My Blog

How much Buying Power do you have as a Potential Buyer

4/14/2019
Thinking of buying a home?  Worried your offer won't get accepted?  Check out what's makes a buyer a strong candidate when facing a multiple offer situation.  This is also true for non-competitive situations on why a seller would consider your offer.  It's a competitive market and you should consider every advantage you can get.

Buying Power Checklist (In no specific order)

0-6 Checks = Low Buying Power.  Buyers in this bracket can expect to lose out on several homes, write several offers and possibly "overpay" for a home.

7-14 Checks = Average Buying Power.  Buyers in this racket can expect to have a good chance of getting their offer accepted without losing out on too many homes.  You may be asked to add a few items to your offer to increase its strength to help get you offer accepted.

15-21 Checks = High Buying Power.  Buyers in this bracket have a high chance of getting their offer accepted. In most cases, your offer will be in the top 2 or 3 that the seller has to choose from.


How many checks do you have?

__  Offer Free Occupancy

__  Buyer assuming City Inspection (if applicable)

__  Offer Extended occupancy (45-90 days after close)

__  FHA Addendum - Zero cost to the seller (if applicable)

__  Pay over appraisal value (5-10% min.)

__  Waive the appraisal (if you can)

__  No contingency on Sale of Close of Current home

__  Larger Earnest Money Deposit or EMD (3% min)

__  Full Lender approval (not just a pre-approval)

__  Non-refundable EMD

__  More money down on loan than typical for price range

__  Appraisal first or at same time as inspection

__  No seller concessions

__  Proof of EMD and Down payment funds with offer

__  Personal letter from the buyer - related to the buyer

__  Shorter timelines to close

__  Buyer knows Seller

__  Offer over asking price (if applicable)

__  Cash Buyer

__  Conventional Financing (No FHA)

__  Waive the inspection

__ Buyer Agent knows Listing Agent

For more details or questions about any of these items give me a call Steven Melchor a.k.a. Melch 810.513.1561.  We can see what you can do to make your offer stronger!!

For Sale By Owner vs. Real Estate Agent - Which is more Profitable?

3/18/2019
Thinking of selling your home yourself?  Somethings to think of before you go that route.

- Do you have a list of potential buyers ready to view your home?
- Do you have time to show the home and let strangers into your home?  Sometimes alone?
- Are you versed in the local trends on the housing market and know the latest regulations for closing a sale?
- Do you have a lot of extra time to market your home and do all the work to meet and greet properly?


Most Sellers don't realize that they can get 8% to 10% more by listing with an agent which is more than the standard 6% Agents get split between two agents.

The attached articles outline this in detail and show that it's a downward trend to go solo

Dangers of FSBO

3 Facts you need to know - Realtor vs. FSBO

Going Solo is not always the most profitable

https://magazine.realtor/daily-news/2018/11/12/fsbo-transactions-hit-new-record-low

What's Up With Zillow?

3/15/2019
What's up with Zillow and the "Zestimates"!

With the way the market is today, clients have been hammering about Zillow "Zestimates" and why (mostly on higher end homes) their home values are over inflated or even worse highly undervalued.  It's very frustrating and frightening to some sellers to the point that they don't want to sell their home.

Well we've compiled some information that you may be interested in.  Some are actual Zillow quotes, data and explanation of their process.  Zillow is undervaluing homes on a regular basis.

First off, what is a Zestimate:
    A: A 'Zestimate' is Zillow's estimated market value of a property.  They ill it as "a starting point in figuring out the true value of a home."  It is calculated using public data, which may or may not be accurate, updated or relevant to your neighborhood or community.  Zillow freely admits that these Zestimates are 'estimates only' meant to be starting points in buyer research, because they typically do not accurately reflect a homes actual value.  "Our data shows that half of all sales are generally above the Zestimate," from Zillow.com.

How accurate is it for Michigan?
   A: Zillow calculates how 'accurate' they etheir Zestimates to be across the country, based on the quality of the source information available to them.
           - Michigan: Zillow estimates that their Michigan data is a 3 out of 4 stars, or 'Good Zestimate'.  3 out of 4, or essentially roughly 75% accuracy!
                 * 35% of homes within 5% of sales price
                 * 60% of homes within 10% of sales price
                 * 77% of homes within 20% of sales price
                 * That leaves 23% of all properties selling for more than 20% higher of lower than the Zestimate.  This can represent tens of thousands of dollars difference from actual value!

Zestimates for properties could be represented significantly lower, or significantly higher than the actual values.  And they are not updated regularly or quickly with recent sales - so in fast selling markets, Zillow's Zestimates tend to not accurately reflect recently sold comparable properties that would positively impact home values.

Also, Zillow does not calculate the value of properties based on what local residents understand to be neighborhoods or communities.  Instead, Zillow calculates by county level data, as they do not have the ability to identify local boundaries.  This is frequently leads to homes in specific neighborhoods to be 'undervalued' due to average sale prices of homes throughout the county.  This means if you are on Lakefront property you could be compared to non-Lakefront property so your value is undervalued.

Can the Zestimate be removed:
   A: No.  Zillow will not remove the Zestimate from any of its listings!  What's up with that?

Can the Zestimate be updated?
   A: Possibly.  Zillow does permit homeowners to modify criteria about their home that 'may' improve the home's Zestimate Value by 'Claiming' their home.  To claim your home and update data regarding beds, baths, square footage, lot size, heat source, etc, click here.

For more detailed information, feel free to check out Zillow's 'What is a Zestimate' page, found here.

Three New Yearís Homebuyer Resolutions

2/20/2017

This is the year you become a homeowner! To make the most of this most important step in your life, make these three New Year’s home buying resolutions now.

1. I will check and repair my credit. Before you start shopping for homes, make sure you have no errors or unresolved credit issues that could prevent you from getting a good loan.
 
The three credit reporting bureaus, Experian, Transunion and Equifax, don’t share data, nor do they correct errors without evidence. Order a full credit report from all three bureaus here. If you find an error, contact the appropriate bureau and mail copies of your payment, release of lien or other proof.
2. I will get preapproved for a mortgage loan. Take two to four months of bank statements, pay stubs, and an account of your monthly debts and expenses to your lender. The lender calculates how much money you can safely borrow and at what interest rate.
 
Preapproval also means a lot to sellers. It show’s that you’re serious about buying a home and that the closing process will be quicker and smoother because you already have a lender.
3. I will buy within my means. It’s sensible to buy the most home you can afford, and your lender will help you get there, but it’s not wise to get a risky adjustable rate mortgage so you can buy more house. Being “house poor” means having no money available for other things in life, so stick to conforming loan guidelines to be safer financially.

Clutter-free Countertops

2/13/2017

Today's kitchens are filled with all kinds of gastronomical gadgets, but if you want to show your kitchen to its fullest advantage, here are five ways to keep clutter down:

  1. Store unused equipment. Which appliances do you use the most? Chances are they’re not vegetable curlers or pasta makers. Store those appliances somewhere else, such as a butler’s pantry, food pantry or the garage.
  2. Build an appliance garage. Many cabinetmakers offer an appliance garage that can be closed when not in use. You can also customize an appliance garage to extend the length of the counter.
  3. Update appliances. If you need a microwave, get one that’s also a convection oven. Commercial-grade mixers have attachments that can make pasta and knead bread. The newest coffee machines can make tea, hot chocolate and all kinds of coffee shop specialty brews.
  4. Mount what you can. Under cabinet mounting is easy to install. Paper towel racks, electric can openers, and task lighting can all be mounted under the cabinets to free up counter space. Throw out smelly dishrags and sponges, and store fresh cleaning aids in caddies under the sink.
  5. Invest in organizers. Corner cabinets can be better utilized with swing out organizers. Drawers on rollers allow better access to all your storage. One charging station should serve multiple devices. Try installing one in the hall or utility room.

Once your kitchen is better organized, you’ll find it easier to prepare for showings and buyers will have an easier time seeing the kitchen’s best features.

Should You Pay Discount Points?

2/6/2017

The low mortgage interest rates that you find online or in the newspaper aren’t necessarily what you’ll pay when you apply for a loan. Why? Because banks will charge you “discount” points to get the best rate, which adds to the cost of the loan.

Points, or discount points, are expressed as a percentage of the loan amount. The point "discounts" the interest rate, that's why it's referred to as a discount point. If your mortgage is $300,000, then one "point" is $3,000. For each point you pay, your interest rate should be reduced by about ¼ percent.

On a 30-year mortgage loan at $300,000 and 5.00%, the monthly payment works to $1,610 without any points.Paying one point ($3,000) would reduce the rate to 4.75%, making your discounted payment $1,564 per month.

That's a reduction of $46.00 per month. Now weigh the cost of $3,000. To get that, divide $46 into $3000. The result is 65. It will take you 65 payments to break even, nearly 5 ½ years. It’s worth it if you’re planning to stay in your home for 5 to 10 years or longer. If not, you’re far better off using the $3,000 to pay down your loan principal or buying furniture for your home.

There’s another way to get the best mortgage interest rate – that’s to have the best credit scores possible. Those with near or perfect credit are considered low risk by banks. As always, consult your financial advisor for more information about home loans.

Countertop Pros And Cons: What To Choose And Why

2/2/2017

Wondering how to choose a countertop for your kitchen? With so much to pick from, it can be challenging - especially with changing trends and so many options that are at similar price points. This pro and con list should help.

Read more

Houzz TV: Letís Go Island Hopping

2/1/2017

Always a popular gathering space, the kitchen island plays a vital role for many households. From stools to countertops to lighting above, the possible combinations are endless. Here’s a collection of some of our favorite kitchen islands with plenty of decorating inspiration.

Read more

Winter Showing Tips

1/30/2017

You may think that wintertime isn’t the best time to show your home, but you’d be surprised. Yes, winter days offer fewer hours of daylight for buyers to see your home. Sleet and snow make it harder for buyers to house-hunt. Even warm regions have challenges – the weather may be gray or rainy.

But winter has a unique appeal - gathering with friends and loved ones by a crackling fire, winter sports played in the backyard, walks on the beach without all the summertime tourists. So play up what’s great about your home.

Make sure the drive-up appeal is strong. Keep driveways and walkways clear of snow and slush. Put a nice, new welcome mat out for buyers and their agents to wipe their feet.

Leave all the lights on for showings and open the drapes to let in more light. Closed homes tend to hold odors, so open the windows for an occasional airing, and run the fans after cooking meals. Bake some cookies or bread. Boil some cinnamon and spices for a natural, wintry fragrance.

If you have a fireplace, turn it on, but low. Stage the scene with a comfy, holiday-themed throw blanket. Put some big fluffy pillows on the floor.

Don’t hesitate to contact me for more winter-selling tips!

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