Real estate is a double-edged sword in the world of credit repair. When leveraged properly, real estate can breathe life into your credit score and portray you as a worthy borrower. When managed poorly, it can ruin your credit score and prevent new financial opportunities. Fix credit related worries by learning more about how selling your home could impact your financial future.
How Does Real Estate Affect Credit Repair?
While owning a home is a huge responsibility, it is also one that carries significant weight when it comes to credit scoring. While foreclosures are known to be devastating, few people understand how even a short sale can cause lasting damage. If you decide to sell your home at a loss, your lender will likely report the difference as a credit deficiency to the credit bureaus, affecting your score in similar ways as a basic foreclosure. And the reason for this is simple: You can’t simply borrow the money to buy a home, then sell it for less, and then expect your lender to forgive the difference and eat the loss. If you are in the market to sell and wish to protect your credit, increasing your home’s worth and upping your asking price is critical. Accomplish these tasks by:
1. Focusing on cosmetics. First impressions are difficult to shake, and the same is true for real estate. Inexpensive improvements can add thousands of dollars to your home’s sticker price. Consider investing in :
• New light fixtures or recessed lighting
• Better landscaping and an attractive fence for the yard
• Updated kitchen cabinets and counters
• A fresh coat of neutral-colored paint on the walls
2. Updating the necessities. A leaky roof or furnace won’t impress your buyers’ home inspector. If you are worried about how to fix credit issues, avoid them by fixing your home’s safety issues first. Hire your own inspector to assess your home and offer improvement advice. Covering your bases early will help you stand firm with your listing price.
3. Cutting energy costs. An inefficient home can wreak havoc on your utility bills, reducing your savings and your home’s worth in the process. Focus on your own credit repair and real estate needs with this task. Ask your inspector to check your windows and doors for air leaks. If you suspect an insulation problem, ask them to test the ceilings and floors for leaks as well. The modern buyer wants a house with eco-friendly updates—a requirement you should not ignore.
4. Maintaining the basics. Within the caveat of cosmetics is basic maintenance as well. Sure, your bathroom faucet works fine, but can you fix that slight drip? Is the exterior of your home looking dingy? Would a power wash help restore its curb appeal? While it’s normal to overlook the everyday imperfections, paying attention to the details could set your house apart from the competition. Focus on maintenance to ensure your house remains in top condition.
5. Checking the square footage. Space is an important factor for any buyer, so it is important to provide accurate measurements. Ask your inspector or a floor plan company to assess your home’s overall size and room measurements. The bigger the space, the greater potential for a more profitable—and credit score enhancing—listing price.