Strategies to help get a home sold
Dear Liz: My elderly mother lives in another state and her health is deteriorating. We want her to come live with us, but her home has been on the market for more than a year and hasn’t sold, even after several price cuts. She’s depressed and we’re getting frantic. What can we do?
Answer: If her goal is to sell the house, she probably needs to cut the price even more. In most real estate markets today, what gets a home sold is a truly competitive price.
You also might consult an experienced real estate agent about what low-cost improvements could speed the sale. If the home is cluttered or stuffed with furniture, for example, removing one-third to one-half of the household contents can make the space seem dramatically larger. Your mom will be packing and discarding all this stuff anyway, and starting the process now can help sell the home. If she’s not able to manage this alone, consider taking a week or so off to help her or hiring a professional organizer to assist with the process.
Other relatively inexpensive fixes can include minor repairs, refreshing the landscaping, washing the windows and deep cleaning the house. Your mom shouldn’t embark on any major projects because she’s unlikely to recoup the expense. But the money she spends getting her home ready for sale can be deducted when she determines whether she has any taxable profit on the sale. (Typically $250,000 of home sale profit is tax-free. The limit is $500,000 for married couples.)
Another alternative is to simply move her in with you and rent out the home, but trying to manage a rental long distance can be a hassle. If that turns out to be your best option, consult the real estate agent for referrals to good property management firms.
Troubled financial past haunts job seeker
Dear Liz: How do you recover from bankruptcy? My daughter lost a very good job and got upside down with her house, so she had to file for bankruptcy. She is working now in a very low-paying job but cannot find a good job in her field of finance. Everything goes well in the interviews, but then they check her records for bankruptcy. Once they learn that she was bankrupt, they will not hire her. How can she dig out of this predicament?
Answer: Federal law prohibits employers from using a bankruptcy filing as a reason not to hire (or to fire or decline to promote) someone. However, most states allow employers to check credit reports, and employers are allowed to use the negative marks they find there as a reason to not hire someone. Since most people who file for bankruptcy have plenty of late payments and charge-offs leading up to the filing, that gives employers the legal cover they need to refuse to hire someone with a checkered financial past.
Interestingly, there’s no research or other evidence that indicates bad credit leads to problems on the job, such as theft or even poor performance. Yet employers continue to use credit checks to screen out job applicants for a wide variety of jobs.
Only six states — California, Connecticut, Hawaii, Maryland, Oregon and Washington — restrict employers’ ability to check credit reports, and often there are exceptions for jobs in finance or those that involve access to large amounts of cash.
Unfortunately, that means your daughter’s troubled financial past may continue to haunt her for years to come unless she finds an employer willing to overlook it. Most negative marks stay on credit reports for seven years, while bankruptcies can stay on for up to 10 years.
Getting a better deal on credit cards
Dear Liz: I would like to get my interest rate reduced on a couple of my credit cards. I’ve never been late on a payment and have decent credit scores. But the last time I called to ask for a reduction, the credit card company raised my rate and lowered my limit. I’m hesitant to call and try again. Any suggestions?
Answer: Unless your credit scores are excellent (typically FICO credit scores of 740 or above), these days you probably shouldn’t waste your time trying to negotiate a lower rate with your current issuers.
People with great credit have some leverage, because they can easily transfer their balances to competitors offering low rates. People with only “decent” credit usually can’t qualify for those offers.
You may be able to get a better deal by transferring your balance to a three-year, fixed-rate personal loan. Check with your local credit union first, as these member-owned organizations often have better rates and terms.
Liz Weston is the author of “The 10 Commandments of Money: Survive and Thrive in the New Economy.” Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon, No. 238, Studio City, CA 91604 or via https://www.asklizweston.com. Distributed by No More Red Inc.
