Selling Your Farmington Hills MI Home? Avoid These Mistakes

Selling Your Farmington Hills MI Home? Avoid These Mistakes

Selling Your Farmington Hills MI Home? Avoid These Mistakes 

Selling your Farmington Hills MI home can be surprisingly time-consuming and emotionally challenging, especially if it’s your very first time. With no experience and a complex, emotional transaction on your hands, it’s easy for first-time home sellers to make mistakes. However, with a little know-how, you can avoid many of these pitfalls. Read on to find out how to sell your house while getting the highest market price within a reasonable time frame – and without losing your mind.

Not keeping your emotions in check

Once you decide to sell your Farmington Hills home, start thinking of the transaction from a purely financial perspective. That way you can distance yourself from the emotional aspects of selling it. While your home is full of sentimentality and memories for you, a potential buyer will be looking at it quite differently.

Try to put yourself in the buyer’s shoes and examine the house’s attributes and imperfections. If you can remember that you are selling a piece of property as well as an image and a lifestyle, you’ll be more likely to put in the extra effort of staging and doing some minor remodeling to get top dollar for your home.

An agent can also help tone down the emotion of the process by interacting with potential buyers and eliminating those who only want to look at your property but have no real intention of making an offer. It may be hard to believe right now, but you’ll soon become just as attached to your new home as you were to your old one.

Not hiring a Farmington Hills MI REALTOR® 

An experienced real estate agent can help you at every stage of the home selling process. They are better-qualified to set the right price for the homes they list, better-equipped to market those homes, and likely to find a buyer in a shorter period of time than if you try to sell on your own. Marketing exposes your property to the public as well as to other real estate agents through a Multiple Listing Service, other cooperative marketing networks, open houses for agents, and so on.

In many markets, a substantial portion of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Real estate agents often use these cooperative relationships to benefit their clients. In addition, an agent will know when, where, and how to advertise, which medium, format, and frequency will work best for your home and your market.  Without an agent, you are the one responsible for showing the house and negotiating the sale with the buyer’s agent, which can be time-consuming, stressful, and emotional for a lot of people.

Not setting the right price  

The selling process generally begins with a determination of a reasonable asking price. One of the biggest mistakes to avoid when selling your Farmington Hills MI is overpricing it. A higher list price will not translate to more money in your wallet. In fact, the National Association of REALTORS® reported in 2020 that sellers typically sold their homes for 99% of the listing price while 38% reduced the asking price at least once.

Listing your home above market value can cause it to linger on the market and make buyers wonder why it hasn’t sold. Buyers see comparable homes in your area online every day and they know how long a house typically lasts on the market. Don’t worry too much about setting a price that’s on the low side, because in theory this will generate multiple offers and bid the price up to the home’s actual market value.

Underpricing your home can actually be a strategy to generate extra interest in your listing, and you can always refuse an offer that’s too low. Your real estate agent can give you up-to-date information on what is happening in your local market as well as the price, financing, terms, and condition of competing properties. These are key factors in marketing your home and selling it at the best price. Often, your agent can also recommend repairs or cosmetic work that will significantly enhance the salability of your property. 

Not being willing to negotiate on the asking price  

Any smart homebuyer will negotiate, and if you want to complete the sale, you may have to as well. Most sellers want to list their homes at a price that will attract buyers but still leaving some wiggle room for negotiations. The buyer then feels like they are getting good value while allowing you to get the amount of money you need out of the sale.

Be prepared to receive multiple offers if your home is priced right and don’t ignore any offers, even if it seems too low. Negotiate by making a counteroffer. Don’t be afraid to make a full-price counter offer if your price is competitive and it’s backed up by comparable sales. Whether you end up with more or less than your asking price will likely depend on whether you are in a buyer’s market or a seller’s market and how well you have prepared your home to sell.

Your agent can help you objectively evaluate every buyer’s proposal without compromising your marketing position and also help you write a legally binding, win-win agreement that will be more likely to make it through the process.

Not investing in quality listing photos  

Since most buyers look for homes online these days, and many of those homes have photos, you’ll be doing yourself a disservice if you don’t have quality visuals of your home. If you do a good job, it will set your listing apart and help generate extra interest. Good photos should be crisp and clear and taken during the day when there is plenty of natural light available. They should showcase your home’s best assets. Consider using a wide-angle lens if possible—this allows you to give potential buyers a better idea of what entire rooms look like.

Ideally, hire a professional real estate photographer to get top quality results instead of just letting your agent take snapshots on a phone. And don’t just stop at photos. Consider adding a video tour or 360-degree view to further enhance your listing. This can be easily done with any smartphone. You can certainly entice more potential buyers into walking through your doors for showings. You may even get more offers if you give them an introductory walk-through of your property. 

Not disclosing problems with your property

You really can’t get away with hiding problems with your property because they will get uncovered during the buyer’s inspection. Basically, you have three options to deal with any issues: fix the problem ahead of time, price the property below market value to account for it, or list the property at a normal price and offer a credit for the issue. Not fixing the problem ahead of time, however, could eliminate a number of potential buyers who are looking for a turnkey home.

Having your home inspected before listing it is a good idea if you want to avoid costly surprises once the home is under contract. Many states have disclosure rules and some require sellers to disclose known problems about their homes if buyers ask directly, while others require that sellers must voluntarily disclose certain issues.

Not preparing your Farmington Hills MI home for sale

Sellers who do not clean and prepare their homes for sale will have a harder time getting them sold fast for the best price. You want your home to be in the best condition possible. Take care of major defects like broken windows or a leaky roof that could discourage buyers.  If you haven’t attended to minor issues, such as a dripping faucet or broken doorknob, a potential buyer may wonder whether the house has other, more expensive issues that haven’t been addressed either.  Anything that’s obviously broken gives potential buyers a reason to submit a lower offer.

Thoroughly cleaning, decluttering, putting a fresh coat of paint on the walls, and getting rid of any odors (litter box) will help you make a great impression on buyers. In addition, you might consider hiring a professional to stage your home for showings or ask your real estate agent for help or ideas. According to the Real Estate Staging Association, homes that are staged before going on the market sell 73% faster, on average, than their non-staged counterparts.

Virtual staging apps such as Ro0omy, VisualStager, BoxBrownie allow you to stage a home digitally, then use the photos in your listings or other marketing material. Remember, you only get one chance, and sometimes only three seconds or so to make a great first impression, so make it count.  

Not estimating your costs to sell

Depending on the price range of the home, be ready to spend 9% – 10% of the sale price on selling costs, including the real estate agent commission and closing costs. Be sure to budget ahead of time for the additional costs involved with selling your home so that you will be ready when the time comes to close the deal. The main types of fees to plan for include:

  • Staging and prep fees (anywhere from a couple hundred to a couple of thousand dollars)
  • Real estate agent commissions (5.8% national average)
  • Inspections and repairs (varies)
  • Closing fees (1% – 3% of the sale price)
    • Title fees
    • Transfer or excise taxes
    • Escrow fees
    • Reconveyance fee
    • Recording fees
    • Prorated property taxes
  • Seller concessions (2% – 6%)
  • Overlap costs (1% – 2%)
  • Moving and relocation costs (varies)
  • Mortgage payoff (varies)

Your real estate agent deals with transactions every day and will be able to give you a very close estimate of seller closing costs.

Not selling to qualified buyers  

It’s more than reasonable to expect a buyer to bring a pre-approval letter from a mortgage lender or proof of funds(POF) for cash purchases to show that they have the money to buy the home. Signing a contract with a buyer may be contingent on the sale of their own property, which may put you in a serious bind if you need to close by a particular date. An unconditional offer is when the buyer does not place any conditions on their offer. This is often preferred by sellers as it is an easier option and the sale can proceed quickly.

The takeaway

Selling your home will likely be one of the biggest transactions of your lifetime. An experienced Farmington Hills MI REALTOR like Tom Gilliam can get broader exposure for your property, help you negotiate a better deal, dedicate time to your sale, and prevent your emotions from sabotaging it. An agent brings expertise to a complex transaction with many potential financial and legal pitfalls.  

Partner with award-winning Farmington Hills MI REALTOR® – Tom Gilliam   

Tom Gilliam is proud to be a trusted REALTOR® in Farmington Hills MI for the past 20 years – offering his guidance and expertise to home buyers and sellers. He 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, Tom will protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure a smooth transaction and the best results possible. 

Tom works hard for his clients and provides the kind of knowledge, skills, commitment, and personalized service you need and deserve when buying or selling a home. Get the process started today by reaching out to Tom Gilliam directly 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 

The Closing Process When Buying a Home in Farmington Hills MI

The Closing Process When Buying a Home in Farmington Hills MI

The Closing Process When Buying a Home in Farmington Hills MI: A real estate closing, also called a settlement, is the process of transferring ownership of a home from the seller to the buyer. In the context of real estate, “closing” is basically synonymous with “signing.” Reviewing and signing documents is the bulk of what a home buyer does during this process. But that’s not all that happens.

Summary: Come closing day, the buyer and seller will sign all the necessary papers to officially seal the deal; the property title and ownership get transferred from the seller to the buyer; the home buyer will sign a variety of documents prepared by the escrow/closing agent and will also pay whatever closing costs are due; and agent commissions and other funds are distributed by the escrow agent. 

The closing process is usually managed by an escrow agent and sometimes an attorney who specializes in handling real estate closings and preparing the related documents. In some states, the home buyer and seller can close separately at different dates and times. While in other states, both parties must attend closing at the same time and sit at the same table with their respective real estate agents and/or attorneys. 

Even though you and the seller may agree on a closing date, your agent will probably work with your lender and title agency to suggest a timeline that allows them enough time to correctly execute their end of the deal.  

The Steps at Closing

While the logistics mentioned above can vary, the steps at closing are basically the same.  

  • The home buyer will bring a cashier’s check to cover all remaining closing costs and fees. 
  • The property title will be signed over from the homeowner to the buyer, thus transferring ownership.
  • The closing agent (or lawyer or notary) will register the new deed with the appropriate government office. After that, the home buyer will be listed as the official owner of the property. 
  • The respective real estate agent(s) involved in the transaction will receive their commission fees. 
  • The seller will receive any proceeds they earned from the sale, once their mortgage balance and closing costs have been paid off.

Closing day documents

A real estate transaction is a complex process that involves a lot of paperwork, and there are many documents that buyers will need to sign on closing day. Fortunately, the escrow or closing agent will have all of the required documents prepared and ready for the buyer’s signature upon arrival at closing. 

There will be mortgage-related documents, legal disclosures, tax records, and more. It’s not uncommon for buyers to sign their name over a dozen times before all is said and done. Buyers will have to sign the property deed, bill of sale, mortgage agreement and note, transfer tax declaration, and closing disclosure. 

Once the buyer has finished signing all of the closing documents, and all funds have been properly distributed, the deed of ownership will transfer from the homeowner to the buyer. If it is a joint closing, the seller will then hand over the keys. If it is a separate closing, the seller’s agent might deliver the keys (This can vary).

How Farmington Hills MI homebuyers can prepare in the days leading up to closing

Knowing what happens in the days leading up to closing can reduce some of the stress and help ensure a smooth transaction. Here is what you can typically expect to happen: Your mortgage lender will send you a closing disclosure a few days prior to closing. Among other things, the closing disclosure shows how much the buyer has to pay in closing costs. The buyer will then need to obtain a cashier’s check in the amount stated in the closing disclosure.

In some cases, the buyer might wire the money to the title/escrow company, rather than paying by cashier’s check. Typically, the buyer brings a copy of the homeowner’s insurance policy to the closing, or an insurance binder, depending on what the lender requires. During the week prior to closing, last-minute underwriting issues may also be resolved in some cases. 

What Farmington Hills MI homebuyers need to bring on closing day

Buyers need to bring all necessary paperwork with them to closing to make sure nothing is missing, different, or overlooked. Some important documents include: 

  • Cashier’s or certified check – You’ll pay your closing costs with a certified check or a wire transfer from escrow.
  • Proof of homeowners insurance – Lenders require an insurance policy before closing   
  • Photo ID – You’ll need to bring a government-issued identification for the title company.

Closing day check list

Review the following checklist to make sure that you have everything in order so that the closing day process runs as smooth as possible:

  • Contact the closing agent – Once you know who your closing agent is and where they’re located,  contact their offices to see if they have any special instructions for you. They’ll typically have a list of items you’ll need to bring.
  • Review your closing documents – Legally, you should receive your closing documents 3 business days prior to closing. Make sure you read them so you understand what you’re signing and check for any errors. Double-check all of the basics: spelling, numbers, names, etc.  
  • Check the fees – Your most recent loan estimate should be close to your closing disclosure. Some fees may change a little, but there shouldn’t be any big surprises at this stage.
  • Review seller responsibilities – Review your final walk-through checklist to make sure the seller has taken care of all their responsibilities.
  • Be payment ready – Expect to write the check for closing costs. Plan in advance if you are transferring funds from another account so they are cleared.

How much It costs to close on a house in Farmington Hills MI 

Closing costs are the fees that third parties charge and typically include the home inspection fee, premium for homeowners insurance, appraisal fee, credit report charges, attorney expenses, and so forth. Some of these fees, such as earnest money and home inspection fees, will need to be paid before the actual closing day. On average, homebuyers will pay between 3% to 4% of the purchase price of the home in closing fees. For example, if your home costs $300,000, you might pay between $9,000 and $12,000 in closing costs.

The takeaway

Closing on a house in Farmington Hills MI may seem like a cumbersome process, but the toughest part of it is the waiting. If you enlist the help of a skilled Farmington Hills MI REALTOR and other experienced professionals at every stage of the process, you will feel confident and look forward to closing day when you get the keys to your new home!

Partner with award-winning Farmington Hills MI REALTOR® – Tom Gilliam   

Tom Gilliam is proud to be a trusted REALTOR® in Farmington Hills MI for the past 20 years, offering his guidance and expertise to 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, Tom will protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure a smooth transaction and the best results possible. He is able to provide the kind of knowledge, skills, dedication, and personalized service you need and deserve. If you or someone you know is interested in Farmington Hill MI real estate, feel free to reach out to Tom directly 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 

Buying a Home in Farmington Hills MI? Conventional Mortgages 101

Buying a Home in Farmington Hills MI? Conventional Mortgages 101

Buying a Home in Farmington Hills MI? Conventional Mortgages 101: This year, you are finally ready to buy a home in Farmington Hills MI. Whether it is your first time or you are an experienced homebuyer, all the mortgage options out there can be overwhelming. Not all home loans are the same and knowing what kind of loan is most appropriate for your particular situation will prepare you for talking to lenders and getting the best deal.

In this article, we are going to take a closer look at conventional mortgages so that you can determine whether this type of loan is the right one for you. 

  • The majority of home loans are conventional loans
  • Conventional loans typically cost less than FHA loans but they can be harder to qualify for.
  • Conventional loans are not guaranteed in part or in full by the government.
  • Conventional loans are offered by private lenders and may be secured by Freddie Mac or Fannie Mac (government-sponsored entities)  

Conventional loan requirements

Requirements for conventional loans vary by lender, but you typically need to demonstrate credit-worthiness and the ability to make your payment every month. Here are some things that a conventional loan lender might look at:

  • Your credit score. In many cases, the bottom cut-off for conventional loan approvals is a credit score of 620. Though depending on other factors, such as the amount of the mortgage and your income, you may need a higher score to qualify.
  • Your credit history. Mortgage lenders may look more in-depth at your credit than other lenders, and you may be asked to clear up old accounts or negative items before final approval.
  • Your income and debt. The lender wants to ensure that you’re able to pay the required monthly amount. They’ll look at how much you make, as well as how much debt you already have—the ratio of your debt to your income. If your debt is already taking up a large chunk of your income every month, you’re less likely to be able to pay a mortgage and less likely to get approved.
  • The value of the home. Typically, banks won’t approve a loan that’s more than the value of the home in question. You usually have to get the property appraised before a mortgage can be finalized for this reason.

Types of conventional loans 

Conventional loans come in a wide range of types. Here are the five most common forms of conventional financing:

1). Conforming loans

A conforming loan simply means the loan amount falls within maximum limits set by Fannie Mae or Freddie Mac, the government-sponsored enterprises (GSEs) that back most U.S. mortgages. The main difference between Fannie and Freddie comes down to who they buy mortgages from. Fannie Mae mostly buys mortgage loans from commercial banks, while Freddie Mac mostly buys them from smaller banks or “thrift” banks.  Fannie and Freddie must purchase loans that fall within the loan limits set by the Federal Housing Finance Agency, which is why conventional loan limits exist.  The types of home loans that don’t meet these guidelines are considered non-conforming loans.

The 2021 maximum limit for conforming loans on single-family homes is $548,250 for most counties across the U.S. Conforming loans are best for borrowers with good credit and low debt-to-income ratios who are looking to get a mortgage with a loan amount that doesn’t exceed conforming loan limits.

2). Non-conforming or ‘jumbo’ loans

Also known as non-conforming loans, jumbo loans are conventional mortgages that exceed the conforming loan limits in a given area. Higher-end homes are often associated with this loan type. Because their significantly higher balances don’t conform to Fannie Mae and Freddie Mac guidelines, jumbo loans aren’t eligible for purchase by either entity. 

Jumbo loans differ from high-balance loans, which are conforming loans with higher balances to reflect average home prices in high-cost areas such as several counties throughout New York and California. The conforming loan limit on single-family homes in high-cost areas for 2021 is $822,375. Jumbo loans are best for borrows who are looking to finance the purchase of a home that costs more than the conforming loan limit in their county.

3). Fixed-rate loans

A fixed-rate loan is a type of conventional mortgage that has the same interest rate for the life of the loan and won’t change. The principal and interest portion of your monthly mortgage payment will be the same amount each month. You’ll generally pay more interest with a longer-term loan and interest rates typically are higher than rates on adjustable-rate mortgages. It also takes longer to build equity in your home with a fixed-rate mortgage. This type of conventional loan is best for borrowers who plan to stay in their home for at least seven to 10 years and who prefer predictable, stable mortgage payments, so they can more precisely budget other expenses month to month.   

4). Adjustable-rate mortgages (ARMs)

Unlike the stability of fixed-rate loans, adjustable-rate mortgages (ARMs) have fluctuating interest rates that can go up or down depending on market conditions. Many ARM products have a fixed interest rate for a few years before the loan changes to a variable interest rate for the remainder of the term. For example, if you have a 5/1 ARM, your mortgage rate would be fixed for the first five years and then adjust annually for the remainder of the loan term. 

ARMs typically start out with lower rates than fixed-rate mortgages, but you can expect rates to increase over time. Most ARMs have a lifetime cap of 5%. During the years that the rate adjusts, it can go as high as 5% above the initial fixed-rate, according to the CFPB. Adjustable-rate mortgages are best for borrowers who are comfortable with a certain level of risk. If you don’t plan to stay in your home beyond a few years, an ARM could save you big on interest payments.  

5). Non-qualified mortgages

A Non-qualified mortgage (Non-QM) is a loan that doesn’t meet the standards of a qualified mortgage and uses non-traditional methods of income verification to help a borrower get approved for a home loan. This type of conventional loan caters to borrowers with low credit scores or other unique financial situations such as self-employed borrowers or those who rely on commissions or bonuses for a large portion of their income. Non-qualified mortgages will typically have higher mortgage rates and fees than prime mortgages, which are reserved for buyers with excellent credit scores. 

Non-QM loans have gotten a bad rap due to the large number of subprime loans that were doled out before the housing crisis and then went into foreclosure. Thanks to a tightening of federal regulations on the mortgage industry, lenders are now more cautious about who they loan to – non-QM lenders included. But for prospective homebuyers, there are plenty of non-QM lenders who can serve their needs. This type of conventional loan is best for borrowers who have serious blemishes on their credit profile, a DTI ratio above 43% or other unique financial situations, but can comfortably afford a mortgage.

Advantages of conventional loans

Conventional loans usually require less paperwork and can be obtained more quickly than government-insured loans. A conventional loan is a great option if you have a solid credit score and little debt. One of the best advantages of conventional loans is the mortgage insurance (MI). Typical monthly MI for FHA loans is 1.35 percent of the loan amount and in most cases will last for the life of the loan. Whereas typical conventional lending MI can be as low as .50 percent of a loan amount on a 95 percent Loan-To-Value (LTV), depending on your fico score. You can avoid PMI by paying 20% of the loan upfront, which will lower your mortgage payments.  

Conventional loans can be more flexible than FHA or other government-backed loans. Lenders of this type of loan don’t have to follow specific government guidelines, which means they may be able to work with borrowers who don’t fit those requirements. They can also provide mortgages for properties that are more expensive. In most cases, borrowers save money in the long run with a conventional loan because there’s no upfront mortgage insurance fee, and the monthly insurance payments are cheaper. 

Disadvantages of conventional loans

Significant documentation is required with this type of loan to verify income, assets, down payment, and employment. Conventional loans also generally come with a higher bar for approval because they are not guaranteed. Because the lender is taking on all the risk, risk, you may need a higher credit score and stronger debt-to-income ratio to qualify for these loans.

Closing costs on a conventional loan usually must be paid at settlement and can’t be rolled into the mortgage as they can with an FHA loan. Such things as loan origination fees are set by the lender, not the government agency, and may be higher. Additionally, lenders may require processing or application fees not applied with government-insured loans. With a conventional loan, you are also more than likely have to pay PMI if your down payment is less than 20 percent of the purchase price.

The Takeaway

Before you move forward on a mortgage, carefully consider your individual financial situation. Review your circumstances and needs and do your research, so you know which types of mortgage loans are the best fit and most likely to help you reach your goals.

Partner with Award-winning Farmington Hills, MI REALTOR® – Tom Gilliam   

Tom Gilliam is proud to be a trusted REALTOR® in Farmington Hills MI for the past 20 years – offering his guidance and expertise to 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, Tom will protect your interests, advocate for you, negotiate on your behalf, and do whatever it takes to ensure a smooth transaction and the best results possible.

Tom works hard for his clients and is able to provide the kind of knowledge, skills, dedication, and expertise you need when buying or selling a home. Feel free to reach out to Tom directly 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 

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  

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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