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Writing an Offer on a Lake Orion Michigan Home

Unless you’re a cash buyer, our standard purchase agreement contains a financing contingency. Even if you are pre-qualified you need this contingency to protect yourself. If your financial situation changes after writing the offer (such as job loss) you need the protectionof the financing contingency. It also protects you if the house has problems with mortgaging, such as appraising too low, clouded title, etc. When it comes to rural properties, the property can present many issues when it comes to obtaining the mortgage. I won’t get into those specifics here, but the bottom line- a standard contingency in the offer to purchase is financing.

Once the seller accepts your offer, their house is off the market while you fulfill the contingencies in the offer, so it is muy important to submit a pre-approval letter with the offer. The pre-approval letter will state the down payment required from you, the type of mortgage you’re getting, how much of a mortgage you can afford, and needed seller’s concessions if any.

Actually, it’s important to get that letter before you even start looking at houses. I need to know what you can afford (or what you’re comfortable with- I bought much lower than the bank was willing to lend me) and the type of mortgage you will be getting. If you are getting a rural development loan, I will know not to look in Lake Orion for example, but go 3 miles north into Oxford the houses would qualify- even in a sub. If you are going to go FHA, I would know not to show you fixers. Etc. So meeting with a good, honest, experienced loan officer, before you start looking, is also muy important. If you don’t already have a loan officer you like and trust, I can supply the contact information for one. More about that in a future post.

At the time we write the offer we also need to decide if you would like a home inspection, and what type of inspections you should get. Now some people think if they get an FHA loan that there is an automatic inspection built into that process. That is not correct. Your lender will send out an FHA approved APPRAISER who will look for repairs that FHA deems necessary, but that person IS NOT AN INSPECTOR.

If your offer is contingent upon the sale or closing of another property, we would include that in the offer. But beware- bank owned homes do not take offers subject to the sale of another property. If we make an offer subject to the closing of another property that you currently have an accepted offer on, we need to submit a copy of that offer with our offer to purchase. We want to submit as strong an offer as possible and to relieve the seller of any doubts of your ability to close. It’s much easier to negotiate from a position of power.

Other things included in the offer to purchase include “possession.” Or how long you are willing to let the seller live in the house once the sale is closed. They usually ask for a specific amount of time in the listing- 30 days or 60 days for example. After the closing the house is yours, and if there is possession, the current seller is now your tenant. They will typically pay you rent in the amount of your new house payment for any time they stay after closing, and that money is typically escrowed from their proceeds at closing. Possession is something we negotiate up front.

We also include time frames in the initial offer to purchase. We give them a certain amount of time to answer our offer. We give them a time frame in which you will make your formal mortgage application and a time frame for you to get a full mortgage commitment. We will include a time frame to close by.

For the most part, the above are the most popular contingencies included in an offer to purchase. Of course everybody’s situation is different, and sometimes there are contingencies that may be unique to your situation. I wrote an offer recently that was subject to the buyer finalizing their job transfer. But no matter what the contingency is, we must include time frames.

One other issue that is not covered above is the EMD or earnest money deposit also known as a good faith deposit. It is usually a check I collect from you at the time we make the offer that shows your “good faith.” Hence the term good faith deposit. If there’s a problem on the inspection or financing, and the sale doesn’t close, you get that money back. If everything goes just fine, and we close on the property, that deposit is applied toward you closing costs/down payment. If everything goes just fine and all the contingencies are fulfilled satisfactorily, and you just change your mind and back out- then that deposit goes to the seller.

Hopefully this gives you a basic understanding of how the offer making process goes. If you have any questions or would like to see a copy of our purchase agreement, please don’t hesitate to call or email me.

Choosing Your Buyer’s Agent

Financing

Writing the Offer

The Home Inspection

Buyer Agency

Foreclosures and Short Sales

Search The MLS

Jackie Hawley
Keller Williams Realty, Clarkston
Cell: (248) 736-6407

Jackie@JackieHawley.com

www.MiRelocation.com 

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Lake Orion MI Homes For Sale There are currently 20 homes for sale in Lake Orion and Orion Township with asking prices between $200,000-$300,000- many which can go FHA requiring as little at 3 ½% down. A couple are lakefronts. One is on acreage. Some are new construction. Interest rates are low and mortgages ARE NOT impossible to get. Lenders ARE lending.

Call Jackie for a list of homes for sale inLake Orion MI(248)736-6407

Lake Orion Michigan Homes For Sale

Search The MLS- No Registration Required

If you would like a more custom search or information about buying real estate in this buyer’s market please call:

Jackie Hawley

Keller Williams Realty, Clarkston MI

Cell: (248) 736-6407

Jackie@JackieHawley.com

Buying Real Estate In Oakland County Michigan

Writing the Offer

Financing

The Home Inspection

Foreclosures and Short Sales 

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Lake Orion MI home sales through April are down a bit from last year- both units and median sales price. The average sales price is up. The year started out a bit strangely with very low median sales prices in Jan and Feb. Then Lake Orion home prices shot up in March and April, so I dug a little deeper and took a look at the amount of foreclosures and short sales over that period.

Median sales price Jan/Feb 2011 – $91,000
Median sales price Mar/April 2011 – $142,795

Jan/Feb 2011 55% of solds were bank owned with a median SP $62,800
Jan/Feb 2010 39% of solds were bank owned with a median SP $79,700
Mar/April 2011 42% of solds were bank owned with a median SP $75,250

Jan/Feb 2011 there were 23 sales at $100K or less or 52%
Jan/Feb 2010 there were 12 sales at $100K or less or 24%

If you compare the first 2 months of the year to each other sales are down this year- both units and median sales price. If you compare the next 2 months unit sales are still down but the median sales price is up 23%. When you combine all 4 months the median sales price is still down but we will have a better indicator of where prices are going in a few months.

At this point it appears the prices of bank owned homes are on the decline- or at least a higher percentage of bank owned homes are tending to be on the cheaper side and when there’s an increase of bank owned sales the over all median price drops.

A more accurate indicator is to look at individual subs or neighborhoods and compare apples to apples.

Inventory is quite low and properly priced homes are flying off the market. On 5/5/2011 there were 143 active listings in Orion Township and the Village of Lake Orion. There were 165 active listings on 5/4/2010 and on 5/4/2009 there were 322 homes for sale in Lake Orion MI. 

Detailed Home Sales Statistics (very dry and detailed)

Lake Orion MI Homes For Sale

Search the MLS

Lakefront Real Estate

Jackie Hawley
Keller Williams Realty
Jackie@JackieHawley.com
cell: (248) 736-6407

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