COVID-19 & The Return to Real Estate

Posted by admingg in Buying a Home, Featured Property, Local Experts, Mortgage Info, New Construction, Pre-Market Opportunities, Real Estate, Selling a Home, Short Sale & Foreclosure, Uncategorized

Governor Whitmer Eliminates Remaining Real Estate Limitations and Reopens Much of the State.

Today, Governor Gretchen Whitmer signed Executive Order 2020-110, rescinding her “Safer at Home” Order, and moving the entire state to phase four of the MI Safe Start Plan. This action removes most of the restrictions that real estate brokerages and clients have been operating under. As we reported last week, Michigan Realtors® was working with the Governor’s Office to remove the previously imposed real estate restrictions. Effective immediately, the following real estate activity is now permitted:

• Private showings are no longer limited to 4 individuals on the property;
• Open Houses are now permitted. However, as an enclosed public space rather than a private showing, masks should be required for those individuals participating. Participants should also adhere to existing 6-feet social distancing requirements;
• Tenant-occupied property may now be shown subject to any requirements under the current lease;
• Short-term rental properties may now be marketed without any state-imposed limitation. However, local restrictions may still be in force.

While many restrictions have been removed, the continued implementation of best practices geared toward Realtor® and client/customer safety remain important. These include:

1. Asking sellers to turn on all of the lights and leave interior doors, drapes and blinds open.  This will ensure that anyone entering the home will not need to touch the light switches and doorknobs throughout the home;
2. Asking sellers to clean and disinfect all frequently touched surfaces prior to and after the showing or open house;
3. Meeting clients at the home rather than driving together to the showing;
4. Encouraging the use of masks and gloves for private showings;
5. Asking buyers to refrain from touching any surfaces in a home (including light switches and interior doorknobs).  Do not share phones, pens or tablets.

Today’s order also makes clear that real estate offices that are open for business must continue to follow the Governor’s workplace rules contained in an earlier order.  (Executive Order 2020-97, available here.)  The rules for offices cover written policies that must be put in place, day-to-day safety measures, as well as procedures to be followed in the event of possible Covid-19 exposure. We had previously provided Realtors® with a summary of these rules. (Available here.)

As always, please visit https://mirealtors.com/Industry-Resources for regular updates.

Selling? Skip Remodelling

Posted by admingg in Featured Property, Local Experts, Pre-Market Opportunities, Real Estate, Selling a Home, Uncategorized

5 Nonlazy Reasons to Skip Remodeling Before You Sell

Home sellers often hear that if they ever hope to find a buyer, they must whip their house into perfect shape—fix this, paint that, overhaul your horribly outdated kitchen. But just looking at the list of renovations is exhausting!

This leads many to wonder: Do I really need to do all that just to sell my home?

If that’s how you feel, here’s some good news: There actually are some good reasons—meaning reasons other than sheer laziness or lack of budget—to not bother renovating before you sell. Really.

1. You can’t read your buyers’ minds

Talia McKinney, a licensed real estate salesperson for Nest Seekers International in Brooklyn, NY, once had a seller who updated her kitchen floors and countertops and splurged on high-end, stainless-steel appliances in the hopes of getting more money for her sale.

Unfortunately, “the buyer who got into contract wanted a different color floor, different countertops, and black matte appliances. They basically wanted to rip out and change everything my seller just renovated,” says McKinney.

The moral of this story: Don’t assume you know what can drive a potential sale.

“When a buyer comes into a home, they have a vision of what they want. Just because something is new and renovated doesn’t mean they’ll pay a premium on that,” McKinney says. “Leave the property as is or do minor touch-ups rather than put a lot of money into upgrades.”

2. Renovate on the cheap, and it’ll show

It’ll make a difference all right—but not for the reason you may think.

“Every time I walk with a buyer through a home that has laminate floors, Home Depot light fixtures and vanities, or cheap cabinets, there is a visceral disappointment factor—an ‘Add that to the list of things I need to budget for once we close,'” admits Courtney Poulos, broker-owner of ACME Real Estate in Los Angeles.

“Rarely does the cost of any home renovation increase the value of the property enough to offset the renovation costs, time, and energy,” says Terrie O’Connor, broker and president of Terrie O’Connor Agency, which handles luxury real estate listings in Saddle River, NJ, and other towns.

3. Small upgrades won’t change the house itself

“I have seen instances in which a flipper buys a cute, little house that needs work, and thinks that just by some painting, tiling, and a new builder-grade kitchen, they can sell the house for two-thirds more than they paid,” says Lori Hoffman-Chlapowski, a licensed real estate broker for William Raveis Real Estate in Chappaqua, NY.

They seldom do, she says. “The house is still small, and buyers are keenly aware when a renovation is cheaply done.”

And so, the property sits on the market. Until, she adds, “the seller can finally find a buyer willing to pay just a bit more than the renovation itself cost.”

4. Taking the DIY route might make things worse

Jose Hernandez, a real estate consultant in Chicago, once had sellers forgo professional contractors and redo bathrooms themselves to save money.

“But while the tile and vanity were new, it was all improperly installed,” he remembers.

Cheap repairs don’t add value, Hernandez cautions. Rather, “sometimes they negatively affect the value because the buyer sees it as another project that has to be redone.”

5. You might end up going overboard

First, you fix the floor. Then you realize the kitchen cabinets need to be replaced. And the countertops. And the sink. And, hell, you might as well do the appliances, too. Once you start fiddling with stuff in your kitchen (or bathroom, or any other room of your house), you may realize you keep finding more and more stuff that needs to be (cheaply and quickly) redone.

“I’ve seen plenty of clients overspend or design too specifically and then net less money than they would have if they had just sold the home in its prerenovation condition,” says Mark Cianciulli, a Realtor and a co-founder of the CREM Group, in Los Angeles.

And while a full renovation can return you a lot of money when you sell, there’s no guarantee. And by the way, did you really mean to do a full renovation?

What you should do instead

Want to get your house ready to sell without going overboard? Here’s how to tread that fine line.

Take care of major problems: First things first, “fix any maintenance issues that might prevent a future buyer from getting financing,” says Amine Aghzafi, managing partner and real estate agent with the Sheehan Agency, in Jupiter, FL.

If your roof, water heater, or plumbing are ancient, consider replacing those items before they cause issues at inspection time.

Not sure of your home’s problem areas? “Consider having a presale inspection before putting the house on the market,” says Aghzafi. “This will bring to light any major points that need addressing and help prioritize costs if your budget is limited.”

Go for truly easy DIY upgrades: Swap out old light fixtures, switch out new handles on your kitchen cabinets, and paint the trim in your home to instantly improve the contrast with the current paint. These are all “inexpensive upgrades that add significant value to your home and will cost a fraction of a full or partial remodel,” Cianciulli says.

Stage your home: Home stagers systematically pack up your personal items, clear out your clutter, and rearrange (or remove) furniture to optimize your home’s flow. Then they bring in their own gorgeous furniture and accessories.

“The proper furnishings showcase the home’s best features, while drawing attention away from any negatives,” says O’Connor. “It creates a mood for the buyer.”

A staged home will also shine in the online listing, which is crucial.

“Buyers today are getting that big first impression of a property long before they physically see it,” says O’Connor.

Choose a price buyers can live with: “Price your home in a way that allows buyers to accommodate making personal choices,” says Poulos. “Some buyers really want to put their own stamp on their new home.”

Published on Realtor.com | written by Stephanie Booth

6 Things That Turn Buyers Off

Posted by admingg in Buying a Home, Local Experts, Real Estate, Selling a Home, Uncategorized

…and What Sellers Can Do To Prevent It!

We’ve talked about surprising home features buyers LOVE, and about why buyers aren’t biting on today’s market, despite it being highly affordable.  But we haven’t talked much about the characteristics of sellers, listings and homes that turn buyers all the way off.  Well, not until now!

Here are 6 big-time homebuyer turn-offs that make buyers cringe at the thought of your home, and action steps you can take to prevent your home from being an offender:

1. Stalker-ish sellers. I know you think you’re being helpful, walking the buyer through your home and pointing out the wagon-wheel light fixture you made with your own two hands, the custom mural of a stingray you paid top dollar to have painted across your living room wall and the way the sounds of happy schoolchildren running across the front yard of your corner lot to get to the school in the next block lifts your spirits.  However, the buyers might be trying really hard to ignore, minimize or figure out how to undo the very features of your home you hold dear.  They also may want or need to have personal space and conversations with their mate or their agent while they’re viewing your home – you being there, especially walking right alongside them while they’re in your home, prevents them from being comfortable about doing this, or discussing all the things they would change if the home were theirs. In my experience, the more nitpicky a buyer gets about a house and the more detailed their list of things they would change, the more serious they are about considering making an offer on this place.What’s a Seller to do? Back off. Let your home be shown vacant, or leave the house when people come to see it.  If you need to be there, at least walk outside or go sit at the coffee shop down the way while prospective buyers view your home.  If the buyers have questions, their people will contact your people.
2. Shabby, dirty, crowded and/or smelly houses.  You already know this one. Yet, buyers constantly marvel. The buyers who come to see your home are making the decision whether to choose your home for the biggest purchase they’ve ever made during the worst economic conditions most of them have ever experienced.  Your job is to get your home noticed – favorably – above the sea of other homes on the market, many of which are priced very, very low.What’s a Seller to do?  Other than listing your home at a competitive price, the only tool within your control for differentiating your home from all the foreclosures and short sales is to show it in tip-top shape. Pre-pack your place up, getting rid of as many of your personal effects as possible. Do not show it without it being completely cleaned up: no laundry or dishes piled up, countertops freshly washed, smelly dogs (I have a couple who smell on occasion – no judgment – but don’t show your house with pet odors) or litter boxes cleaned and/or out of the house.
3. Irrational seller expectations (i.e., overpricing). Buying a house on today’s market is hard work!  On top of all the research and analysis about the market and situating their own lives to be sure they’ll be able to afford the place for 5, 7, 10 years – or longer, buyers have to work overtime to separate the real estate wheat from the chaff, get educated about short sales and foreclosures and often put in many, many offers before they get even a single one accepted.  The last thing they want to add to their task lists is trying to argue a seller out of unreasonable expectations or pricing.  And, in fact, there are so many other homes on the market, buyers don’t have to do this.  When they see a home whose seller is clearly clueless about their home’s value and has priced it sky-high, most often they won’t bother even looking at it.  If they love it, they’ll wait for it to sit on the market for awhile, hoping the market will “educate you” into desperation, priming the pump for a later, lowball offer.What’s a Seller to do? Get real. Get out there and look at the other properties that are for sale in your area and price range. Get multiple agents’ take on what your home should be listed at, and don’t take it personally if their recommendation is low. If your home has much less curb appeal or space or is much less upgraded than the house across the way, don’t list it at the same price and expect it to sell. If you owe more than your home is realistically worth, you may need to reexamine whether you really want or need to sell, or consider a short sale, if you simply have to sell.  Don’t be tempted into testing your market with an obviously too-high price, unless you’re prepared to have your home lag on the market and get lowball offers.
4. Feeling misled. Here’s the deal.  You will never trick someone into buying your home. If the listing pics are photo-edited within an inch of their lives, or your home is described as an “approved” short sale when, in fact, the bank approved another offer, now withdrawn, but will require a new offer to go through any sort of approval process (even a truncated one), buyers will learn this information at some point.  If your neighborhood is described as funky and vibrant, as code for the fact that your house is under the train tracks and you live in between a wrecking yard and a biker bar, prospects will figure this out.  If the detailed information about your home, neighborhood or even transactional position (e.g., short sale status, seller financing, etc.) is misrepresented, the sheer misrepresentation will turn otherwise interested buyers off.  If you authorize your agent to “verbally approve” the buyer’s offer, don’t go back the next day demanding an extra $5,000. In cases where the buyer feels misled, whether or not that was your intention, running through the buyer’s mind is this question: If they can’t trust you to be honest about this, how can they trust you to be honest about everything else?What’s a Seller to do? Buyers rely on sellers to be upfront and honest – so be both.  If your home has features or aspects that are often perceived negatively, your home’s listing probably shouldn’t lead with them (like the ad I recently saw with the intro line: “this place is a mess!”), but neither should you go out of your way to slant or skew or spin the facts which will be obvious to anyone who visits your home.  Make sure you know what the listing of your home reads like, before it’s published to the web, and that a prospective buyer will not feel misled by it.
5. New, ugly home improvements.  Many a buyer has walked into a house that has clearly been remodeled and upgraded in anticipation of the sale, only to have their heart sink with the further realization that the brand-spanking-new kitchen features a countertop made, not of Carerra marble, but brand-new, pink tiles with a kitty cat in the middle of each one (I saw this once, people – no joke).  Or the pristine, just-installed floors feature carpet in a creamy shade of blue – the buyer’s least favorite color.  New home improvements that run totally counter to a buyer’s aesthetics are a big turn-off, because in today’s era of Conspicuous Frugality, buyers just can’t cotton to ripping out expensive, brand new, perfectly functioning things just on the basis of style – especially since they’ll feel like they paid for these things in the price of the home.What’s a Seller to do? Check in with a local broker or agent before you make a big investment in a pre-sale remodel.  They can give you a reality check about the likely return on your investment, and help you prioritize about which projects to do (or not).  Instead of spending $40,000 on a new, less-than-attractive kitchen, they might encourage you to update appliances, have the cabinets painted and spend a few grand on your curb appeal.  Many times, they will also help you do the work of selecting neutral finishes that will work for the largest possible range of buyer tastes.
6. CRAZY listing photos (or no photos at all).  Online, we’ve seen listing photos that have dumpsters parked in front of the house, piles of laundry all over the “hardwood” floors touted in the listing description, and once, even the family dog doing his or her business in the lovely green front yard.  Listing pictures that have put your home in anything but its best, accurate light are a very quick way to ensure that you turn off a huge number of buyers from even coming to see your house!   The only bigger buyer turn-off than these bizarre listing pics are listings that have no photos at all; most buyers on today’s market see a listing with no pictures and click right on past it, without giving the place a second glance.

What’s a Seller to do?  Check your home’s listing online to make sure that the pics represent your home well.  If not, ask your agent to grab some new shots and get them online.

What Affects Mortgage Rates?

Posted by admingg in Buying a Home, Local Experts, Mortgage Info, Real Estate, Uncategorized

Your mortgage rate depends on your own financial portfolio and the home you plan to buy. But that’s not all. Mortgage rates also reflect movements in the U.S. housing market and the global economy — which is why they’re in constant flux.

• Economy – The global financial picture drives all interest rates, including mortgage rates
• Lender pipeline – The amount of business a lender is currently processing can impact their rates
• Property location – State laws can drive up lender costs or keep them down
• Home use – Primary residence, vacation home, or rental?
• Property type – Single-family, multi-family, condo, mobile, co-op, etc.
• Loan-to-value – Borrowing less (and putting more down) gets you a better rate
• Credit score – Better credit means a lower interest rate
• Loan features – Term, documentation, rate adjustment, interest-only payments, etc.
• Points – Paying more up front for “discount points” lowers your rate
• Loan amount – Very high or very low loan amounts can mean higher rates

The lowest advertised mortgage rate will probably apply to you if you have a low loan-to-value ratio and great credit. Everyone else will be subject to risk-based pricing adjustments.

You’ll only know what your rate is by getting a custom mortgage quote from a lender based on your unique borrower profile. And, typically better personal service from a local mortgage broker that will give you personal service with local interest in the community – they have more to lose if they do a bad job!!!

Taking control of mortgage rate factors

You can’t control many of the things that impact your mortgage rate. (Unless, maybe, you’re the president of the Federal Reserve or POTUS.)

The good news is that the variables you can control have the most impact on your rate. They are:

• Property type — If deciding between two homes, incorporate the relative cost of financing when comparing them
• Loan-to-value (LTV) — Putting more money down improves your chances of loan approval, cuts your loan fees and gets you a lower mortgage insurance rate (if applicable)
• Credit score — It may be worth it to put off buying a home and concentrate on raising your FICO score for a lower rate
• Loan features — Choosing a loan with a shorter fixed-rate period, or one with a 15-year amortization instead of a 30-year term can save you a lot in interest
• Points — You can buy a lower interest rate by paying more up front, if you have expendable cash on hand
• Loan amount — It might be smarter to get a conforming first mortgage with a purchase-money second mortgage than taking out a more-expensive jumbo home loan

By understanding the factors you can and can’t control, you can get your best mortgage rate when you buy or refinance a home.

HUD FHA Condo Financing

Posted by admingg in Local Experts, Mortgage Info, Real Estate, Retirement, Selling a Home, Uncategorized

HUD Announces New FHA Condo Financing Rules!

The U.S. Department of Housing and Urban Development is expected to release updated guidance tomorrow on FHA-insured condominium financing. The new rules should benefit your real estate clients and customers by allowing more buyers to obtain low down-payment mortgages on affordable housing options.

Specifically, the new rules will:

• Extend FHA certifications on condo developments from two years to three years, reducing the compliance burden on condo boards.
• Allow for single-unit mortgage approvals—often known as spot approvals—which will enable FHA insurance of individual condo units, even if the property does not have FHA approval.
• Secure additional flexibility in the ratio of investors to owner-occupants allowed for FHA financing in a condo building.

The full guidance will go into effect in mid-October, 60 days from publication.

“Condominiums are often the most affordable option for first time home buyers, small families, and those in urban areas,” said NAR President John Smaby, in a statement issued to the media Wednesday morning. “We are thrilled that (HUD) Secretary (Ben) Carson has taken this much-needed step to put the American dream within reach for thousands of additional families.”

Since 2008, NAR has championed policy changes in condo lending. NAR has sought rules that would allow the owner-occupancy level to be determined on a case-by-case basis and that would extend the approval period for project certification to five years.

NAR’s existing-home sales report for June showed condominium and co-op sales at a seasonally adjusted annual rate of 580,000 units, a decline of 3.3% from May and 6.5% from June 2018. With more than 8.7 million condo units nationwide, only 17,792 FHA condo loans have been originated in the past year.

“This ruling, which culminates years of collaboration between HUD and NAR, will help reverse recent declines in condo sales and ensure the FHA is fulfilling its primary mission to the American people,” Smaby said.

The full rule for single-family condo financing is scheduled to be published in the Federal Register on Aug. 15, 2019, and available online at https://federalregister.gov/d/2019-17213, and on govinfo.gov.

Housing Affordability

Posted by admingg in Buying a Home, Mortgage Info, Real Estate, Selling a Home, Short Sale & Foreclosure, Uncategorized

The Ultimate Truth About Housing Affordability