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Archive for the ‘home buyers’ Category

Buying a HomeWhen news of Uber’s foray into the complex world of real estate hit the wires this past week, many industry watchers took note.  The premises for Haus, the new start-up by the Cofounder of Uber, Garrett Camp is to bring transparency into the bidding process between home buyers, sellers and their agents.

How Haus works:

The online platform will allow buyers, sellers and their agents to see (in real time)  when offers and changes to offers are made during the bidding process AND respond accordingly.  The platform promises to deliver an experience which creates side by side comparisons so that home owners and potential buyers can make fully informed decisions about the home they are bidding on.  At the heart of the issue is the concept of ‘real time’.

Super-heated real estate:

Most of the country is experiencing a super heated real estate market.  In West Michigan, it is not uncommon for some homes to receive multiple offers within a 24 hour period.  Anxious buyers wring their hands as they are informed that offers will not be presented UNTIL a particular time or that they should consider re-submitting their ‘highest and best’ offer due to multiple offers coming in on the same property.  Although the majority of real estate agents are honest, there is no way of actually verifying IF additional offers are being presented and so, home buyers are left wondering just how much more they will have to bid to secure the right to purchase the home of their dreams.

Pride and prejudice:

Another largely unspoken aspect of the process is the fact that purchasing a home is not necessarily based on price.  Prejudice and preference can sometimes play critical roles. Many homeowners have their own ideas about whom they would prefer to purchase their homes.  This may be based on personal preferences, or their concerns about the welfare of their neighbors.  Latent within these normal human emotions and desires lies the potential for discrimination, an issue which is a matter of Federal law when applied to the real estate transaction.

Loving a home can infatuate the mind.  It can make a home buyer willing to do just about anything to gain an edge or advantage.  One of the more commonly used vehicles is a ‘Dear Homeowner’ letter where the potential buyer details why they love the home and why the home owner should in essence ‘pick me!’  Buyers have been known to research the owners place or worship, likes and dislikes and fashion their offers to tug at the home owners emotions.  Sometimes, this has included providing pictures of themselves so the homeowner can see who they are.

When secrecy becomes illegal:

The problem with this is a little thing called the law – which prohibits discrimination when it comes the buying, selling or renting of housing based on some very specific criteria.  The Federal Fair Housing Act of 1968 and the Federal Fair Housing Amendments Act of 1988 prohibit discrimination on the basis of: race, color, religion, national origin, age, disability, handicap, sex, gender and often local ordinances (State and community) have additional qualifiers.

So, to some extent the secrecy which has shrouded the real estate process has served as a cloak for some of these illegal behaviors.  For the same reason that booking a table reservation by Open Table is a preferred vehicle by many when they consider the convenience and the simplicity of not dealing with host/hostess reservations, the idea of being able to view, counter and negotiate a transaction in an open forum might be appealing to a significant segment of the population.

Will we purchase houses like we book online reservations?

Haus does not claim to be a brokerage, financial adviser or tax expert, but the platform may become a tool which serves to bring the bottom line into a transaction negotiation in a very direct way.  That being said, buying a house is not like purchasing a car.  And, for a homeowner, the process is not just a financial investment, but also a relational and emotional one.  It will be interesting to see how or if this catches on as a preferred method of negotiations during a real estate transaction and more importantly to the bottom line, if this results in higher bids for home owners.

 

Additional Articles about additional industry new comers:

Roofstock’s better way to buy and sell homes

Yopa: Online property agent

 

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33341293_sIt’s finally happened!  You Sold your home!  YES!!!   The moment you’ve been waiting for after all the cleaning, making the home available for impromptu showings and enduring nerve-racking anticipation and hope that a purchasing decision will be made in favor of your home.

But even before the ink starts to dry on the fully executed purchase agreement, you’re wondering what does this mean?  Is the home really sold if Inspections need to be cleared and title issues examined?  What about the financing…is the Lender absolutely 100% behind the guarantee for the loan commitment?  When should you order the moving van?

Signing a purchase agreement to sell your home to a prospective buyer starts a detailed and often complex process in which many aspects of the sale need to be coordinated to conclude in a successfully closed real estate transaction.  At Audu Real Estate, our goal is to assist our clients with these details and to relieve the strain and stress of the negotiation process.  Here’s what you can expect from our company.

Coordination:

There are many details to coordinate.  By some estimates, up to 10 different companies with their various employees will be involved in closing your transaction.  These include: the mortgage company, the title company, the other real estate company, the inspection company, the survey company, the home warranty company, the insurance company, the well & septic inspection company, the appraisal company & etc.  As you can see, the list can be extensive and this does NOT include additional companies which are involved in REO or Distress sales.  Coordination with ALL of these different entities and their representatives is a large part of what keeps us busy AFTER you sign the deal to sell your home!

Inspections:

Inspections are a vital part of the real estate process and often one of the most challenging areas to navigate.  So much emotion tends to be involved.  As a homeowner, you want the buyer to love your home and although you know it’s not perfect, there is a vested connection which might make you a little sensitive.  On the other hand, a prospective buyer may have some anxiety about the true value of their purchase.  No one wants to make a poor buying decision.  Navigating this ‘sticky’ territory is what we do best.  It’s our job to help all parties come to a resolution about the results of the inspection and how to move forward.

Follow-up:

Follow-up and Follow-through is where many transactions fall apart.  The details matter when it comes to real estate.  A missed signature can make a transaction which was a ‘sure thing’ become murky in a hurry.  Many aspects of a real estate transaction which is in the ‘Pending’ category are under strict time constraints.  For instance, certain inspections have to be conducted within a particular time frame.  When follow-through is poorly executed, even a solid transaction can go awry.  Our job as REALTORS is to ensure that your transaction stays on schedule.

Communication:

Staying on schedule requires excellent communication skills.  Today, communication flows through multiple channels.  We ask our clients how they prefer to communicate.  We’ll do whatever it takes to stay in touch.  This includes:  calls, e-mails, texts and even social media.  Not only are we keeping you informed about what is going on with your transaction, communication also involves keeping those other 10 companies we referenced earlier in the loop as well.  Good communication is the lubricant that helps to keep the friction down to a minimum.

Negotiation:

Negotiations are an ongoing part of the transaction.  They can involve all sorts of things.  Perhaps, there are some items or belongings which you would like to get rid of, or some repair issues crop up which need to be addressed.  Even the closing place and location sometimes become a part of a negotiated solution.  At Audu Real Estate, our goal is to create successful outcomes for our clients in the real estate negotiation.

Closing Facilitation:

An average transaction can take between 30-45 days to come to a conclusion.  The days leading up the closing are often filled with a flurry of activity as various parts of the transaction are completed.  Because there are so many moving parts, it’s important to have someone who is the Captain of the Ship.  Our job is to navigate your boat into a safe harbor.  We review the closing documents for accuracy in terms of reflecting the terms of the purchase agreement.  There is coordination with all parties regarding move in/move out dates as well as the transfer of utilities.  Well executed closings are like the passing of a baton in a relay race.  They are seemless and enable the next party to successfully execute the next stage of the race.

We hope that this has been a helpful article.  If you’d like to learn more about what we can do to help you sell your West Michigan home, please give us a call at:  616-791-0511.

 

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Question:  Why does it take so long to Close on a home after I buy it?

Answer:  You’ve finally come to terms after a grueling negotiation.  You may have had to battle other parties in order to buy the home of your dreams.  And now that you know it’s yours, you’re ready to move on and move in.  But wait…not so fast.  The contract states that it will take 30 days, 45 days or even longer for you to finally call the home your own.  And, in addition there may be some more time before you can move in.  You’re asking why?

After all, when you negotiate to buy a new car, you hand over the money and drive the car off the lot.  Well, that’s the crux of the situation when it comes to buying a home.  The money thing doesn’t happen quite as quickly as it would for a loan for a car.  In fact, the money thing aka obtaining a mortgage is quite an involved process.

*Please note that there are many different kinds of mortgages, so processing for your mortgage may not be exactly as stated.  If you’ve got questions about your specific situation, speak to a Lender.  We can recommend one if you don’t have one. Which would be a scary thought at this stage of the game…What the heck are you doing making a promise to buy a house when the money  isn’t in order???

Anyway, we’re presuming better things for our readers…

Here are some things that have to happen before the Lender turns over the money to buy your house so you can give it to the owner.

1.  Inspections:  If you’re having the home inspected (read this to find out why you should), the Lender will want to ensure that you and the owner have come to terms about any repair issues PRIOR to spending any more of your money. (Inspection negotiations can take up 2 weeks to be settled in West MI)

2.  Appraisal:  The Lender will order an appraisal to make sure what you’ve agreed to pay for the home is what they’re willing to risk lending to you.  This document is reviewed and must be satisfactory to the Lender before they agree to lend money.  If there are issues, such as your home not appraising for the value you agreed to purchase it for…well, the process stops.  It can stop for good or you may be able to mitigate a negotiated solution.  Either way, there is time involved in this process.

3.  Loan Processing:  Depending on the type of loan and the Lender involved, the bulk of time for closing your home is spent here.  There will be documents you must complete and sign which then have to be reviewed and verified.  There are documents you will need to provide for review.  The appraisal will need to be reviewed.  Your credit, income, debt and employment will need to be reviewed, verified and approved.  All this review takes time as your loan may pass through several different hands and departments before it lands in the Closing Department where it may spend an additional week for review and processing.

4.  MISC:  Survey, Well & Septic Inspections, Sidewalk Inspections etc:  Depending on your contract, additional inspections such as surveying, well and septic inspections may also be required.  In Grand Rapids, MI we were just recently relieved of having to complete a sidewalk inspection in order to purchase your home.  That’s right – for more than a decade, folks living in Grand Rapids had to have a certificate to prove that their sidewalks were in good order.  Most amazing was that this certificate was required even when there was NO SIDEWALK.  Thankfully, in 2014 this additional step is no longer necessary as a requirement to be completed prior to purchasing  your home.

5.  Coordinating the Closing:  By the time 4-6 weeks have gone by, most people are anxious to be through with this process.  But life sometimes happens and schedules may not exactly mesh.  These inconveniences may add a little more time into the mix, but it’s usually not much.  The money from the bank has to be dispersed within a specific amount of time, so expect a flurry of activity to help ensure that delays are minimized.  If you’ve got an attorney involved in reviewing your documents, make sure they are aware of your time constraints ahead of time.

Sorry folks, this has been loooooong explanation for a very short question.  But, this is the reason why closing a home can seem to take so long.  Now, if you’ve got the CASH to buy the home, the process is considerably shorter!

More FAQ’s (Frequently Asked Questions) here

About the FAQ (Frequently Asked Questions Series)

This series is designed to answer questions that we hear clients asking over and over again.  Perhaps, you’ve wondered about some of these questions yourself.  While this is not intended to be an exhaustive explanation on the subject being discussed, it is our hope that these short blogs will provide helpful insights and may encourage you to explore further.  Please feel free to contact us by phone or e-mail with any questions.

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1-Price Reduced dollar days house huntingOne of the best kept secrets in real estate is the ability to get ‘instant’ notification when homes for sale around Grand Rapids MI have a price reduction.  Obtaining real time updates on homes that you have your eye on can save you thousands of dollars!  Price reductions for homes can occur for a number of reasons, including but not limited to…

1.  Increased urgency to sell the home due to changing circumstances

2.  The threat of default on mortgage note

3.  Over-pricing – reduction to bring the home price into conformity with current market conditions

4.  Feedback from agent showings about the fact that a home is over-priced

When a price reduction for a home for sale in Grand Rapids, Mi occurs, it is important to act quickly if this is a home you have some interest in.  When a price reduction occurs for a home, it increases the likelihood that the home will sell.  Home sale price reductions occur everyday!   In fact, 19 homes in the greater Grand Rapids MI area had a price reduction within the past 24 hours.  Of these homes, two were priced above $500,000 and eight were priced below $100,000.  The point being, home price reductions occur in EVERY price range, so being an informed buyer can sometimes make you a lucky buyer!

If you’d like to be e-mailed a list of homes which fit your particular criteria on a daily basis AND be notified when a home selling in the Grand Rapids MI area has a price reduction, contact us or call:  616-791-0511.  There is no obligation for this service.  You will not be contacted unless you specifically request additional assistance or help.  Enjoy the ability to keep informed and updated right from the comfort and privacy of your own home computer.  Contact us for a FREE list of homes reduced for sale today!

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A few short years ago, very few real estate agents could envision a time in which the over-riding trend would be a LACK of housing inventory in the the Greater Grand Rapids, MI area.  In January of 2009, distress sales peaked at over 60% of the volume of sales in the area and inventory was very high.  In fact, some buyers were simply tossing out low ball offers to see which one would stick on a home which the seller was desperate to sell.

That was then.  This is now.  Today, recently released sales statistics from the Grand Rapids Association of REALTORS indicate that inventory levels based on Pending Home Sales is down to 3.7 months supply.  Less than 4 months of housing inventory available for sale.  We are definitely in a Seller’s Market.  This is how the landscape looks to local real estate agents.

Rental Market:

If you’re trying to rent a home in West Michigan right now, you may have found out that its challenging.  In fact, just to get a list of home to RENT, you may be asked to pay a FEE of up to $20 to see what’s available.  A situation which few of us could have imagined in the recent past.  The local MLS set up a RENTAL MLS last year which provides listings for sale through local REALTORS.  Listings for Rent tend to cycle through very quickly, however the good news is that if you’re working with a REALTOR, you are not likely to be charged simply to get a list of what’s available for rent.  Feel free to contact us at 616-791-0511 if you need assistance in this area.

Average number of homes available for rent during the month of April on local MLS:  Range between 5-14 homes and condos.

Resale Market:

It’s no surprise given the low inventory levels that housing prices continue to rise.  Over the past 6 months, there has been an increase of 7.1% in home prices from $115,640 in 2011 to an average sales price of $123,849.  The price range with the most activity right now is the middle of the market defined as $100,000 – $160,000.  This is a marked change from the past few years when we saw a huge volume of sales activity in the price brackets below $50,000.  This is an indication that the move up market is coming back.  If you’ve been thinking about putting your home on the market, now may be a good time.

Total Number of Homes for Sale as of date of publication: 6,023

Inventory Level Based on Pending Sales Activity for April:  3.7 Months

Days of the Market

I can remember a time in the not so distant past where some agents were compiling listing agreements with a 2 year listing period.  That’s almost 10X longer than the marriage of one well know Kardashian.  In 2008 and 2009,  the average listing was taking almost a year to sell.  Today, the Average Days on the Market (DOM) is down to 78 days for Residential Properties and 50 days for Multi-family (1-4 unit) properties.  In the month of April alone, there has been an increase of over 20% in sales activity.

Wondering what this might mean for you?

If you’ve been toying with the idea of placing your home on the market, you may want to look at your options again.  To determine what your price point should be, contact us for a free market trends analysis for your area.  This article about setting the right price from the beginning of your home listing is also worth reading.

Photo Credit courtesy of cc license by erix on flickr.

Review raw data on April Housing Stats from the Grand Rapids Association of REALTORS

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There are a number of terms which real estate agents use to place  markers on what is happening or likely to happen in the marketplace .  One of the most frequently used terms is, the Absorption Rate.  The Absorption Rate is defined as the amount of months that it would take to deplete the current housing inventory in a particular real estate market if homes continue to be Sold at the current rate.

An Absorption Rate of six months is generally considered a Balanced Market.  Absorption Rates greater than six months are considered to be an advantage for Home Buyers while lower Absorption Rates give Home Sellers the upper hand.  Currently, the Absorption Rate in many communities in West Michigan is less than 5 months

Suppose you are currently trying to sell your home in Grand Rapids, Michigan  and have found that you are not receiving a lot of requests for home showings.  How can the Absorption Rate help you determine what you need to do to sell your home?

It is important to know what the Absorption Rate is for your specific neighborhood, not just your larger community.  If the rate is less than six months and especially if it is below four months, the market is talking to you and it would behoove you to listen if selling your home is your ultimate goal.  A home with little showing activity in a Hot Seller’s Market is either over-priced or shows poorly in comparison to other similar homes.

The remedy for this problem is to either lower your home sale price to reflect the current market realities and/or invest money in acquiring the professional assistance of a home stager to help you set up your home for success.

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A forecast report by CoreLogic released by the National Association of REALTORS for the Grand Rapids/West Michigan area at the end of August predicted a decline in foreclosure rates in the last half of the year.  So far, this prediction has held true.  As the charts below indicate, foreclosures have dropped in the Greater Grand Rapids area as a percentage of sales volume and the absolute numbers continue to hold steady with modest declines.

This is a good sign and indicator that the steady rise of home prices will continue as inventory levels remain low.  In a related survey, the National Association of REALTORS statistical survey also indicated a drop in  the 60 and 90 day delinquency rates.   Business Week magazine reported a Bloomberg study in which Michigan is said to be recovering from the recession at the second highest rate in the nation, second only to North Dakota where the boon in economic recovery has been fueled in part by the discovery of oil.

If you are currently considering selling your home and may need to sell your home by Short Sale to avoid Foreclosure proceedings, please contact us for a confidential interview to review the options which may be available for you.

*Data Sources:  National Association of REALTORS, Grand Rapids Association of REALTORS

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