Thursday, September 22, 2011
August Existing-Home Sales Rise Despite Headwinds, Up Strongly from a Year Ago
WASHINGTON (September 21, 2011) – Existing-home sales increased in August, even with ongoing tight credit and appraisal problems, along with regional disruptions created by Hurricane Irene, according to the National Association of Realtors®. Monthly gains were seen in all regions.
Total existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 7.7 percent to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July, and are 18.6 percent higher than the 4.24 million unit level in August 2010.
Lawrence Yun, NAR chief economist, said there are some positive market fundamentals. “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations,” he said. “Investors were more active in absorbing foreclosed properties. In additional to bargain hunting, some investors are in the market to hedge against higher inflation.”
Investors2 accounted for 22 percent of purchase activity in August, up from 18 percent in July and 21 percent in August 2010. First-time buyers purchased 32 percent of homes in August, unchanged from July; they were 31 percent in August 2010.
All-cash sales accounted for 29 percent of transactions in August, unchanged from July; they were 28 percent in August 2010; investors account for the bulk of cash purchases.
“We had some disruptions from Hurricane Irene in the closing weekend of August, when many sales normally are finalized, along the Eastern seaboard and in New England,” Yun said. “As a result, the Northeast saw the smallest sales gain in August, and some general impact is expected in September with widespread flooding from Tropical Storm Lee. Aberrations in housing data are possible over the next couple months as markets recover from disrupted closings and storm damage.”
Yun said an extremely important issue currently is the renewal and availability of the National Flood Insurance Program, scheduled to expire at the end of this month. “About one out of 10 homes in this country need flood insurance to get a mortgage, and we would see significant negative market impacts without it,” he said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.27 percent in August, down from 4.55 percent in July; the rate was 4.43 percent in August 2010. Last week, Freddie Mac reported the 30-year fixed rate fell to a record low 4.09 percent.
NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the market is remarkably affordable for people with secure jobs, good credit and long-term plans. “All year, the relationship between home prices, mortgage interest rates and family income has been hovering at historic highs, meaning the best housing affordability conditions in a generation,” he said.
“The biggest factors keeping home sales from a healthy recovery are mortgages being denied to creditworthy buyers, and appraised valuations below the negotiated price. Buyers may be able to find more favorable credit terms with community and small regional banks, and Realtors® can often give buyers advice to help them overcome some of the financing obstacles,” Phipps said.
Contract failures – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price – were reported by 18 percent of NAR members in August, up from 16 percent July and 9 percent in August 2010.
The national median existing-home price3 for all housing types was $168,300 in August, which is 5.1 percent below August 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 31 percent of sales in August, compared with 29 percent in July and 34 percent in August 2010.
Total housing inventory at the end of August fell 3.0 percent to 3.58 million existing homes available for sale, which represents an 8.5-month supply4 at the current sales pace, down from a 9.5-month supply in July.
Single-family home sales rose 8.5 percent to a seasonally adjusted annual rate of 4.47 million in August from 4.12 million in July, and are 20.2 percent above the 3.72 million pace in August 2010. The median existing single-family home price was $168,400 in August, which is 5.4 percent below a year ago.
Existing condominium and co-op sales increased 1.8 percent a seasonally adjusted annual rate of 560,000 in August from 550,000 in July, and are 8.3 percent higher than the 517,000-unit level one year ago. The median existing condo price5 was $167,500 in August, down 3.3 percent from August 2010.
Regionally, existing-home sales in the Northeast increased 2.7 percent to an annual pace of 770,000 in August and are 10.0 percent above a year ago. The median price in the Northeast was $244,100, which is 5.1 percent below August 2010.
Existing-home sales in the Midwest rose 3.8 percent in August to a level of 1.09 million and are 26.7 percent above August 2010. The median price in the Midwest was $141,700, down 3.5 percent from a year ago.
In the South, existing-home sales increased 5.4 percent to an annual pace of 1.94 million in August and are 16.9 percent higher than a year ago. The median price in the South was $151,000, which is 0.8 percent below August 2010.
Existing-home sales in the West jumped 18.3 percent to an annual pace of 1.23 million in August and are 20.6 percent higher than August 2010. The median price in the West was $189,400, down 13.0 percent from a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
# # #
NOTE: NAR also tracks monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas, which is posted with other tables at: www.realtor.org/research/research/ehsdata. For information on areas not included in the report, please contact the local association of Realtors®.
1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
Benchmark Revisions: All major statistical data series go through periodic reviews and revisions to ensure that sampling and methodology keep up with changes in the market, such as population changes in sampled areas, to ensure accuracy. NAR began its normal process for benchmarking sales at the beginning of this year in consultation with government agencies, outside housing economists and academic experts; there will be no change to median prices. Although there will be a downward revision to sales volume, there will be no notable change to previous characterizations of the market in terms of sales trends, monthly percentage changes, etc.
In the past NAR has benchmarked to the decennial Census, most recently to the 2000 Census, because it included home sales data. However, the data are no longer included in the Census, so we’ve had to develop a new approach with an independent source to improve methodology and to permit more frequent revisions.
Preliminary data based on the new benchmark is undergoing review by professional economists. This process is expected to take some time before finalized revisions can be published to address any issues that may surface in the review process and to update monthly seasonal adjustment factors; NAR is committed to providing accurate, reliable data. Publication of the revisions is expected in several months, and we will provide a notice several weeks in advance of the publication date.
2 Investors, first-time buyers, all-cash transactions, contract failures and distressed sales are from a monthly survey for the Realtors® Confidence Index, posted at Realtor.org.
3The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).
5Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
The Pending Home Sales Index for August will be released September 29, and existing-home sales for September is scheduled for October 20; release times are 10:00 a.m. EDT.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.
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Monday, September 19, 2011
August 2011 Michigan Real Estate Market Update
August brought us another month of good numbers in terms of homes sales and home values in Michigan. They both continue their (seasonally adjusted) upward trend in most all markets and price ranges. The chart below shows the average price per square foot for South East Michigan (bars) and the value change in price per SF compared to the same month a year ago (line), The bars show a steady rise for the last four months and the line (value rise over last year) does as well. The value line is a bit misleading; the downward trend is still in positive territory (save for April) with a strong upward movement in the last four months. Last August was the strongest value month of 2010, but this August still beat it by 6%.
Value Trends by price range also show the same positive movement. Since values do jump month to month, this chart is an average of the past 90 days price per square foot by price category. You can see that all but one price range showed positive numbers. With fewer listings available in the $0-99 category, it is not surprising to see buyers move to the lower end of the next price range ($100-199), thereby keeping the average value increase flat.
The Michigan real estate market is still divided between those homes selling quickly and the 60% that have been on the market for months to years (42% of sold listings were on the market less than 30 days and 47% sold for equal or more than asking price). So although we have some great signs of market activity and appreciation, it is appreciation for homes in good condition and priced well with values based on current solds, not asking prices, so Sellers still need an aggressive view on pricing.
One strange result of our housing recession is that the lack of homeowners’ equity is actually helping our recovery. With so many homeowners upside down and not able to sell, there are not enough salable homes on the market to satisfy buyer demand. This is actually speeding up our recovery since, with fewer homes on the market, demand is beginning to exceed supply. With each uptick in values, a few more Sellers will be able to sell, releasing a few more listings to the market. It is likely to follow a reasonably steady recovery pattern over the next few years. The wild card is interest rates. We know that rates are artificially low to some degree via Federal Reserve intervention, which is creating some level of excess (or borrowed forward) demand. So a significant rise in rates without a significant economic recovery boost could set us back again. For Southeast Michigan, another factor that could potentially hold up our recovery is that for once, in terms of housing, we are an economic bright spot in the country (and the state), so until the rest of the country starts to catch up, we are vulnerable if they sneeze.
If you just looked at the current market activity, inventory levels and general economic news (locally), all signs lead to a housing recovery that is coming faster that anyone had predicted. The problem with that is we have been down so long, none of us (even me) are quite ready to really believe it. I think if we can sustain these activity levels (seasonally adjusted) through the winter months and into next spring, we will have no choice but to become permanent optimists, until then the word “cautiously” will remain in front of “optimistic”.
For Company news, over the last five years we have emerged as the only broker in the state with a fully integrated real estate transaction experience for our clients (combining Brokerage, Mortgage, Title, Home Insurance and Home Services). That integration has been talked about for years as the coming consumer trend, but it looks like it is beginning to become an expectation of the next generation of homeowners. Although it is usually a lot of “little things” done well that makes a company or agent stand above the rest, providing an integrated one stop experience can be a “big thing” that moves us along way with our future clients.
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SE Michigan Price Per Sq Ft Value Trends
The Michigan real estate market is still divided between those homes selling quickly and the 60% that have been on the market for months to years (42% of sold listings were on the market less than 30 days and 47% sold for equal or more than asking price). So although we have some great signs of market activity and appreciation, it is appreciation for homes in good condition and priced well with values based on current solds, not asking prices, so Sellers still need an aggressive view on pricing.
One strange result of our housing recession is that the lack of homeowners’ equity is actually helping our recovery. With so many homeowners upside down and not able to sell, there are not enough salable homes on the market to satisfy buyer demand. This is actually speeding up our recovery since, with fewer homes on the market, demand is beginning to exceed supply. With each uptick in values, a few more Sellers will be able to sell, releasing a few more listings to the market. It is likely to follow a reasonably steady recovery pattern over the next few years. The wild card is interest rates. We know that rates are artificially low to some degree via Federal Reserve intervention, which is creating some level of excess (or borrowed forward) demand. So a significant rise in rates without a significant economic recovery boost could set us back again. For Southeast Michigan, another factor that could potentially hold up our recovery is that for once, in terms of housing, we are an economic bright spot in the country (and the state), so until the rest of the country starts to catch up, we are vulnerable if they sneeze.
If you just looked at the current market activity, inventory levels and general economic news (locally), all signs lead to a housing recovery that is coming faster that anyone had predicted. The problem with that is we have been down so long, none of us (even me) are quite ready to really believe it. I think if we can sustain these activity levels (seasonally adjusted) through the winter months and into next spring, we will have no choice but to become permanent optimists, until then the word “cautiously” will remain in front of “optimistic”.
For Company news, over the last five years we have emerged as the only broker in the state with a fully integrated real estate transaction experience for our clients (combining Brokerage, Mortgage, Title, Home Insurance and Home Services). That integration has been talked about for years as the coming consumer trend, but it looks like it is beginning to become an expectation of the next generation of homeowners. Although it is usually a lot of “little things” done well that makes a company or agent stand above the rest, providing an integrated one stop experience can be a “big thing” that moves us along way with our future clients.
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Tuesday, September 13, 2011
Wall Street Journal Names Top Agents
The Real Estate One Family has 11 WSJ/RT Top Agents.
The annual national rankings for sales associates put out by The Wall Street Journal and Real Trends just came out this week. We are privileged to have 11 members of our family that qualified for the lists this year, a record number and certainly the most of any Michigan broker. In fact, we had the third highest number of Associates on the list among all the brokers across the nation!!
We have the 3rd Highest Number of Agents on the List of National Brokers.
Please join me in congratulating each of our distinguished National Top Realtors!
Kathy Broock-Ballard - Birmingham
Mike Shannon Team - Dearborn
Mike Fayz - Dearborn Heights
McNeal - O'Brian Team - Southfield
Dennis Dickstein - West Bloomfield
Christian Grothe - Birmingham
Chris Pero - Birmingham
Karen Wilson - Troy
Cindy Sienkiewicz - Clinton Twp.
Ken Ritter - Shelby Twp.
Jeannie Proffitt - Southgate
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The annual national rankings for sales associates put out by The Wall Street Journal and Real Trends just came out this week. We are privileged to have 11 members of our family that qualified for the lists this year, a record number and certainly the most of any Michigan broker. In fact, we had the third highest number of Associates on the list among all the brokers across the nation!!
We have the 3rd Highest Number of Agents on the List of National Brokers.
Please join me in congratulating each of our distinguished National Top Realtors!
Kathy Broock-Ballard - Birmingham
Mike Shannon Team - Dearborn
Mike Fayz - Dearborn Heights
McNeal - O'Brian Team - Southfield
Dennis Dickstein - West Bloomfield
Christian Grothe - Birmingham
Chris Pero - Birmingham
Karen Wilson - Troy
Cindy Sienkiewicz - Clinton Twp.
Ken Ritter - Shelby Twp.
Jeannie Proffitt - Southgate
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Monday, September 12, 2011
Choose to Cruze!
The Real Estate One Charitable Foundation and Gordon Chevrolet are sponsoring a fundraising raffle to benefit Special Olympics of Michigan! Only 2,500 tickets will be sold for the chance to win a Chevy Cruze + $3000. Tickets are $20 and may be purchased at the front desk of your nearest Real Estate One, Johnstone and Johnstone or Max Broock Office. The drawing will be held at the REOFamily Corporate office in Southfield on 11.11.11 at 11am. For more info please call: 248.208.2900.
Winner need not be present to win. if 2,500 tickets are not sold, the drawing will revert to a 50/50 raffle. Raffle participants must be 18 years of age or older at the time of entry. Payment of all applicable federal, state and local taxes, fees and surcharges are the responsibility of the winner. Winner will be issued an IRS W2G stating the value of their prize. Prize will be awarded Nov 11, 2011. No cash alternatives. Prize is non-transferable. State of MI Raffle Licenseno. R13150
Thursday, September 01, 2011
New Rules for Appraisers
The Ann Arbor Area Board of REALTORS® sent out an interesting article today addressing the New Uniform Appraisal Dataset (UAD) which goes into effect TODAY (Sept 1, 2011). I've copied the article here and there is also a link to the original at the botttom of this post.
New Uniform Appraisal Dataset (UAD) becomes effective September 1
Appraisers must now use a new set of codes and abbreviations to provide much more information with each appraisal.
Read the summary Bill Holmes of Ann Arbor Mortgage has prepared to find out how you can help avoid unnecessary delays.
Big Changes Ahead with the UAD on September 1
Effective September 1, the implementation of the Uniform Appraisal Dataset "UAD" will certainly cause some consternation in the real estate community.
Q. What is it?
A. The UAD defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields.
UAD Specifications:
Three Property Improvement Ratings = Remodeled, Updated, Not Updated
Six Condition Ratings = C-1 to C -6 (Currently - fair, average, good, superior)
Six Quality Ratings = Q-1 to Q- 6
There are over 100 standardization abbreviations that must be used in the appropriate appraisal report fields.
Q. What types of loans will it affect?
A. At this point, just Fannie Mae and Freddie Mac conventional mortgages. Effective January 1, 2012, FHA will adopt the system with all new case numbers issued. All single family and condominium Fannie Mae & Freddie Mac Real Estate Appraisals MUST use the ratings. The subject Real Estate Appraiser will be required to ask the subject home owner specific questions about the subject property. The answers must support the appraiser's opinions for the ratings in the appraisal report.
Q. Will the current appraisal forms change?
A. No. With the new standards, lenders will be providing more appraisal data than is provided today, but on the existing forms.
Q. What additional info must be provided on the appraisal forms?
A. More explicit info that was never requested before will be required. For example, the following are new data points that are being requested:
We spoke to a number of local appraisers and posed the following question:
This is a list of suggestions from the appraisers:
Ann Arbor Area Board of REALTORS®
http://myemail.constantcontact.com/Appraisers-will-need-your-help-with-their-new-guidelines.html?soid=1101068216507&aid=9kLkVPFvptQ
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______________________________
New Uniform Appraisal Dataset (UAD) becomes effective September 1
Read the summary Bill Holmes of Ann Arbor Mortgage has prepared to find out how you can help avoid unnecessary delays.
Big Changes Ahead with the UAD on September 1
Q. What is it?
A. The UAD defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields.
UAD Specifications:
Three Property Improvement Ratings = Remodeled, Updated, Not Updated
Six Condition Ratings = C-1 to C -6 (Currently - fair, average, good, superior)
Six Quality Ratings = Q-1 to Q- 6
Q. What types of loans will it affect?
A. At this point, just Fannie Mae and Freddie Mac conventional mortgages. Effective January 1, 2012, FHA will adopt the system with all new case numbers issued. All single family and condominium Fannie Mae & Freddie Mac Real Estate Appraisals MUST use the ratings. The subject Real Estate Appraiser will be required to ask the subject home owner specific questions about the subject property. The answers must support the appraiser's opinions for the ratings in the appraisal report.
A. No. With the new standards, lenders will be providing more appraisal data than is provided today, but on the existing forms.
A. More explicit info that was never requested before will be required. For example, the following are new data points that are being requested:
- Days on Market for the subject property and each comp
- Specifically defined Condition and Quality Ratings
- Status of improvements to kitchens and bathrooms for the subject property
- Sale type for the subject property and each comp
- The UAD requires that the United States Postal Service (USPS) standardized mailing address be included in the appraisal report.
- The UAD requires the site size for all properties that are less than one acre to be reported in square feet and the site size of all properties that are one acre or greater to be reported in acres.
"How can Realtors® help in making a smooth transition?"
- Take extra time when filling out the Seller's disclosure. The UAD is particularly focused on the 15 year mark--so the year upgrades and renovations were done is going to be important. According to the UAD, anything older than 15 years is not considered updated and redecorating is not renovation--it has to actually involve physical changes.
- The view from the home is receiving a lot of attention and is going to be very specific in the UAD so be prepared for pointing out enhanced views particularly if they are seasonal (i.e. park).
- Please have Realtors provide comparables at or before the appraisal inspection for appraisers to review PRIOR to the writing of the report.
- Include more detailed photos - in particular kitchen, baths, ½ baths, basement finish, (when you think you have taken enough photos, take a few more).
- Note the basement square footage.
- Note the finished basement square footage.
- Attach to the listing a detailed list of updates completed (the dates of these along with the extent of the updates).
- When appraisers call for information, return their calls in a timely manner (the current deal they are working on may not be yours, but the next one may be - you are helping your fellow Realtors and they, in turn, will be helping you).
Be prepared - this will undoubtedly add extra time to the appraisal turn-around time and may also increase underwriting turn times. Please build extra time into your contingency removal timeframes.
Many thanks to Bill Holmes at Ann Arbor Mortgage for this UAD summary.
1919 W Stadium Blvd
(734) 761-7340
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Wednesday, August 24, 2011
July Real Estate Sales
July sales and buyer activity followed the same positive path as the prior four months. It is too early to see if any of the stock market uncertainty will trickle down to our local Metro Detroit real estate sales but the big offset to any financial market concerns was the statement by the Federal Reserve to keep interest rates low for the next two years. Certainly a reduction in consumer spending, specifically auto, will cause a slowing of our local recovery, but as we saw throughout this recession, low rates and low prices have drawn thousands of people into the market.
Metro Detroit Real Estate Sales Up 8%
Locally sales rose about 8% over last July, which was expected, and anything less would have been a concern since last year sales fell off once the tax credits expired. Buyer inquires, written contracts and in some cases home values have shown a steady rise for the past four months (on a seasonally adjusted basis). Not quite a trend you can take to the bank, but all good news. You will not see these same positive numbers for Michigan for a few months since the national indexes such as Case-Shiller use data that is anywhere from 4 months to 2 years old (example; a short sale written in 2009, based on 2009 values that finally closes in June of 2011 will show up on Case-Shiller as a 2011 sale with a 2009 price). The national data will begin to show what we see everyday late this year.
Aggressive Real Estate Market
One of the biggest challenges in a market that is changing direction is managing the mixed signals of the Seller's need to still be aggressive in pricing and Buyer's need to be aggressive in their asking price for the multiple bid properties. Time on Market is a great way to look at how each should approach their asking/offer price.
The charts below show the available home inventory and home sales categorized by time on the market. Each chart divides properties on the market by 0-90 (dark bars), 90-180 and 180+(light bars) days.
Listing Distribution by Time on Market
41% of all listings have been on the market < 90 days, 18% 90-180 days and 41% 180+
Solds Distribution by Time on Market
79% of all Sales are from listings on the market < 90 days, 14% 90-180 and 7% > 180 days
The vast majority of homes that sell are on the market for less than 90 days. A home on the market for over 90 days has only a 21% chance of selling. So for Sellers, if their home has been on the market for more than three months, it is time for a price or condition change. For Buyers, if they are bidding on a home that has been on the market for less than 90 days, expect some aggressive competition for the home.
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July sales and buyer activity followed the same positive path as the prior four months. It is too early to see if any of the stock market uncertainty will trickle down to our local Metro Detroit real estate sales but the big offset to any financial market concerns was the statement by the Federal Reserve to keep interest rates low for the next two years. Certainly a reduction in consumer spending, specifically auto, will cause a slowing of our local recovery, but as we saw throughout this recession, low rates and low prices have drawn thousands of people into the market.
Metro Detroit Real Estate Sales Up 8%
Locally sales rose about 8% over last July, which was expected, and anything less would have been a concern since last year sales fell off once the tax credits expired. Buyer inquires, written contracts and in some cases home values have shown a steady rise for the past four months (on a seasonally adjusted basis). Not quite a trend you can take to the bank, but all good news. You will not see these same positive numbers for Michigan for a few months since the national indexes such as Case-Shiller use data that is anywhere from 4 months to 2 years old (example; a short sale written in 2009, based on 2009 values that finally closes in June of 2011 will show up on Case-Shiller as a 2011 sale with a 2009 price). The national data will begin to show what we see everyday late this year.
Aggressive Real Estate Market
One of the biggest challenges in a market that is changing direction is managing the mixed signals of the Seller's need to still be aggressive in pricing and Buyer's need to be aggressive in their asking price for the multiple bid properties. Time on Market is a great way to look at how each should approach their asking/offer price.
The charts below show the available home inventory and home sales categorized by time on the market. Each chart divides properties on the market by 0-90 (dark bars), 90-180 and 180+(light bars) days.
Listing Distribution by Time on Market
Solds Distribution by Time on Market
79% of all Sales are from listings on the market < 90 days, 14% 90-180 and 7% > 180 days
The vast majority of homes that sell are on the market for less than 90 days. A home on the market for over 90 days has only a 21% chance of selling. So for Sellers, if their home has been on the market for more than three months, it is time for a price or condition change. For Buyers, if they are bidding on a home that has been on the market for less than 90 days, expect some aggressive competition for the home.
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Friday, August 12, 2011
HUD Homes Explained.
HUD (US Department of Housing and Urban Development):
The largest number of government foreclosures can be found through HUD. HUD is a federal agency that implements housing policy and was created to increase homeownership across America.
Buying a HUD Home is Different than Buying Other Types of Homes
The procedures for pursuing a HUD home purchase are different than those used in buying other types of residential homes. HUD has made the procedure efficient and convenient.
Who can buy a HUD home?
HUD homes can be purchased by anyone. Homes may be purchased by owner-occupants (who have a priority bid period for 10 days), and by investors, who can then bid along with owner occupants. While many HUD homes are considered to be more affordable.
HUD homes are sold at market value.
HUD homes are initially priced for sale at the appraised market value. The buyer may offer any price, but HUD will only agree to offers that provide an acceptable return. Price reductions may take place later if the home does not sell.
Homes offered by HUD are sold "As Is".
It is important to understand that HUD homes are sold in "as is" condition. This means that the condition of the home when you see it is what you will be buying. HUD makes no warranties, does not guarantee the condition of any home, and does not verify that it complies with any local code or zoning requirements. You must make any necessary repairs after the purchase. HUD may make, or give you an allowance for, major system or safety repairs only if you are purchasing with an FHA-insured loan. It is very important that you get a Home Inspection by a licensed professional prior to closing on the sale.
Time limits are important and deadlines must be met.
Generally when you purchase another type of home, you can usually negotiate items within the contract over a period of time. When purchasing a HUD home, this is not possible. In order to be fair to all purchasers, HUD has imposed timetables that must be met or your bid or contract will be cancelled and the home returned to the market. Once your bid is acknowledged as the highest net to HUD, for example, your agent must send in a correct contract within 48 hours or the bid will be cancelled. Generally, closing must take place within 45-60 days.
How to find a HUD home.
As you search this website under 'available homes', you may find homes that have been identified as HUD homes. However, for a complete list in your area, request more information from a Real Estate One associate.
How to make an Offer on a HUD Home
All offers must be submitted by your broker through an electronic bidding process via the computer through the Internet. The electronic bids are stored in the computer system and, at the appropriate time, calculations are automatically performed to determine the apparent highest net offer to HUD.
After acknowledging the seemingly highest bid, HUD will notify the broker to send in a correct, signed sales contract within 48 hours of acceptance. If the contract is not received within 48 hours or is incorrect, the home will be returned to the market or acknowledged to the next highest bidder.
Initial Listing Period
The initial listing period, which is generally the first public listing for HUD homes, is 45 days. During this time, priority is given to owner-occupants who are buying the home as their primary residence. Priority is given for the first ten calendar days as follows:
All owner occupant offers received during the first five days of this initial period are considered to be received simultaneously. On the first business day after this period, these bids are reviewed to determine the highest acceptable offer to HUD.
If there is no acceptable bid, bids are reviewed on a daily basis for the remaining five days. Bids received at different times during the day will be considered received simultaneously, and the highest acceptable net bid will be acknowledged on the date opened. If the property remains unsold after ten days, it is made available to investors as well, and bids are reviewed on a daily basis. (Investor bids may be placed at any time but are not reviewed until the 11th day, if the property is still listed.)
An owner-occupant purchaser is defined as a purchaser who intends to use the property as his or her principal residence; a State, governmental entity, tribe, or agency thereof; or a private nonprofit organization. Governmental entities include those with general governmental powers (e.g., a city or county), as well as those with limited or special powers (e.g., public housing agencies).
Subsequent Listing Period
After the initial 45-day listing period, the subsequent listing period begins and runs for 90 days. During this time, properties are available to owner-occupants and investors. Bids are reviewed on a daily basis; bids received at different times during the day will be considered received simultaneously, and the highest acceptable bid will be acknowledged on the date opened. Price reductions may be made during this period. If the property remains unsold, it will continue to be listed.
Contract must be submitted within 48 hours
If your bid is acknowledged, your broker must submit a correct HUD Sales Contract, along with other required forms and Addendums signed by you, to HUD office within 48 hours. You may be required to submit proof of financing commitment or cash to close, along with other items. You should be working with your broker to put the required items in place before you bid on a home, so that you are ready when the time comes.
Closing on a HUD Home
Closings are generally within 45-60 days and held at the closing agent office. After your contract has been received correctly, it will be signed by HUD’s representative on behalf of HUD and returned to your agent along with a contract acceptance letter. The letter will give you up to 60 days to close. Once you are ready to close, you and your agent must schedule the date with the closing agent indicated on the letter, who also receives a copy of your contract. HUD’s representative does not set the closing date; it is up to you.
If you use the HUD closing agent, HUD pays their fees. You may use your own closing company, but then you must pay the fees. If you use your own closing company, they must work with the HUD agent on some legal items.
HUD will pay some closing and sales commission costs
Generally, HUD will pay up to a certain percentage of a broker's commission cost. In addition, HUD will pay up to a percentage for standard closing cost items (excluding the closing agent fee which is paid for separately). These items are designated by the buyer and may include discount points, loan fees, title costs, surveys, and other items. HUD will also generally pay any outstanding seller costs such as outstanding tax or utility bills which relate to HUD's ownership. You agent will know commission fees for your area.
Return of Earnest Money
There are specific requirements for earnest money deposits when purchasing a HUD property. When you submit a contract, you must deposit earnest money with your agent, usually in an amount of $500 or $1,000. If you know your transaction will not close, your agent must notify the management company as soon as possible so the home can be returned to the market. You may have to forfeit all or part of the earnest money if the sale does not close. If the sale is to an owner-occupant and does not close due to circumstances beyond their control, the money may be returned. Please review the earnest money policy for your area with your broker before you place a bid on a home.
Time Extensions
There are certain circumstances that may allow an extension of time. Extensions for time to close may be granted, in 15-day increments, under certain circumstances. Extensions may be granted at no cost to owner-occupants under certain circumstances that are beyond their control, such as a delay in financing approval that is not due to the buyer. Extension fees may be charged under other circumstances, and for investors. Extension requests must be submitted to the closing agent (not HUD) in writing prior to the expiration of the original closing date, and accompanied by a non-refundable fee, in certified funds, if a fee is required. Contact your closing agent for more information on this process.
Check out this video of HUD Homes now available in Michigan. These homes are featured in our Full color, full page Detroit Free Press ad this Sunday too!
The largest number of government foreclosures can be found through HUD. HUD is a federal agency that implements housing policy and was created to increase homeownership across America.
Buying a HUD Home is Different than Buying Other Types of Homes
The procedures for pursuing a HUD home purchase are different than those used in buying other types of residential homes. HUD has made the procedure efficient and convenient.
Who can buy a HUD home?
HUD homes can be purchased by anyone. Homes may be purchased by owner-occupants (who have a priority bid period for 10 days), and by investors, who can then bid along with owner occupants. While many HUD homes are considered to be more affordable.
HUD homes are sold at market value.
HUD homes are initially priced for sale at the appraised market value. The buyer may offer any price, but HUD will only agree to offers that provide an acceptable return. Price reductions may take place later if the home does not sell.
Homes offered by HUD are sold "As Is".
It is important to understand that HUD homes are sold in "as is" condition. This means that the condition of the home when you see it is what you will be buying. HUD makes no warranties, does not guarantee the condition of any home, and does not verify that it complies with any local code or zoning requirements. You must make any necessary repairs after the purchase. HUD may make, or give you an allowance for, major system or safety repairs only if you are purchasing with an FHA-insured loan. It is very important that you get a Home Inspection by a licensed professional prior to closing on the sale.
Time limits are important and deadlines must be met.
Generally when you purchase another type of home, you can usually negotiate items within the contract over a period of time. When purchasing a HUD home, this is not possible. In order to be fair to all purchasers, HUD has imposed timetables that must be met or your bid or contract will be cancelled and the home returned to the market. Once your bid is acknowledged as the highest net to HUD, for example, your agent must send in a correct contract within 48 hours or the bid will be cancelled. Generally, closing must take place within 45-60 days.
How to find a HUD home.
As you search this website under 'available homes', you may find homes that have been identified as HUD homes. However, for a complete list in your area, request more information from a Real Estate One associate.
How to make an Offer on a HUD Home
All offers must be submitted by your broker through an electronic bidding process via the computer through the Internet. The electronic bids are stored in the computer system and, at the appropriate time, calculations are automatically performed to determine the apparent highest net offer to HUD.
After acknowledging the seemingly highest bid, HUD will notify the broker to send in a correct, signed sales contract within 48 hours of acceptance. If the contract is not received within 48 hours or is incorrect, the home will be returned to the market or acknowledged to the next highest bidder.
Initial Listing Period
The initial listing period, which is generally the first public listing for HUD homes, is 45 days. During this time, priority is given to owner-occupants who are buying the home as their primary residence. Priority is given for the first ten calendar days as follows:
All owner occupant offers received during the first five days of this initial period are considered to be received simultaneously. On the first business day after this period, these bids are reviewed to determine the highest acceptable offer to HUD.
If there is no acceptable bid, bids are reviewed on a daily basis for the remaining five days. Bids received at different times during the day will be considered received simultaneously, and the highest acceptable net bid will be acknowledged on the date opened. If the property remains unsold after ten days, it is made available to investors as well, and bids are reviewed on a daily basis. (Investor bids may be placed at any time but are not reviewed until the 11th day, if the property is still listed.)
An owner-occupant purchaser is defined as a purchaser who intends to use the property as his or her principal residence; a State, governmental entity, tribe, or agency thereof; or a private nonprofit organization. Governmental entities include those with general governmental powers (e.g., a city or county), as well as those with limited or special powers (e.g., public housing agencies).
Subsequent Listing Period
After the initial 45-day listing period, the subsequent listing period begins and runs for 90 days. During this time, properties are available to owner-occupants and investors. Bids are reviewed on a daily basis; bids received at different times during the day will be considered received simultaneously, and the highest acceptable bid will be acknowledged on the date opened. Price reductions may be made during this period. If the property remains unsold, it will continue to be listed.
Contract must be submitted within 48 hours
If your bid is acknowledged, your broker must submit a correct HUD Sales Contract, along with other required forms and Addendums signed by you, to HUD office within 48 hours. You may be required to submit proof of financing commitment or cash to close, along with other items. You should be working with your broker to put the required items in place before you bid on a home, so that you are ready when the time comes.
Closing on a HUD Home
Closings are generally within 45-60 days and held at the closing agent office. After your contract has been received correctly, it will be signed by HUD’s representative on behalf of HUD and returned to your agent along with a contract acceptance letter. The letter will give you up to 60 days to close. Once you are ready to close, you and your agent must schedule the date with the closing agent indicated on the letter, who also receives a copy of your contract. HUD’s representative does not set the closing date; it is up to you.
If you use the HUD closing agent, HUD pays their fees. You may use your own closing company, but then you must pay the fees. If you use your own closing company, they must work with the HUD agent on some legal items.
HUD will pay some closing and sales commission costs
Generally, HUD will pay up to a certain percentage of a broker's commission cost. In addition, HUD will pay up to a percentage for standard closing cost items (excluding the closing agent fee which is paid for separately). These items are designated by the buyer and may include discount points, loan fees, title costs, surveys, and other items. HUD will also generally pay any outstanding seller costs such as outstanding tax or utility bills which relate to HUD's ownership. You agent will know commission fees for your area.
Return of Earnest Money
There are specific requirements for earnest money deposits when purchasing a HUD property. When you submit a contract, you must deposit earnest money with your agent, usually in an amount of $500 or $1,000. If you know your transaction will not close, your agent must notify the management company as soon as possible so the home can be returned to the market. You may have to forfeit all or part of the earnest money if the sale does not close. If the sale is to an owner-occupant and does not close due to circumstances beyond their control, the money may be returned. Please review the earnest money policy for your area with your broker before you place a bid on a home.
Time Extensions
There are certain circumstances that may allow an extension of time. Extensions for time to close may be granted, in 15-day increments, under certain circumstances. Extensions may be granted at no cost to owner-occupants under certain circumstances that are beyond their control, such as a delay in financing approval that is not due to the buyer. Extension fees may be charged under other circumstances, and for investors. Extension requests must be submitted to the closing agent (not HUD) in writing prior to the expiration of the original closing date, and accompanied by a non-refundable fee, in certified funds, if a fee is required. Contact your closing agent for more information on this process.
Check out this video of HUD Homes now available in Michigan. These homes are featured in our Full color, full page Detroit Free Press ad this Sunday too!
Thursday, August 04, 2011
Real Estate One's 1st to Know Program, A Year Later
A little over a year ago The Real Estate One Family of Companies rolled out a new program called "1st to Know". This program offers email, text and toll free capabilities to the public for access to up to the minute information on real estate listed by REALTORS in the state of Michigan. While some of the technology may be advanced for the average home hunter, the uses are limitless to have this kind of tool at our fingertips...For the public as well as the real estate professional.
I'd like to break down the program into parts and explain each:
1st to Know Text is for SMS/MMS enabled phones. You can text the word MYINFO to 59559 and follow the instructions to retrieve instant information on any home listed by a Realtor in the state of Michigan. It is like having the MLS in the palm of your hand. Standard text rates apply.
1st to Know Phone enables anyone with a cell phone to listen to details about any home and receive text messages and pictures. Dial 800-840-5555 -- Press 1 -- Enter the HOUSE NUMBER.
1st to Know Mobile offers http://www.mihome.mobi/. A mobile home search website for handheld devices. Also offered are apps for the iPhone and Android.
These tools are unrivaled by their efficiency and offer solutions from the beginner to the advanced technology user. When you sign up on our website, you may choose to connect your account with your Real Estate One Family agent so they can best serve you in your home search. We are happy to offer these tools and many others to anyone interested in Michigan Real Estate. Visit our website for full details: http://www.realestateone.com/.
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I'd like to break down the program into parts and explain each:
- Text
- Toll Free Call
- Mobile Web
1st to Know Text is for SMS/MMS enabled phones. You can text the word MYINFO to 59559 and follow the instructions to retrieve instant information on any home listed by a Realtor in the state of Michigan. It is like having the MLS in the palm of your hand. Standard text rates apply.
1st to Know Phone enables anyone with a cell phone to listen to details about any home and receive text messages and pictures. Dial 800-840-5555 -- Press 1 -- Enter the HOUSE NUMBER.
1st to Know Mobile offers http://www.mihome.mobi/. A mobile home search website for handheld devices. Also offered are apps for the iPhone and Android.
These tools are unrivaled by their efficiency and offer solutions from the beginner to the advanced technology user. When you sign up on our website, you may choose to connect your account with your Real Estate One Family agent so they can best serve you in your home search. We are happy to offer these tools and many others to anyone interested in Michigan Real Estate. Visit our website for full details: http://www.realestateone.com/.
Michigan Home Search
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Join Us On Facebook
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Saturday, July 30, 2011
Are YOU Ready to Buy a Home?
Getting Started
Buying a property can require a considerable amount of research and time. One of the keys to making the home-buying process easier and more understandable is planning. In doing so, you’ll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the home-buying process.
As you begin your search, keep in mind these key steps.
Step One: Determine if You Are Ready
One of the first questions to ask is whether you are ready to buy. If you are renting, some will tell you that your rent money is going down the drain, that you can pay close to the same for a house payment and actually make your money go toward something (equity or value in the home). While cost of renting vs. buying is a definite consideration, you should consider all aspects of home ownership to determine if now is the right time to buy.
Step Two: Loan Pre-Approval
Before you begin to seriously shop for a home, it makes sense to know your price range or just how much home you can afford. It is beneficial to find the amount of money you can borrow prior to your house search, otherwise you could be spending time and effort looking for a house that does not meet your affordability level. Often the first step a real estate agent will take is prequalify you for a loan. This might be a ballpark figure or estimate based on typical loan setups, or you may formally apply for a loan and become preapproved. You can enhance your buying power by getting pre-approved or pre-qualified.
Step Three: Make a Checklist for Buying
You’ll save yourself many hours of shopping if you narrow your home search and make a list in advance of the features you must have, would like to have, absolutely do not want and would prefer not to have. Start by using basic measures such as general location and affordability, then you can refine your search and focus on homes that offer the most desirable features.
Location is crucial. The choice of area or neighborhood depends on your own particular needs and tastes, some of the following may be important to consider: quality of schools, property values, safety, traffic, future development, and proximity to schools, hospitals, shopping, parks, beaches, theaters and other public amenities. A desirable location can make all the difference if you anticipate reselling the home within a few years.
Style of Home. Once you’ve settled on the “where” it’s time to consider what type of home. There’s a wide selection of homes out there — which is one is right for you? Depending on how much maintenance you want to do, how much privacy you need, or if you want something custom built to suit your particular tastes, each home type has its own features and benefits. Single family home, multi-family home, condominium, ready-to-move-in or fixer-upper, depending on the different stage of your life — whether you have children or are retiring — one type of home can be more attractive than the other.
Wants vs. Needs. Beyond determining number of bedrooms and baths, you search should focus on features which are absolute requirements and those amenities you’d like to have if possible. Homes meeting basic needs may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. Consider your priorities and if you can’t get a home at your price with all the features you want, then determine which features are the most important. Consider too, your needs in years to come.
Step Four: Search for Homes
With the abundant choice of housing options in the market today, the challenge becomes finding the property which best meets your needs. Consumers have access to more information today than ever before. The Internet has become a great resource for finding out about recent home sales prices, market trends, homes on the market, neighborhood/area statistics and the home-buying process.
We make it easy! Real Estate One offers home buyers the most efficient way to search homes in Michigan through 1st to Know. Register to receive automatic email alerts on properties that meet your specifications as they become available for sale. We also have a texting program, text "MYINFO" to 59559. The system will walk you through obtaining instant info on any listed home in the state of Michigan delivered straight to your smartphone.
The search can get complex so you should maintain a file with information on each of the homes you like. Rather than rely on memory, make notes about the homes you visit and review these to help you start narrowing down your choices.
Step Five: Choose a REALTOR(R)
Buyers are looking at a moving target in a marketplace that is never static. Researching recent sales and the price of properties on the market should give a good indication of property values and an understanding of the real estate market in the area which you are looking. It is important to know as much as possible about the choices in preferred markets and the best way to do that is by working closely with an experienced professional. A Real Estate One sales associates can help you through the home buying process from start to close. They can:
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Buying a property can require a considerable amount of research and time. One of the keys to making the home-buying process easier and more understandable is planning. In doing so, you’ll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the home-buying process.
As you begin your search, keep in mind these key steps.
Step One: Determine if You Are Ready
One of the first questions to ask is whether you are ready to buy. If you are renting, some will tell you that your rent money is going down the drain, that you can pay close to the same for a house payment and actually make your money go toward something (equity or value in the home). While cost of renting vs. buying is a definite consideration, you should consider all aspects of home ownership to determine if now is the right time to buy.
- Why do you want to buy?
- Do you know what your want?
- Are you planning to move to a new community due a lifestyle change or is buying an option not a requirement?
- What would you like in terms of real estate that you do not now have?
- Do you have a purchasing timeframe?
- Do you have the money? for financing? the downpayment? closing costs?
- Can you afford the costs of home ownership? maintenance?
- Have you weighed all of the pros and cons of home ownership?
Step Two: Loan Pre-Approval
Before you begin to seriously shop for a home, it makes sense to know your price range or just how much home you can afford. It is beneficial to find the amount of money you can borrow prior to your house search, otherwise you could be spending time and effort looking for a house that does not meet your affordability level. Often the first step a real estate agent will take is prequalify you for a loan. This might be a ballpark figure or estimate based on typical loan setups, or you may formally apply for a loan and become preapproved. You can enhance your buying power by getting pre-approved or pre-qualified.
Step Three: Make a Checklist for Buying
You’ll save yourself many hours of shopping if you narrow your home search and make a list in advance of the features you must have, would like to have, absolutely do not want and would prefer not to have. Start by using basic measures such as general location and affordability, then you can refine your search and focus on homes that offer the most desirable features.
Location is crucial. The choice of area or neighborhood depends on your own particular needs and tastes, some of the following may be important to consider: quality of schools, property values, safety, traffic, future development, and proximity to schools, hospitals, shopping, parks, beaches, theaters and other public amenities. A desirable location can make all the difference if you anticipate reselling the home within a few years.
Style of Home. Once you’ve settled on the “where” it’s time to consider what type of home. There’s a wide selection of homes out there — which is one is right for you? Depending on how much maintenance you want to do, how much privacy you need, or if you want something custom built to suit your particular tastes, each home type has its own features and benefits. Single family home, multi-family home, condominium, ready-to-move-in or fixer-upper, depending on the different stage of your life — whether you have children or are retiring — one type of home can be more attractive than the other.
Wants vs. Needs. Beyond determining number of bedrooms and baths, you search should focus on features which are absolute requirements and those amenities you’d like to have if possible. Homes meeting basic needs may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. Consider your priorities and if you can’t get a home at your price with all the features you want, then determine which features are the most important. Consider too, your needs in years to come.
Step Four: Search for Homes
With the abundant choice of housing options in the market today, the challenge becomes finding the property which best meets your needs. Consumers have access to more information today than ever before. The Internet has become a great resource for finding out about recent home sales prices, market trends, homes on the market, neighborhood/area statistics and the home-buying process.
We make it easy! Real Estate One offers home buyers the most efficient way to search homes in Michigan through 1st to Know. Register to receive automatic email alerts on properties that meet your specifications as they become available for sale. We also have a texting program, text "MYINFO" to 59559. The system will walk you through obtaining instant info on any listed home in the state of Michigan delivered straight to your smartphone.
The search can get complex so you should maintain a file with information on each of the homes you like. Rather than rely on memory, make notes about the homes you visit and review these to help you start narrowing down your choices.
Step Five: Choose a REALTOR(R)
Buyers are looking at a moving target in a marketplace that is never static. Researching recent sales and the price of properties on the market should give a good indication of property values and an understanding of the real estate market in the area which you are looking. It is important to know as much as possible about the choices in preferred markets and the best way to do that is by working closely with an experienced professional. A Real Estate One sales associates can help you through the home buying process from start to close. They can:
- Help you determine how much you can afford when purchasing a home, as well as recommend lenders and work with lenders on your behalf to prequalify you for a loan.
- Provide detailed information on all homes listed for sale in the Multiple Listing Service (MLS). While you can find houses on your own by searching online, looking through the real estate section of the newspaper or attending an open houses, an agent is the best source for complete information on all homes, including how long a home has been on the market, its features, the neighborhood and school system, and more.
- Help you narrow your search and arrange showings for houses of interest. By making note of what you like and dislike they can help you find the ideal match for your specific needs.
- Answer questions about the current market, interest rates and other home buying concerns. As your source for information, an agent can also refer you to other specialists whom you will need, including a home inspector or a lender.
- Negotiate on your behalf when you when you are ready to make an offer on a house. Your agent can assist you in determining exactly what to offer, not only in price but also in other factors affecting the purchase. The agent will write up the offer and present it to the seller’s agent.
- Guide you through the buying process making sure all of the necessary steps are completed, such as securing a loan, getting an inspection, completing a title search, and finalizing items right up to closing on the deal.
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Friday, July 29, 2011
6 Steps to Selling Your Home
Before you take any action to sell your home, take stock of your situation. Selling a home is an important matter and there should be good reason to sell. Look at the big picture and figure out why you want to sell — your reason can impact the negotiating process. Decide if your desire is worth the time, money and energy of selling, moving and buying again. Consider your options.
Once the decision to sell is made there are a number of matters you must cover before your property is officially made available for sale. The home-selling process typically starts several months prior to the “For Sale” sign going up.
First impressions count so the presentation of your property is critical in creating positive initial interest from potential buyers. It’s helpful to look at your home through the eyes of a prospective buyer and do all that is necessary to put it in its best light. A Real Estate One sales associate is uniquely skilled in helping sellers understand what to do to properly prepare your home for sale.
Step Two – Hiring a Realtor®
When you decide to sell your home you will need to decide whether you are going to sell your home through a real estate agent or on your own. While the end goal is essentially the same — the best possible sales price with the least amount of stress — each home sale transaction is different.
The process of selling a home is more complex than ever. Understanding all that’s involved in today’s real estate world requires experience and training — like the expertise of a Realtor®.
The key to a successful sale is choosing the right agent. Real Estate One’s sales professionals receive ongoing training in current regulations and market conditions and can help you get the best results. They can provide you with up-to-date information regarding prices, financing, marketing, and information about the housing market in general.
In choosing an agent to work with you should consider the reputation of the real estate agency, the sales agent’s track record in real estate, recent sales and knowledge of the area. When selling your home you want someone you can communicate openly with and trust. Be sure to ask a number of questions to ensure you are working with the right person to meet your needs.
Whether it be the first meeting or a follow up, have your information ready as well, including pertinent documents relating to your property: deed, mortgage payment information, tax bills and assessment information, homeowner’s association fees, any restrictive covenants, warranties on appliances, as well as other guarantee or legal documents.
When you hire a real estate agent to sell your property you will sign a contract called the agency agreement. This is a legally binding contract that authorizes the agent to act on your behalf in relation to the sale of your property.
The advantages of working with a real estate agent are numerous. An agent knows how to market, negotiate and sell homes and can coordinate the entire process. Throughout the sale an agent will act on your behalf providing you with advice and guidance to help you achieve the goals you set forth.
Step Three – Setting the Price
One of the most important decisions when selling your property is setting the price. Pricing is one of the variables, along with market conditions and interest rates, which will determine the final net proceeds from the sale of the house. The idea is to get the maximum price and the best terms during the window of time when your home is being marketed.
The actual price of your home will largely be determined by current market conditions. Because the real estate market is continually changing, and market fluctuations have an effect on property values, it is imperative to select your list price based on the most recent comparable sales in your area.
What is your home worth? The value of your house relates to local sales prices and is determined by what buyers have paid for the same type of property, with similar amenities, in your neighborhood, at the time.
Sales prices are also a product of supply and demand. A growing area with a limited housing supply will likely have prices that will rise, while the opposite is true of an area in less demand. Owner’s needs also have an impact on sales values. In a “must-sell” situation, the owner will have less leverage in the marketplace as buyers try to take advantage of the need to sell quickly.
Seller incentives, financing options and other factors can also be included when deciding price. What a seller “needs” should not be factored because that amount could drive the price beyond what the market will bear.
Because all transactions are unique there is flexibility in the marketplace. Knowing those limits is key. Remember that overpricing can hurt your chances for the best net proceeds. An experienced agent can help you set a realistic price, which will net you the highest possible return in the shortest amount of time.
In today’s market, your home is competing with a large amount of properties for sale. How do you make your home stand out and capture buyers’ attention?
Marketing plays a very important role in achieving a successful sale. Each home is unique so a carefully planned, well-executed marketing plan will bring the best result.
Selling can demand a variety of marketing strategies and Real Estate One uses a wide array of marketing tools and programs to find the right buyer for each property we list. Each marketing plan is specific to the individual home and is designed to get the best results.
Step Five – Selling It
Selling a home is a major event, one that involves an array of both personal and business concerns so when a buyer makes an offer it’s important to make the right decisions. Your sales associate can assist you in the bargaining process, offering advice and counsel as offers are received and by working closely with legal counsel, tax specialists and inspectors as required.
You will need carefully review any offer received, consider marketplace options and then determine whether that offer is acceptable. Is the offer at or near the asking price? Is it above the asking price? What is the alternative to the buyer’s offer and could there possibly be a better deal? If several offers are received do you choose the high offer from the purchaser with questionable finances who may not be able to close, or a somewhat lesser offer from a buyer with pre-approved financing?
Selling your home is inherently an emotional experience. Learn to detach yourself from the sale and look at offers as business proposals. Just as the buyer had three options in response to the owner’s original price and terms, the seller can now choose one of three reactions to the buyer’s offer.
1. You accept the buyer’s offer as is. The contract then becomes binding on both parties.
2. You reject the buyer’s offer.
3. You change the terms of the contract and counter-offer. It then will go back to the buyer who can either accept your counter-offer or walk away from the deal entirely.
The negotiation process may involve several rounds of counter-offers. Remember that all terms are negotiable. It’s sometimes argued that negotiation must produce one “winner” and one “loser.” Others suggest that a “win/win” situation is possible where each side gets something of value. Real estate bargaining typically involves compromises by both sides.
Step Six – Closing the Deal
Once both parties agree to the terms and sale price stated in the contract the selling process is not over yet. Some of the most complex aspects of a real estate transaction begin now.
Although not required in all states, you may want to require earnest money from the buyer. Earnest money is held in a neutral account called an escrow as a “good faith” or “security” deposit when entering into a contract with the seller. This cash deposit will be paid to the seller in the event the buyer fails to honor the contract. The deposit will be set aside as payment, or returned to the buyer if the seller doesn’t accept the contract terms. If both buyer and seller agree to the contract terms, and then the buyer breaches the contract, the earnest money is paid to the seller as compensation for potential losses the seller may have incurred.
A series of inspections and checks are typically required to satisfy buyers and lenders. Contracts routinely depend on the ability of a buyer to obtain financing, which is why most sellers prefer buyers with pre-approval letters from lenders.
Lenders will establish a number of conditions prior to granting a loan and will want a title exam, title insurance to protect against title errors, inspections, surveys and an appraisal to assure the home has sufficient value to secure the loan.
Closing — or “settlement” or “escrow” — is essentially a meeting where the closing agent (the party who conducts settlement) takes in money from the buyers, pays out money to the owner and makes sure that the purchaser’s title is properly recorded in local records along with any mortgage liens.
The closing agent reviews the sale agreement to determine what payments and credits the owner should receive and what amounts are due from the buyer. The closing agent also assures that certain transaction costs are paid (taxes and title searches).
In preparing to close, it is important to look at the sales agreement and review your obligations. All items agreed upon must be completed before closing.
The closing agent (escrow officer) will handle both the settlement papers and related documents, including title search, record disbursement, paper statements, and the payout of fees and other costs.
If the buyer changes their mind for any reason and breach the terms of the contract, the seller has the right to declare the contract null and void and retain any earnest money. The buyer may also be liable for any other financial damage suffered by the seller and the seller’s agent.
If you fail for any reason to complete the sale of your home according to the terms stated in the contract, the earnest money will be returned to the buyer and you as the seller may be liable for any financial damage.
Once everything is in order, with pen held firmly in hand you sign dozens of documents and as you put your signature on the final dotted line…your house is sold!
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Thursday, July 28, 2011
Michigan School Report Cards, MEAP Test Results and Resources
Resources for Michigan school information:
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- The 2009-2010 Michigan School Report Card spreadsheet can be accessed by clicking this link. Notice each tab outlining the year over year summary and the details for which schools and districts met or did not meet the Average Yearly Progress for 2009-2010 school year. The 2010-2011 reports have not been released yet but we’ll post them once they are.
- You can access Michigan’s MEAP site for all of the information about MEAP scoring in the Fall 2010. To understand what the tests contain and the scores mean you can reference the MEAP Fall 2010 Guide to Reports and this FAQ. You can download the reports but they are quite large or find your school and see their test results.
- GreatSchools.org is a terrific site for school information and parent reviews. Click here to see how Michigan Schools rate according to GreatSchools.org.
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Thursday, July 21, 2011
June 2011 Michigan Real Estate Market Report
Listening to the media reports can get you very confused about the direction of the Michigan real estate market. Most show the market continuing to decline. Much of that is a result of comparing this year, without the benefit of Tax Credits, with last year, which was artificially fueled by the Tax Credits. The market is certainly improving, but until May, had not improved enough to make up for the effect of those Credits. However, in both May and June, sales activity has picked up dramatically (shown by increased pending sales numbers and property showing appointments) and is at a pace to exceed last year's sales rate.
Southeast Michigan continues to lead the country in the housing recovery. That does not mean the market is jumping off the map, but we are seeing more sales activity than we had expected at this point in the recovery. Make no mistake, regardless of what you see in the media, the housing recovery has officially begun, to the best of our estimates it began coming off the bottom this winter. The question that time will answer is; is this current activity boost a long-term movement or the initial rush of water after the dam breaks? It is logical that after a five year hold back, there are thousands of consumers anxiously waiting to buyer or sell, so each step of positive economic movement will bring another bunch of buyers and/or sellers into the market.
What does all this mean for pricing and appreciation? As we have been saying all year, the first stage of recovery is increased activity and sales, the next is appreciation. We are seeing strong evidence that homes that are updated, in good condition and price competitively are selling for more than what they would have received last year. However, there are still plenty of homes in poor condition or with design obsolescence that are still requiring a discount to attract buyers, which continues to bringing the overall market average down.
The number of homes available for sale continues to fall, which will help push up home values, so as a seller, it is a great time to test the waters in terms of home value. For buyers, the market has moved away from the super discount deals, but home values, even for the best homes attracting multiple offers, are still at 14 year lows. For a buyer, with prices so low and interest rates seeming to be holding steady at near record lows it is easy to feel you can sit on the fence and wait. However, many buyers are finding that those perfect homes are selling in days so waiting will leave a buyer with mainly outdated and over priced homes to choose from.
For more positive news about Michigan and Detroit you might enjoy this article from the New York Times about the metro area. http://nyti.ms/iAPgCi
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Southeast Michigan continues to lead the country in the housing recovery. That does not mean the market is jumping off the map, but we are seeing more sales activity than we had expected at this point in the recovery. Make no mistake, regardless of what you see in the media, the housing recovery has officially begun, to the best of our estimates it began coming off the bottom this winter. The question that time will answer is; is this current activity boost a long-term movement or the initial rush of water after the dam breaks? It is logical that after a five year hold back, there are thousands of consumers anxiously waiting to buyer or sell, so each step of positive economic movement will bring another bunch of buyers and/or sellers into the market.
What does all this mean for pricing and appreciation? As we have been saying all year, the first stage of recovery is increased activity and sales, the next is appreciation. We are seeing strong evidence that homes that are updated, in good condition and price competitively are selling for more than what they would have received last year. However, there are still plenty of homes in poor condition or with design obsolescence that are still requiring a discount to attract buyers, which continues to bringing the overall market average down.
The number of homes available for sale continues to fall, which will help push up home values, so as a seller, it is a great time to test the waters in terms of home value. For buyers, the market has moved away from the super discount deals, but home values, even for the best homes attracting multiple offers, are still at 14 year lows. For a buyer, with prices so low and interest rates seeming to be holding steady at near record lows it is easy to feel you can sit on the fence and wait. However, many buyers are finding that those perfect homes are selling in days so waiting will leave a buyer with mainly outdated and over priced homes to choose from.
For more positive news about Michigan and Detroit you might enjoy this article from the New York Times about the metro area. http://nyti.ms/iAPgCi
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Tuesday, July 05, 2011
2011 Special Olympics Michigan Summer Sports Classic
Special Olympics of Michigan will host the 2011 State Summer Sports Classic on July 15th and 16th. The State finals for Softball will be held these days at the Canton Softball Complex with the Golf Competition on the 15th at Pine View Golf Course in Ypsilanti.
The Softball Competition will kick off Friday, July 15th with registration beginning at 2pm. The competition will begin at 4pm with dinner and Opening Ceremonies following then rounding out the night with a dance. The softball event and activities will continue at 8am on Saturday with a full day planned. Registration for the Golf competition will open at 8am on Friday, July 15th followed by the Opening Ceremony at 8:30am then competitions begin at 9:00.
There is a projected 1,000 participants in this event including Athletes, Coaches, Chaperones and Volunteers. It is always a great time that promises many memorable and heartfelt moments. If you would like to find out more or for volunteer opportunities please contact Duke Hynek at the Real Estate One Charitable Foundation. Please download the official flyer here.
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The Softball Competition will kick off Friday, July 15th with registration beginning at 2pm. The competition will begin at 4pm with dinner and Opening Ceremonies following then rounding out the night with a dance. The softball event and activities will continue at 8am on Saturday with a full day planned. Registration for the Golf competition will open at 8am on Friday, July 15th followed by the Opening Ceremony at 8:30am then competitions begin at 9:00.
There is a projected 1,000 participants in this event including Athletes, Coaches, Chaperones and Volunteers. It is always a great time that promises many memorable and heartfelt moments. If you would like to find out more or for volunteer opportunities please contact Duke Hynek at the Real Estate One Charitable Foundation. Please download the official flyer here.
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Wednesday, June 29, 2011
Calendar of Michigan Summer Events 2011
Below is a list of events throughout the state of Michigan. Most of the events have links that will take you to the event site to learn more info. If you have an event you'd like to add to the list please comment below.
I hope you find this list useful!
I hope you find this list useful!
Friday, June 17, 2011
May 2011 Metro Detroit Real Estate Market Update
It has been quite a while since the statement "things are remaining the same" was a good sign, but for Metro Detroit real estate it is. Available home inventories continue to decline and the rate of sales are holding near the same annualized pace as last year, with the average price per square foot on the rise. There certainly is a chance of a double dip market decline, but with the current buyer activity levels and reduced inventories, that does not appear likely.
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*Includes Hamtramck/Highland Park **Incl Eastpointe/Harper Woods ***Incl Grand Traverse, Antrim, Leelanau, Kalkaska, Benzie Counties
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Saleable listings and discounted bank owned properties are getting multiple offers and selling quickly. With so much activity focused on those segments, the best opportunity for bargains are homes that have been sitting on the market. Many are actually priced within their saleable range, but in outdated or poor condition. Using FHA 203K loans, a buyer can find a diamond in the rough, get a loan to cover the repairs and get a home at a great price.
For buyers, with the most popular homes selling in days, it is important to understand the rules of the road when working with competing offers.
• Be ready to move quickly
• Be pre-approved for your mortgage
• It is now officially OK to offer above asking price for the right home
• Be ready to bridge the gap between your agreed upon price and the appraised value (because the next guy will if you don't)
• Be sure to date and time stamp your various counter offers to ensure a backup offer does not slip in.
This average sale price trend chart shows that prices have for the most part stabilized. So for sellers, it is important to reinforce last month's suggestion that now is the best time to test the market if you are considering selling your home in the next 12-24 months.
I've heard an interesting economic theory recently, that the combined buying power of all of the former and current homeowners who are no longer paying their mortgage is the hidden growth engine driving our economic recovery. That may be exaggerated, but I don't think too far from the truth. Over the next few years, as those former homeowners repair their credit, there will be a large wave of additional buyers re-entering the market.
In company news, Real Estate One remains the most viewed broker website across the state according to the latest Hitwise report, giving sellers the best possible exposure among companies in Michigan. Also, the new features in our 1st to Know customer web portal are catching on as well. Sellers can follow up to five different markets, watching homes for sale, sold prices and market trends within each area. It is a great and quick way for both buyers and sellers to keep a pulse on their target market areas.
Source: MIRS, Realcomp, AABOR, TAAR
Months Supply Inventory is the current rate of sales to sell existing home inventory*Includes Hamtramck/Highland Park **Incl Eastpointe/Harper Woods ***Incl Grand Traverse, Antrim, Leelanau, Kalkaska, Benzie Counties
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May 2011 Michigan Real Estate Market Report
Tuesday, June 07, 2011
7th Annual Screen Door Open for Special Olympics
The 7th annual Screen Door Open golf outing to support Special Olympics Michigan is fast approaching. We will be teeing off on Tuesday, June 14th at Northville Hills Golf Club with dinner that evening. The event is always a great time, the weather is guaranteed to be wonderful and most of all, we will raise tons of funds for Special Olympics of Michigan.
The golf and dinner package is only $105 or dinner only for $40. We will have plenty of raffle prizes, silent auction items, course contest prizes and much more. We still have openings for both golf and/or dinner but we will likely sell out soon. If you would like to sign up online please go to: www.golfdigestplanner.com/17781-ScreenDoor.
If you have any questions or would like more information, please contact either Jeff Keoleian keoleian@realestateone.com 248-208-2909 or Dave Foess dfoess@relocationamerica.com 248-208-2980.
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Tuesday, May 24, 2011
April 2011 Michigan Real Estate Market Update by Dan Elsea
The April Michigan real estate market continued to show the strong activity level just as we had seen during the first quarter. The actual rate of sales on an annualized basis did slow however. It is too early to tell if that change is significant, it could have been weather related. Compared to last April, real estate sales in Michigan were off about 15%, but last April was a peak tax credit month, so a 15% decline is not as bad as it may seem and is certainly not unexpected. In most every metro Detroit real estate market we continue to see six year lows in the Months Supply of Inventory (MSI). The cause of this may be that some of the growth slow down from March to April was simply there were not enough salable homes available on the market to purchase.
Even though home values appear to be strengthening, Sellers will still need to set their prices based on the most current sales activity. A home that was on the market last year at $75,000 over the then current market will still be overpriced today. Home values are bouncing off the bottom of actual comparable sales, not what the asking prices have been. We don't expect prices to jump dramatically (tough appraisal standards will keep a check on that) but there could be some nice bidding wars for well priced and conditioned homes bringing prices off their bottoms from last year.
Another thing to keep in mind is that buyers are still being very picky. Homes that are not updated or in great condition are still sitting on the market or going for below asking price. If possible, a Seller might consider using a FHA 203K rehab loan as a refinance to help fund their updates for a more salable home.
Lately there has been an issue that has gotten some press called the MERS (Mortgage Electronic Registration System) foreclosure problem. The core issue is the willingness for title insurance companies to write a title policy on bank owned homes that used MERS in their foreclosure process. It is too early to tell if this will be a significant issue but there have been a few banks that have taken their homes off the market until they can determine their title insurance status. It may have the effect of squeezing the available home inventory even further and in some cases causing a postponing or canceling of a sale if title insurance cannot be provided to the buyer. For current Sellers it would be a good idea to have your old title policy handy just in case there was a MERS foreclosure in your title history.
Great advice is to be sure you've done your homework prior to an appraisal. Research your comps, including pending sales and be prepared to walk through them with the appraiser at the property. With so many of our strong listings selling at or even above list price, appraisers will find it tough to keep up with the market without our help. Also, it is a great idea to council Home Buyers on the most active listings that they will need to make up the difference between the agreed price and the appraised value if they want to win the bidding war on the home.
It is tough to tell just how much of the increasing activity could be a temporary spike vs. a permanent market uptick. We are certainly one of the strongest real estate markets in the country. Regardless of which it might be, the strong activity makes this the best time to have your home on the market since 2005! So for anyone who is considering selling their home in the next 12 months, act now and act fast. Demand is rising, inventories are low as are interest rates.
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Even though home values appear to be strengthening, Sellers will still need to set their prices based on the most current sales activity. A home that was on the market last year at $75,000 over the then current market will still be overpriced today. Home values are bouncing off the bottom of actual comparable sales, not what the asking prices have been. We don't expect prices to jump dramatically (tough appraisal standards will keep a check on that) but there could be some nice bidding wars for well priced and conditioned homes bringing prices off their bottoms from last year.
Another thing to keep in mind is that buyers are still being very picky. Homes that are not updated or in great condition are still sitting on the market or going for below asking price. If possible, a Seller might consider using a FHA 203K rehab loan as a refinance to help fund their updates for a more salable home.
Lately there has been an issue that has gotten some press called the MERS (Mortgage Electronic Registration System) foreclosure problem. The core issue is the willingness for title insurance companies to write a title policy on bank owned homes that used MERS in their foreclosure process. It is too early to tell if this will be a significant issue but there have been a few banks that have taken their homes off the market until they can determine their title insurance status. It may have the effect of squeezing the available home inventory even further and in some cases causing a postponing or canceling of a sale if title insurance cannot be provided to the buyer. For current Sellers it would be a good idea to have your old title policy handy just in case there was a MERS foreclosure in your title history.
Great advice is to be sure you've done your homework prior to an appraisal. Research your comps, including pending sales and be prepared to walk through them with the appraiser at the property. With so many of our strong listings selling at or even above list price, appraisers will find it tough to keep up with the market without our help. Also, it is a great idea to council Home Buyers on the most active listings that they will need to make up the difference between the agreed price and the appraised value if they want to win the bidding war on the home.
It is tough to tell just how much of the increasing activity could be a temporary spike vs. a permanent market uptick. We are certainly one of the strongest real estate markets in the country. Regardless of which it might be, the strong activity makes this the best time to have your home on the market since 2005! So for anyone who is considering selling their home in the next 12 months, act now and act fast. Demand is rising, inventories are low as are interest rates.
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Tuesday, May 17, 2011
Understanding Real Estate Representation
By: G. M. Filisko
Published: March 29, 2010
Whether you’re buying or selling, it’s important to choose representation that meets your needs in the transaction.
1. Buyer’s agency
When you’re buying a home, you can hire an agent who represents only you, called an exclusive buyer’s representative or agent. A buyer's agent works in your best interest and owes you a fiduciary duty. You can pay your buyer’s agent yourself, or ask the seller, or the seller’s agent, to pay your agent a share of their sales commission.
If you’re selling your home and hiring an agent to list it exclusively, you’ve hired a selling representative--an agent who owes fiduciary duties to you. Typically, you pay a selling agent a commission at closing. Selling agents usually offer or agree to pay a portion of their sales commission to the buyer’s agent. If your seller’s agent brings in a buyer, your agent keeps the entire commission.
2. Subagency
When you purchase a home, the agent you can opt to work with may not be your agent at all, but instead may be a subagent of the seller. In general, a subagent represents and acts in the best interest of the sellers and sellers' agent.
If your agent is acting as a subagent, you can expect to be treated honestly, but the subagent owes loyalty to the sellers and their agent and can't put your interests above those of the sellers. In a few states, agents aren't permitted to act as subagents.
Never tell a subagent anything you don’t want the sellers to know. Maybe you offered $150,000 for a home but are willing to go up to $160,000. That’s the type of information subagents would be required to pass on to their clients, the sellers.
3. Disclosed dual agency
In many states, agents and companies can represent both parties in a home sale as long as that relationship is fully disclosed. It’s called disclosed dual agency. Because dual agents represent both parties, they can’t be protective of and loyal to only you. Dual agents don’t owe all the traditional fiduciary duties to clients. Instead, they owe limited fiduciary duties to each party.
Why would you agree to dual agency? Suppose you want to buy a house that’s listed for sale by the same real estate brokerage where your buyer’s agent works. In that case, the real estate brokerage would be representing both you and the seller and you’d both have to agree to that.
Because there’s a potential for conflicts of interest with dual agency, all parties must give their informed consent. In many states, that consent must be in writing.
4. Designated agency
A form of disclosed dual agency, “designated agency” allows two different agents within a single firm to represent the buyer and seller in the same transaction. To avoid conflicts that can arise with dual agency, some managing brokers designate or appoint agents in their company to represent only sellers, or only buyers. But that isn't required for designated agency. A designated, or appointed, agent will give you full representation and represent your best interests.
5. Nonagency relationship
In some states, you can choose not to be represented by an agent. That's referred to as nonagency or working with a transaction broker or facilitator. In general, in nonagency representation, the real estate professional you work with owes you fewer duties than a traditional agency relationship. And those duties vary from state to state. Ask the person you’re working with to explain what he or she will and won't do for you.
G.M. Filisko is an attorney and award-winning writer who zealously protected her clients’ interests as a lawyer. A frequent contributor to many national publications, including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.
“Visit Houselogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®."
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Published: March 29, 2010
Whether you’re buying or selling, it’s important to choose representation that meets your needs in the transaction.
1. Buyer’s agency
When you’re buying a home, you can hire an agent who represents only you, called an exclusive buyer’s representative or agent. A buyer's agent works in your best interest and owes you a fiduciary duty. You can pay your buyer’s agent yourself, or ask the seller, or the seller’s agent, to pay your agent a share of their sales commission.
If you’re selling your home and hiring an agent to list it exclusively, you’ve hired a selling representative--an agent who owes fiduciary duties to you. Typically, you pay a selling agent a commission at closing. Selling agents usually offer or agree to pay a portion of their sales commission to the buyer’s agent. If your seller’s agent brings in a buyer, your agent keeps the entire commission.
2. Subagency
When you purchase a home, the agent you can opt to work with may not be your agent at all, but instead may be a subagent of the seller. In general, a subagent represents and acts in the best interest of the sellers and sellers' agent.
If your agent is acting as a subagent, you can expect to be treated honestly, but the subagent owes loyalty to the sellers and their agent and can't put your interests above those of the sellers. In a few states, agents aren't permitted to act as subagents.
Never tell a subagent anything you don’t want the sellers to know. Maybe you offered $150,000 for a home but are willing to go up to $160,000. That’s the type of information subagents would be required to pass on to their clients, the sellers.
3. Disclosed dual agency
In many states, agents and companies can represent both parties in a home sale as long as that relationship is fully disclosed. It’s called disclosed dual agency. Because dual agents represent both parties, they can’t be protective of and loyal to only you. Dual agents don’t owe all the traditional fiduciary duties to clients. Instead, they owe limited fiduciary duties to each party.
Why would you agree to dual agency? Suppose you want to buy a house that’s listed for sale by the same real estate brokerage where your buyer’s agent works. In that case, the real estate brokerage would be representing both you and the seller and you’d both have to agree to that.
Because there’s a potential for conflicts of interest with dual agency, all parties must give their informed consent. In many states, that consent must be in writing.
4. Designated agency
A form of disclosed dual agency, “designated agency” allows two different agents within a single firm to represent the buyer and seller in the same transaction. To avoid conflicts that can arise with dual agency, some managing brokers designate or appoint agents in their company to represent only sellers, or only buyers. But that isn't required for designated agency. A designated, or appointed, agent will give you full representation and represent your best interests.
5. Nonagency relationship
In some states, you can choose not to be represented by an agent. That's referred to as nonagency or working with a transaction broker or facilitator. In general, in nonagency representation, the real estate professional you work with owes you fewer duties than a traditional agency relationship. And those duties vary from state to state. Ask the person you’re working with to explain what he or she will and won't do for you.
G.M. Filisko is an attorney and award-winning writer who zealously protected her clients’ interests as a lawyer. A frequent contributor to many national publications, including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.
“Visit Houselogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®."
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