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Posts Tagged ‘buying a home in grand rapids michigan’

Competition for the opportunity to buy a home in West Michigan has escalated dramatically within the past 24 months.  Bidding wars are now the new normal.  Potential home buyers may find themselves engaging what may feel like a Reality Show competition when they enter into the ring to bid on a fresh or particularly enticing entry into the housing market place.46500589 - model of cardboard house with key and dollar bills. house building, loan, real estate, cost of housing or buying a new home concept.

In the current real estate arena, knowledge, street smarts and a good team makes a big difference!  Here are some tips to up your ‘winning game’.  Study these details gleaned from over two decades of front line service by an experienced real estate broker to give yourself the edge as you mount your strategy in obtaining the home of your dreams!

1. Be Market Ready. Get Your Financing up to Snuff!

The current (January – February 2017) housing inventory in West Michigan according to the Grand Rapids Association of REALTORS is 1.4 months of supply.  To put that in days – roughly 42 days of housing stock and the market depletes.  IF your’re a seller on the other hand, this means it will take roughly 75 days to list, market, and close your home sale provided you’re within the general norms of the area with regards to price and presentation.

Given these stats, REALTORS have taken to pleading for listings on social media as there are too many buyers looking for a limited supply of homes.  If you’re serious about getting a home, get Pre-approved now.  Submit to the often grueling process of having all your financial details examined by an experienced loan officer which include verification of your credit, employment history, assets and liabilities.  Get your money together too!  The more cash you have (which must be verifiable aka being in the bank long enough to verify that you obtained it legally) the better prepared you will be to win in the days ahead.

 2. Choose  Your REALTOR carefully.

Experience matters when choosing a professional REALTOR to represent you.  But so does temperament and the ability to persevere.  There is so much strangeness in today’s marketplace.  People are bidding for homes as though they are on the gaming floor in Vegas!  And when the high disperses, many are re-thinking what they just paid for a home!  It can become a vicious cycle, which is best avoided rather than trying to detangle.  A good REALTOR by your side will advise and fight for you. In fact, the reputation of a good REALTOR can be powerful edge when a Seller is trying to determine which offer is ‘real’ and which one may be likely to fake out after a month or less leaving them devoid of a truly viable offer to purchase their home.

3.  Circle the Market like a Hawk!

At Audu Real Estate, we provide Homebuyers with a private shopping portal that shoots out instant notifications when new listings pop up on the market.  This gives you an edge over your competition.  But understand that seeing the home before the herd stomps through is itself NOT enough to guarantee you will get the home just because you’re the first offer.  Read on to the next tip to understand WHY strategy is important.

4.   Strategize Like a Pro!

Negotiations are a critical component of the drive towards winning in the real estate multiple bidding arena. There are many components to a successful negotiation and this blog would be way to long to list all of them here.  But, for starters here are some important components for consideration in a winning negotiation:

*Price

*Financing

*Marketplace Knowledge & Comparison

*Terms & Conditions

*Timing

*Flexibility

*Method & Manner of Presentation

*Closing Date

No one wants to win a negotiation only to discover later that you purchased a lousy deal!  Believe me, many who suffered through the recent past recession within which many lost homes through foreclosure will tell you – Buyer Beware.  All that glitters is NOT gold. Which leads us right into our final tip…

5.  Be Sane!  Stay Flexible

Emerging from this process with your new home and sanity in place is the real win!  Buying a new home requires a certain solid internal confidence that in the end, you will prevail.  A belief that if a home is for YOU, it will be yours no matter what storms and obstacles present themselves.  Resolve internally that YOU WILL OVERCOME!  It will not necessarily be easy, but remember that this too shall pass.  Even if the process takes six months, at some point it will be over.  And you will have the enjoyment of your new home for hopefully many years.

Keeping this in mind, it is good to be mindful of the health and sanity of the real estate professionals who you will need to assist you along this journey.  Be kind.  Appreciate their efforts.  You are likely NOT their only client.  So when you are able to reach your ‘help’ after normal business hours and they spend an hour with you on the phone, say THANK YOU.  A good REALTOR or Lender will be going more than the extra mile to help you.

Often, the activity behind the scenes will pale in comparison to the effort you are privy to.  In fact, after you decide on a home, the REALTOR’s job has just begun.  And in a multiple bidding war is likely to include late nights, frustration, dealing with all sorts of issues – some of which are real and some of which are as fake as the ‘fake news’ cycle.  Think about this – treating them with dignity and respect increases the chances that they will be willing and available when you or your friends and family need help the next time housing becomes a priority in your life!

photo credit 123.rf

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House and Keys in Female HandsPurchasing a new home is one of the most exciting experiences an individual or family can have.  If you’ve been out of the real estate market for some time, you may be unaware of some dramatic changes in the real estate market landscape. In today’s market, there are some unique situations which home buyers should be aware of as they prepare to consider the purchase of a new home.

HOW THINGS HAVE CHANGED…

Almost five years ago, one of my blogs featured the quote below:

However, home buyers looking for a home to purchase will also quickly become aware of a notation which currently accompanies almost 65% of the homes listed for sale in November 2008 through the Grand Rapids Multiple Listing Service.  This notation which is accessible to the real estate agent on the listing card, will contain an advisory warning indicating that interested parties should be aware of the fact that the sale of the listed home will necessiate a ‘Short Sale’.

SHORT SALES IN BRIEF…

If you’re a brand new home buyer or recently re-entering the market, this notation may prove perplexing and you may wonder…What is a Short Sale?Well, in short (pun intended)…A Short Sale notation on a listing card is an indication that the home is priced below the mortgage balance owed on the home. (after costs associated with the home sale are paid) What may not be readily apparent to you is the fact that the term ‘SHORT Sale’ does NOT necessarily provide an accurate reflection of the duration of this particular type of transaction.

WHAT DOES THIS MEANS FOR YOU…

Well, it depends.

On the most basic level, this means that in order to become the new owner of this home, you will have to complete a successful negotiation with the owner (s) of the mortgage note to purchase the home to allow the ownership to be transferred to you for less than the current owner owes.  This adds several  additional steps and required signatures to the offer acceptance process which will now include:  the home owner who signed the listing agreement, the lender (s) and in some cases third party investors.

FOR STARTERS…

But for starters, it means that you should be prepared to be very patient and persistent if you truly want this home.  Short Sales are arguably among the most difficult negotiations to complete.  It is not unusual for real estate agents to negotiate for months to bring these transactions to closure.  As housing inventory levels have declined significantly within the past couple of years, some banks have become even more recalcitrant about negotiating a Short Sale in good faith.  Sometimes doing so at the cost of eventually losing the home to a Foreclosure and racking up significant costs in repairing the property, not to mention the fact that payments on the home may not have been made for a long time.

Being prepared for the long haul will save you the angst of increased blood pressure, stress and unnecessary temper tantrums. It will also be deeply appreciated by your hard working real estate agent who will probably accrue more stress than a commission will adequately compensate for.

BASIC STEPS…

Buying a home which requires the negotiation of a Short Sale will also add some additional steps to the home purchasing process.  Be prepared to wait while the bank (s) review the home owners paperwork to determine if they qualify for a Short Sale.  You can also anticipate that a Broker Price Opinion aka Appraisal may be ordered to determine if the bank wants to entertain your offer as one reflective of the current market conditions.  The primary Lender is now required to respond to your initial inquiry within 30 days which should technically shorten the process, but sometimes does not.

Offer submissions for Short Sales may languish on an Asset Managers desk while they sift through hundreds of files which have landed there before yours or wait to see if a better competing offer comes through.  Be persistent.  If you’ve done your homework and received some professional consultation from your real estate expert, you should be aware of the Value of your purchase.  A Short Sale negotiation done correctly can earn you your dream home with a significant amount of equity attached…no small feat in today’s market.

BE PREPARED…

Now, this may seem absurd but you must understand one very important thing; just because the owner of the mortgage may choose to create a long drawn out process does NOT mean that you as a potential buyer will be afforded the same luxury.  In fact, it is not unusual to wait for months for a Short Sale Negotiation to be resolved only to be informed that you have three weeks to close the transaction.

So be prepared!  Make sure that you have a valid pre-approval in place even if this means updating the document while you await a resolution to your negotiation.  During this period of waiting, refrain from the temptation to buy any major purchases for your intended home (or any large purchases of any sort) so the terms of your pre-approval remain valid.  While waiting, take the opportunity to line up services that you may need to contract for the home purchase such as Inspectors, Handymen etc.

HIRE A PROFESSIONAL…

One of the best investments you will make is to hire a Professional REALTOR who has experience with Short Sales.  The National Association of REALTORS does offer a certification for REALTORS (SFR).  Audu Real Estate has two individuals with this Designation.  In addition, we have successfully negotiated Short Sales since 2005.  We work with as a team which includes a title company that not only assists with the paperwork but has legal counsel available to review situations as warranted.

Lastly be flexible.  At times, you will be tempted to throw in the towel.  Dates may be changed, demands made which seem unreasonable.  You may have ordered your moving truck only to be told that the closing cannot happen as planned.  Being flexible will help preserve your dignity, your mind and the pleasure of enjoying a victory of a hard won battle.

WHEN YOU CANNOT AFFORD TO WAIT…

Although Short Sales and Forclosures can provide significant cost savings, there are times when you cannot afford the investment of time and/or money which may be required to purchase a property which is being sold in this way.  For instance, if you have just sold another property and need to move into another home within less than 30 days, it is probably not prudent to try to buy a home through a Short Sale unless you have alternate arrangements for lodging if the transaction cannot be completed within your time constraints. There are many homes being retailed today which will not require a Short Sale transaction.  If you would like to purchase a home, let us help you determine which route may be best for you.  We can also provide you with a FREE list of available homes in the areas and price range you desire.

 

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1950 CVTC 22 Homemaking

1950 CVTC 22 Homemaking (Photo credit: wistechcolleges)

So, you’re ready to buy a new home, or simply another home.  The prospect can be both exciting and scary as there are so many things to consider and one can feel overwhelmed by the enormity of the process and the consequences of making the wrong decision.

While, the process of a home transition is rarely devoid of challenges, there are a number of things which you can do to help finding the right home a more comprehensive and cohesive process.  One which delivers you to your new location in peace…as opposed to pieces.

Here are some tips that I have given as salient advice to my clients over the years.  While, the list is not exhaustive, it will help you to start the process and may bring to attention, some areas that you had not previously considered.

First things First…

It’s important to take the time to figure out what you want.  I am sometimes surprised by how quickly some folks will jump into a car and simply go out looking for homes.  Home searching is not sight seeing.  To be successful in your home search, it is helpful to have a plan for what you want to look for.  Consider it a road map which helps ensure that you arrive at the desired destination.

Your game plan does not need to be exhaustive, but it should be comprehensive.  And…it should include input from everyone who will be living in the household if possible.  Certainly, constraints with regard to location and price and amenities may render some dream options unsustainable, however having input at the planning stage helps to provide a sense of ownership and insight about what will make the most sense for your particular situation.

Some things to consider are:  location, size of home, community, number of bedrooms, number of baths, house style/type of home, amount of land, upkeep or repair work you are willing to tackle, school district desired, commute to work/school etc.

Next…

Then pare down your list by creating two columns which are:  Wants & Needs.  There are things that you many want, but may not really need.  For instance, a swimming pool and/or fireplace are wonderful amenities, but are they really absolutely necessary if the home is the right price and in the right location and has the right combination of bedrooms and bathrooms for you?

Then…

Armed with your refined list, you can then begin to look online and attend Open Houses with confidence that you are now prepared to spot the right home when you come across it, rather than looking for the proverbial ‘needle in a haystack’.

A great place to search for homes once you’ve done your preliminary homework is:  www.audurealestate.com.  Not only can you refine your search to include your specific requirements, you will also be able to save your search and review them at your leisure.  Should you wish to preview a home or have some questions, our agents will be happy to assist you.

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Your nest egg...I can remember a time (seems like ancient history now) when a home appraisal was good for 6 months.   Today,  sometimes you feel you’re lucky if it’s valid for 60 days! Volatility in the real estate market in the West Michigan area mirrors much of what is happening in other parts of the country.  Home prices have declined at record levels due to the economic upheaval in the financial markets and continuing challenges in the jobs sector.

The recent changes in appraisal standards has impacted many new purchases and generated a lot of discussion in the appraisal community.  For home buyers, these changes have sometimes resulted in home appraisals which were lower than the market price arrived at through agreement in an arm’s length transaction between a home seller and home buyer.

For home buyers who find that the appraisal value is lower than the sales price, there are few options.  They may be able to walk away from the transaction without financial penalty if the transaction is funded through a FHA loan (Federal Housing Authority) and all parties to the transaction have signed an Ammendatory Clause Addendum or face a decision about making up the difference between the appraised value and the purchase price.  This essentially means that a home buyer will be bringing additional cash to close on a transaction.  A good real estate agent can be of valuable assistance in negotiating a reduction in the sales price to accommodate for a low appraisal.

There are a few things that a home buyer should keep in mind when faced with this situation.  Although this list is not exhaustive, it provides a basic framework of consideration if you find yourself in this position.

1.  Don’t panic!  Get the facts!

Ask to see the appraisal.  Afterall, you have paid for it.  Sit down with your lender and real estate professional to review the comparables used by the licensed appraiser.

2.  Submit additional data!

Sometimes there have been recent sales which have not been reported which the appraiser may be unaware of.  Appraisers are human and can make mistakes or miss things.  You can submit additional data or home comparisons to the appraiser for consideration.  A licensed appraiser is not required to change his/her report based on your submission, but it’s worth some additional effort if you feel you have some information which gives a more complete profile of the property.

3.  Know the Housing Values in the Area!

One of the biggest challenges in determining home values today is the large number of foreclosed and distressed/short sale properties on the market.  Your proximity to sale of one of these properties will impact the amount of money the bank is willing to loan you on a home although this number may not be entirely reflective of the true market price of the home.  When making an offer, it is important to factor in the distressed sale activity in a given area and make appropriate adjustments.

4.   Consult with Qualified Professionals!

Most real estate contracts will include a clause which advises that consumers obtain appropriate counsel from qualified professionals.  When dealing with Short Sales or Distressed properties, this can be especially valuable.   If you have questions about the terms and obligations on your contract, it is wise to seek counsel.

A successful real estate transaction today requires patience, extensive market knowledge, good negotiation skills and the ability to create solutions which make sense for all parties.  If you’re in the West Michigan area, the agents at Audu Real Estate are available to serve you and answer your real estate questions.  Please contact us @ info@auduhomes.com.

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