Millennials Are Changing The Home Buying Market

Millennials Are Changing The Home Buying Market

Millennials Are Changing The Home Buying Market:

-They’re opting for digital searches, deluxe homes, and the suburbs-  

 

As Millennials enter the housing market in greater numbers, they’re approaching it in a much different way than previous generations of home buyers. They’re bringing with them a new set of values and expectations.  

With a population of 83.1 million, Millennials now outnumbers Baby Boomers and represent more than one-quarter of our nation. The Pew Research Center defines a millennial as anyone born between 1981 and 1996.

Millennials also make up the fastest-growing segment of today’s homebuyers, according to a recent National Association of Realtors® report. The movement in the market by this generation is likely due to growth in their careers, higher income, and paying off student loans and other personal debts.

Although the most common reasons for recently purchasing a home differed between generations, the desire to own a home of their own was the main reason for  Millennials choosing to buy at this time.

“There’s been an influx of millennial home buyers as older Millennials have had some time to grow in their careers and pay off student debt,” says Stuart Eisenberg, national director of real estate and construction practice for accounting firm BDO USA.

Younger Millennials, meanwhile, more often rent as they begin their careers, but according to Eisenberg, the generational shift in home buying is just getting underway.  

Technology has transformed the way real estate is done 

Digital advancements have transformed the way real estate is done. Among millennials, utilizing the internet and mobile devices to find, view, and buy homes has become the norm.

Having grown up in a digital environment, millennials don’t want to spend days touring homes in person. Instead, they expect to shop for homes the same way they shop for everything else—online.

In fact, according to a Real Estate in a Digital Age report, 99% of millennials start their home search online and 58% found their current home on a mobile device. This figure is nearly double that of Baby Boomers using the internet to browse homes.

Digital advancements have also transformed the role of real estate agents. In the past, a REALTOR’s value came from providing important information about properties.

Now, the true value of a real estate agent is through their negotiation skills, professional relationships with other agents, ability to facilitate the transaction, and keeping up with marketing strategies in a fast-paced digital world.

Another digital impact is in how agents list homes. Tech-savvy Millennials are leading agents and brokers to introduce features like live streaming and video rather than traditional photographs, which have become the norm. 

Millennials, technology, and communicating with REALTORS®

Millennials also differ from previous generations in terms of how they use technology to communicate with REALTORS®. Texting represents the most immediate back-and-forth line of communication.

This generation uses text messages to express interest in a property, schedule appointments, and ask questions, while phone calls are typically reserved only for more urgent or pressing concerns.

NAR research suggests that agents are adapting to this demand for electronic communication, with 90% of agents communicating via text and 94% using email. Another 34% chat with clients through instant messaging. 

Millennials are choosing the suburbs and deluxe homes 

Although it’s taking them longer than previous generations, millennials are now buying homes and moving out of the city in larger numbers.

A recent Zillow study shows that almost half of Millenials (47%) prefer to live in the suburbs as opposed to the big city or rural areas. This generation of buyers want homes, but they don’t want just any old homes.

They are finding better options farther out from the city and are increasingly skipping starter homes in favor of something more deluxe. Roughly 45% of homebuyers aged 30 to 39 paid $300,000 or more for a home, according to the latest figures from NAR.  

In conclusion 

Millennials are now buying homes in droves and their habits are proving to shape the housing market in new and exciting ways. This generation’s preference for technology has changed both the way people shop for homes and the job of real estate agents – and could lead to a more streamlined home buying process. 

Partner With Oakland County MI REALTOR® – Tom Gilliam

REALTOR® – Tom Gilliam is your expert to buy or sell your home in Oakland County, Michigan. In Oakland County, MI, you need to find an experienced agent who knows the community.

Tom currently lives in the Oakland County area and is very familiar with the local market, neighborhoods, schools, and community issues. His office is located in the heart of Farmington Hills, with five additional offices throughout the southeast metropolitan area.

Tom is always ready to help families find the perfect home in the Oakland County area they want to live, whether it’s Farmington Hills, Novi, Birmingham, Troy, Rochester Hills, West Bloomfield, Bloomfield Hills, Ferndale, Royal Oak, Northville, Novi, Troy, Rochester, or Rochester Hills.

Give Tom Gilliam – “Your number one Oakland County Michigan REALTOR®” – a call today!

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

Article sources: 

https://www.nar.realtor/research-and-statistics/research-reports/real-estate-in-a-digital-age
https://www.corelogic.com/intelligence/find-stories/the-top-four-ways-millennials-are-changing-the-housing-market
https://www.nar.realtor/sites/default/files/reports/2017/2017-real-estate-in-a-digital-age-03-10-2017.pdf
 https://www.nar.realtor/sites/default/files/documents/2021-home-buyers-and-sellers-generational-trends-03-16-2021.pdf
https://www.forbes.com/sites/theyec/2021/06/01/how-millennials-are-changing-the-mortgage-and-home-buying-market/?sh=34cca84e690b

Buying a Home in Oakland County MI: Responding to A Counteroffer 

Buying a Home in Oakland County MI: Responding to A Counteroffer 

Buying a Home in Oakland County MI: Responding to A Counteroffer 

When buying a home in Oakland County MI, the stakes are high for both the person buying the home and for the seller. Hence, it may take some negotiating to reach an agreement that both the buyer and the seller are happy with. Of course, the optimum scenario would be to submit an offer on a home you love and the seller accepts it with no conditions. However, it’s more common, that the seller will respond to an offer with a counteroffer, which means they are open to starting the negotiation process.  In real estate terms, this is appropriately referred to as the seller-to-buyer counteroffer. 

How Many Counteroffers Are Typical? 

Just as a seller can submit a counteroffer to a buyer, a buyer can counter the seller’s counter, which then becomes a counter-counteroffer or Buyer Counteroffer No. 1. There’s no limit to the number of counteroffers that can go back and forth. If either party does not agree to the terms, the offer becomes void, and the buyer and seller go their separate ways with no further obligation. 

Responding to a counteroffer

A counteroffer changes one or more aspects of your original offer, and basically, you have three options for responding. You can either accept the seller’s counteroffer, reject the counteroffer or present a counteroffer of your own.

If you decide to continue negotiations, know your options such as how much you can spend, whether there are (or will be) similar properties to bid on, and what you are willing to concede – whether that’s contingencies or repairs you were previously set on.  

Also, consider how you can make the deal smoother for the seller, which may help push your offer through. For example, how quickly is the seller looking to close and can you agree on that? Have they already bought a new house? Do they want reassurance that their childhood home will be well-loved?  

View Homes For Sale in Oakland County MI

Find out what the seller’s motivations are – financial, emotional, logistical – and create a counteroffer that is in alignment with your own priorities. The seller’s motivations may become apparent with their first counteroffer and your counter may address some but not all of the seller’s concerns.

Commonly negotiated aspects of home buying 

With homebuying, everything is negotiable from repairs and closing costs to furniture and appliances. Some of the most commonly negotiated aspects of homebuying include the purchase price, closing costs, closing date, contingencies, earnest money deposit, and personal property. Offers and counteroffers can negotiate on a mix of these factors:

Purchase price 

Your pre-approval letter from your lender will tell you the maximum you can pay for a property, but you may not need to increase the price up to your limit. Your Farmington Hills MI REALTORⓇ will be able to advise you on what makes the most sense for your budget and the local market. The sale price is the most commonly changed item in the seller-to-buyer counter offer.

The seller might change this number in one of two ways. They might offer a price that is somewhere in between your offer and the original asking price or counter back with their original asking price, which means they are not willing to negotiate on price. But if they give you a counteroffer below the original list price, the negotiations are on. You can then choose to accept the seller’s proposal or make another counter offer back to them.

Closing costs 

The closing costs, which include insurance, title fees, taxes, and appraisals, are often the most negotiated line item between buyers and sellers. Closing costs can add up to as much as 5% of your total loan amount.  The seller’s counteroffer might address any contributions toward closing costs.

For example, you ask them to cover $6,000 worth of your closing costs, which is a common strategy in a buyers market. The seller might simply say no to this request. They could also agree to contribute $6,000 toward your closing costs while increasing the sale price by $6,000 – allowing you to finance your closing costs into the loan.

Closing date  

This is the date that you get the keys to the home. In a counteroffer, the seller might make changes to the closing date. Maybe they need more time to pack up and move, so they sign a counteroffer back to you proposing a 45-day escrow period. As the buyer, you can accept it or not. In most cases, the buyer will accept the seller’s proposed changes to the closing date, if it’s not a big difference

Contingencies 

If the provisions aren’t met, contingencies let you back out of a contract. A seller can reject or modify the contingencies, or conditions for the purchase, that you included in your offer. A home appraisal, obtaining financing, home inspection, and home sale are all examples of contingencies:

  • An appraisal contingency protects the buyer and is used to ensure a property is valued at a minimum, specified amount. 
  • A financing contingency gives the buyer time to obtain financing for the purchase of the property.
  • An inspection or a due diligence contingency gives the buyer the right to have the home inspected within a specified time period.
  • A home sale contingency gives the buyer a specified amount of time to sell and settle their existing home to finance the new one.

Before you consider dropping contingencies, be sure to speak with your Oakland County MI real estate agent about the possible risks. Sellers almost always accept the home-inspection contingency, as well as the financing contingency because they know that most buyers will refuse to move forward without those contingencies.

Earnest money deposit 

The earnest money deposit – also referred to as good faith money – is the sum you put down with your offer to show the seller you are a serious buyer. The earnest money deposit applies toward your down payment or closing costs. While the buyer and seller can negotiate the earnest money deposit, it often ranges between 1% and 2% of the home’s purchase price, depending on the market.

The earnest money deposit might range between 5% and 10% of a property’s sale price in a hot housing market. Some sellers prefer a fixed amount, such as $5,000 or $10,000. Of course, the higher the earnest money amount, the more serious the seller is likely to consider the buyer.

Therefore, a buyer should offer a high enough earnest deposit to be accepted, but not one so high as to put extra money at risk. Earnest money is always returned to the buyer if the seller terminates the deal.

Personal property 

A refrigerator, washer, and dryer set, and other appliances may be included in a home sale, but if they’re not, ask for them. The same goes for furniture and other personal belongings. The structure, fixtures, outbuildings, and anything attached to the land is included in the sale and is considered the “real property.”  

Negotiate with the market in mind

How you negotiate the seller’s counteroffer will depend on the type of market you’re in. Do you know if the seller has multiple offers on the house? If they do, you need to tread carefully. In a hot seller’s market, the seller’s counter may come with an unofficial “take it or leave it” clause. 

How is a counteroffer accepted?

The buyer can simply accept the counteroffer and deliver it back signed to the seller and their agent. Time is of the essence here as all counteroffers include an expiration date. It’s also important to note that the seller can accept another offer while the buyer is deciding whether to move forward, which is another reason to act quickly when a counteroffer is on the table. 

If the seller receives a more favorable offer while the buyer is deciding, the seller will typically withdraw the counteroffer, effectively removing the first buyer from the situation.  

The bottom line

The counter-offer process in real estate is more art than science. Look at what motivates the other person, get all the information you can about your alternatives, and look for a middle ground that still meets all of your priorities. Also, don’t believe an agent who tells you the seller will always counter the offer. Even if the seller does, you can still lose the house if the home is still getting showings. 

Partner With Oakland County MI REALTOR® – Tom Gilliam

REALTOR® – Tom Gilliam is your expert to buy or sell your home in Oakland County, Michigan – the Oakland County community’s number one REALTOR®.  In Oakland County, MI, you need to find an experienced agent who knows the community.

Tom currently lives in the Oakland County area and is very familiar with the local market, neighborhoods, schools, and community issues. His office is located in the heart of Farmington Hills, with five additional offices throughout the southeast metropolitan area.

View Homes For Sale in Oakland County MI

Tom is always ready to help families find the perfect home in the Oakland County area they want to live, whether it’s Farmington Hills, Novi, Birmingham, Troy, Rochester Hills, West Bloomfield, Bloomfield Hills, Ferndale, Royal Oak, Northville, Novi, Troy, Rochester, or Rochester Hills.

Give Tom Gilliam – “Your number one Oakland County Michigan REALTOR®” – a call today!

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

Oakland County MI First-time Home Buyers: FHA Loans 101

Oakland County MI First-time Home Buyers: FHA Loans 101

 Oakland County MI First-time Home Buyers: FHA Loans 101

While most people consider homeownership the American dream, many are not able to qualify for a conventional loan, which is a type of mortgage loan that’s not insured or guaranteed by the government. Unlike conventional loans, FHA loans are backed by the Federal Housing Administration and help to take some of the risk from lenders and place it on the government for higher-risk borrowers. Although the government insures the loans, they are actually offered by FHA-approved mortgage lenders.

The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), offers a wide range of loans to help different groups of people. FHA loans are helpful for Oakland County MI home buyers with limited savings and/or lower credit scores as they allow for down payments as low as 3.5% and a 580 FICO.  These types of loans are not only for first-time home buyers. Repeat buyers can get an FHA loan as long as they use it to buy a primary residence. FHA loans can also be used to refinance your home or for repairs on an older home.  

How FHA Loans Work

The Federal Housing Administration’s flexible underwriting standards allow borrowers who may not have stellar credit, high incomes, and/or cash savings the opportunity to become homeowners. With an FHA loan, borrowers must pay mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan. The cost of insuring your loan is generally higher than with conventional mortgages, and you can expect to pay higher mortgage insurance premiums (MIPs) each month. Government-guaranteed mortgages are not available on high-priced homes, and you can see the cap in your area using the online tool on HUD’s website.

The differences between an FHA loan and a conventional loan 

When buying a home in Oakland County MI, It’s easier to qualify for an FHA loan than for a conventional loan, which is not insured or guaranteed by the federal government. FHA loans require mortgage insurance regardless of the down payment amount, compared to conventional loans where you need mortgage insurance for down payments under 20%. FHA mortgage insurance payments will be the same regardless of your credit score.

FHA loans

  • More rigid property standards
  • Lower credit scores allowed 
  • Somewhat higher down payment needed
  • Private Mortgage Insurance (PMI) is required for down payments of less than 20%

Conventional loans

  • Higher credit score needed (at least 620)
  • Slightly smaller down payments allowed
  • Private Mortgage Insurance (PMI) is required for down payments of less than 20%
  • More liberal property standards

One of the biggest advantages of an FHA loan is that only a 3.5% down payment is required for a home loan purchase (with a minimum 580 credit score). This is a lot less than other conventional types, which will ask anywhere from 5 to 20%. It’s worth noting that If you were to combine the FHA loan with a down payment assistance program, it could potentially mean that you would only need to put 0.5% down.

With an FHA loan, the down payment doesn’t have to come directly from the borrower; It can come from a family member, employer, or charitable organization as a gift. Also, if you prepay your mortgage before a certain amount of time, many conventional lenders will charge a prepayment penalty. With an FHA loan, there is no penalty for prepayment.

FHA loan limits for Oakland County MI in 2021

No matter which type of FHA loan you’re seeking, there will be limits on the mortgage amount. These limits vary by county. Limits for FHA Loans in Oakland County, Michigan range from $356,362 for a 1 living-unit home to $685,400 for 4 living-units.   

The different types of FHA loans

Loan qualification guidelines are fairly similar across the various types of FHA loans available:

  • Fixed-rate loans – Available in fixed-rate terms between 15 and 30 years, FHA mortgages come with a low down payment advantage- one of the lowest on the market.
  • Adjustable-rate loans – An FHA adjustable-rate mortgage (ARM) comes with an interest rate that “adjusts” over the loan’s term; generally increasing. Many people are drawn to ARM mortgages because they offer initial rates significantly lower than a fixed-rate product.
  • FHA 245(a) loan – An FHA 245(a) loan packs a fixed rate graduated-payment mortgage, also known as a “growing equity mortgage.” Graduated payment mortgages structure your monthly payment to scheduled increases over the life of your loan. As your loan amortizes, you’ll reach a point in time when your equity starts gaining traction. These mortgages are set up in 30-year terms, but it’s not uncommon to pay off the loan early depending on which graduated plan you choose.
  • FHA energy efficient mortgage – The FHA Energy Efficient Mortgage (EEM) program is a financing add-on that allows FHA borrowers to roll the cost of approved energy efficiency upgrades into their home loan. Homebuyers commonly use this program to update their home’s windows, HVAC systems, and insulation.
  • FHA loans for mobile homes – It is possible to use an FHA loan to finance a manufactured or mobile home, but finding a lender willing to approve financing may take a few tries.  
  • FHA loans for condos – Many are surprised to find that they can purchase a condo using the FHA loan. Since some condo associations enforce rules regarding property sales and improvements, however, there are some restrictions when it comes to using your FHA loan for a condo.
  • FHA 203(k) – Compared to other types of FHA products, 203(k) loans offer the opportunity for buyers to purchase fixer-uppers while financing additional funds for home repairs and renovations into the mortgage.
  • FHA reverse mortgage (HECM) – FHA Reverse mortgages are used as a home equity conversion mortgage (HECM). This allows a qualified homeowner to receive monthly cash disbursements by liquidating the equity they’ve built up in their home.

How to qualify for an FHA loan

Getting prequalified for an HOA loan is a simple and quick process, and can even be done over the phone. Your loan officer will require information about your basic finances, such as debt, income, and assets.  After running these numbers and evaluating them, he/she can tell you an amount you may qualify to borrow. To be eligible for an FHA loan, borrowers must meet the following lending criteria:

  • A FICO score of 500 to 579 with 10 percent down or a FICO score of 580 or higher with 3.5 percent down.
  • Verifiable employment history for the last two years.
  • Income is verifiable through pay stubs, federal tax returns, and bank statements.
  • The loan is used for a primary residence.
  • The property is appraised by an FHA-approved appraiser and meets HUD property guidelines.
  • Your front-end debt ratio (monthly mortgage payments) should not exceed 31% of your gross monthly income.
  • Your back-end debt ratio (mortgage, plus all monthly debt payments) should not exceed 43% of your gross monthly income. (Lenders may allow a ratio of up to 50% in some cases).
  • If you’ve had a bankruptcy, you will need to wait 12 months to two years to apply, or three years after a foreclosure. (Lenders may make exceptions on waiting periods for borrowers with extenuating circumstances).

Your credit score

The minimum credit score for an FHA loan is 500. If your score falls between 500 and 579, you can still qualify for an FHA loan, but you’ll need to make a larger down payment. Again, these are FHA guidelines — individual lenders can opt to require a higher minimum credit score.

Your debt-to-income ratio (DTI)

The FHA requires a DTI of less than 50, meaning that your total monthly debt payments can’t be more than 50% of your pretax income. This includes debts that you aren’t actively paying off.

FHA closing costs

FHA closing costs include the mortgage insurance (MIP), lender and third-party fees, and prepaid items that are due when signing your mortgage paperwork. Here’s the breakdown:

  • FHA mortgage insurance premium (MIP) totals 1.75% of your loan amount, due at closing. You can also finance this charge as a part of your loan. You’ll also find that an additional ongoing FHA MIP of 0.45% to 1.05% is built into your monthly payment. While the rate remains the same for the life of the loan, the premium is adjusted annually based on the remaining principal loan balance.
  • Lender fees typically include an origination fee, underwriting fee, document preparation fee, supplemental loan origination fee (for FHA 203(k) renovation loans only), and interest rate lock fee.
  • You may also decide to buy discount points (a prepaid interest that lowers your loan’s interest rate), which will be listed as a lender fee.
  • Third-party fees include fees for services offered by other providers and could include Title insurance policy premium (for the lender and an option for the buyer to purchase as well), notary fee, credit report fee, Recording fees, appraisal fee, courier fee, attorney fees, and flood certification fee.
  • Prepaid items are fees that are paid in advance, with some shared between buyer and sellers such as tax and insurance escrow deposit, flood and hazard insurance premiums, real estate taxes, and per diem interest.

In summary 

Whether an FHA loan vs a conventional loan is the better choice, when buying a home in Oakland County MI, really depends on the situation as each borrower, financial situation, and home are different. Likewise, each loan has its benefits. An FHA loan is more flexible to obtain, but no matter how large your down payment, you will have to pay mortgage insurance. Whereas, a conventional loan requires a higher credit score and more money down, but doesn’t have as many provisions. You’ll want to speak with your mortgage professional to discuss which loan makes more sense for your individual financial situation and needs.

Partner with award-winning Oakland County MI REALTOR® – Tom Gilliam   

Tom Gilliam is proud to be a trusted REALTOR® in Oakland MI for the past 20 years – offering his guidance and expertise to both home buyers and sellers. Tom understands that buying or selling a home is a significant financial and life decision and that you are looking for someone you can trust. As your agent, he will protect your interests, advocate for you, negotiate on your behalf, and guide you towards a smooth and successful transaction.   

Whether you are ready to buy a home in Oakland County MI or its time to list your your current property, feel free to reach out to Tom directly at (248) 790-5594 or you can get in touch with him by email.

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 Loan Programs and Tips For Low-Income Oakland County MI Buyers

Home Loan Programs and Tips For Low-Income Oakland County MI Buyers

Home Loan Programs and Tips For Low-Income Oakland County MI Buyers

Owning your own home is the American dream and being in a lower income bracket doesn’t automatically disqualify you from buying a home. Fortunately, there are a number of low-income home loans available to help you reach your goal of homeownership.

Depending on other important factors such as your credit score, debt, location, and profession, you may be able to qualify for a home loan through one of the following programs: FHA loans, USDA loans, Fannie Mae HomeReady loans, Freddie Mac Home Possible® loans, Good Neighbor Next Door program, and VA loans. 

Before we take a closer look at the eligibility requirements of these different loan programs, here are a few tips for buying a home with low income:

The first thing you’ll want to do is review your credit reports from all three major credit reporting agencies (Equifax, Experian, and Transunion)  and dispute any errors you may find. Make a concerted effort to pay all of your accounts on time and lower your credit usage to below 30% of your available limit. This can help improve your credit score before applying for a mortgage.

You should also try to pay down your outstanding debt (especially credit card balances) which will help lower your debt-to-income (DTI) ratio. Next, you’ll want to get a mortgage pre-approval. When house hunting, sellers are likely to take you seriously if you’ve already been pre-approved when you put in a purchase offer. A pre-approval tells you how much a lender might be willing to lend you, based on a review of your overall financial picture.

After you get a mortgage pre-approval, the next step is to enlist the services of a qualified Oakland County MI real estate agent. Find an agent who is knowledgeable about the local housing market as well as the different home buying programs that are available for low-income borrowers.

Once you’ve found an agent you can work with, start looking at home buying assistance programs. Check with the Michigan State Housing Development Authority (MSHDA) for available homebuying assistance programs, including grants or loans to help cover your down payment or closing costs.

Low-income home loan programs

FHA loans

FHA home loans are loans backed by the Federal Housing Administration (FHA).  An FHA loan can be a good option for first-time homebuyers who may not qualify for a conventional loan or for those who may be struggling to save a 20% down payment. With an FHA loan, a borrower can have a credit rating as low as 500 and a fairly high debt-to-income ratio.

These loans require only a 3.5% down payment, which can come from gifts, and have less stringent requirements for credit rating or income. FHA loans require all borrowers to pay upfront and annual mortgage insurance premiums, no matter their credit score or down payment amount. Borrowers putting the minimum 3.5% down will pay FHA mortgage insurance for the life of the loan.

Eligibility requirements for FHA loans:

  • A 500 to 579 credit score and a minimum 10% down payment
  • A 580 credit score and a minimum 3.5% down payment
  • Meet local county FHA loan limits. Oakland County, MI FHA loan limits range from $331,760 for 1 living-unit home to $638,100 for 4 living-units.  

USDA loans

The U.S. Department of Agriculture also ensures low-income home loans provided by approved lenders up to 90% of the loan amount. USDA loans cater to homebuyers with a modest income. With a USDA loan, no down payment is required, no assets needed to qualify, and no maximum loan amount. 

Eligibility requirements for USDA loans:

  • Preferred 640 credit score
  • Meet local income eligibility requirements. For a family of 1-4 in Michigan, the average household income limit for a USDA loan is around $86,850, and for a family of 5 or more, it can be as high as $143,300.
  • Purchase a home in a designated rural area

Fannie Mae HomeReady® loans

The HomeReady mortgage program from Fannie Mae offers low-income home loans to homebuyers with limited cash for a down payment. Underwriting guidelines are more flexible to make it easier to qualify and both first-time homebuyers and repeat buyers are eligible. If all borrowers on the loan are first-time buyers, at least one borrower must meet the homeownership education requirement, by completing an online course on the Framework website.

Eligibility requirements for Fannie Mae HomeReady® loans:

  • Minimum 620 credit score
  • Minimum 3% down payment
  • Earn a maximum of 80% of the area median income (AMI)

Freddie Mac Home Possible® loans

The Freddie Mac Home Possible® mortgage program also caters to very low-to low-income borrowers with limited down payment funds. Both first-time and repeat homebuyers may qualify. Co-borrowers who do not live in the home can be included for a borrower’s one-unit residence, and borrowers are permitted to have another financed property –  all with competitive pricing and the ease of a conventional mortgage. 1-4 units, condos and planned-unit developments, and manufactured homes are eligible with certain restrictions.  

Eligibility requirements for Freddie Mac Home Possible® loans:

  • Minimum 660 credit score
  • Minimum 3% down payment
  • An income less than or equal to 80% of the Area Median Income (AMI)

HUD’s Good Neighbor Next Door program

With the Good Neighbor Next Door program from the U.S. Department of Housing and Urban Development (HUD), law enforcement officers, teachers (pre-Kindergarten through 12th grade) firefighters, and emergency medical technicians can contribute to community revitalization while becoming homeowners. HUD offers a discount of 50% from the list price of the home.

In return, an eligible buyer must commit to live in the property for 36 months as his/her principal residence. If an FHA loan is used to buy the home under this program, the minimum required down payment is $100. You can also use a conventional or VA loan.

Eligibility requirements for HUD’s Good Neighbor Next Door program: 

  • Work full-time as a pre-K through 12th-grade educator, emergency medical technician, firefighter, or law enforcement officer
  • Buy a home in a HUD-designated revitalization area
  • Must live in the home for at least 36 months (3 years)

VA loans

The U.S. Department of Veterans Affairs (VA) offers a mortgage program to help veterans, service members, and surviving spouses purchase homes. The VA is not a direct mortgage lender, but it does guarantee a portion of the loan so borrowers can receive more favorable loan terms like a lower interest rate. 

If your VA-backed home loan goes into foreclosure, the guaranty allows the lender to recover some or all of their losses. Since there’s less risk for the lender, they’re more likely to give you the loan under better terms.  90% of all VA-backed home loans are made without a down payment. 

There is no minimum required down payment or mortgage insurance requirement. These loans also limit the amount you can be charged for closing costs. There are no VA loan limits  

Eligibility requirements for VA loans:

  • Valid Certificate of Eligibility
  • Preferred minimum 620 credit score
  • Required VA funding fee to offset program costs to taxpayers

Partner with highly-rated Oakland County MI REALTOR® – Tom Gilliam   

Award-winning Oakland County MI REALTOR® – Tom Gilliam provides the kind of knowledge, skills, dedication, and professionalism you need when buying or selling a home. 

With over 20 years of real estate experience, Tom will protect your interests, advocate for you, negotiate on your behalf, and be your trusted guide and advisor every step of the way. Tom works very hard for his clients and will always go the extra mile to ensure a smooth transaction and the best results possible!

If you or someone you know is interested in buying or selling real estate in Oakland County MI, please give 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 

Interested in Purchasing a Foreclosed Home in Oakland County MI?

Interested in Purchasing a Foreclosed Home in Oakland County MI?

Interested in Purchasing a Foreclosed Home in Oakland County MI?

Real estate bargain hunters can find great deals on foreclosures and foreclosed homes in Oakland County MI. The biggest selling point of foreclosed homes is, of course, their marked-down price, which is often significantly lower from other similar properties in the same area, also known as “comparables ” or “comps” in real estate speak. 

Foreclosed homes are available in just about every real estate market across the country, providing opportunities for homeowners and investors alike. Most foreclosures are sold at a sizable discount below market value. Buyers may also take advantage of additional savings such as reduced down payments, lower interest rates, or the elimination of appraisal fees and certain closing costs. 

A REALTOR® for foreclosed homes in Oakland County MI will often know about properties that are nearing foreclosure because they are familiar with the local market, actively network with other agents, and frequently works directly with banks and other lenders.

With access to comprehensive foreclosure listings that include homes already in foreclosure as well as those approaching it, your agent can help you uncover a great deal on a home that you might not find otherwise.  

Locating foreclosures and foreclosed homes in Oakland County MI

One can find foreclosed properties in multiple-listing service (MLS) periodicals and websites, via online real estate searches, bank offices and websites, and through local newspapers. Lenders are increasingly selling their seized assets through real estate agents, so don’t hesitate to ask an Oakland County MI REALTOR® for opportunities.

Some real estate pros even specialize in foreclosure properties, which are often sold well under market value because the owners are eager to unload them.  

Locating foreclosures and foreclosed homes in Oakland County MI greatly depends on what stage the property is in during the foreclosure process. Properties can still be owned by the original homeowner or by an entity such as a bank or the government.

Stages of Foreclosure

Here are the various stages of foreclosure:

1). Pre-foreclosures – A home is in pre-foreclosure after the lender has notified the borrowers that they are in default but before the property is offered for sale at auction. If the homeowner can sell their home during this time, they may be able to avoid foreclosure proceedings. As a result, some homeowners are willing to negotiate. Your agent can help locate those properties that are still in the pre-foreclosure phase. 

2). Short sales – Short sales occur when the lender will accept less for the property than what is owed on the mortgage. Although borrowers don’t necessarily need to be in default of their mortgage for a lender to agree to a short sale, they typically need to prove that they are in fact experiencing financial hardship, such as the loss of a job, which is likely to result in default. Often, the property is worth less than the outstanding balance on the mortgage. 

In order to qualify as a short sale, the lender must agree to accept less than is owed, and the property must be listed as a short sale. A successful short sale helps the lender avoid yet one more foreclosed home on their books as well as the cost and time associated with maintaining that home until its potential sale. Also with a short sale, the likelihood that the borrower/ homeowner will trash the property on his way out the door is reduced.

3). Sheriff’s sale auctions – happens after the lender has notified the borrower of default and allowed a grace period for the borrower to catch up on mortgage payments. An auction is designed for the lender to get repaid quickly for the loan that is in default. Auctions often occur on the steps of a city’s courthouse and managed by the local law enforcement authorities. 

The property is auctioned to the highest bidder at a publicly announced place, date, and time. The large cash outlay required to buy foreclosed property at the Sheriff’s Sale is the biggest deterrent for many buyers. Certified checks and sometimes cash will be required to bid on properties. In addition, you may not be able to inspect a foreclosed property before bidding on it. 

4). REO properties – Properties that don’t sell at auction revert back to the bank or become real estate owned (REO) properties. Cathy has access to extensive listings of such bank-owned properties. REOs are generally purchased “as is,” but buyers can negotiate with the lender to pay for any repairs. 

The option for a home inspection makes REO properties especially attractive to investors because they review the current condition of the property, including any repairs that will need to be made. With short sales or bank-owned (REO) properties, you can finance the purchase with a mortgage. In fact, it’s common to do so.

5). Government-owned properties –  Government foreclosures are residential properties that have been repossessed and put up for sale by a government agency. Several government agencies such as the Housing and Urban Development Department (HUD), the Federal Housing Authority (FHA), the Veteran’s Affairs Department (VA) offer mortgages at special rates for qualified borrowers. 

When a homeowner defaults on their mortgage, these agencies will repossess their property and sell it to recoup money lost on the unpaid loan. Other reasons government properties are sold include homes seized and sold by the IRS due to tax debts and property seized and sold by Homeland Security due to criminal activity. Typically, a government-registered broker must be contacted to purchase a government-owned property.   

Potential pitfalls when buying a foreclosed home in Oakland County MI 

There are some standard difficulties you may encounter when purchasing an Oakland County MI foreclosed home. While foreclosures can be great investments as fixer-uppers, either to live in or resell, these properties will typically come with issues, and the financial rewards of buying one only come after a significant amount of hard work. 

Bank-owned properties are sometimes very dirty because of the amount of time sitting empty,  neglect by the previous owner, or vagrant occupancy. A Home that has been sitting locked up with no air circulating for months can have built-up dirt that causes the entire home to smell. 

Many properties in foreclosure have been poorly maintained and may have water or mold damage, structural issues, or be in violation of codes or other standards. A small leak under the kitchen sink can lead to a mold problem, and a roof leak or burst pipe can lead to major water damage when there is no one in the home to fix it. 

Banks are unlikely to have any knowledge of existing problems with the property since one there has lived in the home. That means you will have to uncover everything yourself, either during the home inspection or through experience after you become the homeowner.  

Vandalism such as graffiti, broken windows, and other damage can also be an issue. After the occupants leave, foreclosures sit abandoned, often inviting criminal activity. Even the prior owners may take fixtures, appliances, windows, crown molding, or anything else of value from the home.

Despite all of the above potential problems, a foreclosed home in Oakland County MI can still be a good deal. If you are up for fixing problems that most people don’t want to deal with, you can purchase a home at a significant discount. 

Financing options for Oakland County MI foreclosed homes and lenders

Buyers should do some research on financing options before shopping for Oakland County MI foreclosed homes. Although you can go the traditional route of using a private lender as you would for a conventional home, some lenders are reluctant to finance a foreclosed home, making the purchase with all cash your only option.

Lenders will typically not give a home buyer money for a home they consider uninhabitable or that appraises below the purchase price. Of course, if you are paying cash, this will not be an issue. If you are not in the position to pay all cash, It’s worth looking into loans from the Federal Housing Administration (FHA) or Freddie Mac.

The HUD Section 203(k) loan program can help in some circumstances. The total amount of your mortgage is based on the projected value of the home after the renovation is completed while also taking into account the cost of the work.  

Keep in mind that when purchasing a foreclosure, negotiating with a bank is very different than negotiating with an individual. A real estate agent who has worked with banks before understands the bank’s processes and can anticipate the bank’s needs to make the transaction go smoother.

Even if you’ve purchased a foreclosure before, it’s still to your advantage to enlist the services of a qualified agent as each bank has its own procedures and timelines. Working with someone who can help navigate the nuances can alleviate a lot of stress. 

Partner with highly-rated Oakland County MI REALTOR® – Tom Gilliam   

Buyers have the opportunity to pay below market value for homes that wouldn’t be available to them under normal circumstances. If done responsibly, and with the guidance of a reputable real estate agent, purchasing a foreclosed home can allow a homebuyer to reap a myriad of benefits.

Inexperienced foreclosure buyers might want to hire a real estate agent for guidance and assistance. Agents have direct access to tools like the Multiple Listing Service (MLS), which they use to share information about properties. 

Oakland County MI REALTOR® – Tom Gilliam has over 20 years of local experience and provides the kind of knowledge, skills, commitment, and professionalism you need when buying or selling a home. As your agent, Tom will protect your interests, advocate for you, negotiate on your behalf, and be your trusted guide and advisor every step of the way.

If you or someone you know is interested in purchasing foreclosed homes in Oakland County MI, please give 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  

First-time Homebuyers: Can I Still Buy a House in Oakland County MI During Covid-19?

First-time Homebuyers: Can I Still Buy a House in Oakland County MI During Covid-19?

First-time Homebuyers: Can I Still Buy a House in Oakland County MI During Covid-19? – If you are a first-time homebuyer and were in the market to buy a home in Oakland County prior to the COVID-19 crisis, the situation has more than likely affected your original gameplan.

It’s one thing to have never bought a house before and be in unfamiliar territory. Throw in a pandemic and the situation is now moved into deeper uncharted waters, even for the most seasoned buyer.

The COVID-19 situation has derailed millions of folk’s financial plans including buying property. But it doesn’t have to be that way. 

If you were still hoping to purchase a home soon, you probably have a lot of questions like whether it’s even possible to buy a home now or tour a house, or how the pandemic has impacted home prices, and more.

The good news is that many people are still buying houses during this unprecedented time, even though things are a bit different than they were before the coronavirus changed the home buying/selling landscape.

As a first-time homebuyer during the coronavirus, here are a few things to know:  

Can You Still Buy a House Now? 

The answer is yes. Although buying a house today may be more challenging due to health and economic concerns, it is definitely possible. The U.S. Department of Homeland Security has declared that residential and commercial real estate services are an essential service.

Search the MLS for Oakland County MI Homes for Sale

If you find a home that seems right for you, have job stability and can get financing at historically low rates, buying property might be a wise choice and the right thing to do – even now.   

You Can Still Shop for a House

You can still shop for a house, but the rules for viewing a property are going to different than before COVID-19. Buyers, sellers, REALTORS, and brokers are coming up with different ways to see and show homes.

Some areas, however, have put a pause order on in-person showings all together. There are also some sellers that might be fine with you touring their house, while others might not be comfortable letting strangers in their home, even if property tours are allowed in your area.

Aside from federal and local restrictions, a lot will depend on the home sellers’ comfort levels. You can also work with an agent and have a virtual showing, where the agent walks through the property with you on Zoom, FaceTime, or some other video conferencing format.

A local real estate agent will know what buyers can and can’t do in your area, so its best to consult an agent for the most accurate, up-to-date information.  

You May Need To Get Your Pre-approval Updated

While the process of getting preapproved for a loan hasn’t changed, as most buyers today do an online preapproval application, the preapproval itself has changed post-coronavirus.

Mortgage lenders are battling economic uncertainty by raising minimum credit scores, requiring higher down payments, triple-checking employment status, and even eliminating certain loan types altogether. 

As some lenders increase their standards (overlays), your price range might change because your approved loan amount is lower, or you may no longer qualify for a loan at all.   

You May or May Not be able to Get an Inspection

Once the house goes under contract, closing is different in today’s world. You’ll still be able to get an appraisal under current regulations, but depending on whether real estate is considered essential in your area, you may not be able to get an inspection.  

If you are able to get an inspection, most likely you and your agent will not be able to attend.  A number of home inspectors are now using live video chatting apps like FaceTime or Zoom to let home buyers tag along remotely. This keeps buyers at a safe distance for home inspections. 

More Buyers Are Doing eClosings

Digital real estate closings or eClosings, give buyers and sellers the ability to sign settlement documents electronically—meaning parties don’t have to meet in a room to close the deal.

Most eClosings are orchestrated by title agents, who often lead individuals through the required paperwork by video conferencing. Most states are now offering electronic notarizations. This map from settlement software company PropLogix shows what states allow digital closings. 

Partner with Top-rated Oakland County MI REALTOR® – Tom Gilliam

 2020 Best of Farmington Hills REALTOR - Tom GilliamWhether you are looking for homes for sale in Oakland County MI or you are ready to list your current property, experience matters most in a changing market.

With over 25 years of local experience, Tom provides the kind of knowledge, skills, dedication, and personalized service you need and deserve.

As your personal agent, Tom will protect your interests, advocate for you, and go above and beyond to ensure a smooth and successful transaction.

If you or someone you know is interested in buying or selling Oakland County MI real estate, please give Tom 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
Call: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #301741

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