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Archive for the ‘buying NON distressed homes’ Category

The 72 hour contingency clause is often referred to as a first right of refusal; that is close but not quite accurate. A first right of refusal is an agreement between a seller and potential buyer that if the seller accepts an offer on a piece of property the potential buyer has a certain time frame to match the offer. There can always be other details built into the agreement, but this is a short basic description.

A 72 hour contingency (the time can be substituted with any number – 24 hour, 48 hour are both common also) is part of an agreement to buy a house that is subject to the sale of another house. It accompanies a fully executed purchase agreement that goes into effect when the 72 hour contingency clause is removed.

After buyer and seller come to terms with the condition the buyer needs to sell, the seller’s house stays on the market and other offers can be negotiated. Once the seller receives another offer, notice is served to the first buyer and that buyer has 72 hours to show their house is sold, show they willing and able to buy without selling, or be released from their offer. If the first buyer chooses to “perform” and go through with the sale, the 2nd offer is then voided. If the first buyer hasn’t sold and doesn’t want to or able to buy without selling the 2nd offer slides into place and the first offer released.

If the first buyer sells, they remove the 72 hour contingency clause and the offer then becomes subject to the close of their house.

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Interest rates are low- super low. How low? Low enough you can pay today’s prices for a smaller payment than 2008 prices with 2008 interest rates.

Last week’s rates for a 30 fixed with 20% down and a half point was 3.625%. With good credit of course. A few weeks ago you could get a conventional mortgage for only 3.5%

But they won’t stay this low forever. As the housing market, and economy in general, improve the rates will go up. I doubt they will ever get back up to the 9+% they were when I got my license, but to put things in perspective the average rate during peak price time of 2003, 04, 05 was right around 5.8%. The National Association of Realtors (NAR) projects interest rates will get as high as 5.4% by the end of 2015.

What this means for you, the home buyer: If you can afford a $500,000 house today you will only be able to afford $405,000 at the same payment. You don’t like what you’re looking at for $150,000 today, be prepared to stay under $120,000 if NAR is right.

See the charts below for an idea of how your buying power diminishes as interest rates go up.

buyers purchasing power 300k March 2015buyers purchasing power 150k March 2015buyers purchasing power 500k March 2015Jackie@JackieHawley.com
(248)736-6407
www.Search-The-MLS.net

www.MiRelocation.com

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why an FHA mortgageWhen an Oakland or Lapeer County home buyer comes to us with a pre-approval letter for an FHA mortgage we will ask both you and your loan officer “Why FHA?”

It’s not that we are FHA snobs or don’t want to work with FHA buyers, but FHA does come with its own baggage. Baggage that affects you the buyer, not me or anybody on my team. We are very experienced dealing with FHA buyers, and FHA is a good program for the right buyer. But it’s not for everybody.

FHA is good if you have bruised credit; it is a program that is more forgiving of less than perfect credit. And what better way to repair credit than making a house payment on time for a few years since your house payment will probably be lower than the rent you are currently paying.

Some people need to go FHA because of their debt to income ratios. FHA allows you to carry more debt than conventional mortgages do.

But if your reason for going FHA is solely because of down payment you may want to find another lender. A big part of a loan officer’s job is to fit you with the loan that is best for you.

Two of the biggest issues with FHA loans from the buyer perspective: 1) Many sellers have heard too many horror stories and are somewhat biased against FHA buyers. You want your offer to be as strong as possible and an FHA offer will make you come across as a weak buyer. 2) You will be paying mortgage insurance for the entire life of the loan.

Until recently if you could show 20% equity after a couple years, you could drop the mortgage insurance from your FHA mortgage. But the rules changed last year and if you want to drop the mortgage insurance you need to re-finance to a conventional loan. And with today’s rates under 4% do you really think you will get that rate in a few years?

There are now conventional mortgages with as low as a 3% down payment. Once you find a house you can lock into today’s low low super low rates and not wonder and hope for the next 3 or 4 years that the rates don’t go up a per cent or two.

www.Search-The-MLS.net

www.JackieHawleyRealtor.com

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Turning your home into that “dream house”

Most Oakland County home buyers come to us with expectations for a home that exceed their budgets. Most people aren’t buying their “forever home” (too much time on pet finder with dogs looking for their forever homes). Many settle for something they like, build some equity and sell in 6 or 7 years and upgrade.

But some are buying that forever home now. Or at least plan on living there long term. I fall into this category. I plan on retiring in my house and living here until I die. The house is less than perfect. The property was less than perfect, too. But both had the potential to become as close as my budget allows to my dream home.

The only thing that concerned me on my home inspection was the ability to add a second story over the rest of the house. It’s a farm house with an upstairs only over half the footprint. I haven’t added the 2nd story, yet, but have made significant changes. I built a pole barn. Added a couple ponds and a “wildlife habitat” next to the ponds- 5 acres of prairie grass and wildflowers. Planted hundreds of pine trees, lilacs, rose of Sharon bushes…

The point is, if you go into your home purchase with a plan, you can more easily achieve as close a proximity to dream home status as your budget, imagination and handyman/landscaping skills allow.

Why List Jackie

Choosing a Buyer’s Agent

www.Search-The-MLS.net

Jackie Hawley, Realtor
Jackie@JackieHawley.com
(248)736-6407

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Why Zillow is a Good Thing

They are well optimized so my listings get good exposure.

And their Zestimates are SOOOOOOO wrong!!

The first is a no brainer. Free exposure with a pretty decent format. My listings are attractively displayed with multiple photos and a good description. I can edit the photos and text, and it allows me to link a virtual tour.

Many agents belly ache that we are giving our listing data over too easily just for Zillow to sell leads to other agents. This is true, but there is nothing I can do about that. Most sellers would not be happy if I excluded Zillow from displaying their listing. And I don’t blame them. So for now I take the free advertising.

Many agents have also been whining lately about the inaccuracy of Zillow’s Zestimates or estimated house values. And they are correct. Most of the estimated home values on Zillow are crap. From my perspective this is a good thing. It bolsters my belief that sellers and buyers still need us. If a computer program can accurately price a home, it greatly reduces the need for real estate agents and appraisers.

So in my mind Zillow is a good thing- further proof for the need of a real estate professional and free advertising on a highly ranked web site.

Thinking of Selling

Thinking of Buying

www.Search-The-MLS.net

Jackie Hawley, Realtor

Cell: (248)736-6407

www.MiRelocation.com 

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When High Tech is just an excuse for laziness

This post is NOT a criticism of electronic signatures, Twitter, Facebook… nor of agents who utilize these methods in their real estate business.

This post IS a criticism of agents who criticize those of us who choose NOT to use any of the above in our real estate practice.

I was in a class a couple weeks ago when electronic signatures was brought up. The main (only) reason many agents gave for using e-signatures was it’s easy. Great- if easy is important then do what’s easy. I choose to meet with my clients to discuss offers and counter offers. I choose to actually watch the person penning the signature I’m going to witness. I think there is a reason most banks won’t accept an electronic signature. I also know it wasn’t that long ago that a 14 month old bought a car on eBay with her dad’s smartphone.

Twitter, Facebook and other forms of social media- Again I think the primary motivation for this form of advertising is that it’s easy. And social. If it works for you then fine. I choose to understand SEO, SEM and a sprinkling of good old fashioned print advertising. I choose to maintain 2 highly ranked web sites optimized for key words I researched for potential results. I know that Clarkston MI real estate gets searched more on Google than Clarkston Michigan real estate. I don’t Tweet, I barely ever log onto Facebook. The closest thing to social media advertising I use is blogging.

Use whatever works for you. But please don’t criticize those of us who don’t jump on the same so called High Tech bandwagon you did.

www.Search-The-MLS.net

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Is My Listing REALLY Overpriced?

It seems lately the explanation that comes with a low ball offer is that the house (my listing) is overpriced. I guess soooo grossly overpriced that your buyer chose it as their favorite. I understand a buyer submitting a low offer trying to see what they can get it for. I don’t agree that is the best way to get the seller to his/her bottom line, but I understand it. But many of these offers are coming in 15%-25% low and negotiations inevitably end with buyer and seller not coming to terms and about 5%-8% apart. That translates to $10K or $20K apart.

I get the feeling the asking price was over those buyers’ purchase abilities. So the agent ends the negotiations with something along the lines of “good luck getting it sold” followed up with something derogatory about the house.

Guess what- prices are going up. Inventory is low. Those houses DID sell within a month or two of your so called offer for the same or more than our lowest counter. And they appraised. And they closed.

At $3.50/gallon, I hope you aren’t still driving those buyers around, writing low offers on “overpriced” houses.

Buyer’s agents need to educate their buyers.

Prices in North Oakland and Lapeer counties have been increasing- sharply. What you can buy for $200,000 today will probably get $210,000 or even $220,000 this summer.

Interest rates are good, and the longer you wait to buy the more you are chancing an increase in interest rates.

Houses are selling on average within 2%-3% of the asking price.

Inventory is low and has been for quite a while. If you’re good at $120,000 today but don’t like any of the houses out there for $120,000, or can’t get anybody asking $140,000 to come down $20,000, you may be forced to buy a house this summer for $120,000 that would sell for $110,000 today.

If a house is slightly overpriced today won’t be this summer. Not every seller has the same motivations. Some want to sell quickly. Some want to sell for top dollar and we are now in a market where patience can be profitable.

Thinking of Selling? –Professional Home Evaluation 
Buying? Choosing a Buyer’s Agent

Search the MLS

Jackie Hawley, Realtor
Cell: (248)736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

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