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Posts Tagged ‘making an offer’

The Job of a Buyer’s Agent in Southeast Michigan

Many agents 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!!

Here in the North Oakland County and surrounding areas there is such a lack of inventory that whenflexing you (the buyer) find a house the objective at this point is to get the house. There’s a good chance you will be in a multiple offer situation. Or if you wait too long you will be in a multiple offer situation. Why would you want to settle for your second or third choice of home because you lost out on the house you really wanted- but your agent felt the need to flex and either encouraged you to write a low offer or didn’t try to talk you out of low balling?

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 the house and go through as little stress as possible. Sometimes that means paying asking price or over. A well priced home in North Oakland County– specifically the Clarkston, Lake Orion and Oxford MI areas will sell quickly and for close to asking price or over.

There are different negotiating strategies depending on the type of sale and the motivations of both the buyer and seller. For example the motivation of a short sale seller will be different than a non-distressed seller. The short sale seller may place more importance on free possession after the closing whereas a non-distressed seller may be more interested in sale price.

peacock

But the one thing all buyers and sellers have in common is getting to the closing table – not watching their agents flex and strut. It doesn’t matter how much of a peacock you agent is if you don’t get the house you want.

 If you are considering purchasing a home in North Oakland County MI, Lapeer County or southern Genesee County please don’t hesitate to contact the Jackie Hawley team. We have buyer specialists who are professional and always put your interests first.

Writing the Offer

Financing

Foreclosures and Short Sales

Choosing a Buyer’s Agent

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Jackie Hawley
Keller Williams Realty, Clarkston MI

Cell: (248)736-6407
Jackie@JackieHawley.com

www.MiRelocation.com

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Am I Overpaying? Is the listing overpriced? What is the house worth?

All questions, or variations of questions, most buyers ask when buying a house. They are valid questions with not easy or pat answer. The value of the home depends on your point of view.

Webster defines “value” as “a fair return or equivalent in goods, services, or money for something exchanged” or “the monetary worth of something.”

Out of everything that is currently on the market: Is it the best house for you, with an asking price you would be comfortable paying? If you were assured the asking price is fair, would you feel like you were settling with this particular house? If the house is everything you were hoping for in your price range, then you’re not overpaying.

Websters defines “market value” as “a price at which both  buyers and sellers are willing to do business.”

Now that doesn’t mean it will appraise. Appraisals are usually needed to get a mortgage.

My definition of “appraised value” is “a price determined by a licensed appraiser who is following both government and lender guidelines.”

Some of the rules appraisers have to follow for most residential loans, that can and do affect “value” are (among others):

  • they are limited on the amount of value they can give outbuildings
  • they are limited on the amount of value they can give to land when buying a home on acreage
  • they are limited on the amount of value they can give for upgrades such as top of the line windows, 50 year warranted roof, finished basements, crown molding, upgraded cabinets, flooring, light or plumbing fixtures…..

Other factors that can affect the appraised value are the lack of comparable sales. If you are selling a custom lakefront home on a lake that has had mostly cheap foreclosure sales, converted cottages, the appraisal could come in low. Especially if the house is on one of the more desirable lakes- the sold comps for more custom homes may come from a less desirable lake and there’s really no way to adjust value for the lake.

If you are buying a house with a hundred thousand dollar indoor arena and another fifty thousand in oak fencing and 20 acres, the lender expects the seller to give little to no value to the barns, fencing and land.

Do these things have value to the consumer? Are there things about the house you want, that have value to you, that an appraiser may not consider? If so, are you able and prepared to pay the difference if the appraisal comes in below the agreed upon sale price?

If you are unable to pay the difference between appraised value and what the seller is willing to sell for, then we would need to determine an approximate value an appraiser would come in at and not exceed that price in negotiations.

If you are able to pay the difference, you need to decide what the value of a particular house is for you. Basing your purchase solely on appraised value can cost you more in the long run.

Making the Offer

All About Financing

The Home Inspection

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Jackie Hawley
ReMax Encore, Clarkston MI

Cell: (248) 73606407

Email: Jackie@JackieHawley.com  

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The Difference Between The Deposit and Downpayment

I recently wrote an offer for a buyer client where the earnest money deposit (AKA good faith deposit or just plain deposit) was $10,000 and the downpayment amount I wrote in the offer to purchase was $70,000. Pretty straight forward- they were putting $70K down and the $10K would apply against the closing costs and downpayment.

Not so straight forward and hence the reason for this post. You see, the buyer didn’t see it the way I described above and the buyer happens to be a very intelligent person who actually listens when you talk. The buyer thought he was putting $70,000 down IN ADDITION to the $10,000 deposit.

So to clarify for future buyers– the downpayment is exactly that. The total amount you will be putting down on your mortgage. If you are buying a $200,000 house in Lake Orion MI and you are putting 20% down, then your downpayment is $40,000. Your deposit is totally separate. It shows your seriousness as a buyer and it does apply toward your closing costs/downpayment.

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

www.MiRelocation.com

For Buyers

The Closing is Set- What to do Now

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If There is a Sale Pending Why is it Still Showing Up in Searches

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When buying a home in Oakland or Lapeer County Michigan a standard contingency is financing (the buyer obtaining a mortgage for the house). Normally, part of the financing process is an appraisal, and the cost of the appraisal is born by the purchaser.

  • So is this the purchaser’s appraisal?
  • And is the appraisal for the protection of the purchaser?

The answers are no and no.

If it really was the buyer’s appraisal, the buyer would get a say in who the appraiser is. Or at least the buyer’s loan officer would get a say.

Loans mortgage appraisalsThe appraisal is for the protection of the lender. The lender loans money to a purchaser, and that money is secured by the house and, rightfully, the lender wants to make sure the value is there.

Because of some of the asinine changes in the mortgage process over the past couple years, the loan officer is no longer able to hire, or even speak to, the appraiser. The lender (loan officer) contacts an appraisal management company who then assigns an appraiser. And like in anything in life, there are good and bad appraisers.

So you the consumer can interview and choose the best real estate agent to work with. Interview and choose the best loan officer to work with, choose the best home inspector, best insurance agent, best title company … But no say on who appraises the home you are trying to buy.

Appraisers themselves are finding themselves under scrutiny because some want to blame them for the housing mess we are currently in. And the result has been overly cautious appraisers. And many inconsistencies in appraisals.

I had a sale earlier this summer where 2 appraisals were ordered from the same appraisal management company, for the same property within a few weeks of each other. The contract price for the house was $380,000 and it was one of multiple offers. So the free market pretty much set a price of $380,000. One appraisal came in with a value of $300,000. The other appraisal came in at a value of $362,000. Both were local appraisers.

I had another sale where I was on the listing end (a short sale) and it was another property with multiple appraisals. Between the buyer and the lien holders there was a total of 5 appraisals. 5 appraisers came in with 5 different values.

horse racing first and last equalOne of the main problems I’m seeing on the appraisals is the appraisers aren’t giving value for quality. Everything is size and location with very few adjustments, and those adjustments are for things like walk out basement vs standard basement. Maybe a few thousand for a finished basement vs an unfinished basement. If the comparable sales are in the same sub you may see an adjustment for location within the sub.

What I’m not seeing is when the house isn’t in a subdivision is credit for a more desirable neighborhood. In the first example above, that house was on a lake in Independence Township with Clarkston schools. Part of that lake is in Waterford with Waterford schools. Homes in the Clarkston school district have always garnered a higher price than Waterford schools- but not according to the appraiser.

I’m also not seeing credit given for quality. Top of the line Anderson or Pella windows will get zero value. Wood interior doors as opposed to the typical builder’s grade plastic feeling doors will get zero value. Upgraded cabinets, counters, light and plumbing fixtures will get ZERO value.

Now take 2 houses in the same or similar neighborhoods, and house a has builder grade everything and house b had the same floor plan built but upgraded everything mentioned above– should both those houses sell for the same price?

From a buyer perspective you may be thinking “Great! I can get $50K mattress money extra downpayment if house doesn't appraiseworth of upgrades for free.” Maybe not. You may find the perfect house and are willing and able to pay for quality. You spend $300+ on a home inspection. You spend $300+ on an appraisal, and the appraiser comes in $30K lower than the agreed upon price. The seller does not have to come down on price. If  the seller won’t come down, and if you still want the house, you would need to come up with the extra $30,000. If you don’t have it, you won’t get the house. You may have to settle for mediocrity in order to get a mortgage. Or in the case of the lake house above, maybe a lesser school district.

By the criteria many appraisers now feel they need to use, with the value determined solely by size and location, that is the same as saying the first place horse in the Kentucky Derby has the same value as the last place horse in the Kentucky Derby- all the same age, about the same height and all the same class of horse.

When I represent a buyer, I will perform a market analysis on the house you want to offer on. I will give you my opinion of value and back that opinion with comparable sales. I will also give my opinion on what I think the appraised value will be, and if there’s a difference, you will need to prepare yourself to possibly lose the house you want or pony up the difference. And if you are a person who feels that quality has value, be prepared to come up with additional down payment.

Please don’t hesitate to contact me about buyer representation if you are considering purchasing a home in North Oakland or Lapeer County.

Jackie Hawley
cell: (248)736-6407
Jackie@JackieHawley.com
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I got burned! I’ve heard it from more than one Oakland County buyer lately. They didn’t get the house they wanted. They wrote low and expected the seller to take it- even though the house was properly priced, even though it was a multiple offer situation, even though the buyer could afford to pay over asking price if need be.

One thing these Oakland County buyers had in common – they all blamed their agents. That’s how we ended up working with them.

Unit sales in Oakland County Michigan are up significantly; there is no shortage of buyers to work with. So we have nothing to lose by being blunt. These buyers burned themselves by not writing a serious offer. Maybe their previous agent didn’t educate them? Maybe they didn’t listen to their agent.

Guidelines to making an offer:

1.) Listen to your agent! You hired me to represent you. Listen to my advise. When you find a house you want to buy I will pull comparable sales and go over them in detail with you. I want you to get a good deal; I don’t want you to lose something you have your heart set on because we’re writing ridiculous offers.

2.) Have a STRONG pre-approval letter

3.) Put up a hefty good faith deposit

4.) You’re buying a house- not appliances, furniture, lawn mowers, etc. Don’t muddy up the offer with crap

5.) Make a fair offer. The definition of fair depends on the individual situation. If you are in a multiple offer situation our strategy will be different than if you are the only offer. Short sale offers will be different than bank owned listings or “regular” sales

6.) Did I mention- LISTEN TO YOUR AGENT!!!

Search the MLS for Oakland and Lapeer County Michigan Homes for Sale

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“Highest” and “Best” Are Not Synonyms

True story:

A friend of mine, who is also a Realtor, wrote an offer on a house for herself. The house is a short sale, and my friend made a fair offer. The listing agent called to tell my friend that there were other offers, and hers wasn’t the highest, and did my friend want to increase her offer.

My friend (did I mention she is an EXCELLENT agent) pointed out that her offer was within 10% of asking price, that the comps bore it out, and it still had to appraise in 3-6 months in a declining market. That she was willing to look at a reasonable counter offer if the lien holders needed a higher pay off. AND that she was willing to buy the appliances or lawn tractor- up to $10,000. She pointed out that this particular lien holder wasn’t receptive to releasing the seller from their responsibility for the deficiency (waive their right to sue the seller in the future) without a note or cash payoff for a portion at close. If the sellers know in advance that they have a buyer for up to $10K of their stuff, it can change the playing field a bit when it comes to negotiating the short sale.

The listing agent came back after meeting with her seller with an accepted offer. They were all in agreement- my friend’s offer wasn’t the highest offer, but it was the best.

The moral of this story:

Everybody has a bottom line, but as long as you meet that bottom line – or come close enough to lower that line- there are other factors important to today’s sellers in Southeast Michigan.

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