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Ilyce Glink
Every year since I started writing this column in 1993, I've offered
I start by recapping what's happened in the world of real estate and then move on to some specific resolutions I think will help buyers and sellers move the ball forward.
This year is, I'm sorry to say, has been lousy for the real estate industry in general:
-- Roughly 28 percent of homeowners are underwater or are nearly underwater with their mortgages, according to third-quarter 2010 data from
-- New home sales are at record low levels.
-- Home prices haven't moved much at all, and in some states are still declining.
-- The overall number of households has shrunk by millions.
-- Millions of homes have received foreclosure notices this year, and it's likely that 2 million homes will have been foreclosed on by the end of 2010.
-- Despite the lowest interest rates in history, millions of homeowners remain in financial jeopardy, unable to afford their payments and unable to refinance because of declining or negative equity in their homes.
-- The government's Making Home Affordable programs have been a disaster, with just 10 percent of applicants being granted a permanent loan modification. In some cases, the loan modifications have increased payments for homeowners, further jeopardizing their homeownership.
-- The shadow inventory of homes is growing and may eventually reach another 4 to 12 million foreclosures, depending on how quickly unemployment comes down.
-- Federal Reserve Chairman Ben Bernanke went on "60 Minutes" and announced that America's unemployment levels, which are officially at 9.8 percent (but are really more like 18 percent, if you include all those who are underemployed and have just given up on finding a job), might take five years or more to normalize.
-- There's still no consensus on what to do about
This isn't a particularly happy state of affairs. And yet, hope blooms eternal. So here are a few
1. Pull a copy of your credit history and credit score. Mortgage lenders have become extremely conservative and restrictive in deciding which mortgages will get funded. Lenders will pull credit scores from each of the three credit reporting bureaus,
2. Practice good credit behavior. Lenders regard those borrowers with a credit score above 780 as their best borrowers. Unless your credit score is above that level, you should work on eliminating any errors, and practicing good credit behavior so that your credit score rises. The best thing you can do? Pay your bills on time and in full each month. The next best thing you can do is maintain four open and active lines of credit. Each credit reporting bureau offers good credit behavior tips for free on its website, or you can go to MyFico.com, which is the consumer-facing credit site owned by
3. Shop around for the best loan. Even though the federal government is backing more than 90 percent of all the loans through
4. Create a great home buying team. Whether you're buying investment property or a home to live in, you'll want to create a team of real estate professionals who can help you find the right property, at the right price, on the best terms, without any headaches. Home buyers will want their team to include a great real estate agent, mortgage lender, real estate attorney, tax preparer (with experience in investment real estate if you plan on buying real estate as an investment), and real estate inspector to start. Residential real estate investors will want to add a 1031 exchange professional and commercial (if appropriate) inspector to the mix.
Having the right team in place will go a long way toward making your dream of homeownership come true.
Ilyce R. Glink's book is "Buy, Close, Move In!: How to Navigate the New World of Real Estate--Safely and Profitably--and End Up with the Home of Your Dreams"