchase in a place you are not familiar with- housing laws, walkability of the community, home maintenance concerns, etc. can be vastly different from one state to another. This article is a step-by-step guide to follow if you are considering buying out of state.
When you are researching different areas, you should ask yourself, “should I prepare for a buyers’ market or sellers’ market?” Today, buyers should expect competition in many markets in North America as it is primarily a sellers’ market. In a sellers’ market, many buyers compete for a limited supply of real estate listings. So, what do you do in these cases? Act fast. Additionally, team up with a real estate agent who is knowledgeable about the local market and neighborhoods you are exploring. An agent is a great asset when it comes to speedy and seamless transactions.
When you’re looking to buy a house out of state, consider what factors are important to you in terms of location and property. For example, are you looking to live somewhere with a more temperate climate? Do you have concerns about the age of the properties in a certain neighborhood? You will want to research as much as possible before making an offer. We recommend researching the area’s job growth, walkability (especially if you aren’t keen on driving often), school system, transport facilities, shopping centers, and parks. There are online tools to make your research easier. For example, you can search for your desired city on Census.gov or Statcan.gc.ca. You can also read reviews on sites like niche.com or bestplaces.net. That being said, an expert realtor is always your best bet for market information. The best realtors know the ins and outs of the local market, should be able to answer any questions you may have, and point you to reliable resources.
A trustworthy buyer’s agent is an indispensable part of your team when buying a house out of state. Read testimonials from past clients and ask the agent about his or her experience, especially as it relates to out-of-state transactions. Experienced agents are great resources when it comes to recommending other reliable professionals such as home inspectors, contractors, moving companies, etc. They also save you time by curating a list of homes that match your criteria and price range.
When you’ve found the home you desire, your buyer’s agent will advise you on how to negotiate and what contingencies to include in the contract. Be aware that some states allow dual agency, so it is possible that your agent could represent the home seller as well. Although this is not the norm, it is rarely a problem due to the high standards expected of real estate professionals. However, if you have concerns, you should ask your agent in advance.
While planning your move, you should contact a relocation expert to make your out-of-state transition easier. Their services are often free to the mover. They get paid referral fees from vendors and moving companies they refer. Relocation specialists can help with a variety of tasks, such as:
How do you find a relocation expert? We recommend checking out sites like PODS or Realty Executives Relocation. You can also search for experts in your city with CRP (Certified Relocation Professional) or GMS (Global Mobility Specialist) designations.
You need to know your target area’s real estate laws, not just from online sources but also from your agent and other property owners in the area. Some laws are specific to the local neighborhood. For example, you must purchase flood insurance in some Florida counties. But ideally, you want to know the state’s laws regarding:
Instead of depending on online sources, you could consult with a local lawyer to help you understand what applies in your target state.
In the last five years, real estate has felt the positive impact of disruptive technology. Right now, buyers can view drone footage of homes that are 2000 miles or more away. Documents can be signed online, making it easy to close on out-of-state real estate without leaving your current state. You can view homes through mobile apps and access unique information on getting mortgages.
Physical viewing can be replaced with 3D Matterport scans, 360 virtual tours, and videos. You can take advantage of Facetime and Google Hangouts to converse with your buyer’s agent from any part of the world. With technology, you can expedite much of the home buying process. If your real estate agent isn’t familiar with using some of these tech tools for home buying and selling, that’s a big warning signal.
Now it’s just a matter of making yourself credit worthy.
Today, you don’t need to show up to view homes in person. You can check out videos and virtual tours of homes online. This is why the percentage of home buyers making sight-unseen home purchases when buying a house in another state increased. Redfin estimated that 33% of home buyers bought homes sight unseen in 2020. This means that they bought their home without physically touring the place.
Buying a house in another state sight unseen is risky, especially in a hot market, where you may be compelled to waive the inspection. Online information can be incomplete, and the property may include some flaws that could be costly to repair in the future. It’s essential that you go and physically check out the property- especially if you are planning to waive the inspection.
If you cannot physically travel to the property in person, ask a friend or family member living in that state to accompany your agent and take videos of the property and surrounding area. These videos will show you how the property looks in real life. Remember, most real estate professionals are more than happy to do this on your behalf!
A home inspection contingency allows a buyer to back out of a transaction if there are costly repairs uncovered on the property or if the seller is unwilling to make requested repairs. Some fixes are mandatory, like removing mold or electrical hazards. However, many minor fixes can pop up on an inspection report (like a leaky faucet). It is common for a seller to resolve the issues from the home inspection or negotiate which items will be fixed to keep the sale process rolling. Major defects like roof leaks or faulty electrical wiring are expensive to fix and will affect your safety in the home. It’s important to detect these early to make an informed purchase.
Ideally, you should be present during the inspection. The inspector would be able to reveal to you directly what they found and how critical it is. You’ll also be able to ask questions about any problem the inspector reveals. The typical inspection lasts two to three hours and would reveal:
Regardless of whether you attend, expect a full inspection report with photos so you have a better grasp of the condition of the home.
Nowadays you can close on a home from out-of-state since closings can be handled digitally. Remote online notarizations, remote ink-signed notarizations, and mobile notary services are being used in the real estate industry today to speed up closings.
For documents that require physical signature, instead of traveling over, those could be sent via direct mail. Your real estate agent or relocation expert should be able to recommend a good title or escrow company and assist you through the closing process. Note that closing may take a bit longer than you expect as banks may require extra paperwork or sellers may request an extension.
It’s recommended that you get preapproved for a mortgage before relocating. This initial pre-approval letter shows sellers and real estate agents that you are qualified to make a large financial investment. In many cases, buyers may even need to supply proof of pre-approval before visiting properties.
However, even with a pre-approval letter, it doesn’t mean your financial situation won’t be reassessed before final approval. A lender primarily wants to know that you can repay a loan regardless of where it is located. Typically, the lender will want to see that you have job stability, solid credit, and money for the down payment. This means that your lender will request information like W-2s from the last two years of employment, copies of bank statements from the previous 60 days, and more.
Buying a home out of state is not only possible but can be exciting. However, you need to build a team of trustworthy professionals. Realty Executives’ network of experienced buyers’ agents and relocation specialists can help make your move to any state a breeze.
Author Bio: Agnes A. Gaddis is a specialist writer for real estate SAAS companies. She is a contributing writer for Credit.com, CXL, Getresponse and Inman news. She’s a big fan of caramel coffee and mystery novels. Get in touch with her on Twitter @Alanagaddis or visit her website, agnesgaddis.com.
