America On Line featured an article today written by Eric Peters entitled Six Rules for Savvy Car Shopping The basic ideas in Eric's article on successfully purchasing a car can also be used when looking for and buying your next home. Here are the six rules; every home buyer should follow when purchasing their next home. Shop when you don't have to: Desperation rarely leads to a good deal. Be a smart home buyer and. start looking online before you need to move. Allow at least 6 months to decide which school district and community you want to live. Real Estate professionals are prevented by Federal and State laws from showing you a specific area. Buyers must use information readily available online to narrow their search area. Search Public Muliple Listing Services: There are so many places to search online for a home. Please do not give out your email address to receive information or to view more information about a home. Here are websites to search most of Michigan. Shop for money first: The first person to contact is not an unrepresented homeowner or real estate professional. The first person should be a lender. I would suggest speaking with one lender, allowing that lender to pull your credit and getting a copy of your credit report. Some lenders charge up to $399.00 for this service get that information in advance. Lender suggestions are available by clicking on my photo. Lenders can help you determine the MINIMUM amount of money you need for your desired real estate transaction. Once you have an idea of this value, you can discuss if this is actually a good time for your next transaction or determine if you need credit counseling assistance from a Government approved agency. Don't be afraid to get opinions from family and friends. If some monetary assistance will be offered to help you purchase, make sure you discuss it with your lender to verify it is legal. Compare incentives: This could be a big money saver. According to Bankrate.com, here is a list of Average Closing Costs per State. Lenders are required to give you a Good Faith Estimate. Watch for points and other costs that may be hidden in the loan. In addition, there will be fees for Homeowners Insurance, a Buyers Title, a new tax rate (follow instructions for area and school district), private home inspection, septic and well inspections, and an appraisal. Some homeowners are offering incentives to purchase their home. This can vary from lease to own and land contract to mortgage assistance. Sellers, Spot Light your home with these incentives. These are some homes offering incentives through The Michigan Group (items subject to change without notice) - Know what you're buying: This is where a Buyers Agent proves most valuable. Through Agency Disclosure, Michigan law requires all real estate professionals to work FOR THE HOMEOWNER unless under a signed Buyers Agency Agreement. This agreement stipulates that the agent must work for your benefit, not the agents and not the homeowners. As your representative, an agent can go over the positive and negative attributes and potential resale value of a specific home. (please view the sample forms underlined)
Know how much your old home's worth: Don't let your emotions cause you to focus on the new home without confirming with several professionals your current home's MINIMUM VALUE. A very rough rule of thumb is twice your homes State Equalized Value (SEV). Call your local City or Township Clerk or Assessors office or review a recent tax bill to get this information. In some markets, homes are selling from 1.8 to 2.1 times their SEV MINUS seller concessions of up to six percent. Do not over estimate the value of your home! It's better to be pleased with excess net profit than create a hardship for your next transaction.
As a general rule of thumb, if you are purchasing a home $60,000 more than your current home, moving to a State where home prices are rapidly increasing, or in danger of loosing your home to foreclosure you should consider selling and making up the loss on your next real estate transaction.
Don't wear your heart on your sleeve: Eric uses the analogy of Mr. Spock on the old Star Trek series. Home Buyers, when viewing any home, NEVER show emotion inside the home or around the homeowners or their agent. Talk about anything but the home and your needs. Here's why. Homeowners read your bodily reactions (80 percent of communication comes from bodily reactions) and will not drop their price if they sense you love the house. Technology in the form of web-cams and hidden cameras can also record your home inspection without your knowledge. I've show several homes where a computer with a web-cam sits on the living room desk potentially recording buyer's reactions. Always better safe than sorry, it could cost you thousands of dollars. In some cases, I've asked buyers to write down their questions.
During negotiations, agents have been trained not to show emotions. I also recommend making fact based decisions about price and terms when making an offer. If your offer is less than five percent below the range of recent sales. (roof needs replacement, driveway cracked, siding needs replacement, and we need to remove this to make it our home are all good reasons to ask for less on a home) including facts with your offer can show homeowners why their home is worth less.
For additional information on how buying a car also relates to buying your next home, please read Eric's complete article above. Oakland County home buyers, this information is provided as a service by Gary Smith, The Michigan Group, 6870 Grand River Ave, Brighton, MI. No obligation questions and information available, feel free to contact me. Not happy where you live? How can we help? Simply choose from the services available below. Know of someone needing assistance? We can suggest Federally approved Housing Counselors. Most require a monthly fee. We also have a short sale specialist that will work on your behalf to assist our agents to negotiate the best offer from the bank. There is a fee to a third party and home sellers must pass their qualifications to use this service when selling a home. - Search the Multiple Listing Service for Homes in southeastern Michigan through Internet Data eXchange (IDX) in Genessee County, Livingston County, Oakland County, Wayne County, Washtenaw County and Surrounding Areas. No sign-in no obligation.
- Search other areas of Michigan. Public access to several Multiple Listing Services throughout Michigan. None of these sites require login.
- While Your Sleep automated home search. Receive up to 250 homes from southeastern Michigan by email initially and then only new homes (new and changed price status homes) daily, usually while you sleep. The best homes still sell within days. Looking for lake frontage, foreclosures, or short sale homes? We can modify your search to fit your exact needs.
- What's Your Home Worth in Today's Market? No Obligation Home Evaluation for homes in southeastern Michigan usually 24 Hour turn-a-round for legal homeowners. Ownership verified through public records to safeguard your information. Non-owners and home buyers. You will receive generic information based upon the entire subdivision or general area. Valid email address required, your information remains confidential unless written permission received. Subject to available areas.
- Have a question? Click email me on the right column below my photo. We may not be experts in all fields but we will try to find you reliable choices to solve your problem and include any sources we find.
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2 Comments on Six Rules of Savvy Home Buyers
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There are some wonderful points to consider for buyers in that article Gary. The increase or decrease in property tax assessments is something I go over with each buyer. I don't want them having a suprise the following spring. In fact, I encourage buyers to add extra money each month to their escrow account so that they can get used to the higher tax payment right from the start.