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Buyer Advice of the Day: 3 Tips to Get Your Offer Accepted

Make no mistake about it, it is a seller’s market out there. On our listings, we are getting double digit offers in 24 hour periods. I have seen more sales over list price than I did in all of 2016. The market is on complete fire. This really makes it difficult for buyers who are trying to maximize their potential. With 11 years of experience, I have not been immune to the seller’s market, myself. Not only have I dealt with numerous buyers who have struggled to find their dream home, I have also been in the market to purchase a home for the past year. It has even been difficult for me. But all is not lost…

I have learned a lot about buyer strategy over the past 11 years. Having a good game plan as a buyer can really make all of the difference in saving time and energy. The last thing you want to do is to start making offers on properties blindly. You will most likely swing and miss and start to get very frustrated. So here are a few tips on how to avoid the painstaking struggles of a seller’s market.

  1. Have an AMAZING Game plan

    You will want to know exactly where you stand financially, well before you start making offers. Find out how much you will be pre-approved for with your lender, before you even consider shopping. Working with a reputable lender will help give you a good idea of where you stand financially and how much you will be able to afford.

    I always advise shopping for homes 10% lower than what you are preapproved for. This will give you some wiggle room when you approach the seller and you won’t be getting attached to a home that you can’t compete against other buyers for.

  2.  Know Your Comps!!

    It is always important when making an offer to know your comparable market values. However, it is now more important than ever. You don’t want to get attached to a house that is priced over market value and reward a seller for the current market condition. You can still find houses that are selling at or below market value and you will never want to stray from this strategy. A house is not just a home, it is also an extremely valuable financial asset.

    The best way to know your comps is to find a really good agent (Pick me! Pick me!). A good agent will be very comfortable with all of the comps in their market and can instruct you on how to go about finding a house at or below market value. Agents have a lot of tools and experience at their disposal to develop a financial offer strategy.

  3. Appeal to the Seller

    The home buying/ selling process can be a little dehumanizing at times. Often, sellers want to detach themselves from their home that they cherish and love by sending it off to the highest bidder. Buyers can often feel neglected because they find a home they love and see their family living in and caring for, yet the seller is far removed from these emotions for financial reasons.

    I always advise my motivated buyers to prepare a “cover sheet.” Get personal with it! Let the seller know that you are human and you want to love and care for their home. Share photos of yourself or your family that lets them know who you are.

    This may not help you underbid someone by $15,000 and get your dream home, but it might help get a seller interested in working with you on your offer and potentially only having to match other buyers. If you had a good offer strategy going in, you should have some wiggle room to increase that offer.

Don’t get frustrated. Eventually you will find that perfect home for you and your family. Just stick with your game plan and trust your agent. And don’t be afraid to reach out to us if you need any help!!

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3 Reasons to Sell Your Home Today and What to do Next

There are a lot of unsure homeowners out there and I keep getting the same questions about what owners should do with their valuable assets. There is never a one-sized fits all approach, so it’s very difficult to answer these questions with a blanket statement. However, there are some creative strategies to explore for the current environment. Here are 3 reasons I think you should consider in selling your home today.

  1. Political Uncertainty
    Boy isn’t this an obvious one? Although we all may have our own political opinions, there is no denying that tensions are high in the political scene of the United States. High tensions are not exactly the best environment for home value stability. With increasing pressure inside our own landscape and outside pressures from North Korea, Syria, and even Russia, it’s hard to tell how the buyers and other sellers are going to react. The less people want to buy and more people want to sell, the worse off our asset becomes. And political tension can cause uncertainty in these areas.
  2. Economic Uncertainty
    I am no finance expert. I am a real estate expert. However, the experts in the financial sector are starting to question how long this 8 year bull market can really last. Aside from the political landscape, there are other concerns in the economic landscape such as the student debt crisis that are a cause for concern to homeowners.
  3. Diversification
    This might be the most important reason to sell your home today. Right now, the average price per home in the United States is 1% higher than pre-recession highs. If you purchased your home anywhere between 2009 and 2015, you could have anywhere from 25 to 50% equity in your home. This would make your home by far the most significant resource you have. Given current interest rates being still relatively low, there are better places for this money to be than sitting below your roof.

Investing Your Equity

Okay, so you have been considering selling your home for a while now, but the problem is that you don’t know what to do next. You may not want to use your equity to buy a bigger and better house (we have seen how that could play out). But maybe you want to start focusing on building wealth, instead of living lavishly, financially trapped in your single family home.

FHA loans do not only apply to single family homes. You can get an FHA loan (in Michigan) for up to $530,000 on a fourplex (a four unit multi family). That’s a 3.5% down payment of only $18,550.

Wayne County

There are a few criteria that the Multi-Family must pass like the units must be attached and all under one roof, as well as you must live in the building for one year. However, with $530,000 to work with, you could easily build your own immaculate 4 unit complex.

If you were to build a 4 unit complex in the right area (in MI, for example, Oakland County or Downtown Detroit), you could easily get north of $2,000 per month for a two bedroom. The cost of running a 4 unit complex would be about $2,500 per month. So after collecting rent on 3 units and paying off your expenses, you would be in the black of about $3,500 per month. And you would be living for free!

After one year, you could move anywhere you would like and fill the unit. Maybe another fourplex?! Or maybe it will be time to retire and move to the Dominican on your $6,000 a month passive income.

Finding Your Dream Home

Maybe a multi-family isn’t the right move for you. Maybe you want to cash in your equity for your dream home.

Here in Michigan, we have a team dedicated to finding your dream home at MI New Homes. Vincent Venturini recently joined the Property Marketplace team. He is a former sales person at Pulte Homes and knows the market and new home buying experience as good as anyone.

Fill out the form below to get more information.

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Video tour

The Consumer Financial Protection Bureau announced on Wednesday a proposal to delay the effective date of the TILA-RESPA Integrated Disclosure rule until Oct. 1.

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Real Estate Roundup!

May new home sales gain 2.2% from April

Sales of new single-family houses in May 2015 were at a seasonally adjusted annual rate of 546,000, which is up 2.2% from April, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. — From Housing Wire

3 ways to tame student loan debt and afford a mortgage

It’s no secret that student loans can make buying a home a challenge. But what exactly is the problem, and how can buyers overcome it? The problem is that student loans can be included in the buyer’s debt-to-income ratio, or DTI. — From Bankrate

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We’re ready for the TRID rules!

At 5 p.m. EST June 17, the Consumer Financial Protection Bureau issued a statement that the effective date for the TILA-RESPA Integrated Disclosure (TRID) rules would be pushed back to Oct. 1, 2015.

CFPB Director Richard Cordray said in a prepared statement: “The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until Oct. 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

Rainier Title has been working towards the TRID implementation for over a year and felt prepared for August 1st. However, with the proposed delay we will be taking this opportunity to continue our education and training of TRID. While we believe that we have been proactive and ready for this change, there are still so many unknowns that will have to be addressed at the time of implementation. The industry should still prepare for 45-60 days for transaction to close due to the new timing parameters of the forms.

We’re working hard to be ready for all changes!


Real Estate Roundup

Active Home-Building Industry Will Lead to More Demand for Warehouse Space

Strong consumer spending and the rise in housing construction activity are currently the prime factors for the incredible rebound of the U.S. industrial real estate sector, and experts say as home buying continues to increase, so will demand for warehouse space. — From NRE Online

To Buy or Not to Buy: That Is the Developer’s Question

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