Michigan Real Estate Market Update, August 2007
So you want to know how long this bad real estate market is going to last in Michigan? I or anybody else can't accurately predicate that.
Here is what I know at this moment.
1.) Home prices are down anywhere from 20 to 30% off their highs of several years ago. I personally have helped clients buy homes that were less than 7 years old for 10% less than the original owner paid the builder. That is not even including what the original owner put into the landscaping, decks, window treatments and any upgrades after they moved in. My clients and I even bought one where the original owners finished the basement. The original owners have lost a lot of equity in the last few years not even including the real estate commissions they have to pay.
2.) It is not going to change within the next year because of these reasons.
a. Michigan has lost people to other states because of the automotive buyouts, Phizer, layoffs, and re-locations. That means less people to buy the same amount of homes.
b. There are more foreclosures on the horizon as there are thousands of adjustable rate mortgages that are going to adjust upward in the next year. How is somebody that has a $350,00 4.75% mortgage going to be able to afford their rate going up to 6.75%? They can for a while. But some people were banking on selling at a profit in 5 years. They can't sell the house for what they have in it right now. They may be able to survive with the large mortgage payment for a while, but at some point they will have to sell or lose the house. (if they can't afford the payment)
c. Banks have tightened up credit guidelines because of the foreclosure rates. What that means to the real estate market is that they have taken approximately 20% of the buyers (that could buy last year) out of the market. No more easy credit. That means less buyers for all these homes.
d. Because of the upcoming foreclosures prices will continue to drop as banks unload those homes. Are they always a bargain? See my how to buy bank foreclosures or are bank foreclosures a bargain? Or my article on how to buy a bargain
So the bottom line is why do you want to sell? Do you have to sell right now? Are you going to wait for the prices to come back? Can you wait for 5 to 10 years? That's how long it may take to get back to those high levels. If houses have lost 20% of their value from the high point and we only gain a 5% increase per year. That means a minimum of 4 years for it to return if we have a turnaround this year and we have 4 years of solid increases Do you think that is possible in the Michigan economy?
If you have more questions and would like to explore your options of buying or selling give me a call on my cell at (313) 310-9855 Selling tips or buying tips
Or go to my website www.russravary.com or search Michigan homes
Monday, July 30, 2007
Sunday, July 22, 2007
Common Home Buying Mistakes
1. FAILURE TO GET PRE-APPROVED IN WRITING FOR A HOME MORTGAGE.
Most home buyers need to obtain a home loan to purchase their house or condo. Smart buyers shop for a mortgage before searching for a home. They know if they have issues with their credit before they start to look. They have time to correct the mistakes on the credit report. They have time to reduce their debt. They have time to get their paperwork and finances in order.
Although it's fun to "shop" for a house or condo on the Internet -- where more than 90% percent of today's home buyers begin looking. The smartest home buyers get pre-approved in writing by an actual lender so they know the maximum mortgage amount available. They sit down with a local lender or call a local lender.
Be sure the lender gives you a pre-approval letter. Bring in all the documents required so there are no mistakes. You may be surprised but some deals fall apart because there is miscommunication between the mortgage person and the buyer. The mortgage person may not know all the facts. Not that the buyer lied to them, but the buyer didn't know it was an important detail. Like they were laid off for three months, or they paid rent in cash to their uncle, or they make $42,000 but the W-2's only show $32,000 because they took a lot of time off.
2. GET YOUR OWN BUYER'S AGENT.
The second major mistake some home buyers make is they forget they need their own buyer's agent. It's very easy for prospective buyers visiting weekend open houses to let the listing agent they meet prepare the purchase offer.
Whether that listing agent acts as a "dual agent" representing both the home seller and buyer (an inherent conflict of interest) or the listing agent represents only the seller (and nobody represents the buyer), such a situation is not in the home buyer's best interest.
To find a reputable buyer's agent, home buyers should ask friends, relatives and business associates for recommendations of local agents.
It costs home buyers nothing extra to have their own buyer's agent. If the home is listed for sale, the listing agent will split the sales commission with the buyer's agent. In the rare situation of a "for sale by owner" home, most FSBO (fizz-bo) sellers are only too happy to pay the buyer's agent half of a customary sales commission, usually 2-3 percent to get the home sold.
3. Refusing to Confide in a Trusted Advisor (your agent)
Buyers withhold information for a variety of reasons such as:
Fear of how they will be perceived
Irrational belief they have all the answers
Don't feel it is important enough
Lack confidence in their advisor
Experienced real estate agents like myself (Russ Ravary) handle such a multitude of transactions and personality mixes, there's little they haven't heard before. Your advisers are representing your best interests and have a fiduciary responsibility to do so. They can't help you if they don't know what you are doing behind their backs. Plus, they will likely have a better idea for you than you can think up. Be open, be honest. By letting them know your feelings will help them find you a home that you want at a price that you want.
If you have cold feet and have thoughts about backing out of the transaction, talk to your agent about those feelings. She can help walk you through the anxieties. Pros will help you to determine if you really need to cancel and, if so, try to get your earnest money back.
4. Not Understanding The Common Negotiating Methods Used At Offer Time
Some buyers have been told that the best way to get a good price is to low-ball the seller from the start in hopes that the seller will drop their price down fast in their counter offer. In reality this often does nothing more than upset the seller and will probably end up ruining the chance at an acceptable offer to both of the parties involved. Have good communication with your agent, and they will be able to inform you on the many proper ways to negotiate a deal and still get you the lowest price. A low ball offer is only good if it is a buyers market and you don't absolutely have to have "that home". A low ball offer does upset some sellers and they may refuse to negotiate at all. So be careful when you put one in if you really want the house.
5. Changing your Finances Prior to Closing
I have had people who bought new cars, or bought furniture, or quit their job before the closing. More debt meant debt ratios were out of wack, meant they were no longer qualified to buy a home.
Today's home buyers make the same mistake. Do not buy anything on credit and / or with a credit card once you have completed a loan application. Do NOT buy:
Automobiles
Washers, dryers, refrigerators
Lawnmowers or garden equipment
Expensive electronics or computers
Furniture for your new home
Slight alterations in your credit ratios could cause an underwriter to throw out your loan and deny it. If your loan contingency has expired or been removed, you could forfeit your earnest money deposit in addition to losing the home.
6. Failing To Know Research The Market Before Making Your Offer or FAILING TO INSIST ON A COMPARATIVE MARKET ANALYSIS (CMA) BEFORE MAKING A PURCHASE OFFER. Amazingly, many home buyers still follow the old rule: "Offer 5 percent below the asking price." That makes no sense.
Instead, smart home buyers ask their buyer's agent to prepare a written comparative market analysis (CMA) before making a purchase offer. This CMA is the same form the listing agent prepared for the home seller.
It shows recent sold prices of comparable nearby homes. Just because other homes are asking similar prices doesn't mean you are getting a good deal. It is what has sold recently that is the true measure of what a home is worth. That is how appraisals are done. Not by houses that are listed.
With the help of the buyer's agent, smart buyers then discuss the pros and cons of the homes on the CMA before arriving at a reasonable purchase offer price.Have your agent prepare all the area sales and comparables in your area and get a copy to look over before you make your offer. This will help ensure that you do not overpay what the home is really worth. In most cases, this is the same type of information that the seller saw when setting the price of their home ( and most likely ignored). Failing To Use Certified Home Inspection Company Buying your home often times the most important investment and financial transaction that you will ever make. A home inspection can save you hundreds or even thousands of dollars and unexpected problems down the road. In addition to the inspection, it is often a good idea to request some type of Home Warranty to cover the unexpected problems that may arise after you buy the house.
7. BUY A HOME WITH AN UNCHANGEABLE ISSUE.
A issue that will affect the future sale of the home and the price. In the current buyer's market in most communities, where there are more home sellers than qualified buyers, house and condo buyers can afford to take their time and be "picky." You need to be picky about the home you buy.
No home is perfect. Even brand-new houses and condos have their defects. Thankfully, most homes don't have major defects, such as being located next to a noisy railroad track or a freeway. Smart buyers think into the future and ask, "Will I have any trouble selling this home because of its problems?"
Serious defects are called "economic obsolescence" by appraisers. Examples include a bad floor plan, poor location (such as backing to a main street), outside factors ( such as cell phone towers, freeways, city dumps, commercial properties, high-voltage power lines), noisy street traffic, or lack of on site parking. Serious consideration should be given to these homes. There has to be a good price reduction in order to make it a good value.
8. Buying the Wrong House
The very first thing home buyers should do is make a list of priorities and define your home purchase wants and desires. Figure out what features and benefits are most important and which you can live without. Before you close escrow, review this list. It's easy to overlook a major factor that could come back to haunt you later. If you need four bedrooms for your three kids don't buy a three bedroom and try to "get by"
Know what you can afford for a house payment. Going house poor is going to have you end up in foreclosure. Buy within your means. Don't let your emotions cloud your judgement.
9.. NEGLECTING TO RE- Read and examine the Purchase agreement, it's clauses, conditions, and contingencies..
Today's smart home buyers include at least two purchase-offer contingencies: (a) a satisfactory lender's professional appraisal of the home for at least the purchase price, and (b) the buyer's approval of a professional inspection report to be obtained at the buyer's expense.
Depending on local custom, additional inspection contingencies might include termite or pest control, building-code compliance, energy efficiency, and radon.
A controversial contingency makes the home purchase contingent on the buyer's sale of his/her current residence. Many home sellers refuse to accept such a contingency. Others will accept it but with a 48-hour release clause if a better purchase offer from another buyer materializes
10.. Falling in love
If you think a house is ideal, don't let the seller or any of the seller's agents know. If the seller finds out you're in love with the house, the seller could hold out for a higher price.
A wise home buyer knows there's lots of houses -- and there's one out there that's the right house at the right price. If you can't afford it, move on and keep looking.
11. Overlooking an inferior floor plan for an attractive exterior.
It may have gorgeous curb appeal, but you don't live on the lawn. No matter how attractive the exterior, you need a livable home
12. Overlooking how the house will function for your family.
How do you really live? Do you really need a formal dining room and living room? Would you be happier with an eat-in kitchen and a great room and a den to use as a home office? The house only needs to fit one family -- yours.
13. Not getting what you want because you're impatient.
This is a big decision. You need time. Impatient decisions can lead to mistakes. Take your time, think about your decision. Re look at your favorite houses. Re look at the one you love. You would be surprised at how many times people get frustrated with the buying process and just buy any house because they are tired of looking. Take your time.
For more buyer and sellers tips go to my website www.russravary.com and you can also search for Michigan homes for sale with out leaving your name, email, or phone number
Most home buyers need to obtain a home loan to purchase their house or condo. Smart buyers shop for a mortgage before searching for a home. They know if they have issues with their credit before they start to look. They have time to correct the mistakes on the credit report. They have time to reduce their debt. They have time to get their paperwork and finances in order.
Although it's fun to "shop" for a house or condo on the Internet -- where more than 90% percent of today's home buyers begin looking. The smartest home buyers get pre-approved in writing by an actual lender so they know the maximum mortgage amount available. They sit down with a local lender or call a local lender.
Be sure the lender gives you a pre-approval letter. Bring in all the documents required so there are no mistakes. You may be surprised but some deals fall apart because there is miscommunication between the mortgage person and the buyer. The mortgage person may not know all the facts. Not that the buyer lied to them, but the buyer didn't know it was an important detail. Like they were laid off for three months, or they paid rent in cash to their uncle, or they make $42,000 but the W-2's only show $32,000 because they took a lot of time off.
2. GET YOUR OWN BUYER'S AGENT.
The second major mistake some home buyers make is they forget they need their own buyer's agent. It's very easy for prospective buyers visiting weekend open houses to let the listing agent they meet prepare the purchase offer.
Whether that listing agent acts as a "dual agent" representing both the home seller and buyer (an inherent conflict of interest) or the listing agent represents only the seller (and nobody represents the buyer), such a situation is not in the home buyer's best interest.
To find a reputable buyer's agent, home buyers should ask friends, relatives and business associates for recommendations of local agents.
It costs home buyers nothing extra to have their own buyer's agent. If the home is listed for sale, the listing agent will split the sales commission with the buyer's agent. In the rare situation of a "for sale by owner" home, most FSBO (fizz-bo) sellers are only too happy to pay the buyer's agent half of a customary sales commission, usually 2-3 percent to get the home sold.
3. Refusing to Confide in a Trusted Advisor (your agent)
Buyers withhold information for a variety of reasons such as:
Fear of how they will be perceived
Irrational belief they have all the answers
Don't feel it is important enough
Lack confidence in their advisor
Experienced real estate agents like myself (Russ Ravary) handle such a multitude of transactions and personality mixes, there's little they haven't heard before. Your advisers are representing your best interests and have a fiduciary responsibility to do so. They can't help you if they don't know what you are doing behind their backs. Plus, they will likely have a better idea for you than you can think up. Be open, be honest. By letting them know your feelings will help them find you a home that you want at a price that you want.
If you have cold feet and have thoughts about backing out of the transaction, talk to your agent about those feelings. She can help walk you through the anxieties. Pros will help you to determine if you really need to cancel and, if so, try to get your earnest money back.
4. Not Understanding The Common Negotiating Methods Used At Offer Time
Some buyers have been told that the best way to get a good price is to low-ball the seller from the start in hopes that the seller will drop their price down fast in their counter offer. In reality this often does nothing more than upset the seller and will probably end up ruining the chance at an acceptable offer to both of the parties involved. Have good communication with your agent, and they will be able to inform you on the many proper ways to negotiate a deal and still get you the lowest price. A low ball offer is only good if it is a buyers market and you don't absolutely have to have "that home". A low ball offer does upset some sellers and they may refuse to negotiate at all. So be careful when you put one in if you really want the house.
5. Changing your Finances Prior to Closing
I have had people who bought new cars, or bought furniture, or quit their job before the closing. More debt meant debt ratios were out of wack, meant they were no longer qualified to buy a home.
Today's home buyers make the same mistake. Do not buy anything on credit and / or with a credit card once you have completed a loan application. Do NOT buy:
Automobiles
Washers, dryers, refrigerators
Lawnmowers or garden equipment
Expensive electronics or computers
Furniture for your new home
Slight alterations in your credit ratios could cause an underwriter to throw out your loan and deny it. If your loan contingency has expired or been removed, you could forfeit your earnest money deposit in addition to losing the home.
6. Failing To Know Research The Market Before Making Your Offer or FAILING TO INSIST ON A COMPARATIVE MARKET ANALYSIS (CMA) BEFORE MAKING A PURCHASE OFFER. Amazingly, many home buyers still follow the old rule: "Offer 5 percent below the asking price." That makes no sense.
Instead, smart home buyers ask their buyer's agent to prepare a written comparative market analysis (CMA) before making a purchase offer. This CMA is the same form the listing agent prepared for the home seller.
It shows recent sold prices of comparable nearby homes. Just because other homes are asking similar prices doesn't mean you are getting a good deal. It is what has sold recently that is the true measure of what a home is worth. That is how appraisals are done. Not by houses that are listed.
With the help of the buyer's agent, smart buyers then discuss the pros and cons of the homes on the CMA before arriving at a reasonable purchase offer price.Have your agent prepare all the area sales and comparables in your area and get a copy to look over before you make your offer. This will help ensure that you do not overpay what the home is really worth. In most cases, this is the same type of information that the seller saw when setting the price of their home ( and most likely ignored). Failing To Use Certified Home Inspection Company Buying your home often times the most important investment and financial transaction that you will ever make. A home inspection can save you hundreds or even thousands of dollars and unexpected problems down the road. In addition to the inspection, it is often a good idea to request some type of Home Warranty to cover the unexpected problems that may arise after you buy the house.
7. BUY A HOME WITH AN UNCHANGEABLE ISSUE.
A issue that will affect the future sale of the home and the price. In the current buyer's market in most communities, where there are more home sellers than qualified buyers, house and condo buyers can afford to take their time and be "picky." You need to be picky about the home you buy.
No home is perfect. Even brand-new houses and condos have their defects. Thankfully, most homes don't have major defects, such as being located next to a noisy railroad track or a freeway. Smart buyers think into the future and ask, "Will I have any trouble selling this home because of its problems?"
Serious defects are called "economic obsolescence" by appraisers. Examples include a bad floor plan, poor location (such as backing to a main street), outside factors ( such as cell phone towers, freeways, city dumps, commercial properties, high-voltage power lines), noisy street traffic, or lack of on site parking. Serious consideration should be given to these homes. There has to be a good price reduction in order to make it a good value.
8. Buying the Wrong House
The very first thing home buyers should do is make a list of priorities and define your home purchase wants and desires. Figure out what features and benefits are most important and which you can live without. Before you close escrow, review this list. It's easy to overlook a major factor that could come back to haunt you later. If you need four bedrooms for your three kids don't buy a three bedroom and try to "get by"
Know what you can afford for a house payment. Going house poor is going to have you end up in foreclosure. Buy within your means. Don't let your emotions cloud your judgement.
9.. NEGLECTING TO RE- Read and examine the Purchase agreement, it's clauses, conditions, and contingencies..
Today's smart home buyers include at least two purchase-offer contingencies: (a) a satisfactory lender's professional appraisal of the home for at least the purchase price, and (b) the buyer's approval of a professional inspection report to be obtained at the buyer's expense.
Depending on local custom, additional inspection contingencies might include termite or pest control, building-code compliance, energy efficiency, and radon.
A controversial contingency makes the home purchase contingent on the buyer's sale of his/her current residence. Many home sellers refuse to accept such a contingency. Others will accept it but with a 48-hour release clause if a better purchase offer from another buyer materializes
10.. Falling in love
If you think a house is ideal, don't let the seller or any of the seller's agents know. If the seller finds out you're in love with the house, the seller could hold out for a higher price.
A wise home buyer knows there's lots of houses -- and there's one out there that's the right house at the right price. If you can't afford it, move on and keep looking.
11. Overlooking an inferior floor plan for an attractive exterior.
It may have gorgeous curb appeal, but you don't live on the lawn. No matter how attractive the exterior, you need a livable home
12. Overlooking how the house will function for your family.
How do you really live? Do you really need a formal dining room and living room? Would you be happier with an eat-in kitchen and a great room and a den to use as a home office? The house only needs to fit one family -- yours.
13. Not getting what you want because you're impatient.
This is a big decision. You need time. Impatient decisions can lead to mistakes. Take your time, think about your decision. Re look at your favorite houses. Re look at the one you love. You would be surprised at how many times people get frustrated with the buying process and just buy any house because they are tired of looking. Take your time.
For more buyer and sellers tips go to my website www.russravary.com and you can also search for Michigan homes for sale with out leaving your name, email, or phone number
Buying floreclosures
Everybody watches late night TV and sees the infomercials on how people made millions buying bank foreclosures. Can you do it? It is possible but banks have closed many of the loopholes in the lending process.
Let me explain what happens in the foreclosure process in Michigan. A homeowner falls 3 or more payments behind on the mortgage. The bank then sends them a letter that they are going to start foreclosure proceedings against the homeowner. Sometimes the banks are very quick to get a letter out and start the foreclosure proceedings. Other times some banks take months to get the foreclosure process started.
If the home owners make no attempt to correct the situation and pay up, then it is usually turned over to a foreclosure attorney to handle. During this time the bank usually requires the full amount of arreage to be paid. They won't accept just one payment. They want the full amount. If they owners don't pay the full amount or reach an agreement with the bank. (Remember the bank does not have to agree to take partial payment) The house is then scheduled to be sold at * sheriff sale*. The home is auctioned off. Unfortunately many people think you can steal the homes at the sale. There are deals there at the sale but you have to do the research on the homes and their value. But what usually happens is the bank will buy the home back. The reason they do this is because they have a mortgage on it. Let's say the house is worth $120,000 and the homeowners owe $100,000 on a mortgage. The bank will buy it back up to the $100,000 to recover their costs and to get the other possible liens off the home. You could buy it for $101,000 or more and the bank would probably let you buy it.
If the mortgage was $90,000 then the bank would bid up to $90,000 to keep their interest in the property. So up to this point the only way you can get a deal on the property is to out bid other buyers on a home. (and the mortgage on the property was not close to the value of the home.)
Now the bank owns the home. The original owners may still be living in the home. They have up to 6 months to pay the bank the full amount to keep the home. This seldom happens. The poeple can actually still live in the house and not pay anything and the bank can't kick them out until the six months is up. So sometimes these people live in the house for up to a year or year and a half and not pay a dime!
The bank usually waits for the six month redemption period to lapse. They then contact 3 different real estate agents. The bank will ask the three realtors to give them a price that the house should sell for. The bank is asking the realtor for a price, that price usually is fair market value in the eyes of the realtor. So that foreclosed home is no deal. It is around fair market value. The bank then hires a realtor to change locks, winterize the home, clean carpets, and if necessary get the home in saleable condition.
So the bottom line is that the bank is trying to recover what they are owed on the house or get fair market value. So most homes that are foreclosed are not great deals. Though there are some fixer uppers that may be deals. Ask your real estate agents to look for them. There also are HUD foreclosures that go through a little different process. There may be deals in them. I will be talking about them in another section.
The key to buying homes cheaply is to know values of the neighborhood and city and look for fixer uppers or homes below market value. Or buy Michigan homes that the people have relocated and have to sell. Or a divorce situation where they want to dump the home.
To get more buyers tips and sellers tips go to my website www.russravary.com or search Michigan homes for sale
Let me explain what happens in the foreclosure process in Michigan. A homeowner falls 3 or more payments behind on the mortgage. The bank then sends them a letter that they are going to start foreclosure proceedings against the homeowner. Sometimes the banks are very quick to get a letter out and start the foreclosure proceedings. Other times some banks take months to get the foreclosure process started.
If the home owners make no attempt to correct the situation and pay up, then it is usually turned over to a foreclosure attorney to handle. During this time the bank usually requires the full amount of arreage to be paid. They won't accept just one payment. They want the full amount. If they owners don't pay the full amount or reach an agreement with the bank. (Remember the bank does not have to agree to take partial payment) The house is then scheduled to be sold at * sheriff sale*. The home is auctioned off. Unfortunately many people think you can steal the homes at the sale. There are deals there at the sale but you have to do the research on the homes and their value. But what usually happens is the bank will buy the home back. The reason they do this is because they have a mortgage on it. Let's say the house is worth $120,000 and the homeowners owe $100,000 on a mortgage. The bank will buy it back up to the $100,000 to recover their costs and to get the other possible liens off the home. You could buy it for $101,000 or more and the bank would probably let you buy it.
If the mortgage was $90,000 then the bank would bid up to $90,000 to keep their interest in the property. So up to this point the only way you can get a deal on the property is to out bid other buyers on a home. (and the mortgage on the property was not close to the value of the home.)
Now the bank owns the home. The original owners may still be living in the home. They have up to 6 months to pay the bank the full amount to keep the home. This seldom happens. The poeple can actually still live in the house and not pay anything and the bank can't kick them out until the six months is up. So sometimes these people live in the house for up to a year or year and a half and not pay a dime!
The bank usually waits for the six month redemption period to lapse. They then contact 3 different real estate agents. The bank will ask the three realtors to give them a price that the house should sell for. The bank is asking the realtor for a price, that price usually is fair market value in the eyes of the realtor. So that foreclosed home is no deal. It is around fair market value. The bank then hires a realtor to change locks, winterize the home, clean carpets, and if necessary get the home in saleable condition.
So the bottom line is that the bank is trying to recover what they are owed on the house or get fair market value. So most homes that are foreclosed are not great deals. Though there are some fixer uppers that may be deals. Ask your real estate agents to look for them. There also are HUD foreclosures that go through a little different process. There may be deals in them. I will be talking about them in another section.
The key to buying homes cheaply is to know values of the neighborhood and city and look for fixer uppers or homes below market value. Or buy Michigan homes that the people have relocated and have to sell. Or a divorce situation where they want to dump the home.
To get more buyers tips and sellers tips go to my website www.russravary.com or search Michigan homes for sale
Thursday, July 19, 2007
Gosh darn why isn't my home selling?
It is a tough time to sell a home in Michigan, but homes are being sold. It is going to take time to sell your home no matter how nice your home is.
Turning 'For Sale' into 'Sold'
Getting Your Home Ready To Sell Requires A Little Money And A Lot Of Work!
Depersonalize your house
Get rid of family pictures on walls, dressers, and refrigerator.
Odors will kill a sale. Pet odors, smoking odors, old person odor, mildew odors.
Find the source and clean it. Then buy one of the many products to eliminate the smell and make your house smell better. I always remember I was showing a home to a couple with a 5 year child. We walked into a home and the child blurted out "what is that smell". Make sure litter boxes are clean and dog hair is up if you have a pet.
Clean everything! Bathrooms and kitchen, all rooms and closets from ceilings to floors and carpets!!
Caulk all areas that need it (around sinks, bathtubs, shower stalls, windows, doors, etc)
Grease or oil all squeaky doors and gates.Repaint all areas, especially halls, kitchen and family room if possible.
Neutral paint is one of the biggest selling features! If you have wallpaper consider removing it and repainting. I went into one kitchen that had vegetable wallpaper. I'm sure the homeowner loved it but it killed the deal. And my buyer liked the house up to that point.
If you have worn or stained carpeting consider replacing it with a neutral carpeting.
Clean the windows and doors (inside and outside) Make them shine. Make sure they open, close, and lock with ease.
Get rid of extra chairs, cabinets, or anything that takes up floor space in the kitchen. Every lady likes a spacious kitchen. Get rid of the dog bowls, the potato bin, the desk.
Wipe down all light fixtures including outdoor ones.
Edge your flowerbeds and add fresh mulch. Keep the lawn mowed and edged. Trim the shrubs. Get rid of any overgrown bushes or trees that hide the house. Reseed any bald spots in the yard.
If you have a pool make sure the water is sparkling clear.
Plant flowers in bloom or add baskets and planters. Remove anything that has been laying around the yard, or garage ( that you have been saving ie old wood, that old barbecue).
Make sure your front door is stained, varnished, or painted.
Your front door is the first impression. Add a welcoming wreath to your front door. Repair any leaking water pipes or faucets. If there are water stains clean them up after repairing the leak.Replace stained, bowed, or missing ceiling tiles.
Polish all brass fixtures.
Replace your furnace filters and leave a few extra ones out to show you're good at regular maintenance.
Unclutter all cabinets and closets by packing away things you are not currently using. you want the appearance of spaciousness. By have a crowded closet it appears smaller to the buyer.
Have the siding, deck, stained cement, and railings pressure washed.Put a coat of paint or varnish on the deck.
Clean and organize the garage, work bench, and shed.Clean up grease and oil stains on the garage and driveway.Give your hardwood floors a shine, clean grout on floor tiles.
Get rid of or hide counter 'stuff' too much clutter makes a kitchen or bath look smaller.
If you have an asphalt driveway, consider having it "black topped" for a fresh clean look.
Inspect the wooden trim (window sills, roof line, porches, decks) replace rotten wood and repaint as necessary. Make sure windows and doors open, close, and lock easily.
Add bright bulbs to all areas of the house inside and out.
Add plug in air fresheners all around the house (oil variety in natural soft fragrances are great).
Here are links to different articles on how to help sell your house.
Why your house isn't selling
6 reasons your home isn't selling by MSN
Help my house isn't selling by CNN Money
My house isn't selling what should I do?
What should I do if my house isn't selling? by Home Gain
Sell your house by do it yourself
Prepare your house for sale
Depersonalize your house by real estate abc
How to prepare your house for sale by homebuying
Get your house ready for sale by realtor.com
Getting your house ready for sale by Long and Foster
Getting your house ready for sale by Seacoast
Getting your home ready for sale by homes101
Curb Appeal Curb appeal
How to improve curb appeal by homebuying.com
How to boost your home's curb appeal by Popular Mechanic
Easy way to boost your home's curb appeal by Good Housekeeping
8 tips for curb appeal by bankrateShowing tips
Top home showing tips by a realtor
Tips on home showings by homegain
Preparing your sellers for showings by homeHome Staging
Home staging by home about
Staging your home by globalspan
7 Articles about staging your home by realtor.org
Staging your home to maximize profit by Lisa
I have over 100 pages of tips, advice, reports, and list on how to sell your home and what to look for when buying a home. Go to my website http://www.russravary.com/ for more great info. Or search Michigan real estate
Turning 'For Sale' into 'Sold'
Getting Your Home Ready To Sell Requires A Little Money And A Lot Of Work!
Depersonalize your house
Get rid of family pictures on walls, dressers, and refrigerator.
Odors will kill a sale. Pet odors, smoking odors, old person odor, mildew odors.
Find the source and clean it. Then buy one of the many products to eliminate the smell and make your house smell better. I always remember I was showing a home to a couple with a 5 year child. We walked into a home and the child blurted out "what is that smell". Make sure litter boxes are clean and dog hair is up if you have a pet.
Clean everything! Bathrooms and kitchen, all rooms and closets from ceilings to floors and carpets!!
Caulk all areas that need it (around sinks, bathtubs, shower stalls, windows, doors, etc)
Grease or oil all squeaky doors and gates.Repaint all areas, especially halls, kitchen and family room if possible.
Neutral paint is one of the biggest selling features! If you have wallpaper consider removing it and repainting. I went into one kitchen that had vegetable wallpaper. I'm sure the homeowner loved it but it killed the deal. And my buyer liked the house up to that point.
If you have worn or stained carpeting consider replacing it with a neutral carpeting.
Clean the windows and doors (inside and outside) Make them shine. Make sure they open, close, and lock with ease.
Get rid of extra chairs, cabinets, or anything that takes up floor space in the kitchen. Every lady likes a spacious kitchen. Get rid of the dog bowls, the potato bin, the desk.
Wipe down all light fixtures including outdoor ones.
Edge your flowerbeds and add fresh mulch. Keep the lawn mowed and edged. Trim the shrubs. Get rid of any overgrown bushes or trees that hide the house. Reseed any bald spots in the yard.
If you have a pool make sure the water is sparkling clear.
Plant flowers in bloom or add baskets and planters. Remove anything that has been laying around the yard, or garage ( that you have been saving ie old wood, that old barbecue).
Make sure your front door is stained, varnished, or painted.
Your front door is the first impression. Add a welcoming wreath to your front door. Repair any leaking water pipes or faucets. If there are water stains clean them up after repairing the leak.Replace stained, bowed, or missing ceiling tiles.
Polish all brass fixtures.
Replace your furnace filters and leave a few extra ones out to show you're good at regular maintenance.
Unclutter all cabinets and closets by packing away things you are not currently using. you want the appearance of spaciousness. By have a crowded closet it appears smaller to the buyer.
Have the siding, deck, stained cement, and railings pressure washed.Put a coat of paint or varnish on the deck.
Clean and organize the garage, work bench, and shed.Clean up grease and oil stains on the garage and driveway.Give your hardwood floors a shine, clean grout on floor tiles.
Get rid of or hide counter 'stuff' too much clutter makes a kitchen or bath look smaller.
If you have an asphalt driveway, consider having it "black topped" for a fresh clean look.
Inspect the wooden trim (window sills, roof line, porches, decks) replace rotten wood and repaint as necessary. Make sure windows and doors open, close, and lock easily.
Add bright bulbs to all areas of the house inside and out.
Add plug in air fresheners all around the house (oil variety in natural soft fragrances are great).
Here are links to different articles on how to help sell your house.
Why your house isn't selling
6 reasons your home isn't selling by MSN
Help my house isn't selling by CNN Money
My house isn't selling what should I do?
What should I do if my house isn't selling? by Home Gain
Sell your house by do it yourself
Prepare your house for sale
Depersonalize your house by real estate abc
How to prepare your house for sale by homebuying
Get your house ready for sale by realtor.com
Getting your house ready for sale by Long and Foster
Getting your house ready for sale by Seacoast
Getting your home ready for sale by homes101
Curb Appeal Curb appeal
How to improve curb appeal by homebuying.com
How to boost your home's curb appeal by Popular Mechanic
Easy way to boost your home's curb appeal by Good Housekeeping
8 tips for curb appeal by bankrateShowing tips
Top home showing tips by a realtor
Tips on home showings by homegain
Preparing your sellers for showings by homeHome Staging
Home staging by home about
Staging your home by globalspan
7 Articles about staging your home by realtor.org
Staging your home to maximize profit by Lisa
I have over 100 pages of tips, advice, reports, and list on how to sell your home and what to look for when buying a home. Go to my website http://www.russravary.com/ for more great info. Or search Michigan real estate
Wednesday, July 18, 2007
FSBO myths
FSBO MYTHS
Almost every For Sale By Owner site will tell you that you no longer have to be tied to a Realtor to sell your house. You no longer have to have your home ready to show. You are now the boss and you dictate those things. They are right. You are the boss! But they are leading you down the wrong path.You need to have your home in showing condition. Sure it is a pain to keep it clean. But think of when you looked at houses. What did you think of the homes that were messy or sloppy? What about the one that you could not get scheduled that day. If you found one you liked you most likely never rescheduled to go see that one home.
You have to be ready to show your home when the buyer wants to see it. If you tell a buyer no I'm busy and you will have to schedule it another day. They may not have the time or may not be in that area to see your home. I have sold homes when the buyer was in front of the house with their agent and wanted to get in right then! They walked in and liked the house. They saw the house by driving by and wanted to get in right away. They bought it.
FSBO Myth 1 -You don't have to have your home ready to show and you can show it at your convenience. You will lose buyers guaranteed. There are other houses they can look at. People want to see the home as soon as possible in their time schedule not the sellers.
For sale by owner sites tell you to put a number down that you can be contacted at. Good real estate offices are open 7 days a week. Usually from 9-7 during the week and 10 -3 on the weekends. Good agents respond quickly. If an agent does not call you back within 3 or 4 hours you have the wrong agent. Usually most of the good ones pick up the phone or respond back quickly. As For Sale by Owner of Michigan Real Estate you are now the agent. You need to be accessible and contact potential buyers back quickly. Most salesmen in any field will tell you that you always call back a potential buyer quickly. Get them while they are hot.
FSBO Myth 2 - You are in total control of your time. Wrong! If you don't call back buyers quickly and promptly they may never come and see the house. They may even forget which one it is. Remember when you looked at houses and they all seemed to run together after a while.
For sale by owner sites tell you don't need Realtors. Like all things sure you can do it yourself. But be prepared to know or have your purchase agreement looked at by a lawyer. Have the correct legal disclosures for buyers. Spend the money for advertising. Many real estate agents spend hours and hours in training and reading about real estate, negotiating. They have other real estate agents and their brokers to resolve problems and issues when they are selling Wayne County Real Estate or Washtenaw County Real Estate. For sale by owner sites make it sound easy to sell real estate. If it was easy then Real estate agents would be millionaires from all the easy sales they have done.
FSBO Myth 3 - It is easy to sell your home and doesn't involve too much. Realtors go through constant training, have guidance, experience, and knowledge gained from doing real estate for years. Wouldn't you like somebody that knows what they are doing to do it right? Real Estate contracts are binding and can cost you a lot of money if you don't know what you are doing.Real estate transactions are tricky whether it is Livingston county real estate , Livonia real estate, Oakland County real estate, or Novi real estate As you know it is always better to have a knowledgeable person on your side. Give me a call at (313) 310-9855 to get started listing your Michigan home. For buying tips and selling tips go to my website www.russravary.com
Almost every For Sale By Owner site will tell you that you no longer have to be tied to a Realtor to sell your house. You no longer have to have your home ready to show. You are now the boss and you dictate those things. They are right. You are the boss! But they are leading you down the wrong path.You need to have your home in showing condition. Sure it is a pain to keep it clean. But think of when you looked at houses. What did you think of the homes that were messy or sloppy? What about the one that you could not get scheduled that day. If you found one you liked you most likely never rescheduled to go see that one home.
You have to be ready to show your home when the buyer wants to see it. If you tell a buyer no I'm busy and you will have to schedule it another day. They may not have the time or may not be in that area to see your home. I have sold homes when the buyer was in front of the house with their agent and wanted to get in right then! They walked in and liked the house. They saw the house by driving by and wanted to get in right away. They bought it.
FSBO Myth 1 -You don't have to have your home ready to show and you can show it at your convenience. You will lose buyers guaranteed. There are other houses they can look at. People want to see the home as soon as possible in their time schedule not the sellers.
For sale by owner sites tell you to put a number down that you can be contacted at. Good real estate offices are open 7 days a week. Usually from 9-7 during the week and 10 -3 on the weekends. Good agents respond quickly. If an agent does not call you back within 3 or 4 hours you have the wrong agent. Usually most of the good ones pick up the phone or respond back quickly. As For Sale by Owner of Michigan Real Estate you are now the agent. You need to be accessible and contact potential buyers back quickly. Most salesmen in any field will tell you that you always call back a potential buyer quickly. Get them while they are hot.
FSBO Myth 2 - You are in total control of your time. Wrong! If you don't call back buyers quickly and promptly they may never come and see the house. They may even forget which one it is. Remember when you looked at houses and they all seemed to run together after a while.
For sale by owner sites tell you don't need Realtors. Like all things sure you can do it yourself. But be prepared to know or have your purchase agreement looked at by a lawyer. Have the correct legal disclosures for buyers. Spend the money for advertising. Many real estate agents spend hours and hours in training and reading about real estate, negotiating. They have other real estate agents and their brokers to resolve problems and issues when they are selling Wayne County Real Estate or Washtenaw County Real Estate. For sale by owner sites make it sound easy to sell real estate. If it was easy then Real estate agents would be millionaires from all the easy sales they have done.
FSBO Myth 3 - It is easy to sell your home and doesn't involve too much. Realtors go through constant training, have guidance, experience, and knowledge gained from doing real estate for years. Wouldn't you like somebody that knows what they are doing to do it right? Real Estate contracts are binding and can cost you a lot of money if you don't know what you are doing.Real estate transactions are tricky whether it is Livingston county real estate , Livonia real estate, Oakland County real estate, or Novi real estate As you know it is always better to have a knowledgeable person on your side. Give me a call at (313) 310-9855 to get started listing your Michigan home. For buying tips and selling tips go to my website www.russravary.com
Tuesday, July 17, 2007
Why FSBOs do not always sell
FSBOs, why they don't always sell
Advertising is what sells a house. Getting it out there that your home is for sale. Whether you are a for sale by owner or have your home listed by a real estate agent it needs to be advertised.
The number 1 reason that for sale by owners don't succeed is the lack of advertising. You need to have:
1) a for sale sign out front with a phone number that goes to you directly
2) listing brochure out front of the house with all the facts of the home (the data sheet)
3) getting listed on the local Realtor multiple listing service.By being listed on the local MLS (multiple listing service) in Michigan your home's information is put on multiple websites like http://www.realtor.com/ and http://www.moveinmichigan.com/ . Your home is available to thousands of real estate agents and their clients by having an exclusive right to sell contract with a Realtor. Your home is on the INTERNET and available to thousands of real estate agents across Michigan 24/7. Whenever a client comes in and asks about Michigan Real estate and the criteria meets your home's criteria,.... your home will be one of the homes that will be emailed or shown to the prospective client. That is why most FSBO's don't sell, they don't reach a big enough buying audience. It's that simple.
For sale by owners usually don't have the time or dedication to put the advertising out there. They can get listed on the MLS but if they do not have an exclusive right to sell contract then they may not even be pulled up by the Realtors. The MLS was set up by Realtors so their clients and themselves can advertise and see all the properties listed easily any time of the day or night. The MLS is the give and take of information, and advertising at the touch of a few buttons. (That is not available to most for sale by owners)
Sure a for sale by owner that advertises well, has open houses, has good traffic by the house, puts the word out to his neighbors, family, friends, and co-workers will have a good chance of selling their home if it is in good conditions and priced right for the market.
But over 80% of the homes are sold by Realtors, real estate agents, and the MLS. So if you are thinking of selling your house, advertise, advertise, advertise! Go to http://www.russravary.com/ for more home buying information, home selling tips, search michigan real estate
May your home sell quick whichever way you decide to sell. Russ Ravary
Advertising is what sells a house. Getting it out there that your home is for sale. Whether you are a for sale by owner or have your home listed by a real estate agent it needs to be advertised.
The number 1 reason that for sale by owners don't succeed is the lack of advertising. You need to have:
1) a for sale sign out front with a phone number that goes to you directly
2) listing brochure out front of the house with all the facts of the home (the data sheet)
3) getting listed on the local Realtor multiple listing service.By being listed on the local MLS (multiple listing service) in Michigan your home's information is put on multiple websites like http://www.realtor.com/ and http://www.moveinmichigan.com/ . Your home is available to thousands of real estate agents and their clients by having an exclusive right to sell contract with a Realtor. Your home is on the INTERNET and available to thousands of real estate agents across Michigan 24/7. Whenever a client comes in and asks about Michigan Real estate and the criteria meets your home's criteria,.... your home will be one of the homes that will be emailed or shown to the prospective client. That is why most FSBO's don't sell, they don't reach a big enough buying audience. It's that simple.
For sale by owners usually don't have the time or dedication to put the advertising out there. They can get listed on the MLS but if they do not have an exclusive right to sell contract then they may not even be pulled up by the Realtors. The MLS was set up by Realtors so their clients and themselves can advertise and see all the properties listed easily any time of the day or night. The MLS is the give and take of information, and advertising at the touch of a few buttons. (That is not available to most for sale by owners)
Sure a for sale by owner that advertises well, has open houses, has good traffic by the house, puts the word out to his neighbors, family, friends, and co-workers will have a good chance of selling their home if it is in good conditions and priced right for the market.
But over 80% of the homes are sold by Realtors, real estate agents, and the MLS. So if you are thinking of selling your house, advertise, advertise, advertise! Go to http://www.russravary.com/ for more home buying information, home selling tips, search michigan real estate
May your home sell quick whichever way you decide to sell. Russ Ravary
Sunday, July 8, 2007
Are open houses effective?
For years we have held open houses. But did you know that open houses only sell 2% of the houses. It is just another marketing tool. I have been able to convert lookers into buying the house I have held open. Is it luck or just the right buyer? I do not know. I know agents that have held open hundreds of houses and never sold one.
Open houses are held for four reasons:
1.) To advertise the house
2.) To make the seller's happy that the agent is doing something to market the house
3.) To get the agent more buyers and more exposure.
4.) To get the neighbors inside, talk to them, and get them to talk to their friends, neighbors, relatives and co-workers.
I recommend open houses to be done at least once or twice per house. Sometimes only one or two people come through but you never know when it might be "your buyer". So if you have a Wayne county home, Livingston county home, or Oakland county home that you want to list for sale and have an open house email me. For more information on buying a Michigan home or selling a Michigan home go to my website www.russravary.com
For years we have held open houses. But did you know that open houses only sell 2% of the houses. It is just another marketing tool. I have been able to convert lookers into buying the house I have held open. Is it luck or just the right buyer? I do not know. I know agents that have held open hundreds of houses and never sold one.
Open houses are held for four reasons:
1.) To advertise the house
2.) To make the seller's happy that the agent is doing something to market the house
3.) To get the agent more buyers and more exposure.
4.) To get the neighbors inside, talk to them, and get them to talk to their friends, neighbors, relatives and co-workers.
I recommend open houses to be done at least once or twice per house. Sometimes only one or two people come through but you never know when it might be "your buyer". So if you have a Wayne county home, Livingston county home, or Oakland county home that you want to list for sale and have an open house email me. For more information on buying a Michigan home or selling a Michigan home go to my website www.russravary.com
Saturday, July 7, 2007
21 low cost tips to improve your curb appeal.Buyers will drive by your house when you don't know. Make your home more appealing all the time. Be ready for that buyer. If they don't like the outside they won't come inside. You have to get them inside to sell the house, so curb appeal is important. Here are some quick and easy tips.
1. Trim bushes and Trees neatly so they don't block windows and cut down on light.
2. Trim lower branches of trees so you can see your home from the street.
3. Buy a new doormat.
4. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
5. Plant annuals in your flower beds
6. Put new doorknobs on your doors.
7. Remove the weeds in the cracks of the driveway and concrete
8. Put a fresh coating on your driveway.
9. Cut and edge the grass more often. Trim around walks and trees.
10. Clean up the yard and remove all the debris
11. Be sure kids put away their toys12. Put a fresh coat of paint on the outside.
13. If anything is leaning or crooked straighten it up (crooked shutter, leaning pool).
14. Buy a new mailbox.
15. Upgrade the outside lighting.
16. Polish or replace your house numbers
17. Clean your gutters.
18. Buy a flowering plant and put it in a window you pass by frequently.
19. Put a seasonal wreath on your door.
20. Put fresh mulch or stones down in the beds and have the beds weeded
21. Put a fresh coat of glossy paint on the front door that will accent the entrance way and coordinate with the rest of the colors on the outside.
By doing all of these tips will improve your chances of getting people inside your Oakland County home, or Wayne County home, Livingston county home. Remember it is work that will pay off in selling your Michigan home! For more tips on selling and tips on buying ( over 50 articles on buying ) go to my website http://www.russravary.com
1. Trim bushes and Trees neatly so they don't block windows and cut down on light.
2. Trim lower branches of trees so you can see your home from the street.
3. Buy a new doormat.
4. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
5. Plant annuals in your flower beds
6. Put new doorknobs on your doors.
7. Remove the weeds in the cracks of the driveway and concrete
8. Put a fresh coating on your driveway.
9. Cut and edge the grass more often. Trim around walks and trees.
10. Clean up the yard and remove all the debris
11. Be sure kids put away their toys12. Put a fresh coat of paint on the outside.
13. If anything is leaning or crooked straighten it up (crooked shutter, leaning pool).
14. Buy a new mailbox.
15. Upgrade the outside lighting.
16. Polish or replace your house numbers
17. Clean your gutters.
18. Buy a flowering plant and put it in a window you pass by frequently.
19. Put a seasonal wreath on your door.
20. Put fresh mulch or stones down in the beds and have the beds weeded
21. Put a fresh coat of glossy paint on the front door that will accent the entrance way and coordinate with the rest of the colors on the outside.
By doing all of these tips will improve your chances of getting people inside your Oakland County home, or Wayne County home, Livingston county home. Remember it is work that will pay off in selling your Michigan home! For more tips on selling and tips on buying ( over 50 articles on buying ) go to my website http://www.russravary.com
Thursday, July 5, 2007
Appraisals
When to order an appraisal
You have completed the loan application, put in a purchase offer. When do you order an appraisal? You order an appraisal after the home inspection. You don't want to order and pay for an appraisal until the house passes inspection. If the house fails inspection you don't order the appraisal until you have a signed addendum stating the the seller will do the repairs, give you a lower price, or you accept the house as is. Then you order the appraisal
Appraisals are performed for the benefit of the lender. They are trying to justify the loan amount based on the appraised value. The appraiser will have a copy of the Purchase agreement. (contract). The typical cost of an appraisal is $275 - $350 and is normally paid to the lender upfront by the borrower. Appraisers charge more for rental properties, FHA appraisals, and multi family properties. Commercial appraisals start at $1500 and go up to $5000
An appraisal is subjective. One appraiser may come up with one value and another may come up with a totally different value. An appraisal is not what the house should sell for, it is a educated estimate of value using different value approachs.The most common way an appraisal is done is that the subject house ( the house being bought) is compared to 3-5 homes that are similar in style, size, and location that have sold in the last 6 months. So your appraisal is based on homes that have sold recently that are like yours and near yours!
STYLE By style I mean they compare ranches with ranches. They will not compare a ranch to a colonial. ( or 2 story)
SIZE, AGE By size I mean they compare square footage, number of bedrooms, bath rooms, age, garage, ammenities. Your home may be 1200 sq ft 2 bedroom,1.5 bath, built in 1999, with a 2 car garage. One of the ones that sold may be 1200 sq ft, 3 bedroom, 2 bath, built in 1952, with a 1 car garage. The appraiser has a general formula that he uses to give value to a 3 bedroom versus a 2 bedroom, A home built in 1999 is worth more than one built in 1952 so more value is given to the 1999 home. This gets very complex. What the lender is looking for from the appraiser is that he is not giving some ridiculous value to say the garage or the age. Remember very little value is given to updates. Bigger value would be given to an addition or a garage.
Location If it is in the city lenders like to see the comparable sold homes that the appraiser is using to be within a half a mile. Without crossing main roads or railroad tracks. This common sense, because if you cross a main road the houses can be totally different. The lender wants the appraiser to use the houses closest to the subject property. So if a similar house sold on the same street the appraiser is supposed to use it.That is how many times appraisals are different. Appraisers may be using different comparables (sold houses) and may be using a little different adjustments for the value of a three bedroom home versus a two bedroom home. It gets even more difficult when homes are not selling, or there are very few comparables close by. They sometimes have to go further away and futher back in time. Up to a year ago.
Appraisals are reviewed by the bank. Sometimes the bank has a review department in house or they pay another appraiser to review the appraisal. So there are checks and balances in the system.
What happens is your house does not appraise for the sales price ? Most houses do but every once in a great while one won't.Either the appraiser appraised it for less than the sales price or sometimes the bank rejects the value of the appraisal and will come back with a lower value of the house. What the means to you the buyer is that the sales price must be reduced or you have to bring more money to the table. For example you bought a home for $200,000 and you are borrowing 100%. The bank or the appraiser says it is only worth $190,000. The bank is only going to loan $190,000. You either have to go back to the seller and renegotiate the price or you have to come up with $10,000.
VA Appraisals: If you are getting either of these government mortgages, the appraiser will not only look at valuation but will also look at the condition. If defects are noted, they may require that they be fixed prior to closing. Since the borrower has such a low downpayment, Lenders want to make sure that Borrowers are not hit with any up-front maintenance expenses. The Seller is not obligated to make the repairs; consequently, they will have to be negotiated.
Appraisals are not a guarantee of value. Most lenders will have a disclaimer to that effect. Remember, the appraiser has a copy of your fully negotiated contract BEFORE establishing the appraisal value. It is more of a confirmation of value.
Russ Ravary
You have completed the loan application, put in a purchase offer. When do you order an appraisal? You order an appraisal after the home inspection. You don't want to order and pay for an appraisal until the house passes inspection. If the house fails inspection you don't order the appraisal until you have a signed addendum stating the the seller will do the repairs, give you a lower price, or you accept the house as is. Then you order the appraisal
Appraisals are performed for the benefit of the lender. They are trying to justify the loan amount based on the appraised value. The appraiser will have a copy of the Purchase agreement. (contract). The typical cost of an appraisal is $275 - $350 and is normally paid to the lender upfront by the borrower. Appraisers charge more for rental properties, FHA appraisals, and multi family properties. Commercial appraisals start at $1500 and go up to $5000
An appraisal is subjective. One appraiser may come up with one value and another may come up with a totally different value. An appraisal is not what the house should sell for, it is a educated estimate of value using different value approachs.The most common way an appraisal is done is that the subject house ( the house being bought) is compared to 3-5 homes that are similar in style, size, and location that have sold in the last 6 months. So your appraisal is based on homes that have sold recently that are like yours and near yours!
STYLE By style I mean they compare ranches with ranches. They will not compare a ranch to a colonial. ( or 2 story)
SIZE, AGE By size I mean they compare square footage, number of bedrooms, bath rooms, age, garage, ammenities. Your home may be 1200 sq ft 2 bedroom,1.5 bath, built in 1999, with a 2 car garage. One of the ones that sold may be 1200 sq ft, 3 bedroom, 2 bath, built in 1952, with a 1 car garage. The appraiser has a general formula that he uses to give value to a 3 bedroom versus a 2 bedroom, A home built in 1999 is worth more than one built in 1952 so more value is given to the 1999 home. This gets very complex. What the lender is looking for from the appraiser is that he is not giving some ridiculous value to say the garage or the age. Remember very little value is given to updates. Bigger value would be given to an addition or a garage.
Location If it is in the city lenders like to see the comparable sold homes that the appraiser is using to be within a half a mile. Without crossing main roads or railroad tracks. This common sense, because if you cross a main road the houses can be totally different. The lender wants the appraiser to use the houses closest to the subject property. So if a similar house sold on the same street the appraiser is supposed to use it.That is how many times appraisals are different. Appraisers may be using different comparables (sold houses) and may be using a little different adjustments for the value of a three bedroom home versus a two bedroom home. It gets even more difficult when homes are not selling, or there are very few comparables close by. They sometimes have to go further away and futher back in time. Up to a year ago.
Appraisals are reviewed by the bank. Sometimes the bank has a review department in house or they pay another appraiser to review the appraisal. So there are checks and balances in the system.
What happens is your house does not appraise for the sales price ? Most houses do but every once in a great while one won't.Either the appraiser appraised it for less than the sales price or sometimes the bank rejects the value of the appraisal and will come back with a lower value of the house. What the means to you the buyer is that the sales price must be reduced or you have to bring more money to the table. For example you bought a home for $200,000 and you are borrowing 100%. The bank or the appraiser says it is only worth $190,000. The bank is only going to loan $190,000. You either have to go back to the seller and renegotiate the price or you have to come up with $10,000.
VA Appraisals: If you are getting either of these government mortgages, the appraiser will not only look at valuation but will also look at the condition. If defects are noted, they may require that they be fixed prior to closing. Since the borrower has such a low downpayment, Lenders want to make sure that Borrowers are not hit with any up-front maintenance expenses. The Seller is not obligated to make the repairs; consequently, they will have to be negotiated.
Appraisals are not a guarantee of value. Most lenders will have a disclaimer to that effect. Remember, the appraiser has a copy of your fully negotiated contract BEFORE establishing the appraisal value. It is more of a confirmation of value.
Russ Ravary
Tuesday, July 3, 2007
Making an offer
Ask for this Instead!!!
So you are ready to put an offer in on a Wayne County home, or any Michigan house for sale. Here is another way to negotiate.Sellers sometimes get stuck on a price in their head. The way to get around it and get a lower bottom line to you is ask in a different way. People sometimes don't think about the extras if it is not showing up as a black and white number. So here is different ideas on how to negotiate.
Here are things to ask for:
1.) Personal Property. Ask for the pool table, ask for furniture, ask for the appliances, ask for the riding mower, or the boat. These are give mees that sellers may say let's just throw it in to sell the house. It's free for you and may save you a few dollars. Especially if you need them.
2) Home Warranty. This help protects you if there is a major repair within the first year. The seller doesn't have to pay for this until closing, so it is no money out of his pocket.
3.) Repairs. If you know of something that needs repaired. Ask for it to be fixed before closing. It will save you the cost and time of having it fixed yourself.
4.) Closing Costs. Did you know that lender allows the seller to pay up to 3% of the purchase price? If you don't have a lot of money this is a great way to get a reduction. You can save your money to buy furniture or things you need when you move in. The seller can pay for the title insurance, appraisal, survey, bank fees and even set up your escrow account. They can even pay for your pre-paid interest. (that is the interest until the first of the month)
5.) Tax pro-rations. This is a great one. The seller paid this months ago and may not even think of getting the pro-rated taxes back from you the buyer. This can add up to several thousand dollars. The seller usually never thinks of this in dollars because he already paid it and it is out of his pocket.
Whether you are buying Livonia real estate, Novi real estate, or Oakland County Home, Livingston County Home, or Washtenaw county home I hope these real estate buyer tips help you get a little lower price for your dream home. Russ Ravary
So you are ready to put an offer in on a Wayne County home, or any Michigan house for sale. Here is another way to negotiate.Sellers sometimes get stuck on a price in their head. The way to get around it and get a lower bottom line to you is ask in a different way. People sometimes don't think about the extras if it is not showing up as a black and white number. So here is different ideas on how to negotiate.
Here are things to ask for:
1.) Personal Property. Ask for the pool table, ask for furniture, ask for the appliances, ask for the riding mower, or the boat. These are give mees that sellers may say let's just throw it in to sell the house. It's free for you and may save you a few dollars. Especially if you need them.
2) Home Warranty. This help protects you if there is a major repair within the first year. The seller doesn't have to pay for this until closing, so it is no money out of his pocket.
3.) Repairs. If you know of something that needs repaired. Ask for it to be fixed before closing. It will save you the cost and time of having it fixed yourself.
4.) Closing Costs. Did you know that lender allows the seller to pay up to 3% of the purchase price? If you don't have a lot of money this is a great way to get a reduction. You can save your money to buy furniture or things you need when you move in. The seller can pay for the title insurance, appraisal, survey, bank fees and even set up your escrow account. They can even pay for your pre-paid interest. (that is the interest until the first of the month)
5.) Tax pro-rations. This is a great one. The seller paid this months ago and may not even think of getting the pro-rated taxes back from you the buyer. This can add up to several thousand dollars. The seller usually never thinks of this in dollars because he already paid it and it is out of his pocket.
Whether you are buying Livonia real estate, Novi real estate, or Oakland County Home, Livingston County Home, or Washtenaw county home I hope these real estate buyer tips help you get a little lower price for your dream home. Russ Ravary
Sunday, July 1, 2007
Home inspections
You should never go without a home inspection by a certified home inspector. They are trained, educated, and can spot items that a ordinary person would miss. They do it every day. they are a wealth of information. so whether you are buying Livonia real estate, Novi real estate, or any Michigan home for sale you should get a home inspection done. This checklist can serve as a reminder of some things to consider to make wise home buying decisions, to help aid you in your decision.
Check the foundation, floors, walls and poured concrete. Are there cracks, are there evidence of bowed walls?Are there water stains on the basement walls?
Make sure there's no evidence of water seepage or moisture problems. Are there electrical fixtures in the basement that look improperly wired?
Outside does the ground slope away from the house for drainage.
If there is a sump pump does it work
Check to see if the crawl space is dry, ventedWhile in the crawl space check for condition of floor joists.
Inspection by qualified exterminator is necessary for existing and potential problems related to wood rot and termites (termite inspections are an extra cost and separate inspection).
Check the condition of Underlayment flooring, whether plank or plywood.
Check for solid construction of bridging and joists.
Check walls, whether drywall or plaster. Make sure there are no water marks.
Make sure the attic is sufficiently insulated and ventilated. Check for mold spots for inadequate ventilation
Check that the fireplace damper is in working order, and flues to the chimney are clear.
On heating and air-conditioning systems, check what minor periodic maintenance is required, such as oil fan motor, lubricate bearings, clean humidifier, replace filters, etc.
Check the hot water system -- type and gallon capacity. How long has the present unit been in service?
Check the electricity to make sure that the standard house current, number of circuits, outlets and fuses or circuit breakers are sufficient for everyday needs, and the condition of wiring is good.
Check for good water pressure throughout house and that the tie-in to local water supply facilities, etc. are all in working order. If well and septic you should have a seperate water and well inspection done even if costs extra.
Bathroom and kitchen fixtures should be in good shape. Is there evidence of water leakage under the sinks. Make sure the range, refrigerator, dishwater/disposal, laundry facilities, etc. are all in working order.
Check exterior lot and landscaping. Are trees and shrubs overhanging electrical and phone lines. Is it properly graded or contoured?
Check that fences, walls, patio and driveway are in good condition. Does concrete have major cracks or uneven?
Be sure exterior walls are suitable to weather conditions. Is caulk missing? Does it need repainting? Are boards rotted?
Check doors and windows. Are they easy to open and close (or replace) for storm/screen removal or installation? Is there moisture between the seals. Is any part of the window rotted?
Are the roof, gutters and downspouts in good condition? Are they clean? Are they sagging?
Is the garage door or opener in good working order? Is there sufficient electrical and heating access in the garage?
After you have the home inspected you now know whether your "Plymouth home" or "metro Detroit home" needs major or minor repairs. Every house has repairs. If you have major repair you need to have the seller fix them, renegotiate the sales price, or accept the home as is. It is your choice. The seller usually has the choice to do the repair or back out of the deal.
Good luck on this final phase of the buying process. Russ Ravary
Check the foundation, floors, walls and poured concrete. Are there cracks, are there evidence of bowed walls?Are there water stains on the basement walls?
Make sure there's no evidence of water seepage or moisture problems. Are there electrical fixtures in the basement that look improperly wired?
Outside does the ground slope away from the house for drainage.
If there is a sump pump does it work
Check to see if the crawl space is dry, ventedWhile in the crawl space check for condition of floor joists.
Inspection by qualified exterminator is necessary for existing and potential problems related to wood rot and termites (termite inspections are an extra cost and separate inspection).
Check the condition of Underlayment flooring, whether plank or plywood.
Check for solid construction of bridging and joists.
Check walls, whether drywall or plaster. Make sure there are no water marks.
Make sure the attic is sufficiently insulated and ventilated. Check for mold spots for inadequate ventilation
Check that the fireplace damper is in working order, and flues to the chimney are clear.
On heating and air-conditioning systems, check what minor periodic maintenance is required, such as oil fan motor, lubricate bearings, clean humidifier, replace filters, etc.
Check the hot water system -- type and gallon capacity. How long has the present unit been in service?
Check the electricity to make sure that the standard house current, number of circuits, outlets and fuses or circuit breakers are sufficient for everyday needs, and the condition of wiring is good.
Check for good water pressure throughout house and that the tie-in to local water supply facilities, etc. are all in working order. If well and septic you should have a seperate water and well inspection done even if costs extra.
Bathroom and kitchen fixtures should be in good shape. Is there evidence of water leakage under the sinks. Make sure the range, refrigerator, dishwater/disposal, laundry facilities, etc. are all in working order.
Check exterior lot and landscaping. Are trees and shrubs overhanging electrical and phone lines. Is it properly graded or contoured?
Check that fences, walls, patio and driveway are in good condition. Does concrete have major cracks or uneven?
Be sure exterior walls are suitable to weather conditions. Is caulk missing? Does it need repainting? Are boards rotted?
Check doors and windows. Are they easy to open and close (or replace) for storm/screen removal or installation? Is there moisture between the seals. Is any part of the window rotted?
Are the roof, gutters and downspouts in good condition? Are they clean? Are they sagging?
Is the garage door or opener in good working order? Is there sufficient electrical and heating access in the garage?
After you have the home inspected you now know whether your "Plymouth home" or "metro Detroit home" needs major or minor repairs. Every house has repairs. If you have major repair you need to have the seller fix them, renegotiate the sales price, or accept the home as is. It is your choice. The seller usually has the choice to do the repair or back out of the deal.
Good luck on this final phase of the buying process. Russ Ravary
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