A For Sale By Owner-6 Reasons To Use Caution

A For Sale By Owner-6 Reasons To Use Caution

When you’re looking to buy a home, you may wonder, “Does it matter if the property is listed with a real estate agent or a for sale by owner who are trying to sell it themselves?” Um, yes. It matters. A lot. The truth is: When it comes to signing contracts, handing over escrow money, and digging into the home’s history, going it alone can end up costing homebuyers a bundle.

The following are 6 reasons to avoid a For Sale By Owner (FSBO) home.

1. Are you sure it’s legit what they are selling?

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Unfortunately, scams abound and the real estate industry isn’t immune, specially if buying a for sale by owner. If you don’t have an agent looking out for your best interests, it’s easy to be duped. For example, would you know what a proper sales contract looks like if real estate is not your field of expertise? Depending on the state in which your reside, there are a number of legal forms that must be completed. In addition to a contract, property disclosures, occupancy agreements, and lead paint records are just a few documents that must be signed. Because a for sale by owner is not bound by a code of ethics as Realtors® are, there’s no way to be certain they won’t try to take an unsuspecting buyer for all he or she is worth. No would-be buyer should suffer sleepless nights wondering where that escrow money ended up.

2. Full disclosure When Selling

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Obviously, when you’re making a significant investment you want access to as much information as possible. Real estate agents have the ability to get you the answers you need. Whether it’s about repairs made to the home or liens against the property, the more you can find out, the better off you’ll be when it comes to negotiating. Plus, no one likes an unpleasant surprise when it come to a for sale by owner. Remember: Knowledge is power. On your own, would you know what to ask a seller? And, more to the point, would you know if a seller is hiding key information? It’s a risk better off not taking.

3. Are you a skilled negotiator?

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In the course of doing business, you’ll probably have to go back and forth quite a bit — and not just about the price of a for sale by owners home. What if repairs need to be made? Are you ready to haggle over who takes care of a leak or a structural issue? What if you can’t agree on a closing date? When you have an agent, he or she will handle all that for you.

4. Is money an issue?

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The main reason sellers choose to sell their homes as a for sale by owner is to save money by not having to pay an agent’s commission. So what happens if your seller is strapped for cash but problems pop up during a home inspection and they can’t afford to fix them? This, in turn, raises a red flag as you start to wonder if they took the cheap way out when making important home repairs.

5. Are you ready to deal with a for sale by owner all the time?

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When it comes to arranging the home inspection or any other viewings of the house, your agent can serve as your go-between so you don’t have to contact the homeowner repeatedly. Unless you’re completely comfortable making all those appointments yourself, you should probably have someone representing your best interests.

6. What’s the timeframe for selling?

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When a seller hires an agent, you know they’re serious about making a deal. With a for sale by owner, are you sure the sellers are really going to get moving? Some may have put the home on the market just to see what offers it could attract. If you’re an interested buyer, you need to know that the seller is just as eager to make a move; otherwise you’re wasting your time and getting your hopes up for nothing.

Of course, there are honest for sale by owners out there, but when it comes to making one of the largest investments of your life, you don’t want to take any chances. Having a real estate agent working on your behalf at every stage of the transaction can offer peace of mind and end up saving you money and countless headaches.

The Myth of FICO Scores – Buying a House Is “POSSIBLE”

The Myth of FICO Scores – Buying a House Is “POSSIBLE”

What is the first thing people worry about when they are considering buying a home for sale in West Bloomfield, Michigan? The FICO scores.

In your eyes, what is the perfect score? 800? 850?

When you are saving for the down payment, what is your goal? 15? 20?

All these questions have myths attached to them that stop you from buying your dream house.

You see, most people don’t have thousands of dollars lying around in their bank account. There are other needs such as energy bills, food, etc, that stop you from making a frivolous purchase. However, a house is a totally different matter.

Let’s have a look at John’s life:

John has been working as a supervisor in a departmental store for about three years now. He makes $15,000 in a year. He has been saving for the past 6 years, since he was in the last year of his college. He meets this amazing young woman at the day of his graduation and he falls in love. After 2 years of dating, they decide to get married. They make plans for the wedding and decide that it would be better to spend the money he has saved onto buying a house instead of going to a foreign country for their honeymoon. They look for a home for sale in West Bloomfield, Michigan and after 2 days, find the one they like. Instead of taking out a loan, John decides to spend all his money on the house. Now, his savings account is quite low and he is struggling with the house bills and maintenance. He eventually decided to take out a pay day loan but due to the high interest rates, he ends up in debt.

As you might have guessed, the mistake John made was almost emptying his savings account.

Why did he do this? It’s probably because he thought he wouldn’t be able to get a loan due to his low FICO scores. Let’s get to the main point:

Busting the Myth

Here’s a shocker for you: you do not need a high FICO scores to get a mortgage loan! You will get the loan but to keep himself safe, the lender will probably charge a slightly high interest rate. This is a better option than going broke like John, don’t you think?

FICO Scores for Loans

Year All Loans Conventional FHA
2014 727 755 684
2015 730 757 688
2016 726 753 686
2017 722 751 680
2018 726 753 677

Interest Rates

The good thing about interest rate is that they change very slowly. They either go up by 1% or down by 0.5%. So, you don’t have to worry when going with a variable interest rate loan. Here’s a breakdown of how drastically the interest rates have changed in the past 5 decades:

  • 1970: 8.86%
  • 1980: 12.7%
  • 1990: 8.12%
  • 2000: 6.29%
  • 2010: 5.21%
  • Today: 4.52%

The reason why most people who have saved enough money by living in co-accommodations don’t go for apartments is because landlords keep increasing the rent yearly, which can make you lose all your hard earned money.

So, now that you know you don’t need a high FICO scores for buying a home for sale in West Bloomfield, Michigan, you can start searching for your perfect American Dream. Looking for a house that falls under your budget? Visit Homes2MoveYou and get in touch with me directly at 248-790-5594 to start seeing houses in areas of your liking.

How Comparable Sales are Use to Price Your House

How Comparable Sales are Use to Price Your House

How Comparable Sales are Use to Price Your House

Comparable sales are one of the biggest weapons in the real estate agent’s arsenal that he uses to set the sale price of your house. It involves looking at the previously sold neighboring houses and drawing comparisons based on its features. Of course, the current market value tells you a lot about how much the house can be sold for but if you want to find out the sale price to the last dollar, then looking at comparable sales will give you a clear idea on how high you can go on your asking price.

The reason why this step of the home-selling process is best handled by a real estate agent is because they have been inside hundreds of houses. They know what features impress buyers and what they see as frivolous and a waste of money. So, if you are planning to go the FSBO route to save on the commission, know this that you might lose a winning deal.

How Comparable Sales Help In Setting the Asking Price

Your home for sale in Oakland County, Michigan is valued on many factors, which include:

Location: The closer the comparable sale is to your house, the better the chances are that it has the same layout.

Home Type: From the square footage to the construction material, home style including the number of rooms, basement and attic… everything is taken into account.

Upgrades: Any upgrades that you have made in the past year are included in the comparable sale. However, if these renovations do not match the basic requirements of the buyer, you might not see any ROI.

Date of Sale: When using comparable sales, make sure the house was sold within the 90-day window.

Sale Sweeteners: If the comparable sale offered sale sweeteners such as paying for the closing costs or low down payment, then you will have to lower the asking price of your house or offer the same benefits.

Insider Insights Allow Real Estate Agents to Settle on the Price

Subdivisions present a problem when selling your home for sale in Oakland County, Michigan because they are different than the comps. However, since the real estate agent has insider knowledge about the comps in your areas, they will be able to negotiate on the asking price with the buyer based on other factors such as land value and major repairs.

This way, even if the buyer comes back with a counteroffer, you will be able to show him the comps as proof that the house is in fact valued just right. Of course, at this point you can use sale sweeteners to entice the buyer. However, even this should be done keeping in mind that you are not giving away something that will cost you more.

In such cases, what you can do is offer home insurance or kitchen appliances for free. These big gestures will show the buyer that you are willing to offer something in return for the high asking price on the house.

They Pick the Right Home Listing Price

Say, there are about four comps in your neighborhood. Some of them were sold cheap and some of them were sold at a high price. At this step, the real estate agent evaluates each and every feature of the house from the quality of the paint to the durability of the roof and more to set the right asking price to the last dollar.

So now you know why having a real estate agent is so important when it comes to setting the asking price on your house. Looking for a real estate agent to help you put up your home for sale in Oakland County, Michigan? Visit my website Homes2MoveYou or you can reach me at 248-790-5594 for the right listing price.

Home Inspection – Preparing Yourself for the Surprises

Home Inspection – Preparing Yourself for the Surprises

When you hire a home inspector for your home for sale in West Bloomfield, Michigan, you are often afraid of losing the house because this is the time when the house reveals its secrets. When the home inspection goes on for long, you become disappointed that you have to let go of your dream house.

However, why retract the offer when you can come up with a counteroffer? Yes, there might be a few repairs but those can be easily dealt with if the seller agrees to offer you a few warranties or other incentives.

Let’s have a look at what this inspection holds for you and your dream house:

The first thing you need to do is stop worrying about the home inspection. The inspector will make sure that all problems are noted down. These problems are invisible to an untrained eye, so you can trust the inspector. Once the report is in your hand, consult with your real estate agent and come up with a counteroffer if you don’t like the results.

The Connection between the Inspection Report and the Appraisal Value

As mentioned earlier, major repairs in the report can affect the appraisal value of the home for sale in West Bloomfield, Michigan. If the seller lied on the home inspection report, then according to the State Law, he has to cover all the repairs.

The report covers the following areas:

  • Mold
  • Pest Infestation
  • Any damages in the construction or foundation
  • Roof leaks

The report provided by the inspector covers the following things:

  • Repairs in the house
  • How the repairs can be tackled
  • Repair costs

Hiring a Home Inspector

Before hiring a home inspector, ask him the following questions:

  • How much experience do you have in this field (5 years is a good number)
  • Are you licensed?
  • Explain to me your charges?
  • Can I see a sample report?
  • How much time will it take to make the report?
  • Which areas do you check and which ones do you leave out?

Areas Inspected

  • Water pressure
  • Attic leaks
  • Electrical wiring
  • Plumbing
  • Strength of door and window frames
  • Installation of safety features (smoke and carbon monoxide detectors)
  • Fencing
  • Siding
  • Appliances
  • HVAC system
  • Radon
  • Termites
  • Lead paint
  • Asbestos

Negotiating – Preparing the Counteroffer

Once you have the report in your hand, calculate the cost of the repairs and compare it with the house’s value? Is it worth it? By law, the seller is only required to fix anything that:

  • Compromises safety
  • Violates building code
  • Might cause structural defects

Now is the time for you to negotiate. Here, you have two options:

  • Tell the seller to make the repairs (ask for the invoice)
  • Present the seller with a counteroffer, in which you have lowered the house’s price in exchange of you taking care of the repairs

So, there you go… these are the surprises you need to look for when buying a house. This is why, better get the home appraised before the home inspection, so that you are one step ahead. If you want to buy a home for sale in West Bloomfield, Michigan that falls under your budget and has all the features you need, then visit Homes2MoveYou. Get in touch with a real estate agent and start seeing houses in areas of your liking.

 

Buyer Competition Heats Up This Spring

Buyer Competition Heats Up This Spring

From all accounts, this spring’s 2018 housing market is going to be a busy one. High buyer demand has carried over from last year and so have inventory concerns in many markets. In other words, anyone hoping to find and buy a house this spring should be prepared for buyer competition from other interested buyers. What does that mean? Well, in short, it means moving quickly and saving up some extra money to sweeten the pot, if necessary. In fact, according to a recent survey, home buyers say they are checking online listings every day and 40 percent say they’re planning to put more than 20 percent down, which is a great example of  in today’s market . Other strategies buyers say they’re employing this spring to beat the buyer competition include setting price alerts and offering above asking price.

Overall, home buyers are aware of current conditions and are preparing themselves for the possibility of having to win over a home seller with an offer that exceeds all others. As evidence of this, as buyer competition heats up, just six percent of survey respondents said they are doing nothing to prepare for competition from other buyers. More here.

Do you want to increase the chances that you get a good deal on a house when you buy one without buyer compitition!?

Of course you do. Who doesn’t?

But most people go about it all wrong. They think that you have to find a desperate seller, or some overlooked, underpriced home that’s a steal.

Sure, those are ways to get a good deal, but there are always buyers waiting in the wings wanting to scoop those up if and when they appear. But most aren’t ready and able to do anything about it.

Here are 6 tips to help you be able and ready to get those deals when you find one and beat the other buyer competition .

1. Be flexible with your closing date.

This sounds so easy and simple. And it is. Many buyers simply cannot be flexible with their closing date. They need to time the closing on the sale of their home, or the end of their lease, for instance.

People selling their home are no different. This is a super common issue. And finding a buyer who can be entirely flexible is a huge benefit to a homeowner. Such a huge benefit that it can help you negotiate a better price and terms than someone who can’t be flexible.

2. Have cash.

You’ve probably heard the term “cash is king”. And it’s true, to a degree. A homeowner isn’t necessarily going to give you a steal just because you have cash…but they might if they’re in a rush, or they’ve been burned by your previous buyer competition who was turned down for a mortgage.

The weight of cash will vary from seller to seller. And, obviously, having enough cash to buy a home outright isn’t something a lot of people have. But, if you have the cash, it can certainly help.

3. Be pre-approved for a mortgage.

This is also pretty much a basic in the world of real estate. Talk to any real estate agent and they’ll tell you this is a must-have.

However, you’d be surprised at how many buyers don’t have a solid pre-approval in hand when they find a great deal. So, have that figured out and ready, so that when a good deal shows up, you’re ready to roll.

4. Be ready to jump before your other buyer competition.

Oddly, a lot of buyers looking for a good deal feel like it makes sense to wait a bit once they find a good deal. Let the owner stew a little bit, and come begging for an offer.

That can work…

It can also cost you a great deal. All it takes is someone else coming across the deal and scooping it up before you even make an offer. In the least, it can create a bidding war between you and someone else…and then it might not be such a deal anymore.

Another thing many deal-seekers do is wait to see if a better deal comes around. Deals don’t necessarily come around every day…or week…or month. Maybe not even that many in a year.

So, don’t wait. Go after a deal when you see it.

5. Go after houses that have been on the market for a long time.

So many buyers ignore houses that have been sitting on the market for a long time. They often think something must be wrong with the house, or feel like the owner isn’t going to listen to lower offers…so why waste their time.

But, those are great opportunities.

Those sellers are most likely desperate for anyone to simply come see the house, let alone make an offer. Sure, they aren’t necessarily going to love you coming in with a low offer. But, since most buyers are ignoring the house, and it’s been on for quite some time, the chances of you having any competition are slim. So, you can take more time negotiating the best deal possible.

6. Don’t have multiple real estate agents looking for you.

So many buyers who are specifically looking for a great deal feel like it makes sense to have as many agents looking out for deals for them as possible.

This backfires. All it leads to is a bunch of agents who’re halfheartedly looking for you. Agents will figure out if you have other agents looking for you as well, and will likely not pay you the attention you need if you’re going to get the best deal.

Be loyal to one, rather than having a bunch of half-looking, half-caring agents. Be all in.

Your loyalty and commitment to the agent and the process of finding and buying a great deal will pay off.

In summary

The best way to find and get yourself a great real estate deal is to be ready to beat your other buyer comptition. So many people just go around saying, “Got any hot deals?” to every real estate agent they come across.

However, they aren’t actually able and ready when and if the time comes. Or they think that it’s about driving a hard bargain when negotiating, or playing some sort of game with the seller.

Nope. The best way to get a deal is to be a solid, ready, and able buyer, who can give sellers something beyond a higher price.

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The Top Sacrifices Millennial Buyers Say They’ll Make

The Top Sacrifices Millennial Buyers Say They’ll Make

Buying a house is a major financial transaction and, for most Americans, the largest one they’ll ever undertake especially the millennial population. So pulling the necessary resources together to be able to afford the upfront costs, in addition to the ongoing obligations, maintenance, and upkeep can be difficult. Especially for first-time home buyers who don’t have the benefit of being able to sell a home to help fund their down payment.

For this reason, many millennial buyers who aspire to homeownership have decided it’s worth making a few sacrifices in order to help save money to buy a house. In fact, according to a recent survey from ValueInsured, there are some common sacrifices young Americans say they are willing to make in order to buy their first home. For example, nearly 60 percent of respondents said they would cut down or give up eating out – which made giving up restaurants the most popular sacrifice among survey participants. Other common sacrifices included taking a second job, not going on vacations, moving back in with their parents, and giving up shopping for clothes. More here.

Millennial Home Buying Roadblocks

Millennials, which is the generation comprised of people born from 1980 to 1998, are buying homes at a much lower rate than previous generations in favor of renting or moving back in with their parents after college. And a large reason they’re not buying?

Because they believe they can’t afford it. According to data from Apartment List, 72% of millennials say they can’t afford to buy a home.

 

One of the major roadblocks millennials believe stands in their way to homeownership is the down payment. But many millennials are operating with incomplete or incorrect information about how to purchase a home. According to a Fannie Mae survey, 73% of millennials surveyed were unaware of lower down payment options (like the ability to pay 3% to 5% of the home’s purchase price instead of the traditional 20%).

 

These lower down payment options are increasingly common in today’s market. According to a recent NerdWallet report, 30% of all homebuyers put down 3% or less when purchasing a home.

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