It is still a buyers market in Michigan's Upper Peninsula. The question is, what does that mean for those of you who are looking at a possible purchase? First, it does provide you some very specific leverage. As a Home Inspector, I found it quite common over the years to see homes in need of rather costly repairs marketed in the same price range as those that had been well maintained. It was kind of a "Caveot Emptor" market, especially up here.
In the past year, I have seen prospective buyers demanding that those significant items be addressed by the seller, or they simply keep searching. I have also had the pleasure of working with more Realtors who are pricing these homes at reasonable market prices given the overall condition of a given home. One Agent I know has her properties on the market an average of about 28 days before they sell. That's impressive in any market.
So, what can you do? If you are going to work with a Buyer's Agent, make it clear that you are looking for a home in good repair, in your given price range. If you are dealing directly with the Listing Agent, ask if a thorough Market Analysis was completed, and ask to see the details.
When you find the home your interested in, Hire a Licensed Home Inspector to conduct a comprehensive inspection of the entire structure. You can do this prior to making an offer or as part of a contingency in the Purchase Agreement.
Think of it this way. Have you ever been in the market for a car and then settled on one that seemed priced quite reasonable, only to discover later that it was in need of repairs that no longer made it a good deal? Buying a house is the same way. The difference is that with a Home, those overlooked repairs could come back to take a huge bite out of your budget.
What do you do if the inspector finds some issues that would be costly to address? Well, if it is a significant issue as defined in the Inspection Contingency in the Purchase Agreement, the seller has the right to correct those issues in a specified period of time. If the seller does not correct, you can walk away. If the items are deferred maintenance, or general repair issues, you can try to negotiate to reflect the cost of such repairs. Sometimes the seller will agree, sometimes not.
In truth, you have more leverage if the Inspection is conducted before you make a formal Purchase Agreement.
Some of you may have seen an increase in the number of Bank owned properties for sale. Sometimes these can be bought at a discount, but remember that the homes condition is the key here. I have had several customers who hired me to do an inspection, but had a very difficult time getting the bank to turn on the utilities. Let me ask you this; would you buy a home, even at a discount, if you knew the furnace didn't work, that the electrical was unsafe or that the plumbing system needed to be replaced due to broken pipes? When you are the buyer, you are in the driver's seat. Demand that all the utilities be turned on at sellers expense for the inspection.
Never "fall in love" with a home. Yes, I know Valentines day is upon us, but save the goo goo eyes for your spouse. When looking at homes, you need to have some objective detachment and think the process through carefully and logically.
The good news is that interest rates are very low and an adequate inventory of homes will give you the opportunity to find something in your price range that won't become a headache!
I know "Good" Realtors in most parts of the UP, and I would be happy to talk with you about any questions you may have. 1-800-935-9384
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