If you’re anything like the average New Year’s Resolution-setter, you’ve probably already declared that 2012 will be your year. And that means different things to different people. It might be the year you pay off your credit cards, fit back into your “skinny” clothes, or finally take that dream vacation you’ve been eyeing. 

Given the volatility of the real estate market over the last few years, my guess is that more than a few of you are also considering including real estate resolutions on the short list of things you want to take care of over the next 12 months.

Whether your stage of life renders you more interested in buying, selling, getting right side up - consider adding one of these real estate resolutions to your list:

1.  Buyer Resolution: fix up your financials and buy a home. It’s no secret that the mortgage lending world is tough out there. But don’t let that stop you from buying a home in 2012. The name of the game is to prepare, prepare, prepare. 

In particular:

• Pull your papers together: Spend January gathering up: your past two years’ federal tax returns and W-2s; your last two months’ pay stubs; and statements from bank and other asset accounts, like retirement accounts and investment accounts. You might also find it handy to have marriage and divorce certificates on hand, as well as the statements from any credit, auto or student loan accounts you hold.
• Also, start keeping a running file to collect and keep handy new stubs and statements throughout the year; when you find your dream home, your lender will ask you to refresh your application with the latest versions.
• Compile your cash to close: If you’re serious about buying a home this year, you’ve probably already started saving up - or at least know where and how you plan to access your down payment funds. Early this year, meet up with your real estate and mortgage brokers and do a double-check on how much cash you’ll need for your down payment and closing costs to buy the sort of home you’re looking for in a location you’d like.
• Also, touch base with your team on timing matters around any gift money or money from your own retirement accounts that you plan to use toward your purchase. You might need some lead time in order to draw your own funds, specific documentation of where the monies came from, or a couple of months for the money to sit and ‘season’ in your own accounts before the lender will greenlight the deal; the best practice is to make yourself aware of any such requirements as soon as possible.
• Have your mortgage pro run your credit report. Again, if you’re planning to buy this year, chances are good you’ve already pulled your own reports from the three bureaus. But as you move down the home buying timeline, it’s imperative to get your mortgage broker or banker to pull their versions of your reports, as that what the lender will go by. 

This is another task you should check off your to-do list sooner rather than later. If by chance an error or issue does arise, you’ll need some time to remediate your report, whether by paying off that mystery collection, disputing an erroneous ding on your own or paying for your broker to obtain a Rapid Rescore.

2.  Seller Resolution: Price it, spruce it and sell it. A too-high price is a sure-fire way to ensure  your home lags on the market, causing you more anxiety and costing you more money as the days turn into weeks, months or even longer. Rather than testing the market, the end result of overpricing is usually that you end up receive no or lowball offers, or even resigning yourself to lowering the price below what you could have originally gotten, to offset the stigma of desperation buyers sense when a home has been on the market a long time. 

Resolve to price your home right before it goes on the Multiple Listing Service. Study your local market, visit Open Houses similar to yours, look at as many recent comparable sales as possible, and talk to your agent in detail – talk to several agents, if that makes you more comfortable -- before landing on your home’s list price. 2012 is going to be another competitive year for sellers, so manage your own urge to overprice in order to position your home to best the competition. 

One more thing – given the intense level of competition among homes, curb appeal can go a long way to entice buyers to come and see your house. Of course, it behooves you to stage the inside too, but don’t overlook outside upgrades like shrubbery, flowers and painting the exterior.  

And before you worry about breaking the bank, use your agent as a resource to get insight into what local buyers want, aesthetically, these days. Chances are there are a few critical, inexpensive projects you can undertake to boost buyers’ desire to come in and have a look around. Keep costs down by painting trims, doors, eaves and focusing on landscaping, and using your repair budget on small fixes like driveway cracks and fallen shutters.

3.  Owner Resolution: Get right-side up. Over 25 percent of Americans who have a mortgage owe more than their home is currently worth. While getting right-side up, so to speak, is certainly easier said than done, it’s not impossible (especially if you include getting your payments lowered in your definition of right-side up).

2012 might be your year to:

• take advantage of newly expanded federal underwater refinance programs like the Home Affordable Refinance Program (HARP 2) and Hardest Hit Funds (if you live in one of the states on this list);
• get assertive about getting a loan modification – even if you’ve been rejected before, and even if you have to get help from a non-profit credit counseling organization or a program like NACA’s Home Save program;
• get a second job or rent out a room to catch up on payments or pay down your balance or, if all else fails;
• put your home on the market, listing it as a short sale.

Keep in mind that the federal income tax exemption on mortgage debt that is forgiven through a foreclosure or short sale is currently set to expire on December 31st of this year, but banks are taking around 2 years after the first missed payment, on average, to foreclose on homes. If you list your home as a short sale with an experienced short sale agent, stat, you have a better chance of avoiding the potentially massive income tax implications of offloading your upside down home than you do if you just stop making the payments and walk away from it!  

Talk with a local agent with a their track record of closing short sales, and with a local attorney and CPA before you make this move.

4.  Renter Resolution: Make the rent vs. buy decision and start saving, if you decide to buy. Depending on where you live, it might actually be cheaper to own a home than to rent it! Mortgage rates hit record lows last month (below 4% for a 30-year-fixed!), and there are tons of homes on the market, tilting the supply-demand imbalance in buyers’ favor. If you live in an area with a strong buyer’s market and think you might be ready to commit to homeownership, this is exactly the right time to start getting serious about making the decision whether to proceed down the path to home ownership.

It can take months – even years – to save enough cash to buy a home, not to mention the many moons it takes today’s buyers to find and buy a home. So, if you do decide to buy, you’d be wise to start your saving up for a down payment now to maximize your chances of getting into the market while home prices are still relatively low (even if that is a year or more down the road).

In that vein, look for spending cuts you can make that will enable you to save as much as possible each month until you reach your goal. Take on extra work, if you can, to stash more cash in your savings account. And consider setting up a separate savings account called “Home” where you can watch it grow and stay inspired to keep moving toward your goal.

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