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


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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.



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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


Jackie Hawley, Realtor
ReMax Encore

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Customer Service…. What doe is mean to you?

I have been selling real estate for a touch over 23 years and it still amazes me sometimes how little effort other “professionals” put into a transaction.

A little background without names or exact location. One of my listings is supposed to close this Friday. The sale was subject to the closing of the buyer’s current house, and that house was supposed to close today. A little after 11 o’clock last night (after I was sawing logs – sleeping) the buyer’s agent sent an email to me, the buyer, and the loan officer letting us know his house wasn’t going to close today. She forwarded an email from the buyer’s agent on that transaction which was a forward of an email from that lender. The initial email was after 7 pm.

The gist of the original email was they weren’t ready to close because they were waiting on an IRS transcript they had expected the previous week. Except the buyer filled the form out wrong and the IRS rejected it. So the loan officer filled out a new one for the buyer to sign and expected the transcript this  morning. Planning on closing next week instead of today.

This so far is about the underlying sale.

BUT the seller, who is the buyer for my listing, was pre-approved to buy without selling. So I hit reply all on the email and asked if our closing was still on for Friday. If the buyer was able to buy without the closing of his house or did he need to go back through underwriting since the conditions changed. The only answer I got was from the buyer asking his lender if that was possible. He was still willing to close on Friday and close on his house next week.

No response.

I follow up 4 or 5 hours later asking if anybody had heard back from the lender. I got an email from the buyer’s agent stating he needed money from the closing on his house to close on ours. I asked if this had been verified by his lender since he was willing to close. And I asked if she had spoken to the lender for the underlying sale (her listing) to confirm they received the IRS transcripts.

No word. The buyer called me directly. He hadn’t heard from anybody either.

Since this is Wednesday night I figure we are not closing Friday and will close after the underlying sale closes. But if nobody gets back to me by tomorrow morning I am going to do what those directly involved seem to have a problem with. I am going to actually pick up the phone and make a call. Maybe the lender on the underlying sale will be surprised enough to hear it ring he might pick it up out of curiosity. That hasn’t worked with the lender on our sale thus far; I think she may have it go directly to voicemail when my number shows up.

What amazes me about this very long story. The buyer’s agent on the underlying sale was upset because their loan officer had told the buyer they were clear to close on Mon. The agent didn’t verify himself. Neither agent actually communicated with that loan officer to verify the buyer was clear to close. The lender on that sale sent a form to the IRS without making sure it was filled out properly. The listing agent on that sale (aka buyer’s agent on my sale) didn’t pick up the phone and call the loan officer to make sure they actually received the transcript today as anticipated. Just assumed they got it. She never picked up the phone and called the loan officer on our sale to find out if we could still close Friday as scheduled. Never picked up the phone and updated her buyer/seller. The loan officer on the underlying sale notified everybody last night after 7 o’clock. Well after business hours. And via email.

What is the aversion to actually calling people involved in a six figure transaction? Short, vague emails and text messages with little detail and no verifications of any facts. Is this what passes for customer service these days?

For real service, whether buying or selling your home or vacant land, please don’t hesitate to call (or email if you prefer) Jackie Hawley at ReMax Encore. I’m old enough to know what customer service is, and still young enough to be tech savvy.

Choosing a Buyer’s Agent

Homes For Sale


Jackie Hawley, Realtor
ReMax Encore

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How to make your Oakland County Michigan VA offer stronger

VA offers are not what makes a seller’s heart flutter. Too many things can go wrong. In my experience you tend to get poor appraisers who are not local. The appraised values tend to come in low.

One of the primary reasons a buyer goes VA is because it is 100% financing. Good for the buyer. Not for the seller. Zero down buyers tend to be weak buyers. VA buyers typically ask for the seller to pay for their closing costs and there are some fees the buyer isn’t allowed to pay and those usually get picked up by the seller.

So from the seller’s perspective- Why would they look at your VA offer?

If VA is the only financing option for you, there are a few things that can strengthen your offer.

Don’t ask for the seller to pay for your closing costs. Check with your lender, but I believe you can finance the 4 or 5% by paying a slightly higher interest rate. When you ask for a seller to pay your closing costs, you are asking that seller to take 4 or 5% less than the appraised value.

Don’t ask for anything that isn’t being offered. If the seller isn’t offering to leave the appliances, don’t ask for them. Don’t ask for the lawn mower. Don’t ask the seller to pay for a home warranty.

Don’t ask for less possession after the closing than the seller is asking for. There is a reason a seller is asking for 30 days or 45 days. You may even want to offer that possession time free of charge.

Don’t use your home inspection as a “honey do” list. You are buying a used house. Minor repairs and maintenance items are a part of home ownership.

Offer full price or even over. Especially if you are in a multiple offer situation. Also, that low appraisal may come in closer to the asking price than an offer that is right at asking price.

Obviously, if you can go conventional that is ideal. Many lenders are offering 5% down conventional mortgages

If you are considering buying a home- VA or not- please don’t hesitate to call Jackie Hawley with ReMax Encore.

Why VA?

The Job of a Buyer’s Agent


Choosing a Buyer’s Agent

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Why VA for your Oakland County Michigan Home Purchase?

When I receive an offer on one of my Oakland County listings, and the financing is a VA loan, my first question to the buyer’s agent is “Why?” The usual answer is “because they can” or “because they qualify” or “earned it” or some other vague non answer.

On the surface it can seem like a good loan for the veteran. No down payment needed and some other perks I’m not going to get into on this post.

The problem in reality– The appraisals usually suck. The appraiser is usually from out of the area, and their values tend to be low. Almost every VA sale I have been involved in had a low appraisal- some ridiculously low.

You ask- Isn’t this good for the buyer? Doesn’t the seller have to reduce their price?

The answers are “no” and “no.”

It doesn’t do the buyer any good to pay for a home inspection and then pay for an appraisal and then not get the house they want.

At this point the house has been held off the market for a month or so.

So, if a house is salable- what is the incentive for the seller to take your VA financed offer?

Buyers- if you can come up with the 5% down payment, you may want to see if you qualify for a conventional mortgage. Your offer will be stronger and you have a better chance of the transaction actually closing.

If you are considering purchasing a home- VA or not- please don’t hesitate to call Jackie Hawley with Remax Encore.

If you really HAVE to go VA

The Job of a Buyer’s Agent


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