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By Tara-Nicholle Nelson | Broker in San Francisco, CA

7 Things To Do In December If You Want to Buy or Sell in 2013

True Confession: I set a handful of New Year’s Resolutions every single year. Why? They work for me - I’ve got probably a 75 percent success rate. Some of this is in the science of setting the Resolution the right way in the first place, including the preparation.

Here’s my secret: I always get started in December. I like to use my holiday down-time to plan things out, gather up the resources or do the research I need, figure out what my challenges are likely to be and make a plan to deactivate them, set appointments with any professional I need to get on board to make my goals happen and even get some momentum built up with my new eating program, workout plan, financial goals or career endeavors. 

I aim to be like that old Marines commercial - by January 1, I’ve already done more than most Resolution-setters do all year!


And I’d like to help you do the same.  Let’s boost the chances that your home buying or selling goals for 2013 will be successful by devoting a little time in December to getting things lined up and in motion.  Here is my short list of tasks I would put on my December to-do list if I wanted to buy or sell a home next year:

1.  Handle your credit horrors.  Maybe you don’t have any credit horrors - kudos to you! But let’s get real, this year will be a year in which many post-foreclosure, post-bankruptcy, post-layoff Americans will find themselves sufficiently recovered, post-recession, to get back into the real estate market and buy a home. If you count yourself among the number of 2013 wanna-be buyers who experienced a financial glitch of any degree during the recession, December is the right time to start pulling your credit reports and doing a damage assessement and control campaign.

  • Visit AnnualCreditReport.com (the only website through which you can access your government-mandated free reports) and order your own credit reports from all three reporting bureaus.
  • Review them all, line-by-line, checking for errors and discrepancies. It is extremely common for paid-off accounts to still be reporting as delinquent, for foreclosed mortgages to still be listed as open and past-due and for bills that were settled in collection to be reported as behind. Follow the instructions to dispute any such errors you see.
  • When you talk with your mortgage broker (see #4), go over the reports with them again, getting a read on precisely when your foreclosure, bankruptcy, delinquencies, gaps in employment or other credit woes will be sufficiently “seasoned” (i.e., long ago) to allow you to qualify for another loan, and get their advice on any action items, like paying a particular debt or set of credit cards down to $X amount will be important for you to complete before you try for a legitimate pre-approval next year.

In fact, this last point applies to everyone - whether or not you think you have any dings on your credit report. It’s essential to get clear on any of the work you’ll need to do to optimize your credit standing now, as the payoffs, disputes and other credit work that can move the needle on your score may take some time.

2.  Purge.  It’s time.  Time to get rid of all that things you know qualify as clutter - all of the stuff you know buyers won’t want to see when they tour your home, and all the stuff that you won’t want to move to your next place. If you donate your junk before the end of the year, you might be able to get a receipt and deduction for the taxes you file in 2013.  And tax break or not, getting all that stuff out of your attic, your closets, your shelves and your rooms will clear up loads of mental space and energy, minimize some of the overwhelm latent in the prospect of moving - and might even surface a few things you can sell to boost your down payment savings or your home staging budget.

Clutter clearing gets overwhelming when you simply lack the time, in the face of everyday urgencies, to invest a few hours or days to go deep, pull out all the minutae and memory-laden How better to spend those wintry days between Christmas and New Year’s than to clear out the clutter in your home - and your mind?

3.  Plan your prep. If you’re thinking of selling your home in 2013, now is a great time to start organizing your list (or spreadsheet, or Evernote file) of home preparation tasks that need to get done before you put the place on the market. Things like painting, carpeting, landscaping and other preparation tasks can be less taxing and less disruptive to your life if you have plenty of time to collect bids, sock away the cash to cover the costs and arrange projects at your family’s convenience or during off-seasons, when contractors might be wiling to charge a bit less.  

Talk with your agent before you put a plan in place; they can help you make good decisions which projects to do (and which to forego), as well as choosing finish materials and colors that will appeal to the broadest segment of buyers - to boot, they often can refer you to the most cost-effective contractors in your area for these sorts of pre-listing projects.

3.  Save. More. There’s no such thing as saving too much cash up for your down payment. If you have a home to sell, you have no idea how much you’ll take away from that transaction until it closes. And even if you’re currently renting, having maximum savings set aside allows you maximum flexibility in terms of selecting homes, competing with other buyers, covering closing costs (which can run as high as 3-4% on average for an FHA loan) and even handling post-closing repairs, appliances and property personalization.

4.  Collect your gift money.  Buyers who get gift money from a relative to apply toward their down payments are often subject to seemingly strange and definitely invasive documentation requirements - the most onerous of which is to produce copies of the gift GIVER’s bank accounts proving the source of the funds. If you know Mom, Dad, Granny or Aunt Bernie is going to chip in some cash toward your down payment in the Spring, consider asking them to go ahead and give it to you now, so you can put it in your own accounts and begin “seasoning” it as yours, which will help you avoid all those documentation demands.  

Your benefactor should check with their financial and tax advisors to be sure the gift is structured so as to avoid any tax implications, before they give it.

5.  Connect with an agent and a mortgage broker - stat.  Don’t wait until the month before you want to buy or sell to ring up your trusty agent and initiate the conversation. Ask around for referrals or find an agent here on Trulia Voices now, get a mortgage broker (or 3) on the phone, and ask them to help brief you long-lead topics like:
  • Whether your market is a buyer’s market or seller’s market, and how that translates into what you can and should expect when you plan to buy or sell next year
  • Whether there are any area-specific timing issues you should factor in as you map out your timeline
  • What - given the specifics of your financials, your savings, any past credit or other issues you have - you should be doing now in terms of paying bills down, settting savings targets, and such
  • What changes, if any, you should plan on making to your property before listing it
  • What sort of property you can get for your money in the areas you’re targeting as a buyer, and what kind of money you can expect to command for your property in your local market (this, obviously, will change over time - even over the few months or so between now and the time you list your home, but it still helps to have a general ides of the current market values).

6.  Go Open House hunting.  If you’re selling next year, it’s essential to get a real-life read on what the competition’s like, everything from what sorts of houses in your area are listed at various price points to what your target buyers are going to be seeing on their way into or out of your house.  There’s no reality check on your own home’s preparation and staging - its overall readiness for listing - like putting on a buyer’s shoes and taking a tour through similar homes in your area.  And there’s no time for this reality check like right now: when Open Houses are still a-plenty, you have more time to attend them, and you still have plenty of time to process your takeaways and incorporate them into your own property preparations.

Open House hunting is also helpful for those who have home buying on their 2013 to-do lists.  It’s the only way you can start understanding how to decipher the listings you see online into a reality-based set of expectations about a property.  It’s also the best way to get indoctrinated deeply into the realities of what you get on your local market at various price points, and it’s the most impactful strategy for starting the process of negotiating compromises with your co-buyers.

7.  Think hard about your deductions, if you’re self-employed. In the wake of the recession, most mortgage guidelines for self-employed borrowers changed, so that your income for purposes of qualifying is assumed to be the average of your last two years’ Adjusted Gross Income, as reported on your federal income tax returns.  That means lenders calculate your income after all your business-related and other deductions, not before.

So, yes, this does mean that maximizing your deductions may impact your ability to qualify for a home loan in 2013.  But them’s the breaks - better to know this before you file your tax return, in the event it might change something about how you file.  Loop your tax advisor, business bookkeeper and mortgage broker into your decision-making process about your 2012 taxes before filing, if you’re self-employed and plan to buy or refinance your home next year.


ALL: Whatever your 2013 goals are, I've put together some 'gifts' to help you get a head start: 12 lists of the best books, blogs and videos to make ANY change on your personal Resolution list. Click here to follow my 12 Days of Transformation.

ALL:  You should follow Trulia and Tara on Facebook!    

Comments

By Timothy M. Garrity,  Wed Dec 19 2012, 16:06
Great stuff as always, Tara.

Timothy M. Garrity - REALTOR | http://PhillyUrbanLiving.com
By Pskjak,  Thu Dec 20 2012, 08:04
When does the tax for Obama Care when selling a house go into effect. How will it be calculated???
By LJC1,  Thu Dec 20 2012, 10:56
Don't you mean activate your plans, not DEactivate?
By Fred Strickroot,  Thu Dec 20 2012, 10:59
Great suggestions! Thanks Tara.
By Don Bass,  Thu Dec 20 2012, 11:24
Tara,

It was an Army commercial but we get it. lol.
By Helen Oliveri,  Thu Dec 20 2012, 11:49
Great tips, Tara.
By Kate,  Thu Dec 20 2012, 11:55
The point about gifting money is very true. It's not just "give me 5K". It's a real pain in the butt.
By Tonya Hurt,  Thu Dec 20 2012, 12:11
As a Realtor I can recommend that many homebuyers need 6 months ramp up time to prepair their financial house and taxes to buy a house. I always recommend looking at a few homes even if you are 6 months away. It will keep you motivated and give you an idea of pricing the market. http://www.tonyahurt.com
By Linda M. Bagley,  Thu Dec 20 2012, 12:32
Thanks Tara. Great tips!
By MCD,  Thu Dec 20 2012, 12:48
Tara,

I think it is truly refreshing that you stated "contact a Mortgage Broker." I have been a Mortgage Broker for 13 years and I truly believe we are the best avenue for anyone in need of a mortgage. BTW, I worked for big banks prior to being a Broker. Nice job!!! Happy Holidays!
By Deckerdowns,  Thu Dec 20 2012, 13:00
@mtrob: most Americans do NOT want socialism! The lessons of Germany, Russia, Italy,and over 100 other "experiments" into socialism proved that it it doesn't work for anyone except the first generation of citizens. I keep hearing the media advocating socialism, but that is because it sells newspapers, not because it is good for anthing. The above mentioned countries managed to maintain socialism for upwards of 75 years max, then disintegrated.
By Deckerdowns,  Thu Dec 20 2012, 13:02
While the American Republic has maintained it's system for 240 years.
By Tim Hunnicutt,  Thu Dec 20 2012, 13:23
Thank you, Deckerdowns. The most successful country in the worlds history (America), the Light of the World that others flock to, is built on Christianity and capitalism. No need to argue opinions, learn from history, mtrob.
By Mike Oslo,  Thu Dec 20 2012, 13:25
I would love to take your advice on #5, but its not that easy finding a real estate agent that will do anything more than sending you a short copy/pasted courtesy email if you aren't moving for 5-6 months, let alone finding one to give you honest advice about neighborhoods and markets.
"Get in touch when your ready to move" "Call me when your ready to put your house up" etc..
By Nancy Demarkis,  Thu Dec 20 2012, 14:01
The selling your home tax for the AFA goes into effect in 2013 however will only affect people making over $250,000 and more for couples. That is net income not gross. Then it will only be on the amount over $250,000.

http://www.forbes.com/sites/beltway/2012/04/02/there-is-no-obamacare-tax-on-most-home-sales-really/
By Sukh Sagar,  Thu Dec 20 2012, 14:08
I still feel that next year is again good time to buy because after some years (unless there is already too much supply) there will be shortage of land and houses. So the prices should continue to increase for at least another seven years or so. My feeling is after that many won't be able to afford.
I would like to see what people think about this.
By Michael Adams,  Thu Dec 20 2012, 14:27
@Mike Oslo. As a central NJ Realtor, I have no problem working with serious buyers with plans to purchase 6 months or more. All that I require is commitment and loyalty from the buyer. Overall, these are great tips. http://about.me/michael.adams
By Paulette Jenkins,  Thu Dec 20 2012, 16:42
look at assessed value. not all lots are the same use imagination to sell ,don't talk people into giving their place away, makes it bad for the properties surrounded around a cheap priced lot, this realtiy company, is lazy does not individual each property as unique. just looking for a quick sale, the seller gets ripped of f. making colorado land look cheap and not worth a whole lot, giving impression don't live here. come on increase the prices be proud of your colorado land, each lot is very special.
By Anthony Mccartney,  Thu Dec 20 2012, 17:16
Mtrob you are mostly correct but most Americans want social programs to act as a safety net. Not full communistic socialism which Deckerdown is confuseing us with.he needs to do some more studying on the subject before making his rediculous remarks.
C Marks
By Stuart3,  Thu Dec 20 2012, 17:56
Very good article with a lot of good ideas. I would like a realtor to come out and do a walk thru and give me specific ideas on what I need to get done before listing the property. I tried that last year and all they told me was "we will have to look at it before we list it." I wish realtors would put forth some effort before they get their fat paycheck.
By David,  Thu Dec 20 2012, 18:41
I used to be a Realtor and enjoyed it very much, But it takes time to "coach" homeowners and buyers who have not at least educated themselves about the basics of buying and selling. Also, if you start holding their hands they will introduce you to others that want their hands held....while the apathetic sales agents are making sales. Dont ask an agent to do something you wouldn't do yourself.
By George Grayson,  Thu Dec 20 2012, 21:07
Selling next year, but not using an agent. Successfully sued one this year. Never again.
By Itsnotme1207,  Fri Dec 21 2012, 00:33
good stuff and i did all this already. i hope i sell in 2013, so that i can then buy as well.

http://www.trulia.com/property/3006972280-1802-Twin-Oaks-Dr-Van-Buren-AR-72956
By Nicole McNeil,  Fri Dec 21 2012, 05:45
Once again, nicely done Tara!
By Wil Roan,  Fri Dec 21 2012, 10:44
Thanks Tara for the helpful Tips, I will be sharing some with my new market in New York
Happy and Healthy to you

Will
By Pat and Steve Pribisko,  Fri Dec 21 2012, 15:41
Tara, great blog on planning for the 2013 real estate year!
By Antalec,  Fri Dec 21 2012, 21:22
Mtrob, I worked 2 jobs paid my own way through college, drove a piece of crap car, had cheap apartment and lived well below my means for many year and I saved all my money to start my business which I worked over a hundred hours every week in.

I'd also bet that you have a newer phone, bigger tv and nicer cloths than me. Because I still live Conservatively so I can keep the money I earned. I'll be damned before I give it up to a bunch of under achieving slouches who want to have a quality of life as good as mine with out having done anything to earn it.

FYI the top 10% of earners pay 70% of the tax bill already!
By Kerington,  Sat Dec 22 2012, 00:41
Okay I know this isn't going to be popular with many but. I am in the mist of purchasing/refinancing now. I reading the fine print on commitment offers and I see the Mtg Brokers fee is 2points of the financing. Somehow this seems outrageous. I actually have decent credit. I am organize so there isn't a massive amount of work to get my document in order for underwriters. So what the hec justifies this rate. My loan is Jumbo.

PS I can confirm the validity of the Helpful tips. I have several properties it has taken me 3 years to get back into a position where I could accomplish the simplest purchase. It involved obtaining a bookkeeper, new accountant fewer deductions and other things which all boosted my income and my tax liability ouch! I reside in the US Tax Capital NY. All taxes here are double OUCH!!
By Mary E. Weaver, Patrick H. Weaver,  Sat Dec 22 2012, 04:10
We just posted this on Facebook, great advice, especially on the Credit Check. We have had our share of Short Sales, near misses with Foreclosure and stressed Buyers, Here's to a future of smarter buying and selling. The Weaver Team., Central New Jersey Real Estate help is here.
By Austen Rosenthal,  Sat Dec 22 2012, 10:28
Great ideas! Getting started in December-brilliant!
By Bill.hawkins1,  Sun Dec 23 2012, 14:02
Very good advice. Especially about consulting with the pros BEFORE listing or hunting. One professional I also suggest is a home inspector. If you are buying, you need to know what to be looking for before you get emotionally invested in a property. And if you are selling, you need to know what your buyer's inspector is likely to find to you can fix it BEFORE they find it.
By Margproperties,  Mon Dec 24 2012, 02:01
Great article and I found a lot of ideas. And a great way to start 2013
By Darren,  Mon Dec 24 2012, 02:39
that great tara
By Hjf9031,  Wed Dec 26 2012, 14:06
Buy your contract for deed. http://www.notebuyerservices.com
By Hjf9031,  Wed Dec 26 2012, 14:06
nice site
By Jackhhampton,  Thu Dec 27 2012, 01:10
Hi Tara-Nicholle Nelson, really this all small clue can help to buyer or seller in 2013. Nice tips shared with us
By اسلام حسين,  Fri Dec 28 2012, 14:38
thank you a lots
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By Brandy Heales,  Mon Jan 21 2013, 15:12
Nice tips....I shared with several clients!
By Tony Cabral,  Wed Sep 25 2013, 17:59
Great information lets send it to all of the First Time Home Buyers at least once every Month.
Sincerely
Tony Cabral Realtor
Metro west Mass.
tcabral@hammondre.com

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