Buying a home can be confusing and frustrating in any market simply because you don't know all the ins and outs of the home buying process. Buying a home in a seller's market can be more frustrating.
So what is going on with the Michigan real estate market in 2017? There is limited inventory for the amount of homes that are out there. The really nice properties that are priced good are selling quickly. However there are many homes in Southeastern Michigan that are over priced because sellers are going for top dollar. So you have to look at the comps to decide for yourself whether the homes are priced right or outrageously priced. I have been in multiple offer situations many times lately with my clients on the really nice and updated homes. It is a fight sometimes to get that beautiful updated home.
So what shouldn’t you be doing if you are buying a home this year?
Sellers always look at their net figure when you make an offer. They look at the financing types in this order.
1.) Cash is king. If the offer amounts are very similar the seller most likely is going with a cash offer. The reasons why a seller takes a cash offer over others is because there is no appraisal, no mortgage on a cash offer. They do not have to worry about the house appraising, or the mortgage going through. So the closing is almost a sure thing and it is going to close quicker than a offer with a mortgage.
2.) Conventional mortgages with 20% or more down. Usually if a person is a saver and is able to qualify for a conventional mortgage it means that they are a better borrower. A better borrower means that there is a lower likelihood of having issues with the mortgage.
3.) FHA mortgages. FHA mortgages are usually for borrowers withbruised credit or short term credit. Lower down payment. Many buyers that cannot qualify for a conventional mortgage will get a FHA mortgage. It is a step down for a mortgage and seller’s see it that way too.
4.) VA mortgages. No disrespect for our servicemen, but VA mortgages are the toughest mortgages around. They are basically an FHA mortgage with added baggage of a tough appraisal. The VA mortgage is a combination of home inspection. There are criteria that may require the seller to pay money to fix things. So why would a seller take that chance of having to pay money because something came up on the appraisal when they could take an offer that does not have the potential to cost them money.
So whether you are buying a Oakland County lake house or any home in the metro Detroit area go with a conventional mortgage if you can. If you enter into a multiple offer situation and have somebody you can get the cash from then you will have a great chance of winning the multiple offer situation.
The last piece of advice I can give you is do not ask for seller’s concessions in a multiple offer situation. #1 it lowers the seller’s net. Even if you offer a great price the seller is going to look at the concessions because if the home does not appraise you still need the concessions. So if you are asking $4000 in concessions a seller may take an offer $2000 less than yours because they will get $2000 more than with your offer if the house does not appraise. This is just how some sellers think when looking over your offer. I hope this helps you in your lake home buying process this year. If you have any questions feel free to call me anytime. (248) 310-6239
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Here is what one of my clients had to say about me
"My husband and I chose Russ to be our real estate agent after a friend highly recommended him. We were moving here from Canada and only had a few days to look at homes. When we came in to town, Russ went far above the call of duty. He had thoroughly planned our 2 days and had numerous homes lined up for us to view. After talking to us briefly and asking us a few questions before our arrival, he new exactly what types of homes would be ideal for us. After searching for a short time he found the perfect home for us.
After the sale, Russ even met our painters, carpet cleaners and home inspector at our new home since we were still out of town. He also gave us detailed lists of available utility companies, schools, cable services, cleaning companies, house cleaners, fun things to do and wonderful restaurants in the area. Russ made the entire experience enjoyable and easy. He has a laid back, genuine personality and my entire family felt comfortable with him immediately. He feels like a friend not just our real estate agent.
I would HIGHLY recommend Russ to anyone with complete confidence. "
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Lindsay Gourneau
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