Archive for the ‘making an offer’ 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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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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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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What is the job of an Oakland County Michigan buyer’s agent?

Many agents, and buyers, seem to have the idea that the primary job of a buyer’s agent is to get the seller to come down on his asking price. The more you can get the seller down, the better you’ve done your job. NOT!!

My job as a buyer’s agent is to find you the best house for your wants and needs for a price you are comfortable with, then make sure you get that house and go through as little stress as possible. Sometimes that means paying asking price or over.

There are many things to take into consideration when you draft your offer. Are there other offers currently on the house? How badly do you want it? Do you need it to appraise? Is it the house you want for the payment you will incur at asking price? Or over asking price? Have you seen anything else you like as much or more?

Buying a house isn’t a game. You’re buying a home. If you think the asking price is fair, there is nothing wrong with paying what the seller is asking. The list price is just an arbitrary number the seller or his agent came up with. The value is what a buyer is willing to pay.

So what it basically comes down to- How much is that house worth to you?

If you are considering buying a home please contact Jackie Hawley with ReMax Encore.

Negotiating Tips

Choosing a Buyer’s Agent

The Purpose of an Appraisal


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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

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Jackie Hawley, Realtor
ReMax Encore, Clarkston MI
Cell: (248)736-6407



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The Perfect House Probably Does Not Exist

Even with the low inventory in North Oakland and Lapeer County MI, I still consider this pretty much  a buyer’s market. Prices have been increasing pretty rapidly, BUT are still quite low compared to peak times as are interest rates. And there are good houses out there, but if you are looking to buy the “perfect” home there’s a good chance it just doesn’t exist.

Like in any market there are nice houses in just about every price range- but nice house is a subjective term. Houses are still selling for way less than they had, or could have, at one time but most houses will NOT have everything you want. No matter what price range you are in. That is true now as it was true in 2004, as it was in 1991 when I got my license.  

So basically, when you start looking for that great new home, don’t expect perfection. No matter what price range you are in, it probably doesn’t exist. Don’t spend every penny you have to get into the house, and don’t max yourself out on what you purchase. You will probably need/want to make improvements/changes/updates to the home you buy. There ARE great deals out there- just not perfect houses.

Jackie Hawley
ReMax Encore, Clarkston MI
cell: (248)736-6407



Homes for Sale
Writing an Offer
Reasons for a Low Appraisal

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