Homeowners Insurance When Buying a Home in Farmington Hills MI

Homeowners Insurance When Buying a Home in Farmington Hills MI

Homeowners Insurance When Buying a Home in Farmington Hills MI –  Buying a home is exciting whether you are a first-time homebuyer or an experienced homeowner. However, often overlooked in the long list of things to do between price negotiations, home inspection, and mortgage terms is getting homeowners insurance, which is an important step in the home buying process and one that should be a priority. 

Of course, If you plan on paying off your home in cash, then technically you don’t need home insurance before closing. There’s no law that requires home insurance, but most mortgage lenders will require you to get home insurance coverage before they will agree to finance your home purchase. 

Home insurance protects the mortgage lender’s investment by providing the money to repair or rebuild the home if it is damaged or destroyed by a fire, a lightning storm, a tornado, or some other covered event. By securing the coverage you need before you even move into your new home, you safeguard your purchase from disaster.

What does homeowners insurance cover?

Most homeowners insurance policies cover flooding from a burst pipe or other water leak in your home, but they usually don’t cover flooding as a result of a natural disaster. Depending on the location of your home, your lender may require you to buy insurance that covers earthquakes or floods. 

Basic homeowners policies will usually include liability coverage to protect you against legal action if someone is hurt on your property. 

If you have valuable items that exceed the special dollar limits of your policy, such as a fine art collection, sports memorabilia, or expensive jewelry, you may want to purchase extra coverage, known as a Personal Articles Floater (PAF).

Shopping for homeowners insurance

It’s a good idea to start shopping for homeowners insurance as soon as you sign a contract to buy a Farmington Hills MI home. This allows you to get your policy in place before closing on the purchase. It’s important to research various policy options as they may offer different levels of coverage. 

Once you have decided on an insurance policy that fits your needs, make sure you check that it also meets the requirements of your lender. 

The cost of home insurance

The cost of homeowners insurance depends on a number of factors, including the coverages you select, features of your home, and the value of your personal belongings. There may also be extra costs for additional coverage or increased coverage limits.

Once you’ve determined that your desired policy meets your mortgage lender’s requirements, you can purchase the insurance, which should be done sometime before you go to the meeting to officially close on your home. 

The insurance company will typically pre-approve the policy and then wait for your escrow/title company to send a request for Proof of Insurance when the final closing date is near. The insurance company will then email or fax the confirmation of coverage before the closing date. 

Paying for your home insurance

Paying for your home insurance is usually made simple with an escrow account, which is a separate bank account that you maintain with your mortgage lender. An escrow account can help you set aside money each month for bills that relate to your property and usually come due as a lump sum.

Typically, your escrow payment covers part of your property taxes, mortgage insurance, and homeowners insurance. When you have an escrow account, you make a single payment, usually monthly, which includes both your loan payment and your escrow payment.  

The takeaway

When buying a home in Farmington Hills MI, your lender will probably require at least a basic homeowners insurance policy and may also require additional coverage for natural disasters such as floods or earthquakes. Make sure that you give yourself plenty of time to get your policy in place before closing on your new home.

Partner with Top-rated Farmington Hills MI REALTOR® – Tom Gilliam

Whether you are interested in Farmington Hills MI homes for sale or it’s time to list your current property, experience matters most in a changing market. Top-rated Farmington Hills REALTOR® – Tom Gilliam offers over 20 years of local experience, in-depth market knowledge, and access to the most up-to-date listings for Farmington Hill MI homes for sale and the surrounding area.

Known for his professionalism and care for every detail, Tom is an expert at uncovering the perfect home for his clients’ lifestyle needs in the right neighborhood or community.

2020 Best of Farmington Hills REALTOR - Tom GilliamIf you are ready to sell your home, Tom will create a comprehensive marketing plan that exposes your home to the public as well as to other real estate agents through the Multiple Listing Service (MLS), other cooperative marketing networks, open houses for agents, etc.

Your listing will appear on all the most popular real estate sites where buyers spend hours a day looking at homes such as Realtor.com, Zillow, Trulia, REMAX, Redfin, and dozens of others. 

Your property will also be featured on Tom’s own highly-trafficked website Homes2moveyou.com. You can be assured that your home will get sold quickly and for the best price.

Search Farmington Hill MI Homes for Sale

Tom works very hard for his clients. He will protect your interests, advocate for you, negotiate on your behalf, and go the extra mile to ensure the best possible results. If you or someone you know is interested in buying or selling Farmington Hills MI real estate, please give top-rated Farmington Hills MI REALTOR® – Tom Gilliam a call today at (248) 790-5594 or you can get in touch here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578  

Home Appraisal Tips For Farmington Hills MI Homebuyers

Home Appraisal Tips For Farmington Hills MI Homebuyers

Home Appraisal Tips For Farmington Hills MI Homebuyers

You’ve been shopping for a home in Farmington Hills MI for weeks and you finally uncover the ideal home for your family in a great neighborhood. You put in a good offer and it gets accepted. If you are planning on taking out a mortgage, it now has to undergo a comprehensive appraisal of its worth. 

Although this may sound harsh, your dream-home-to-be isn’t a “home” to your lender. It’s a house and collateral, and if for some reason you are unable to make your mortgage payments, your lender can foreclose on your home and sell it to recoup all or some of its costs. 

Your mortgage lender will have to know the value of your home before handing over that large chunk of change. After you sign a home purchase agreement (the contract between you and the seller about the terms of the pending sale), and before your lender approves your loan, the home you are planning to buy must pass an appraisal by an unbiased third party – the appraiser.  

The home appraiser’s job 

An appraiser is a state-licensed or certified professional. Their job is to assess an opinion of value or how much a house is worth. The appraiser is a neutral party who doesn’t represent the buyer or the seller, a contractor chosen by your lender through an appraisal management company (AMC).

They work for lenders and help them decide if the home is a sound investment and worthy of the loan you’re asking for. Unlike a home inspector, who looks for defects that could cost the buyer money down the road, an appraiser looks at home components that contribute to the home’s value.

The appraiser will survey the house in person using specific criteria such as location, age, condition, square footage, additions/renovations, and recent sales of comparable homes. Home appraisals aren’t public records, but appraisers use public property records and other public documents to support their appraisals.

Some sellers have their Farmington Hills MI homes appraised before listing them on the market to help arrive at a fair asking price.

Who pays for the home appraisal?

Generally, it’s the buyer’s responsibility to pay for the home appraisal, a fee that’s typically included in your closing costs. While the cost of a home appraisal varies by the size and location of the home (among other factors), you can expect to pay around $300 to $400, according to recent estimates. Appraisers protect the bank and buyers from a potentially bad deal, so they’re worth every penny. 

The appraisal report

Once the appraisal is finished, the appraiser issues a written report with their opinion of the value of the home, and both the buyer and the lender will receive a copy of the report. If the home’s appraised value ends up higher than what you’re paying, generally the deal will move forward. 

However, if the appraisal is lower than your offer on the Farmington Hills MI home, your lender won’t give you a loan for more than the appraised value. If you and the seller agreed on $300,000, for example, but the appraisal value comes in at $290,000, there is a $10,000 shortfall. 

Options if faced with a low appraisal

If you are faced with a low appraisal, all is not lost. Negotiations aside, if the appraisal price seems much lower than the contract price, your agent can ask the appraiser to reevaluate their report. Appraisers can sometimes make mistakes in the basic data.

For instance, the number of bedrooms or baths. Or maybe, they need context for the comps, such as if a recent sale for a lower-than-typical price was between family members — or if a more-recent sale is available that changes the perspective.

If your offer included an appraisal contingency, you can renegotiate the price with the seller by persuading them to lower the sales price or split the difference between the home’s appraised value and the offer. If the seller is unwilling to negotiate, you can choose to walk away from the deal and keep your deposit.

Or you could decide to pay the additional $10,000 out of pocket so your home loan goes through. In either case, you have options. 

Talk with your Farmington Hills MI REALTOR® about their experience with the appraisal process, how they would recommend handling any shortfall — and how willing you should be to walk away from a deal that’s not right for you.

Partner with Top-rated Farmington Hills MI REALTOR® – Tom Gilliam

Whether you are interested in buying a home in Farmington Hills, MI, or it’s time to list your current property, experience matters most in a changing market. Top-rated Farmington Hills REALTOR® – Tom Gilliam offers over 20 years of local experience, in-depth market knowledge, and access to the most up-to-date listings for Farmington Hill MI homes for sale.

Known for his professionalism and care for every detail, Tom is an expert at uncovering the perfect home for his clients’ lifestyle needs in the right neighborhood or community.

2020 Best of Farmington Hills REALTOR - Tom GilliamIf you are ready to sell your home, Tom will create a comprehensive marketing plan that exposes your home to the public as well as to other real estate agents through the Multiple Listing Service (MLS), other cooperative marketing networks, open houses for agents, etc.

Your listing will appear on all the most popular real estate sites where buyers spend hours a day looking at homes such as Realtor.com, Zillow, Trulia, REMAX, Redfin, and dozens of others. 

Your property will also be featured on Tom’s own highly-trafficked website Homes2moveyou.com. You can be assured that your home will get sold quickly and for the highest market price.

Search Farmington Hill MI Homes for Sale

Tom works very hard for his clients and will be there to protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure the best possible results. If you or someone you know is interested in buying or selling Farmington Hills MI real estate, please give top-rated Farmington Hills MI REALTOR® – Tom Gilliam a call today at (248) 790-5594 or you can reach him here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578 

 

Tips for Winning a Farmington Hills MI Real Estate Bidding War

Tips for Winning a Farmington Hills MI Real Estate Bidding War

Tips for Winning a Farmington Hills MI Real Estate Bidding War

After weeks, maybe even months, searching for a home in a low-inventory competitive market, you finally uncover the perfect home for your family. It’s in the right neighborhood, near top-rated schools, has the right number of bedrooms, and provides convenient access to everyday amenities. The house has everything you have been dreaming so you decide to make an offer. But, because of the current housing market, your Farmington Hills MI REALTOR® comes back with the news that several other buyers have also submitted offers on the home. Suddenly you find yourself in a situation with multiple buyers vying for the same property, otherwise known as a bidding war. 

With so few houses for sale today and historically low mortgage rates driving buyer activity, bidding wars are becoming the new norm. In a bidding war, each buyer will make a more attractive offer, often driving up the price beyond what it was listed for, in hopes of winning the home. Although bidding wars are more likely to occur during hot seller’s markets when there is less inventory for buyers to choose from, the quality of the property, the desirability of its location, and the strength of its school district can also increase the chances of a bidding war. If you do find yourself in a bidding war, there are some things you can do to make your offer more appealing to the seller than the other offers. 

Here are some things you can do to up your chances of winning in a multiple-offer situation:

Hire an experienced Farmington Hills MI real estate agent

If you are serious about winning a bidding war, it would be wise to enlist the services of a reputable, seasoned real estate agent. A qualified REALTOR® will have the experience and skills necessary to help you win in a multiple bid situation. They will also have extensive market knowledge, which is crucial in determining the fair market value of the home you’re interested in.

By enlisting the services of a Farmington Hills MI real estate agent, you can feel confident that you won’t offer more than the house is worth or more than you can realistically afford to pay for it. Your agent will give you much-needed advice and also ensure that all decisions made are in your best interest. Bidding wars can be challenging to navigate, especially if you’re a first-time homebuyer. It’s vital to do your research so you have a clear understanding of the process, the market, and the home you are interested in purchasing.

Waiving contingencies 

In a competitive market, buyers will often waive certain contingencies to make their offers more attractive to sellers. Contingencies in home buying contracts allow a way out for the buyer should there be unexpected issues with financing or defects with the property. By waiving certain contingencies—for example, your financial contingency (an agreement that the buyer will only buy the property if they get a large enough loan from the bank) or your inspection contingency (an agreement that the buyer will only buy the property if there aren’t any deal-breaker issues found during the home inspection) – you show just how serious you are about moving forward with the deal. 

Waiving contingencies can make an offer more appealing to the seller, but it can also be a risk for the buyer. If for example, you waive your inspection contingency and then find out during the inspection that the home has serious plumbing issues, you may have to sacrifice your earnest money to back out of the deal or pay for repairs once the title has been transferred. Although waiving one or more contingencies in a multiple offer situation could be the extra push needed to get the house you want, it ultimately comes down to how much risk you feel comfortable with.

There a number of different contingencies, but the three most common include the financing contingency, inspection contingency, and appraisal contingency: 

1). Financial contingency

One common strategy used to make an offer stand out from the competition is to waive your financing contingency. In a home sale and purchase agreement, financing contingency refers to a clause that states the offer is contingent upon the buyer securing financing for the property – a standard feature in most Offers and Purchase and Sales Agreements. If your mortgage is not approved for the amount of financing you need, the seller agrees to refund your deposit in full.  During a bidding war, waiving your financing contingency sends the message that you are confident you will get the loan no matter what.

With a clear picture of your finances and enough money in reserve, you can safely waive the financial contingency with minimal risk on your end. Of course, if you are paying for the home in cash, then financing is not an issue and you can exclude the financing contingency in your offer. Not only are you eliminating the need for a third party to get involved in the deal, but you’re also showing the seller that you mean business. There is a risk any time a lender has to get involved, so when you eliminate their presence, you eliminate the risk. 

2). Inspection contingency

In a standard real estate agreement, the buyer retains the right to back out of the contract if they find unacceptable issues with the property. This contingency allows the buyer to hire a home inspector to survey the home for damages before the deal closes. If major issues are discovered during the inspection, the buyer has the right to negotiate with the seller for repairs or back out of the deal. One safe way to waive your inspection contingency is to have a pre-inspection done on the property before ever making an offer.

If the report doesn’t reveal any serious issues, you can confidently waive the contingency with minimal risk. When a seller accepts an offer, their home is off the market. In a competitive market, the last thing the seller wants is to be waiting for an extended period of time for the inspection to happen. Make the contingency period no more than a week. If the home looks well maintained visually, it may be worth the risk to waive the inspection if you are confident you want the house no matter what. To minimize risk, the decision to waive inspection contingency should be made carefully and with the guidance of your real estate agent. 

3). Appraisal contingency

When an offer is accepted on a home, the lender will come out and appraise the property to determine its value. Mortgage lenders use appraisals to calculate the loan amount they will give buyers. If the appraisal falls short, the appraisal contingency lets the buyer cancel the contract rather than make up the difference in cost themselves.  If you waive this contingency, you are still responsible for purchasing the home if the loan does not work out – or you may be able to back out of the contract but lose your deposit. It is also possible the seller will decide to sue you if you break the contract.

That being said, more buyers these days are willing to waive appraisal contingencies to enhance their offer in a bidding war. Compared to a fully mortgage-contingent buyer, waiving the appraisal contingency is more attractive from the seller’s point of view because they have more certainty the deal is going to get done no matter where it appraises at. 

Waiving contingencies risk: Yes, there can be risk associated with waiving contingencies, but depending on the circumstances, a buyer might be in a position to do so.  When considering whether to waive contingencies, speak with your estate agent. They will be able to help you decide what’s best for you and help you determine if you are in a position to take on that risk. Your Farmington Hills MI REALTOR’s knowledge of normal practices and probable outcomes in the local market will make your offer more likely to succeed.

Up your offer

If you are set on winning a bidding war on a Farmington Hills MI property, your best bet is offering more money than the other buyers. Upping your offer doesn’t have to mean paying another ten thousand dollars or more. Sometimes, going up just a few thousand dollars can make all the difference between winning the bid on a property or losing out on it. One important thing to keep in mind when upping your offer is that just because you are ready to pay more for a house doesn’t mean the bank is. When it comes to your mortgage, you are still only going to be able to get a loan for up to what the house appraises for. So, if your higher offer gets accepted, that extra money might be coming out of your own pocket.

Pay in cash

This obviously isn’t going to apply to everyone, but if you have the cash to cover the purchase price, offer to pay it all upfront instead of getting financing. Not only are you eliminating the need for a third party to get involved in the deal, but you are also showing the seller that you mean business. Sellers typically prefer dealing with a buyer who can pay cash because they don’t have to worry about a potential buyer actually receiving the financing they need. There’s a risk any time a lender has to get involved and when you eliminate their presence, you eliminate the risk. According to a Redfin analysis of home sales over the past two years, buying a home without financing boosted a buyer’s chance of winning a bidding war by 97%.

Include an escalation clause

An escalation clause can be an excellent asset when trying to win a bidding war. An escalation clause is an addendum to your offer that states you’re willing to go up by X amount if another buyer matches your offer. More specifically, it dictates that you will raise your offer by a specific increment whenever another bid is made, with a cap. if winning a bidding war on a home is the end result you are looking for, there’s nothing wrong with putting it all on the table and letting a seller know how serious you are. Work with your agent to come up with an escalation clause that fits with both your strategy and your finances.

Be flexibility

The date of possession is often an important part of the offer in a multiple bid situation. Typically, the closing period lasts 30, 45, 60, or 90 days. Customizing the length of the closing to suit the needs of the seller can often help clench the deal over a higher offer. Sellers almost always want fast closings, usually 30 days. If the seller needs to coordinate selling with buying another home, or moving in a short amount of time, giving them the close date they want can often be the difference in getting the house or not.

If the seller needs a rent-back, you can offer to allow them to stay in the property after the close of escrow. Depending on the circumstances, you might charge them what your PITI (principal, interest, taxes, and, insurance) payment is or the local market rent rate. You can even consider giving it to them to enhance the terms of your offer, depending on the situation.

The takeaway

Bidding wars can be challenging to navigate, especially if you’re a first-time homebuyer. It’s vital to do your research so you have a clear understanding of the process, the market, and the home you are interested in purchasing. Finding experienced representation is the best way to ensure a smooth and successful transaction in a multiple offer situation.  If you are a first-time buyer or even a seasoned buyer, you should seriously consider working with a qualified Farmington Hills MI real estate agent you can trust, and carefully listen to their advice.

 

Partner with Top-rated Farmington Hills MI REALTOR® – Tom Gilliam

Whether you are interested in buying a home in Farmington Hills, MI, or its time to list your current property, experience matters most in a changing market. Top-rated Farmington Hills REALTOR® – Tom Gilliam offers over 20 years of local experience, in-depth market knowledge, and access to the most up-to-date listings for Farmington Hill MI homes for sale. Known for his professionalism and care for every detail, Tom is an expert at uncovering the perfect home for his clients’ lifestyle needs in the right neighborhood or community.

2020 Best of Farmington Hills REALTOR - Tom Gilliam

If you are ready to sell your home, Tom will create a comprehensive marketing plan that exposes your home to the public as well as to other real estate agents through the Multiple Listing Service (MLS), other cooperative marketing networks, open houses for agents, etc.

Your listing will appear on all the most popular real estate sites where buyers spend hours a day looking at homes such as Realtor.com, Zillow, Trulia, REMAX, Redfin, and dozens of others. Your property will also be featured on Tom’s own highly-trafficked website Homes2moveyou.com. You can be assured that your home will get sold quickly and for the highest market price.

Search Farmington Hill MI Homes for Sale

Tom works very hard for his clients. He will be there to protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure a smooth and successful transaction. If you or someone you know is interested in buying or selling Farmington Hills MI real estate, please give top-rated Farmington Hills MI REALTOR® – Tom Gilliam a call today at (248) 790-5594 or you can reach him here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578

 

 

Things To Consider Before Buying a Fixer-Upper in Farmington Hill MI 

Things To Consider Before Buying a Fixer-Upper in Farmington Hill MI 

Things To Consider Before Buying a Fixer-Upper in Farmington Hill MI  

Are you currently thinking about purchasing a fixer-upper home in Farmington Hills MI? Keep in mind that it will require time and money – not to mention, home improvement experience or the ability to hire professionals and design experts. For homebuyers with the right skill-set and resources, purchasing a fixer-upper can be enticing and a rewarding project. 

In many cases, renovating a home in need of major repair and TLC allows buyers to purchase a property in a neighborhood they would like to live in but may not be able to afford otherwise. There are definitely pros and cons to be considered before investing in a fixer-upper rather than a move-in ready home. Ultimately, the decision will come down to your needs, abilities, and resources.

The pros for buying a move-in ready home in Farmington Hills MI 

The pros of buying a move-in ready home vs a fixer-upper are pretty straight forward: No painting, no carpeting, no knocking out walls, no plumbing fixes or hidden electrical problems, no adding rooms or landscaping changes. Just move in and unpack your boxes.

Not only is life a whole lot simpler with a move-in ready home, but financing can also be. Loans for both fixer-uppers and move-in ready homes depend on credit history, employment history, down payments, etc. However, when it comes to a 30-year fixed mortgage, the move-in ready homebuyer may have an easier time qualifying for a mortgage. 

The pros in favor of buying a fixer-upper in Farmington Hills MI 

A fixer-upper, (code phrase for “needs a lot of work”) is a good choice for those who are generally intrigued by the idea of fixing up a run-down home and understand that it will take some time before the property is move-in ready. Of course, the price of a fixer-upper is usually a lot less than the market price the home will command once all the renovations are finished.

The lower price and potential increase in value are appealing, especially in today’s economic climate. Property taxes are another pro. Your property taxes are based on the sale price of your home, which means that your annual property tax is often a lot lower for a fixer-upper than on a move-in ready home. 

Here are a few important questions to ask yourself before committing your time and resources to a fixer-upper:  

1). Can you afford to renovate a fixer-upper?

Before purchasing the home, conduct a walk-through with a general contractor and ask for advice and guidance on repairs, remodeling, and pricing. The contractor may be able to give you a rough estimate of overall costs. Also, do your own research on the average cost for the repairs and renovations needed.

Make sure that you include enough room in your budget for unexpected expenses as most all fixer-uppers come with a few unexpected surprises, some more costly than others. 

2). Are you getting a good deal on the property?

If you are planning to sell the fixer-upper in the future and make a profit, make sure that you are getting a good deal on the home. To ensure that you are not paying too much for the home, it is a good idea to partner with a qualified Farmington Hills MI REALTOR®.

A skilled agent can help you determine and negotiate a fair price for the home. If you can’t get a fair price, you can walk away from the deal.

3). Are you planning to flip the house?

If you are planning on flipping the house and selling it to local homebuyers, you will need to research which home improvements will give you the most return on your investment. For the most part, buyers are likely to pay up for a house that includes a master suite, nice landscaping, and updated kitchen and bathroom finishes.

You will need to assess the costs of renovations and upgrades that will appeal to most buyers such as neutral paint colors, flooring types, etc.

4). How exactly are you going to renovate the home?

Unless you’re a licensed contractor, make sure you have a list of top contractors in the area. An experienced general contractor will be able to help you secure permits from the city, collect materials needed for the renovations, and find reputable subcontractors to complete the various projects.

Because the general contractor will be your main point of contact for everyone and everything going on, you will want to make sure that you hire someone you trust and don’t mind spending a lot of time around. 

5). How much time will it take to renovate the property?

Before investing in a fixer-upper, you will want to get an idea from a local contractor on how long the renovations will take. More often than not, renovating a fixer-upper can take four months and upwards. If permits from the city are required, expect a delay in your timeline as permits can sometimes take several weeks and even months to obtain.

If you need to move to a new home in under six months, you might not want to take on a fixer-upper at this time.

6). Will you be able to live in the fixer-upper while it’s being renovated?

If you are not able to live in the house during the renovation process, which could take anywhere from four months to a year, then you will need to arrange for a place to stay.  However, if you are going to have to live in the house in the midst of renovation and construction chaos, which could go on a lot longer than anticipated, you may not want to purchase a Farmington Hill MI fixer-upper.  

The takeaway 

With a fixer-upper, renovations, especially kitchen and bathroom upgrades, will typically get you instant equity that can take years to build otherwise. However, it has to be the right type of renovation and the right scale in order to reap these benefits. If you don’t mind taking risks, getting your hands dirty, and the time needed for renovations and repairs to be finished, a fixer-upper could possibly be the right home purchase decision. 

Work closely with your Farmington Hills MI real estate agent, who can help you buy a home for the right price and ensure you are yielding a good return on the improvements you plan on making.

Partner with Top-rated Farmington Hills MI REALTOR® – Tom Gilliam

Whether you are interested in buying a home in Farmington Hills, MI, or its time to list your current property, experience matters most in a changing market. Top-rated Farmington Hills REALTOR® – Tom Gilliam offers over 20 years of local experience, in-depth market knowledge, and access to the most up-to-date listings for Farmington Hill MI homes for sale.

Known for his professionalism and care for every detail, Tom is an expert at uncovering the perfect home for his clients’ lifestyle needs in the right neighborhood or community. 2020 Best of Farmington Hills REALTOR - Tom Gilliam

If you are ready to sell your home, Tom will create a comprehensive marketing plan that exposes your home to the public as well as to other real estate agents through the Multiple Listing Service (MLS), other cooperative marketing networks, open houses for agents, etc.

Your listing will appear on all the most popular real estate sites where buyers spend hours a day looking at homes such as Realtor.com, Zillow, Trulia, REMAX, Redfin, and dozens of others.

Your property will also be featured on Tom’s own highly-trafficked website Homes2moveyou.com. You can be assured that your home will get sold quickly and for the highest market price.

Search Farmington Hill MI Homes for Sale

Tom works very hard for his clients. He will be there to protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure a smooth and successful transaction.

If you or someone you know is interested in buying or selling Farmington Hills MI real estate, please give top-rated Farmington Hills MI REALTOR® – Tom Gilliam a call today at (248) 790-5594 or you can reach him here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578

 

Factors That Influence Your Farmington Hills MI Home Value

Factors That Influence Your Farmington Hills MI Home Value

Factors That Influence Your Farmington Hills MI Home Value – When selling your Farmington Hills MI home, setting the right list price requires both assessing nationwide housing market trends and knowing what’s going on in your local market.

The truth is that no matter how highly you value your own home, there’s no guarantee that it’s actually worth as much as you may want to get for it.

That is why you want the assistance of a qualified Farmington Hills MI real estate agent who not only keeps their finger on the pulse of the market at all times but is actively selling homes in your local area.

Get A Free Comparative Market Analysis of Your Home

An experienced and skilled agent like top Farmington Hills MI REALTOR® – Tom Gilliam understands how to gather and evaluate all of the hard data that’s key to getting your home sold fast and for the highest market price.  

Here are three important macro factors that influence the value of your Farmington Hills MI home:

1). Inventory, or months of supply

Inventory, or months of supply, is the calculation of how long it would take for currently listed homes to sell out. For example, 100 homes sell every month and there are 600 homes on the market, which equals a six-month supply of inventory.

In most markets, a six-month supply is considered a balanced market, meaning that there is an equal ratio of buyers to homes for sale. Markets with a below six-month supply are considered low inventory, meaning there are more buyers than available homes, making for seller’s market conditions.

Above a six-month supply and you’ve got buyer’s market conditions, where there are more homes listed than there are buyers house hunting. So what does inventory or monthly supply have to do with home values? It’s simple.

High demand and low supply push prices up. Low demand and high supply puts downward pressure on prices, and vice-versa in a seller’s market when homes are in tight supply.  

Even if your home is in excellent condition, situated in the best location, and filled with premium upgrades, the number of other properties for sale in your area, and the number of buyers in the market can impact your home value.  

Home buyer’s in a buyer’s market will likely have more wiggle room to negotiate on the home’s price, timeline, and contract contingencies.  Sellers in a buyer’s market may have to adjust the price to attract more offers or be willing to make concessions to a buyer, like covering repairs, paying closing costs, or being more flexible with the timeline. 

2). Interest rates 

It might appear on the surface that interest rates would matter more to home buyers, but interest rates can also impact sellers when it comes to home values. If interest rates increase, fewer people may be able to afford homes, and this can impact how much you can sell your home for. 

The easiest way to understand this is through the basic principle of supply and demand. A lower interest rate allows more of the buyer’s monthly payment to go toward the principal, which means they can afford to buy a higher value home. A higher rate means a higher mortgage payment, which reduces the purchase price they can afford. 

For example, a buyer can afford a $500,000 home at a 4% interest rate. If they can only get a 5% mortgage rate, that’s an extra $50,000 going toward interest instead. That means that the buyer can only actually afford a $450,000 home at that 5% rate.

A 1% rate increase will up the cost of the house by 10%. The higher interest rates rise, the fewer buyers there are who can afford to buy a house. If buyers drop out of the market, inventory levels rise and home values fall.

3). Market cycles and consumer behavior 

Staying on top of current market trends can help in predicting the future of home values. The Federal Housing Finance Agency tracks these trends among single-family house prices with the House Price Index. And while home values historically trend upward, they’re known to fluctuate or fall in the short term.

When home prices start to fall, many buyers will wait out the market and watch the downward trend. When home buyers wait out the market there are fewer active buyers, which leads to higher inventory and lower home values.

That is why you want to partner with a reputable Farmington Hills MI REALTOR® and local expert who really understands the trends in your area. Recent trends within the last four to five months can greatly impact your home’s value. What goes down, must come up when it comes to real estate. And if your home value has recently decreased, analyzing home value trends can indicate how long it could take for it to rise again.

The takeaway

It’s easier to avoid common home-selling mistakes and price your home correctly from the get-go by being aware of the factors that impact your home’s value such as interest rates, supply and demand, and market cycles. Consider these important macro factors when pricing your home to help attract serious buyers and prevent your home from lingering on the market and becoming a stale listing, which ultimately comes at a cost.  

Partner with top-rated Farmington Hills MI REALTOR® – Tom Gilliam

Whether you are interested in buying a home in Farmington Hills, MI, or its time to list your current property, experience matters most in a changing market. Top-rated Farmington Hills REALTOR® – Tom Gilliam offers over 20 years of local experience, in-depth market knowledge, and access to the most up-to-date listings for Farmington Hill MI homes for sale.

Known for his professionalism and care for every detail, Tom is an expert at uncovering the perfect home for his clients’ lifestyle needs in the right neighborhood or community. 2020 Best of Farmington Hills REALTOR - Tom Gilliam

If you are ready to sell your home, Tom will create a comprehensive marketing plan that exposes your home to the public as well as to other real estate agents through the Multiple Listing Service (MLS), other cooperative marketing networks, open houses for agents, etc.

Your listing will appear on all the most popular real estate sites where buyers spend hours a day looking at homes such as Realtor.com, Zillow, Trulia, REMAX, Redfin, and dozens of others.

Your property will also be featured on Tom’s own highly-trafficked website Homes2moveyou.com. You can be assured that your home will get sold quickly and for the highest market price.

Farmington Hill MI Homes for Sale

Tom works very hard for his clients. He will be there to protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure a smooth and successful transaction.

If you or someone you know is interested in buying or selling Farmington Hills MI real estate, please give top-rated Farmington Hills MI REALTOR® – Tom Gilliam a call today at (248) 790-5594 or you can reach him here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578

 

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