The Story on Credit

When Johan and I sold our house last year and bought a new house, we knew we’d have to get the new loan in his name since I had changed from salary to commission-only which greatly changed my financial history. We had confidence in his credit for various reasons and figured the loan process would be smooth and easy. But that’s when this happened…

Home-Alone

Flashback 2 years ago, Johan moved out of his apartment and they hit him with an extra bill. Not only did they keep his deposit, but they were trying to charge him more money to fix things in the apartment “caused by dogs.” It’s funny because he never had a dog in his apartment and everything they were claiming was bogus.

Long story short, we refused to pay thinking that small amount couldn’t possibly hurt his credit and then we were hit with the truth. Fast forward almost 3 years – trying to buy a house – and his credit was hit hard by that “small amount.”

Warning: Don’t ever let anything go to collection at those credit bureaus, no matter how “unfair” the charge. Pay it and dispute later.

I’m going to share a few lessons we’ve learned along the way about credit and how this translates into making a large purchase, like a home.

Keep an Updated Address
A lender told me once that the thing that hurts peoples’ credit the most tends to be medical bills. And it’s not even that people refuse to pay them – it’s that someone moves, forgets to update their address with the hospital and/or their insurance, the bill gets sent to the wrong address, it never gets paid, and it goes straight to credit collection. How is this fair? Exactly, it’s not. There are lobbyists for this issue trying to change its effect on credit but unfortunately there’s no solution right now. So make sure that if you’re going to get billed by anyone, they have your updated address.

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“Debt-free” Isn’t the Best for Credit
Now don’t get me wrong here, I’m not saying you need to rack up a bunch of credit card debt and never pay your student loans. What I’m saying is that you need to be using credit in order to build a credit score.You’ll want to go slap some congressmen after hearing this but it’s actually not good to pay off all debt and live on cash-only. We actually just applied for a new credit card so that Johan could rebuild his score faster. Make sure that each month you’re always paying your minimum balance (at least), you don’t spend more than 30% of your credit limit, and you’re consistently paying into 3-5 different accounts.

Example:
Car payment = $250/month
House payment = $1200/month
Student loans = $300/month
Visa card (limit is $10,000) ~ $2000/month
American Express card (Limit is $5000) ~ $1000/month

This is 3 revolving accounts where you’re consistently making the minimum payment and 2 revolving credit card accounts where you always pay the full balance and you don’t spend more than 30% of the limit. This is great! Even if you pay off your student loans quickly, you’ll still have 4 revolving accounts which is wonderful for your credit. I know I know, it’s crazy sauce that you have to maintain some form of “debt” to prove you’re good at handling money. But who thinks the government is perfect? Yeah…

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Pulling Credit Will Not Hurt Your Score
Lots of my clients are worried about talking to lenders because they think if they get their credit report pulled too many times that it’ll severely hurt their credit. All I can say is, “Don’t believe everything you read on the internet.” Did you know that any inquiries made within a 45-day period count as one? So 10 different people can pull your credit at one time and it’ll show up like one person pulled it 1 time. If you’ve got a really good score, this may drop you 2-3 points total, so it really does not “hurt” your credit. Some people have even seen their score go up as a result of this. If you have a low score and you’re still worried, just mention it to the lender before starting the process and he/she can give you the best options.

Talk to a Lender 6 Months Before Buying
This one is really important, especially for young people just out of college or people worried about their credit. If you’re thinking about making a home purchase then it’s really good to get with a lender 3-6 months ahead to see where you stand. I know a lender who said he had a client fresh out of college and she literally had no credit score – she didn’t have any history! So he told her to get a credit card and become an authorized user on her fiancé’s card, and then BAM, her score went up to 720 within 3 weeks. Crazy huh? That little change made a huge difference and that’s what lenders are for. They can coach you on how to raise your score and things to stay away from so you can qualify for the best possible rate once it’s time to buy. Trust me, don’t wait, they’re there to help.

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So folks, those are the biggies. Hopefully you know a little more about how credit works than before you read this post and hopefully you can all go out and start working on those scores. Most lenders will tell you they’ve never seen someone with a perfect score, but there are ways to get there. Why don’t we all try? 850 here I come!!

“For no man can lay a foundation other than the one which is laid, which is Jesus Christ. Now if any man builds on the foundation with gold, silver, precious stones, wood, hay, straw, each man’s work will become evident; for the day will show it because it is to be revealed with fire, and the fire itself will test the quality of each man’s work.” – 1 Cor. 3:11-14

Let’s Talk Curb Appeal

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Selfie with Mom

For my first post about actual real estate “stuff,” I want to talk about something that’s close to my heart and probably even closer to the woman who gave me the gift of life – Beth Emery. My mom has always been a green thumb. And I’m not talking about a person who thinks that planting flowers once a year is fun and has a decent-looking yard; I’m talking about a woman who can say she’s won “Yard of the Month,” has so many different pieces of vegetation in her yard that there’s pretty much something new every time I visit, completely designed the landscape for our current home, and probably had something to do with the invention of the term “curb appeal.”

curb appeal (Merriam-Webster): the visual attractiveness of a house as seen from the street

The definition is pretty simple to understand: when you’re sitting in your car and driving by a house, do you say “Oh wow! What a pretty house!” or do you say “Ummmm, do they even water that thing in front?” A lot of people judge a house by what’s presented in front of it. Is this fair? What if people just don’t do well with yards but they really and truly have a gorgeous house? What if there’s a drought in the area and it’s hard to maintain a house when you can’t water often? While some may think it’s not “fair” to judge a house by its front side cover, I want to provide you with some tips on having curb appeal that’s low maintenance and won’t cost you an arm and a leg.

What do you notice about this picture at first glance?

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Notice how it looks so plain? There’s no vegetation at all, the brick steps and concrete pathway don’t look like anything special and the white siding even makes the house look pretty old. This house is not very appealing from the outside. Now what about the next picture?

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Now this is a good looking house! The potted plants hanging and on the ground give good symmetry, the dark front door gives nice contrast to the lighter exterior paint colors, and the tree in front provides something different. If you can see the yellow chairs on the left side of the porch, they even give a great accent color.

Symmetry is important

Have you ever heard that “attractive people” tend to have more symmetrical faces? Symmetry is pleasing to the human eye and the exterior of your house makes no exceptions. I’ve noticed that this is important for bushes and other pieces where you plant numerous ones. When it comes to that oak tree you’ve always wanted to plant, or the bird bath you want to put in, don’t go rush and find two trees and two stoke baths. Your yard needs some unsymmetrical things too.

Take care of your front door and windows

These two things can make or break the look of the house. If you don’t have the money to upgrade your windows, make sure to keep them clean! Having a nice shine on the glass and trim will instantly add some glamor. The front door is the welcome factor of your home and the last thing people see before they step into your house. Give it a fresh coat of paint or add new hardware. You don’t have to spend $1000 on a new front door if you can just spruce it up a little bit.

Install outdoor lighting

Adding fixtures clearly defines pathways, gives accents to trees and parts of the house, and provides light at night for you and your guests. Johan and I installed some solar fixtures to avoid hard wiring but they haven’t been very reliable. While it may be tempting to get the cheapest lights you can find, do your research and find what works best for you.

Add in or clean up your pathway

Paths provide somewhere for guests to walk up to your front door as well as a nice look for your front yard. If you already have one, power wash it every once in a while! Or resurface it! If you don’t have one, consider putting one in if you can. It can be poured concrete done by professionals or you can even just buy some stepping stones at Home Depot and install them yourself. Having a walkway can be an important element to any yard.

Get rid of those exterior eyesores

You know those little things in your yard or attached to your house that can be eyesores? Find ways to hide them! It’s amazing what some stones, a little paint, and fencing can do to hide things that you don’t want people to see.

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Use different colors

I think this is the most important factor of a truly beautiful yard – using different colors for contrast and accent. Think of it like a brown couch with accent pillows. Would you put brown accent pillows on a brown couch? Probably not. So if you already have a light-colored house, then paint your front door dark or do a dark trim around your windows. Paint isn’t expensive and it can go a long way in making different elements of your house “pop.” (Always remember to buy an “exterior” paint for the outside.)

So now that you have all of these great ideas, go out and do some yard work! And if you don’t have a yard, then go out and do your friend’s yard work. Or better yet, come help us with ours! Johan and I will be out trying to figure out how to install a better path and outdoor lighting. Stay tuned for our finished product in the near future!

“For as the earth brings forth its sprouts, and as a garden causes the things sown in it to spring up, so the Lord GOD will cause righteousness and praise to spring up before all the nations.” – Isaiah 61:11

From Engineering to Real Estate

Hello world.

My name is Kate and I just quit my job as a civil engineer at a top transportation firm in order to join the challenging world of real estate. Why is it so challenging? Well, my real estate exam prep teacher told me that only about 10% of people who get their real estate licenses actually stay in the business more than 1 year.

Only 10% of people actually make it – 90% of people quit and return later or don’t return at all.

So those are my odds, and guess what, I’m not one to back down from a challenge. Why would I quit a job where I was on my way to a 6-figure salary and a spot on the management team down the road? I quit because my job wasn’t fulfilling. I know what you might be thinking, “Oh you’re one of those Generation X’ers who needs instant gratification and doesn’t want to ‘put in the time’ that your parents did.” If you’re thinking that then you obviously don’t know me. Instant gratification? Sure, what person wants to wait 5-10 years to actually be doing something for 10-12 hours per day that fulfills him/her? But in terms of “putting in the time,” I didn’t want to put in time to something that was sucking the life out of me. There were some days I was spending more hours at the office than at home with my husband. (Please note here that I worked for a great company, I just wasn’t happy. I would encourage anyone who wants to do engineering design and to work on some really cool projects to go work for HNTB.)

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2014 Petterson Family Christmas Card

Speaking of my husband – SHOUT OUT TO JOHAN PETTERSON FOR BELIEVING IN ME AND SUPPORTING ME THROUGH THIS CRAZY TIME OF TRANSITION.

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Rachael and me at my engagement party

So yes, I was spending so much time at the office, behind a computer in a small cubicle, working on Microstation by myself and taking at least 10 breaks each day to talk to another human being. I was productive; I was quick at getting work done; I produced quality designs; people liked me; and I loved everyone I worked with. Leaving that job was hard – not because of the work but because of the people. And one of my coworkers, Rachael Durham, not only is my best friend and was my matron of honor at my wedding last Fall, but she was the one who hooked me up with the broker I’m now currently working for in real estate. She gave me a way out of my daily misery and for that, I’m forever indebted to her.

It’s crazy the way the Lord can lead you in a direction you didn’t even consider you would go. When I think back to how this all happened, a lot of things confirmed my decision to make the change.

  • Johan has been telling me for a couple of years that I should get my real estate license just for our sake as home-buyers and potential home-investors
  • Friends have always said I’d be good in a sales job because I’m so good at working with people
  • The day I put in my 2-week’s notice at HNTB, my manager told me she was probably quitting soon too
  • My brother, the one who questions almost every decision I make, immediately affirmed my decision to do real estate (that never happens!)

I could go on and on about little things that happened during this whole time and I’m grateful that the Lord revealed His plans to me so clearly so that I can walk confidently in my days. Also, I am forever grateful to work for such an amazing broker, Paula Cleveland, owner of Keystone Signature Properties, and to represent her in all of my future real estate transactions. She is a true woman of God and a great mentor for any agent starting out in the industry. When you have your boss actually praying for her business and praying for those who work for her and their successes as well, it changes your perspective about your job. I’m excited to learn and to serve my community. I’m excited to learn more about buying and selling houses and the Houston market.

I hope to use this blog as a place to share my experiences and my insights about life. My posts will include interesting articles, my cooking/baking endeavors, DIY and home improvement projects, listings around town, and anything else that people may find useful. I hope that you will continue on this journey and let me know if I can be of service to you in any way!

“By wisdom a house is built, and by understanding it is established.” Proverbs 24:3