Nov 2021 • May 11, 2022

Hard vs. Soft Credit Inquiries

by Matt Davies

When you get a copy of your credit report, you’ll see more than just your current and historical credit accounts. You’ll see your payment history, including any payments made more than 30, 60 and 90 days past the due date, along with your account balances and credit limits. You’ll also see credit inquiries.

A credit inquiry is simply an instance where you or a third party has looked at your credit report. Some credit inquiries can have an impact on your overall credit scores, but not all inquiries are so consequential. There are two types of credit inquiries – a hard and a soft inquiry.

Soft inquiries are common and somewhat frequent. The most common type of soft inquiry is one where a creditor is curious about offering you a new credit account, so they check your score to make sure you qualify. If you’ve ever received an offer for a credit card that’s preapproved, that company has done a soft inquiry on your report.

Other types of soft inquiries include potential employers checking your credit, or when you check on your own score. It’s important to understand that soft inquiries have no impact on your credit, but they will be noted on your report and can be done without your consent.

Hard inquiries occur when you apply for a loan, credit card, or mortgage and you’ve given written consent to a creditor to check your scores. Several hard inquiries in a row for a credit card can negatively impact your score, as this type of action may give the impression you’re scrambling for credit ahead of some financial hardship. Multiple hard inquiries in a row from an auto, mortgage, or student loan lender are less likely to have a negative impact. In these instances, reporting agencies are more likely to assume you’re “rate shopping,” and the multiple inquiries are viewed as a single inquiry.

Hard inquiries stop impacting your score after a year’s time, but they will remain on your credit report for 24 months. While inquiries do play a part in assessing an individual’s credit, they represent only about 10% of what goes into a credit score. Things like making payments on time and your overall debt burden have a far greater impact on the health of your credit reputation.

Blog post courtesy of Market Leader Monthly Newsletter ~ 2021

Oct 2021 • May 11, 2022

Putting Roots Down This Fall

by Matt Davies

Spring is often thought of as the best time for planting, but planting in the fall can offer some significant advantages for your plants. Below are some reasons why fall is the best time for planting perennials, trees, and shrubs.

Perfect Planting Weather
The cooler weather of fall is easier for plants and gardeners alike. The ground isn’t dry or frozen, and temperatures are mild and enjoyable. Your plants aren’t stressed out by extreme conditions, so they acclimate to their new environment quicker. Plus, you can tend to them without excessive sweating or sunburn!

Flexibility and Rampant Roots
There is no need to rush to prevent plants from drying up in their containers or delay because the ground is too hot. You can plant whenever is convenient for you.

As for trees, planting them when they’ve lost their leaves is actually better because they won’t have to exert energy growing leaves and can focus on growing roots. This is the biggest fall advantage – plants can grow better roots, which will allow for gorgeous foliage and blooms come springtime.

Lower Maintenance, Lower Bills
Cooler weather means less frequent watering. You can relax with more free time, a lower water bill, and the knowledge that your plant babies will not shrivel and roast in the heat of the day.

A good tip for planting in the fall is to water the plants in their pots a few hours before you transport them to their new homes. This lets them soak up water and be better prepared for planting. Pre-water the hole they’ll be placed in as well.

Devise Your Plant Plan
Fall allows you to see sparse areas of your garden that need more foliage. It is the best time to plan out next year’s garden and get a head start on planting. You’ll know exactly how the other plants look at full bloom and how much space they take up, allowing you to add pops of color where you know you need it.

Supply Sales
Gardening supplies are typically at their peak prices in spring, but prices drop in fall when shops need to clear space and some even close their business for the winter. Fall is a great time to shop for non-perishable supplies, seeds, and even some bulbs. You can often get gardening tools at discounted prices along with some fertilizers, netting, pebbles, and similar things. Watch out for sales on pots and containers too!

Blog Post Courtesy of Market Leader

September 2021 • May 11, 2022

Demo Day the Responsible Way

by Matt Davies

Thanks to HGTV, “Demo Day” is often thought of as the fun part of renovation and construction. Owners and celebrity reno stars wield sledgehammers and power tools while kicking down drywall, tearing out cabinets, and throwing building material from second-story windows. The carefree assault on a dated home makes demolition look easy and fun, but there’s more skill and expertise involved then you might think.

If you are considering a DIY demo to save money before a renovation, make sure you know what you are getting into, and you are prepared for any surprise problems that may arise.

Safety First: Ensure you have enough safety equipment — steel-toed work boots, safety glasses, hard hats, masks, and work gloves for everyone in your crew. Full coverage, snug-fitting shirts and pants provide protection from splinters, itchy fiberglass, and rusty-nail scratches. Keep a first aid kit handy, and make sure your phone is fully charged in the event of an emergency.

Hidden Hazards: Is there asbestos in your carpet padding or lead in the wall paint? If your home was built before 1978, there’s a good chance some paint in the home will contain lead. Asbestos is trickier – it’s been banned in some common building materials, but is still used in others. When in doubt, test flooring, walls, ceilings, and pipe wrappings before beginning work. The risks from asbestos arise when it is damaged or disturbed and the asbestos fibers become airborne, so wearing a proper respirator and following the correct procedures is crucial.

Work Smart: Does everyone involved know how to use power equipment and heavy tools like crowbars and sledgehammers? Each helper should be cognizant of what is happening around them when the swinging and smashing starts.

Secure The Site: Is the worksite safe? Shut off power when working on or close to electrical systems. Turn off the water main when plumbing is involved. Sites should be secured to keep kids, pets, thieves, and curious passers-by out. Make sure to display “No Trespassing” signs as well.

Plan For Success: Take a close look at the structure and materials to be demolished before you start anything physical. Which way do the joists run? Which walls are structural? Which walls have water lines, electrical wires, or gas lines behind them? Is there anything you want to protect and preserve? If you can’t identify structural components, then you certainly shouldn’t remove them. Consult a building professional (architect, engineer, contractor) before smashing into your walls, and check with your insurance broker to confirm you are covered for all liabilities before you begin.

Remember the big picture: These are just a few of the things you should consider before beginning a DIY demo. Every project is unique and comes with its own unique conditions and challenges. Take the time to talk to contractors, architects, interior designers, and real estate professionals to learn what should be done before you start, that way you don’t end up demolishing your dreams and your budget!

Blog Post Courtesy of Market Leader 2021

September 2021 • April 19, 2022

30 or 15 Year Mortgage? Those aren’t your only choices.

by Matt Davies

If you’re brand new to the wonderful world of home loans, you might be a bit overwhelmed by how many different types of financing options are really out there. Both primary loan types (fixed-rate and adjustable-rate) have many variations, so how do you know which one is best for you?

Let’s start with Fixed-Rate Mortgages. The most popular loan in today’s marketplace is the 30-year fixed. This is a loan paid over the course of 30 years, with a fixed interest rate, meaning you’ll pay the same interest rate in year one as you will in year 30 of your mortgage. Your payment may change due to insurance or taxes, but generally a 30-year loan is seen as a practical option due its stability, simplicity, and month-to-month affordability.

So, what’s the attraction of the 15-year-fixed? A 15-year loan will have slightly lower interest rates compared to a similarly priced 30-year loan, but since the term is so much shorter, you’ll pay much less in interest over the life of the loan. The tradeoff is that the monthly payments will be much higher because the term isn’t stretched out over 30 years. If a buyer’s goal is to save as much as possible over the long term, and they can afford the steeper monthly payment, a 15-year is a good choice.

If you’re interested in a 15-year term but the high monthly payments make you wary, consider a 20-year or a 25-year term. These two choices provide a “middle of the road” option when it comes to balancing monthly payment and long-term savings.

The other primary loan type is the Adjustable Rate Mortgage (ARM). With an ARM, your interest rate will change annually (or sometimes semi-annually) based on the market rates and your loan agreement.

Today, most ARM loans for property buyers are really Hybrid ARMs. These types of ARM loans feature a fixed initial period where the interest rate is locked, with rates adjusting on a regular basis after that. For example, a 5/1 ARM has an initial fixed rate period of 5 years, with the rate adjusting annually (the “1” in 5/1) after that. 3/1, 7/1, and 10/1 are other common hybrid ARMs.

With an ARM, the interest rate during the initial period will be much lower than that of fixed rate loans. The downside is that after the initial period, the rate will adjust based on the index the loan is tied to and most often this means an increased payment over time. ARMs can be a really good choice for a handful of prospective borrowers:

Borrowers who are confident in future earnings: If you’ve recently graduated from medical school (congrats!) or you’re the beneficiary of a trust that’s not paying out yet (also, congrats), a hybrid loan will allow you to qualify for a larger loan despite your current financial status, as you’ll be able to afford the rising rates later on.

“Here for a good-time not for a long-time” homeowners: If you’re confident you’ll be in the home for a very short period of time (say, less than 5 or 10 years), you can enjoy a super-affordable interest rate and sell the home before the end of the initial fixed rate period.

You plan to pay off the loan fast: Let’s say you’re downsizing to a smaller home but haven’t received funds from the sale of your previous home. An ARM will allow you to enjoy a low payment until your cash is disbursed, at which time you can pay off your ARM before the end of the initial fixed-rate period.

~Blog Post Courtesy of Market Leader 2021

April 2022 • April 18, 2022

Disaster Prep: Do You Have a Home Inventory?

by Matt Davies

Disaster can strike anytime, anywhere.

Last year, for instance, aside from experiencing a pandemic, the US declared 58 disasters which caused billions of billions in damage, according to the Federal Emergency Management Agency. (FEMA)

Especially during the aftermath of hurricanes, we learn just how many Americans lack hazard insurance. Those who did have it faced the challenge of trying to figure out how to tally up their losses. It’s not easy to recall everything one owns, especially when confronting devastation. Then, there are the other losses a homeowner might face, such as those from theft and fire.

Being prepared will help to avoid delays in receiving an insurance payout should you someday face a disaster.

Dig Out your Homeowner Insurance Policy
If you’re like many of us, it’s still in the sealed envelope in which it arrived in the mail, shoved into a box or bin of “important papers.”

Get to know exactly what coverage you have and how to submit a claim should the unthinkable happen.

Then, create an inventory of your belongings. Many people choose an old-fashioned checklist (such as the one offered by NYCM Insurance or at Allstate.com), while others use video (narrated with the necessary information), or photographs labeled with the information that insurers require when considering a claim.

Information required by insurers:

Each item’s description and the quantity (ex: 2 sterling silver candlesticks)
Name of the manufacturer (ex: Tiffany & Co.)
Make/model/serial number
The date (or estimated date) of purchase
Where the item was purchased
The appraised value of each item (or an estimate)
If you can’t find the written appraisal for any item, jot down the name and contact information of the appraisal company and the date the items were appraised.

Keep your Inventory Safe
It’s important to find a safe spot, off-site, to store your inventory. You may choose to store it in the cloud with a backup service or save money by backing up the information to a USB drive and then placing it in a safe deposit box.

Tips from the Experts

The Insurance Information Institute recommends that you include possessions that are stored somewhere else (like a storage facility) in your inventory.
Keep all receipts and copies of appraisals with your inventory.
Keep a count of each item, such as “5 long-sleeve shirts, 7 pairs of sneakers…”
Break your inventory-taking into chunks. If you try to do too much of it at once, you may become overwhelmed and drop the project.

Finally, run the inventory by your insurance agent to ensure that you have enough coverage. The time to get clear on your insurance coverage is before a disaster strikes.

Monthly Newsletter courtesy of Market Leader 2022

April 2022 • April 18, 2022

How Does Inflation Affect Home Prices?

by Matt Davies

Real Estate can help protect you against inflation.

If you’ve followed the news lately, you’ve probably seen quite a bit about inflation. The consumer price index jumped 8.8% in February, bringing the total increase over the last 12 months to 7.9% – this is the largest annual jump in the last 40 years.

So, how does all of this affect the real estate market?

The Inventory Issue
Interest rates have been kept low for so long it’s created a bubble for everything and not just the housing market. There’s also inflationary pressure on the housing market because of limited inventory. Limited inventory stems from a myriad of problems in the industry.

First, many homeowners aren’t putting their houses on the market. This is due to factors like lockdowns, but also the fear they won’t be able to find a new home to buy.

There are construction delays due to supply chain bottlenecks as well.

Low inventory means buyers are often having to put in bids well above asking to get properties, creating a frustrating situation, to say the least.

Other Inflationary Effects On Real Estate
There are a few other ways inflation can influence how much you pay for a home.

First, inflation is a reference to a rise in the price of everyday goods. Those everyday goods are used to build homes. If the price of things like lumber and appliances go up, then the builder will pass those additional costs onto the buyer in the form of higher prices.

In some cases, however, inflation can have oppositional effects on real estate. If inflation rises, then theoretically, money should become more expensive to borrow. People borrow less of it, so there are fewer home purchases and that can lead to lower prices.

Real Estate Can Protect You Against Inflation
While real estate can be negatively affected by inflation in the form of higher prices, it can also protect you from its effects.

As home prices go up over time, you’re lowering the loan-to-value of your debt. You’re simultaneously increasing your equity, but your fixed-rate mortgage payments will stay the same.

If you’re a real estate investor earning income from rental properties, then you’re likely going to be able to charge higher rent when inflation is up. You can adjust the rent while the mortgage stays the same.

The relationship between housing and inflation can go in both directions. If you’re a buyer right now, inflation isn’t good news, but if you own a home, it can be one of the best ways to protect yourself against rising prices.

Blog Courtesy of Market Leader 2022

August 2021 • March 28, 2022

Winter is Coming… Again

by Matt Davies

As Ben Franklin once said: “In this world, nothing is certain but death and cleaning your gutters before winter to prevent ice dams”. With that, here are five fall home maintenance activities to start thinking about in the coming weeks.

Check your chimney
Make sure everything is in order before the first fire of the season. “Creosote buildup causes chimney fires,” says Family Handyman. “You should have your chimney professionally inspected or cleaned after every 70 fires. Don’t remember the last time you had it cleaned by a pro? A quick way to tell if your chimney needs cleaning is to run the point of your fireplace poker along the inside of your chimney liner. If you find a 1/8” layer (or more) of buildup, call a chimney sweep.”

Check your roof
Storms, wind, and other weather conditions over the past year could have done damage that you’re not aware of. Don’t wait until the first heavy snow to find out you have a leak. If you’re not comfortable on a ladder or just want a professional eye, a pro roofer will typically charge you less than $100 to check it out.

Seal it up
There are three important reasons to make sure your home is air tight: 1) Keeping moisture out; 2) Keeping critters out; 3) Keeping warm air in. Fall is when pests begin to look for places to ride out the winter, so make sure your exterior is free of gaps and holes that will allow for unwanted houseguests.

Sealing up holes and cracks can also make your home more efficient—saving you money and keeping you warm and cozy. In most cases all you need is weather stripping and caulk.

Disconnect garden hoses from faucets
As soon as the weather dips, it’s time to disconnect and drain hoses. This simple task can potentially save you a lot of heartache later. “Leaving hoses attached can cause water to back up in the faucets and in the pipes just inside your exterior walls,” says HouseLogic. “If freezing temps hit, that water can freeze, expand, and crack the faucet or pipes.”

Also, make sure to drain your hoses before storing them to prevent cracking during the cold winter months.

And, of course, clean your gutters
Depending on your climate and the surrounding foliage, you may need to clean your gutters more than once throughout the fall. Your gutters are your best ally when it comes to moving moisture away from your home, so it’s critical to keep them free of obstruction.

Blog Courtesy of Market Leader ~ 2021

August 2021 • March 28, 2022

To save or to splurge? That is the question.

by Matt Davies

When decorating your home, saving money is great. Who doesn’t love finding a deal on an item and then not-so-subtly bragging about it when guests come over? Bargain-hunting does, however, have its limits, and the impulse to save now might cost you in the long run. Here are a couple places to splurge, and a couple ways to save when decorating your home.

Furniture
Furniture is a mixed bag. You can get away with an inexpensive coffee table found at a vintage store, and you may be able to score a killer deal on a dining table that looks far more expensive than it is. But when it comes to upholstery, proceed with caution, especially with large pieces. Cheap textiles can pill, rip, wear out easily, and stain permanently. Plus, the material often gets scratchy and uncomfortable.

If you consider the amount of space a sofa occupies, and how often you’re using it, it’s best not to cut corners. Spring for something with quality construction and materials, and it could last 15 years or more. That being said, furniture manufacturers are facing the same supply chain and labor issues that are impacting the prices of many consumer goods right now. If you are considering splurging on a sofa this year, it might be best to sit tight and wait for things to cool off.

Art
While some designers will tell you that price is no object when it comes to art, the reality is that most of us aren’t playing with Picasso money. Luckily, online marketplaces like Society6, Minted, and Etsy allow you to find unique pieces without breaking the bank, and, as a bonus, you’ll be supporting emerging artists instead of buying stuff that’s mass-produced.

Flooring
Skimp out on your flooring and you may find yourself needing to replace it prematurely—or live with the consequences of a poor choice. Everything from thin wood, to poor adhesive, to carpet that won’t stand up to kids and pets, can cause problems sooner than you expect. Save yourself the time, money, and headache, and pay to get it done right the first time.

Rugs
Area rugs are one of the best items for bargain hunters because there are myriad options that are both durable and affordable. A natural sisal rug can hide the appearance of dirt and take a beating, but at a price point that won’t make you cry when Fido has an accident. Flatweave wool rugs are another popular-yet-affordable option.

When in doubt, just consider the room your rug is going in. Is there a lot of foot traffic? Pet and kid access? Potential for food or drink spills? If the answer is yes to any of the above, save your money and go with something inexpensive and replaceable.

~Blog courtesy of Market Leader 2021

July 2021 • March 28, 2022

“We Buy Houses for Cash” too good to be true?

by Matt Davies

In today’s real estate market, homes stay on the market for about 25 days on average before going under contract. That’s better than back in 2010, when homes were averaging 140 days to sell, but it’s still not fast, and there’s no guarantee that your home will sell in 25 days. Location, season, and many other factors affect how quickly you can sell a home.

If you need to sell your home quickly, those “We Buy Houses for Cash” billboards may have caught your eye. Can you really sell your home as-is in just a few days?

Who are they?
“We buy houses for cash” buyers are not your typical buyer looking for a home to live in or rent out. They are real estate investors looking to make a quick profit.

As such, they are looking to purchase a home for the lowest price possible, fix it up as needed, and sell it on the open market a short time later. These types of investors can make a huge profit on a home in just a few months.

Who do they target?
These cash buyers are looking for motivated or desperate sellers. For example, let’s say you listed your home, but the listing eventually expired without resulting in a sale. At this point, you would probably be contacted by a cash buyer. They’re hoping you’ll be discouraged by your failure on the open market and will be willing to sell your house for cash at a reduced price.

In the same vein, cash buyers go after people in situations that require a fast sale such as divorce, bankruptcy, foreclosure, and probate sales.

Are there benefits?
For many people in situations such as these, selling a home quickly might be the number one priority, despite the potential to maximize return. And selling to a cash buyer certainly is fast.

The typical financed purchase takes about 30 days to close. Appraisals, contracts, and other procedures take time, and they must be done before funds are released.

Cash buyers don’t have to deal with that. They’ll typically come to your home within a day or two of you contacting them and make an offer on the spot or soon after. They often process the sale in-house and have a title company at the ready to clear the title.

Cash buyers also eliminate the inspection and objection process by simply buying a home “as-is”. In only a few days, your house will be sold and you’ll be turning over the keys.

Sounds easy enough. What’s the catch?
Say goodbye to any profits and probably the equity that you’ve built up in your home. The offer that cash buyers make is often suspiciously just enough to pay off your mortgage. You will likely only receive 50-80% of market value.

80% of market value might seem like it’s worth it to avoid the hassle of going the conventional route, but the average is more like 65% of market value.

Another reason to be extremely careful with these types of companies: scams. Phony investors have all sorts of tactics and tricks to extort money from desperate sellers. You don’t want to lose money, or worse, your home, just in an effort to save time.

In short, if you are considering selling your house to a cash buyer, do your research first. Selling a home to get out from under it isn’t the only alternative you have. There are other, more profitable options.

Blog post courtesy of Market Leader 2021

June 2021 • March 28, 2022

Vacation Without Worry

by Matt Davies

Taking a summer vacation? Here’s how to make sure your time away from home is relaxing and stress free.

Check Your Thermostat

If you haven’t already installed one, a smart thermostat can be a lifesaver when you are away. They will allow you to control and monitor conditions in your home all by your smartphone with an app. This way you can reduce energy costs by turning up the thermostat when you are gone, as well as prevent things like mold and mildew.

Turn Water Off
Prevent plumbing leaks from occurring in your absence, and avoid significant water damage and costly repairs. After shutting off the main water valve, let your kitchen and bathroom faucets run dry, ensuring that no water is left in the pipes. Make sure you turn the valves to the off position upon leaving.

Double Down on Smart Security
Consider a smart security system – the most popular being Ring- modern systems feature contract-free, affordable monitoring, quick DIY installation, and remote monitoring notifications. You can control the security of your home by app on your smartphone.

Empty the Fridge, Take Out the Trash
No one wants to come home to a stinky smelly house! Take out all the trash before you leave and take it to the curb if you can. Food inside your fridge can go bad and create moldy science experiments, be sure to clean out your kitchen before heading off as well.

Blog Post Courtesy of Market Leader 2021

Hard vs. Soft Credit Inquiries

Putting Roots Down This Fall

Demo Day the Responsible Way

30 or 15 Year Mortgage? Those aren’t your only choices.

Disaster Prep: Do You Have a Home Inventory?

How Does Inflation Affect Home Prices?

Winter is Coming… Again

To save or to splurge? That is the question.

“We Buy Houses for Cash” too good to be true?

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