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.

• 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? 

Whether you decide to take the step to home ownership, the more you know about your financial capabilities and the real estate market, the more likely you are to effectively define your goals.

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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6 Steps to Selling Your Home

Step One: Preparing to Sell Your House
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.

Step Four – Marketing Your Home
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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Michigan School Report Cards, MEAP Test Results and Resources

Resources for Michigan school information:

• 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.
  

The updated links to the MEAP and AVP reports as soon as they are released.



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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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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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