When you are selling your home, whether it is For Sale by Owner or traditionally with a real estate agent/Realtor, you will have to understand the offers presented to you and the financing they have been approved for. Each type of financing can be different, and each have their pros and cons. Let us look at an VA loans.

A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). The program is for American veterans, military members currently serving in the U.S. military, reservists and select surviving spouses (provided they do not remarry) and can be used to purchase single-family homes, condominiums, multi-unit properties, manufactured homes and new construction. The VA does not originate loans, but sets the rules for who may qualify, issues minimum guidelines and requirements under which mortgages may be offered and financially guarantees loans that qualify under the program.

The basic intention of the VA home loan program is to supply home financing to eligible veterans and to help veterans purchase properties with no down payment. The loan may be issued by qualified lenders.

The VA loan allows veterans 103.3 percent financing without private mortgage insurance (PMI) or a 20 percent second mortgage and up to $6,000 for energy efficient improvements. A VA funding fee of 0 to 3.3% of the loan amount is paid to the VA; this fee may also be financed, and some may qualify for an exemption. In a purchase, veterans may borrow up to 103.3% of the sales price or reasonable value of the home, whichever is less. Since there is no monthly PMI, more of the mortgage payment goes directly towards qualifying for the loan amount, allowing for larger loans with the same payment. In a refinance, where a new VA loan is created, veterans may borrow up to 100% of a property’s reasonable value, where allowed by state laws.

VA loans allow veterans to qualify for loan amounts larger than traditional Fannie Mae / conforming loans. Standard VA guidelines state that the VA will insure a mortgage where the monthly payment of the loan is up to 41% of the gross monthly income vs. 28% for a conforming loan assuming the veteran has no monthly bills, although there is no hard limit to the DTI for a VA home loan. Veterans have been known to be approved with a DTI of up to 80%, if there are other factors that strengthen their loan application. These factors include a low Loan-To-Value (LTV), sufficient residual income, additional income received but not used to qualify for the loan, good credit, etc.

Let me break down the pros and cons of this type of loan. This will allow you to get some insight on how the borrower was approved and what guidelines they will be facing.

VA Loan Pros

Here are some of the major advantages of the VA home loan program:

  • No down payment: This is such a significant benefit. Qualified borrowers can borrow as much as a lender is willing to lend, all without needing a down payment. FHA loans typically require a 3.5 percent minimum down payment, and for many conventional loans it is a 5 percent minimum. On a $175,000 home purchase, that is a $6,125 down payment for FHA and a $8,750 for conventional.
  • No private mortgage insurance (PMI): This is required for conventional borrowers who cannot put down at least 20 percent. FHA borrowers have a couple forms of mortgage insurance, one that is paid up front at the time of purchase and another that is paid monthly. PMI typically disappears once you have about 20 percent equity in your home. There is no PMI on a VA loan.
  • Higher allowable DTI ratio: Lenders will look at the ratio of your total monthly income to your total monthly expenses. The VA typically wants to see a debt-to-income ratio of 41 percent or less. That benchmark is higher than what you would see on conventional and even FHA loans. And it is possible for qualified borrowers with a DTI ratio greater than 41 percent to still secure VA financing.
  • No prepayment penalty: You can pay off your VA loan early with no fear of getting hit with any prepayment penalties.
  • Refinance options: The VA home loan program has a pair of refinance loans that can help qualified buyers lower their monthly payments or get cash back from their equity. The Streamline refinance, also known as the Interest Rate Reduction Refinance Loan (IRRRL), is for homeowners with existing VA loans. The VA Cash-Out Refinance allows VA and non-VA homeowners to refinance and get cash at closing to pay down debt or take care of other needs. Refinancing may result in higher finance charges over the life of the loan.
  • Flexibility with bankruptcy and foreclosure: Some borrowers who qualify can be eligible for a VA home loan two years after a bankruptcy or foreclosure. The wait can be much longer for different loan types.

VA Loan Cons

Now here are some of the potential drawbacks of the VA loan:

  • It is not for everyone: The VA loan program is a benefit you must earn, which makes it relatively rare to obtain compared to other loan products. VA home loans are only available to eligible service members who have served their country in the United States military. Spouses of veterans who have died in the line of duty or because of a service-related disability may also be eligible.
  • VA Funding Fee: All VA loans come with a mandatory VA Funding Fee charged by the VA. This fee goes directly to the agency and helps keep the VA home loan program running for future generations. It is a cost you can finance into the loan, and borrowers with service-connected disabilities are exempt from paying the fee. But this is not something you will pay on a conventional loan or FHA loan. You can learn more about how much the VA Funding Fee is, who pays what and who is eligible for a refund.
  • They are intended for primary residences: This is not a loan program you can use to purchase a second home or an investment property.
  • Sellers are not always on board: Some home sellers are not open to receiving offers from VA borrowers. A lot of this undoubtedly has to do with some of the myths and misconceptions surrounding VA loans.

 

The information here is provided for informational purposes. The writer is not a mortgage or financing professional. It is always best to discuss financing matters with a mortgage or financing professional.

As a veteran myself, I have used this loan product myself and had an amazing experience. Besides the loan product, it takes a good mortgage company to make the who loan process easy and streamlined.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

When you are selling your home, whether it is For Sale by Owner or traditionally with a real estate agent/Realtor, you will have to understand the offers presented to you and the financing they have been approved for. Each type of financing can be different, and each have their pros and cons. Let’s look at an FHA loan.

An FHA insured loan is a US Federal Housing Administration mortgage insurance backed mortgage loan that is provided by an FHA-approved lender. FHA insured loans are a type of federal assistance. They have historically allowed lower-income Americans to borrow money to purchase a home that they would not otherwise be able to afford. Because this type of loan is more geared towards new house owners than real estate investors, FHA loans are different from conventional loans in the sense that the house must be owner-occupant for at least a year.  Since loans with lower down-payments usually involve more risk to the lender, the homebuyer must pay a two-part mortgage insurance that involves a one-time bulk payment and a monthly payment to compensate for the increased risk.

FHA allows first time homebuyers to put down as little as 3.5% and receive up to 6% towards closing costs. However, some lenders will not allow a seller to contribute more than 3% toward allowable closing costs. If little or no credit exists for the applicants, the FHA will allow a qualified non-occupant co-borrower to co-sign for the loan without requiring that person to reside in the home with the first-time homebuyer. The co-signer does not have to be a blood relative. This is called a Non-Occupying Co-Borrower.

FHA also allows gifts to be used for down payment from the following sources:

  • the borrower’s relative
  • the borrower’s employer or labor union
  • a close friend with a clearly defined and documented interest in the borrower
  • a charitable organization
  • a governmental agency or public entity that has a program providing home ownership assistance.

Now we will look at the pros and cons of the FHA loan so you can further understand the buyer you will be working with. The pros and cons are directly about the loans themselves. By understands the good and the bad of the loan product, you can choose to accept the FHA offer or state in your MLS listing you will accept FHA loans. One thing I would like to point out from a Realtor perspective, is that just because someone cannot afford 20% down, it does not make the offer less desirable. If the client is approved for the offer amount in purchase agreement, the offer has merit to consider.

Pros

  • Low down payment with low credit scores. FHA loans require a 3.5% down payment with a credit score of 580 or more — much lower than the 620-score required by conventional lenders. Employers, close friends, family members or charitable organizations can contribute gift money towards your FHA down payment. In contrast, some conventional loan programs do not allow gifts or restrict who can contribute gift funds for a down payment.
  • Lower credit score with a higher down payment. The lowest credit score for an FHA mortgage is 500 to 579 with a 10% percent down payment. Applicants with credit problems, including bankruptcy or foreclosure in their recent financial history, may still qualify for an FHA loan when they would likely be turned down for a conventional loan.
  • Higher debt-to-income ratio (DTI) is allowed. Your debt-to-income (DTI) ratio is calculated by dividing your total monthly debt payments by your gross monthly income. FHA loans allow for a DTI ratio up to 43%, although some lenders will accept a higher DTI under certain conditions. Meanwhile, a higher DTI may require a 740 score for minimum down payment conventional financing.
  • Housing options. An FHA loan can be applied to several housing types: a single-family home, a multifamily home with up to four units, a condominium, or a manufactured home that’s on a permanent foundation. Another perk: You can use an FHA loan to buy a multifamily (two-to-four unit home) with a 3.5% down payment and qualify with rent on the other units as long as you live in the home for a year.
  • No income limits. Higher-income earners with credit problems can qualify for FHA financing with a minimum down payment. You cannot qualify for 3% down conventional loan programs, such as the Fannie Mae HomeReady® loan, if your household income is more than 80% of your area’s median income.
  • Cheaper monthly mortgage insurance for low credit scores. If you cannot swing a 20% down payment, lenders usually charge mortgage insurance to cover the risk of default if you fail to repay the loan. You’ll pay the same FHA mortgage insurance premium regardless of your credit score. On the other hand, conventional private mortgage insurance (PMI) premiums are much higher if you have bad credit.

Cons

  • Higher total mortgage insurance costs. Borrowers pay a monthly FHA mortgage insurance premium (MIP) and upfront mortgage insurance premium (UFMIP) of 1.75% on every FHA loan, regardless of down payment. A 20% down payment eliminates the need for PMI on a conventional purchase loan. You can also cancel PMI once you build 20% equity in your home.
  • Restrictive housing standards. The government requires that all homes bought with FHA-backed loans are structurally sound and secure, and meet minimum health and safety standards. A particularly picky appraiser could make it difficult for a fixer-upper house to be approved for an FHA loan.
  • Lower loan limits. Each year, the FHA sets FHA loan limits by county. This may impact how much home you can buy with an FHA loan, especially in high-cost areas. In general, FHA limits are 65% of an area’s conforming loan limits. For example, conforming loan limits in most parts of the country are $510,400, compared to $331,760 for FHA loan limits for 2020.
  • Limited to a primary residence only. You can only use an FHA loan to buy a home you plan to live in as a primary residence. To finance a vacation or investment property, you will need a conventional loan.
  • Lifetime mortgage insurance expense. If you opt for an FHA loan with a minimum down payment, you are stuck with the MIP for the life of the loan. The only way to get rid of it is to refinance into a different loan type, such as a conventional mortgage. 

The information here is provided for informational purposes. The writer is not a mortgage or financing professional. It is always best to discuss financing matters with a mortgage or financing professional.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

When you are selling your home, whether it is For Sale by Owner or traditionally with a real estate agent/Realtor, you will have to understand the offers presented to you and the financing they have been approved for. Each type of financing can be different, and each have their pros and cons. Let’s look at the conventional loan.

A conventional mortgage or conventional loan is any type of home buyer’s loan that is not offered or secured by a government entity. Instead, conventional mortgages are available through private lenders, such as banks, credit unions, and mortgage companies. However, some conventional mortgages can be guaranteed by two government-sponsored enterprises: The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).

Conventional mortgages typically have a fixed rate of interest, which means that the interest rate does not change throughout the life of the loan. Conventional mortgages or loans or not guaranteed by the federal government and as a result, typically have stricter lending requirements by banks and creditors.

In the years since the subprime mortgage meltdown in 2007, lenders have tightened the qualifications for loans—“no verification” and “no down payment” mortgages have gone with the wind, for example—but overall most of the basic requirements haven’t changed. Potential borrowers need to complete an official mortgage application (and usually pay an application fee), then supply the lender with the necessary documents to perform an extensive check on their background, credit history, and current credit score.

Required Documentation

No property is ever 100% financed. In checking your assets and liabilities, a lender is looking to see not only if you can afford your monthly mortgage payments, which usually shouldn’t exceed 28% of your gross income.6 The lender is also looking to see if you can handle a down payment on the property (and if so, how much), along with other up-front costs, such as loan origination or underwriting fees, broker fees, and settlement or closing costs, all of which can significantly drive up the cost of a mortgage. Among the items required are:

  1. Proof of Income

These documents will include but may not be limited to:

  • Thirty days of pay stubs that show income as well as year-to-date income
  • Two years of federal tax returns
  • Sixty days or a quarterly statement of all asset accounts, including your checking, savings, and any investment accounts
  • Two years of W-2 statements

Borrowers also need to be prepared with proof of any additional income, such as alimony or bonuses.

  1. Assets

You will need to present bank statements and investment account statements to prove that you have funds for the down payment and closing costs on the residence, as well as cash reserves. If you receive money from a friend or relative to assist with the down payment, you will need gift letters, which certify that these are not loans and have no required or obligatory repayment. These letters will often need to be notarized.

  1. Employment Verification

Lenders today want to make sure they are loaning only to borrowers with a stable work history. Your lender will not only want to see your pay stubs but may also call your employer to verify that you are still employed and to check your salary. If you have recently changed jobs, a lender may want to contact your previous employer. Self-employed borrowers will need to provide significant additional paperwork concerning their business and income.

  1. Other Documentation

Your lender will need to copy your driver’s license or state ID card and will need your Social Security number and your signature, allowing the lender to pull your credit report.

Most sellers tend to favor the conventional loan. These borrowers tend to be putting more down, they tend to have better credit, and they meet tighter requirements that lead to their approval. This does not mean, FHA or VA offers will not close or are inferior, it is just another or different type of financing.

As a Realtor, I do prefer conventional, but look at all offers to decide which one will benefit the client. All offers are different when they come in, just like the financing. It is sifting through all the information to decide which offer and financing meets the needs of the situation.

The information here is provided for informational purposes. The writer is not a mortgage or financing professional. It is always best to discuss financing matters with a mortgage or financing professional.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

A FLAT FEE LISTING can be either an MLS ONLY LISTING or a FULL-SERVICE LISTING FOR A FLAT FEE. You will want to make sure you know which one is which when you sign up and what you get for what you are paying for.

To see what an MLS ONLY listing is, please visit the BLOG located HERE.

The flat fee listing option can help save you money with a reduced rate of commission to get your home sold, but you will want to look at the terms. There are companies that charge a flat fee and the payment is due at the closing, but there are companies that collect the flat fee when you sign up for the services and it may or may not be refundable if the property does not sell – typically it is not refundable and not contingent upon the house actually selling. You will want to read through the flat fee contract thoroughly before signing.

Legit flat fee real estate companies do what they promise. They work toward the goal of getting your home sold. They promote it using all the modern tools from social media to email to text marketing, along with open houses, and agent to agent connections. Real estate companies do not want a ton of properties that get listed and then get withdrawn. This will not look good when potential customers do their homework on the Realtor or Broker. Not every property will sell during the contract period, but when more do not sell, than sell under a Realtor or Broker, there typically is a problem with how they handle their business.

What is typically provided by FULL-SERVICE Realtors?

  • Property review and pricing
  • Photography/Video
  • Sign and lockbox
  • Marketing
  • Handling and following up from showings
  • Open houses
  • Review of offers and negotiating/re-negotiating
  • Review appraisals and inspection reports
  • Monitoring the deal to keep it moving toward close
  • Review of title work
  • Review of closing docs
  • Setting up and attending closings
  • Making sure you get your proceeds
  • Following up after close to make sure move went as planned

A full-service Realtor does a lot of work. There are more steps and processes that are handled, but that should give you the basics of what is considered full-service.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

Earnest money (EMD) is a deposit made to a seller that represents a buyer’s good faith to buy a home. The money gives the buyer extra time to get financing and conduct the title search, property appraisal, and inspections before closing. In many ways, earnest money can be considered a deposit on a home, an escrow deposit, or good faith money.

The EMD will be placed with a broker, a title company, or a lawyer to hold while the real estate transaction is processing. Who will hold the EMD will vary, depending on the instructions for sale or the negotiated place between buyer and the seller. The EMD is a way to ensure that the buyer is serious about the purchase of a property and not “SHOPPING AROUND” while taking properties off the market. The EMD will be credited on the closing statements.

The buyer’s agent should make sure that there are contingencies in the purchase agreement, so the buyer will get their EMD back under certain scenarios. Some of the scenarios include:

  • Bad inspection
    • At times, the seller will negotiate or work out the issues with the inspection, but when both sides cannot agree, the EMD can be released back to buyer and deal mutually released.
  • Property does not appraise
    • Markets change and properties may not appraise for the agreed upon price. Like the inspection, if both sides cannot come to terms, the EMD is released back to buyer and deal mutually released.
  • Misrepresentation by the seller
    • The property should have a seller disclosure. This is 100% completed by the seller. If there is something that is misrepresented, on purpose or by accident, the parties can find a way to fix the situation or mutually release property and EMD returned to the buyer.
  • Mortgage cannot be approved
    • Approvals are not guaranteeing that the deal will close. There are many other factors that come into play after the purchase agreement is signed and the deal processes. If the lender ends up stating the buyer cannot continue, the EMD is returned and property mutually released.

The amount of the EMD is up to the buyer. Normal EMD amounts are around 1% or 2%, but in particularly good markets, the EMD can be as high as 5% to 10%.

Sellers look at the EMD as part of the strength of the offer. For example, if someone offers $500 EMD on a $500,000 home, the seller will feel as though the buyer is not serious. The seller may also feel it is not an amount worth taking the house off the market for. If a small EMD is part of the purchase agreement, you will want to investigate further with the mortgage lender and if cash deal, proof of funds.

When there are multiple offers, every detail is important, including the amount of EMD placed to secure the property. You want to make the listing agent and seller see your deal as the best opportunity to get to the closing table.

In the case where the EMD is being disputed, you will need to review the purchase agreement to decide how to proceed – some purchase agreements have built in mediation or arbitration clauses. You can contact the other broker, use the local real estate board, or in extreme situations, you may need to use an attorney to get the EMD released. Both the buyer and the seller can try to claim the EMD. Therefore, having contingencies in the purchase agreement and everything in writing as the real estate deal progresses. Besides everything in writing, you will want to make sure all parties sign any changes or addendums.

Here are some situations where the seller has the right to request the EMD be provided to them:

  • Buyer gets cold feet and wants out:
    • Just because the buyer gets cold feet or decides the home is not what they wanted; does not mean they get their EMD back. The seller has taken the home off the market and accepted the EMD as good faith that the buyer wanted the home.
    • Both the buyer and seller will need to review the PA for deadlines agreed upon. If the buyer fails to perform, the seller is entitled to the PA.
  • Buyer cannot perform or close by a specific date:
    • If the buyer cannot perform by the contract date, the seller can request the EMD be sent them.
  • Buyer did not provide accurate information:
    • When the buyer provides documentation to the lender, and it is later found out to be untruthful and the mortgage declined, this is not the same as being denied the loan.

These are just a handful of reasons as to why a seller may have rights to the EMD. Both the buyers Realtor and Listing Realtor should have protections in place for their client.

In the case where the EMD is being disputed, you will need to review the purchase agreement to decide how to proceed – some purchase agreements have built in mediation or arbitration clauses. You can contact the other broker, use the local real estate board, or in extreme situations, you may need to use an attorney to get the EMD released. Both the buyer and the seller can try to claim the EMD. Therefore, having contingencies in the purchase agreement and everything in writing as the real estate deal progresses. Besides everything in writing, you will want to make sure all parties sign any changes or addendums.

Writing up a purchase agreement has more than a price to offer a seller. Realtors are professionals at making sure your offer is written to secure your interests and protect you. Listen to the Realtors advice when they are working on your deal. They do this every day. Although, the Realtor does work for you, and in the end will submit the offer how you feel comfortable, they are the best resource for making deals happen.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

As a For Sale by Owner, you will get inundated with Realtors wanting to help list your home for sale. This is a natural course of business (if you use a flat fee service to get on MLS – the Realtors cannot solicit you reducing calls, emails and texts – visit www.fsbomadeeasy.com for more info). As you are selling the home on your own, it does not hurt to interview some of the Realtors in case you need some help in the future. This will save you time and weed out those you may want to use and those you will not use.

Here are some of the best questions to ask when interviewing potential agents – some obvious and some not so obvious.

  • Are you licensed in this state?
    • You will want to make sure the Realtor has a current and valid license. There are state sites that can also help you verify their credentials.

 

  • How long have you been a Realtor?
    • The length of time someone has been in the real estate industry is important. Realtors who have spent time in real estate have been through the various markets and understand how to adjust to accomplish the goals of selling the homes they represent.
    • A newer Realtor does not always mean they cannot help you.
    • Many new Realtors, who are professionals, have done their research and can be as productive as a seasoned pro. As you ask follow up questions, you will get a feeling where both the seasoned Realtors and new Realtors fit in your needs to sell your home.
    • A good follow up question to this is “are you a full time or part time Realtor?”
      • You may get a Realtor in business for 20 years who is part time, and you may get a Realtor who is new and full time. This is where your gut feeling, and additional questions come into play.
    • Are you part of a team or will you be the Realtor I am working with?
      • There is no wrong answer to this question, but you will want to know who will be handling the process of your home and who you should speak with. Communication is key.
      • A team does not mean you will get more help, just simply means they are part of a group of Realtors under someone else.

 

  • What MLS board are you currently with?
    • There are many MLS boards. You will want to make sure that the Realtor is part of the board for the area your home is located.
    • There are usually major MLS boards and smaller, region specific boards. Both can be useful, but make sure you get maximum exposure.
  • Can I get referrals?
    • Realtors typically have past clients happy to give them a glowing review. Much like online reviews, they do not always reflect how good or bad something is.
    • If the Realtor is reluctant to provide referrals is when there is red flag.
  • What are your average listing Days on Market (DOM)?
    • This number will vary depending on the time of year and the type of market we are in – buyers or sellers.
    • High days on market is not good but ask for them to explain.
    • If they seem way too low, ask how they can sell so quick for every property. Also ask how many sales they have had. They could have very few deals, which would give them a low average days on market number.
  • Have you sold a home in my neighborhood?
    • Some Realtors specialize in geographic markets. Many times, you will get a “NO” to this answer but does not mean they are not the right person for the job. Follow up with, “have you sold homes in this area?”. This will allow them to explain their market and what they have sold that compares to your neighborhood.
  • Have you sold any homes in the price range of my home?
    • Like the geographic area question, many Realtors specialize in price ranges they can acquire buyers or know how to market them.
  • How do you plan on marketing my home?
    • Like many of the other questions, you may feel as if there is a template of answers from all Realtors.
      • “We have social media” – everyone does
      • “We have email marketing campaigns” – everyone does
      • “We have buyers already” – watch out for this answer. Most people lure sellers with their “IN HOUSE” buyers who then decide on a different home after you sign the agreement.
      • “We have a database of people we market to”
      • “We will host open houses” – this is for them to collect buyer’s info more than to sell your home.
      • “We will do your photos and drone work” – everyone does
    • Realtors all have the same access to all the same tools. It is a good question to ask, but the boiler plate answers provided will not be able to help you decide if their marketing plan is different. Fancy flyers and listing presentations are for you, not how they will market your home.
  • How much will you charge to list my home?
    • The Realtor may tell you that it will be 6% – 3% for the listing side and 3% for the buyers agent side and that is typical – yes it is typical or industry standard, but YOU AND YOU ALONE WILL BE THE DECIDER OF WHAT YOU CHOOSE TO PAY.
    • Do not get drawn into the Realtors who say “NO ONE WILL SHOW YOUR HOME FOR LESS” – this statement alone is breaking so many rules.
    • Tell the Realtor what you would like or were thinking of paying both sides. You are the client, and it is YOUR EQUITY THE FEES ARE COMING OUT OF.
    • Never sign up with a Realtor pressuring you for fees. You are using your home to provide revenue for them. If they are high pressure to sell you as their listing agent, they may be high pressure through whole process. You must feel comfortable with all aspects of the Realtor.

 

  • What price do you think my home should be listed for?
    • A Realtor coming to get you to list your home should have done a comparable market analysis giving them a rough idea of your home listing price.
    • When they arrived at the home, they should have requested a tour of the home to verify some things that will affect the comparable market analysis
    • As you interview several Realtors, you will start to see numbers close to each other.
    • WATCH OUT FOR ABOVE MARKET NUMBERS OR REALTORS WHO AGREE TO ALL YOUR PRICING (sometimes you may be right on with value but watch out for those too agreeable – have them show their valuation on paper).
      • Realtors will come in with high numbers to get you to list with them, only to come back soon after for a price reduction.
    • How much will I get at close at the price you suggest?
      • Realtors should be able to provide NET SHEETS to give a rough estimate of your proceeds at close. You may need to provide some info to help fill in some costs.
      • Realtors should provide multiple NET SHEETS to show what you would get at different offer prices.
    • Once my home is listed, what happens?
      • Find out what you need to do to prepare home to get listed
      • Find out when the sign and lock box will be installed
      • Find out when the photos and drone video will be done
      • Find out when the first open house will be
      • Find out what the process is when you get an offer
    • How do I contact you if you list my house and when are you available?
      • Make sure you have easy access to the Realtor listing your home
        • Phone/Text
        • Office Line
        • Email
      • There will be many moving pieces and people coming and going into your home. You do not want an absent Realtor.

There seem to be many questions to ask when you are interviewing a Realtor. On paper it seems drawn out, but you will find in natural conversation many of the questions above will happen. We just provide a guide and insight on what to look for when interviewing potential listing Realtors.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

An open house is a good way to get more people in your home at one time. It can capture Realtors with their clients, independent buyers, neighbors curious and people who are driving by. To hold an open house, even with the help of your Realtor (if you have one – if not, feel free to call Mitten Realty Group, LLC at 248-294-7850 – yes, an early plug of the business!!), takes effort and planning. You do this because the first impression people get, is the impression they will keep. It is much harder to get a potential buyer to see a house twice they did not connect with.

Curb Appeal: Make sure that you have the landscaping done before the open house – yard mowed, garden raked and cleaned up (fresh flowers are nice if they are in season), look for chipping paint, unclean gutters, remove excess items from yard, porch and driveways.

Lawns can be especially important to some buyers. If you have bare spots you can throw down seed a couple weeks before home goes on market or first open house. Fill in holes where animals may have dug as well. Simple things can fix a problem before a buyer sees it.

Interior: The inside of the home should be extra clean. If you can hire a professional cleaner that can come in the morning of or day before, this will help get you to showroom perfection. If you have pets, this is even more important. People with pets tend to not smell them, but it is there, no matter how clean you normally are. Cleaning should include the appliances, cupboards and the closets. People open everything when they are looking at a house.

You will want to remove excess clutter from around the house. This distracts from the home and the buyers tend to also get distracted. Counter tops, floors, tables, dressers and closets should be free of clutter. In fact, you should try to reduce the amount of stuff in the closets to show how bog they are. A packed walk in closet can seem small if jammed with stuff.

While you are reducing the clutter, remove personal items. This includes photos on the wall – family and kids pictures included and kids’ artwork on the walls and fridge. It may have been the best Mona Lisa macaroni craft, but it should be stored away for the next home. Buyers want to see themselves in the home or their kids. By taking away the personalization you have, they can start to visualize their stuff in the home.

Valuables should be locked away as well. We all want to believe the best in people, but not all people, no matter what they seem like, are good people. People tend to get overly comfortable at open houses and open drawers and you do not want something of value to disappear.

Pets: We have discussed getting the home clean of the pet smell and hair, but pets should not be at an open house. It does not matter if it is the friendliest pet in the world, a pet can turn off some potential buyers. You also do not want the chance of something happening – a potential buyers or Realtor while in the house getting bit or scratched. People are sue happy these days. Pets in aquariums and cages that cannot be moved are fine. You may want to put a “DO NOT TOUCH” sign on them.

Promote Open House: if you are using a Realtor, ask them how they are getting out the word. The Realtor should be using the MLS to post open houses, which feeds to many thousands of sites. They also should be doing email blasts, social media posts and calling other brokers and Realtors. On the day of the open house, your Realtor should be putting directional signs from major roads to lead people to the open house.

As the homeowner, you should also use your social media, especially if you have a neighborhood or community page you are involved with. People in your neighborhood are great sources of buyers. They may know family or friends looking to move into the area.

Never be afraid to ask your Realtor how they are promoting. They do work for you, they are getting paid with your equity, so you should know. It will help you understand the process and reduce some of your stress.

Day of Open House: The day of the open house, all the windows of your homes should have their blinds raised. The Realtor (and maybe even the homeowner) should turn on all the lights in every room, along with open every door. During the times we are in, this reduces the amount of touching in your home. With the permission of the homeowner, the Realtor should have cookies and water. People like to snack!! What would even be better is if the Realtor used the oven to make the cookies to allow for that smell to fill the house. If not, there is always candles or plug-ins to do the same thing.

(DISCLOSURE – DUE TO THE COVID-19, COOKIES AND WATER MAY NOT BE ADVISED – BUT IT’S THE THOUGHT THAT COUNTS FOR NOW)

The homeowner should not be at the open house if possible. Let the Realtor be there to help guide the potential buyers or other Realtors. They know how to interact with them.

After the Open House: Your Realtor should have had a sign in sheet at the open house. The Realtor will follow up with everyone who signed in to get feedback and see if there is any interest. Here is where you as the homeowner must keep an open mind. The feedback is not personal, it is about the house and the needs of the potential buyers. Listen to the feedback. If there are changes that can be made to improve the home for other showings and open houses, the feedback is where these suggestions will come from.

In the end, the goal of all open houses is to get the home sold. These are some basic steps to making sure your open house is effective. We wish you luck on getting to the closing table.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

 

A buyer’s market occurs when the supply (available homes for sale) exceeds demand (the number of buyers seeking to purchase homes).

FOR BUYERS: If you are buying a new home, a buyer’s market is the ideal time to make your move. You might be able to buy a great home for a lower cost than you would in a seller’s market. This is the best market for you to get equity from the start. Your Realtor should be able to do the homework and know what the market is trending at regarding pricing for the area you are looking in. Not all homes will be affected by buyer’s markets. Sellers who do not need to sell, sellers who can wait out the current market, and specialty homes where the seller knows there is value outside of market conditions. There are still multi-offer situations in a buyer’s market. This situation may drive the price back to asking or above. Decisions will be made to get your dream home above what you were expecting or move on to find the bargain during the buyer’s market.

FOR SELLERS:
If you are trying to sell your property in a buyer’s market, your home may remain on the market longer before you’re able to secure a buyer due to the large number of available properties. You may also have to lower your listing price or make other concessions in order to secure a buyer. Your listing Realtor should help you find ways to maximize the value of your home. There are things you can do and offer to attract a buyer who is willing to pay the right price for your home. In a buyer’s market, you want to 1) make sure your home in priced right 2) make sure your home in prepared right and 3) make sure you home is marketed right (show all the value).

FOR SALE BY OWNER SELLERS: Many people try to sell their home For Sale by Owner during a buyers’ market in order to save money on commission. For some, this will work, but for many, they may not have the knowledge of the market, and negotiations skills in order to get the maximum pricing for their home. Using a Realtor can help you make more money on the sale of the home, above what you would have paid out in commission. Realtors do the research, know the values, and can make sure the purchase agreements are not in favor of only the side of the buyer. When a buyer’s agent sees that the property is FSBO, they tend to be more aggressive with lower offer and requesting additional concessions the seller may not realize they are paying out. Call on the professionals to help guide you through this market.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

 

A seller’s market occurs when demand exceeds supply, or there are more buyers seeking to purchase homes than there are available homes on the market. This often leads to multiple buyers interested in a single property, resulting in bidding wars. Bidding wars delay you from getting an accepted offer, along with driving up the price of the home.

FOR SELLERS: A seller’s market is a fantastic time to sell your home as you could secure a sale price that’s higher than your listing price, or at least more than your bottom line (the lowest price you’d be willing to accept for your home). As a seller there are things you will still need to be aware of. The first is appraisal – homes still need to be appraised for those using financing. If you are lucky enough to have a cash buy, this does not typically come into play. Sellers should make sure their agents are creative in how they counter and accept purchase agreements. A good Realtor (Listing Realtor) knows how to handle purchase agreements in this type of market.


FOR BUYERS:
If you are buying a home in a seller’s market, be aware that the seller has the advantage. If other buyers are interested in the same property, you are making an offer on, trying to get a lower sale price probably will not work to your advantage. In fact, you could lose the opportunity to purchase the property altogether if a competing buyer makes a higher offer. A seasoned Realtor can help get creative to win when competing in a sellers’ market. Even with the offer not being the highest, there are statements and offers that can be built into the purchase agreement that will get you the bottom line and add value to the seller.

Buyers during a seller’s market feel as though they are getting taken advantage of, and you are right. Seller’s and the Realtors monitor the market and know when the favor turns to them. Remember that markets will flip and become buyer’s markets too. Then the seller’s now feel how buyers did. You can push through these markets on either side. Missing out on your dream home for a higher offer should never be a factor that stops you from buying.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

The MLS or Multiple Listing System is a tool used by Real Estate professionals to list real estate or to locate properties. In order to get on the MLS you have only one way – USING A REALTOR or BROKER, but you have MULTIPLE OPTIONS on how you use the Realtor.

If you are looking to sell your home – For Sale by Owner, you do not want the services of the Realtor, just their access to the MLS. Some Realtors offer flat fee MLS only listing options that can start at $99 and go up from there depending on the options you choose.

When you speak to the Realtor, you will want to get specifics on what you are getting for your fee and if there are any hidden fees when the property closes or for changes. You also must be aware; you cannot pay the Realtor directly. The fee for the access to the MLS must go through the BROKER in which they work. The payment needs to be made to or through the broker. We do not recommend cash.

The MLS is a good way to get your property out to the masses, not just on the MLS, but to many 3rd party websites that pull information from the MLS. When the Realtor lists your home on the MLS, you will also want to make sure your contact information is being used. YOU WILL SEE THE REALTOR AND BROKER INFORMATION ON THE LISTING EVEN WITH THE FLAT FEE FOR SALE BY OWNER. You see this information, because the Realtor or Broker is still listing the property since it is the only way to get on MLS.

Part of the MLS is SHOWING TIME. This program is the scheduling system for Realtors to set up to show your property. The contact for this should also be your information.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

In real estate, there are many moving pieces, lots of paperwork, and many hands touching things associated with your property from the title company to the mortgage company to other city and state agencies. Mistakes will happen and these mistakes can cause delays or cause deals to fall apart.

The question of when to order title work is an easy one – AS SOON AS YOU DECIDE TO SELL. Your title report is like the credit report for your property. You want it as clean as possible and only things you know and have permitted attached to it. CLEAN and MARKETABLE TITLE can save you time and make your home sale smooth and easy.

Common things to look for when you get your title ordered:

  • Liens – if you have taken a mortgage or other financing on the property
  • Liens – are there any liens you do not recognize
  • Taxes – are there any past due taxes owed
    • If you have paid taxes, you can just provide proof to title company to clear this
  • Ownership – is the title in the correct name you purchased in

 

If there are items that you do not recognize or showing in error, you will need to work with the title company in order to clear the title. Sometimes you will bring in the previous title company if there is something that should have been cleared before.

The title company will be able to guide you as to what is needed to clean up the issues – if there are issues to clear. The title company knows their business, so take their advice. Lawyers can be expensive, but a good time team can help guide you, and save you money.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

A Realtor is a powerful tool to use when you are selling (or buying) a home. For a For Sale by Owner, there is a hope there will be no need for a LISTING REALTOR. Saving the commission on one side of the deal by not having a listing realtor can be a significant savings (generally around 3% of the home sales price), but what happens when your home does not sell and sits on the market. When should you get a Realtor involved?

On the MLS, there is a counter called DAYS ON MARKET (DOM). This shows the other Realtors how long a home has been listed. The higher the number of Days of Market, the more likely the offers will not be what you were hoping for. A home sitting on the market is usually priced wrong, the condition of the home is not what buyers are looking for, or location is not where people are looking. Two of the three of these is curable, but which one is it?

As a home sits on the market, there are costs associated with it. These are the holding costs. The costs typically include – utilities, taxes, insurance, maintenance, and mortgage. They add up as time passes reducing your potential profit on the home. Since most mortgage payments go toward interest, you are paying out money, you will not get back. The same is true with all holding costs.

Many For Sale by Owners drop pricing thinking that is the solution. It could be but dropping the price without understanding the market may in fact hurt you. There could be another solution that could get you your price, so randomly dropping the price may not help get a buyer to make an offer. The real estate market is a funny beast. If you understand it, research it, it can be tamed and understood. It just takes the right person or company at times to assist.

We could go on and on about the different aspects of why your home is not selling, but the main question we need to answer is when you should get a Realtor involved. The best answer to this is – when the costs and time outweigh the savings on your home.

Typically you are told that Realtors charge 6% to sell your home (this is not always the fact, but it’s a on-average commission with 3% on each side of the deal – but the seller is always in charge of deciding the commission). The listing Realtor on a deal of $200,000 would be earning $6,000. This $6,000 would have been your savings if you would have sold it on your own. Let’s look at the costs for a home sitting on the market for 3 months:

                Holding Costs for 3 months:

  • Mortgage: $1400 x 3
  • Taxes: $300 x 3
  • Insurance: $100 x 3
  • Maintenance: $100 x 3
  • Utilities: $150 x 3
    • TOTAL: $6150

As you can see it would cost just over $6,000 to have your house sit on the market for three months without selling. This is 3% of your home cost already. Now after three months, you decide to get a Realtor involved. You will now be adding 3% of the Realtor cost, plus the holding costs for another 1 to 3 months (depending on when a purchase agreement is signed and closing happens – closings are usually 30 – 45 days after a purchase agreement is signed).

Your costs to sell the home are now 2 ½ to 3 times what it would have cost to have a Realtor involved, along with time you put in showing the house and maintaining the house while you were selling it For Sale by Owner. Time is valuable.

 This information is not to scare you into running out and hiring a Realtor from day 1. This information is to let you understand that you may need to get a Realtor involved to help sell your home and reduce the holding costs and time on the market. For many For Sale by Owners, mentally they are so against using a Realtor and pride takes over causing them to accumulate holding costs, make bad pricing decisions or put too much money back into the home they will not get out (updating home).

The main goal with or without a Realtor is to get your home sold either as a For Sale by Owner or with a Realtor. Both information and professionals are powerful tools.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

An MLS only entry generally refers to a For Sale by Owner (LIMITED SERVICES) listing in which a Real Estate Broker places a listing onto the local MLS (multiple listing service) for a fee. Once placed on the MLS, the For Sale By owner seller handles all matters of the sale – from calls to showings to closings.

The MLS and the access to it is a valuable and cost saving tool for those choosing to sell For Sale by Owner. The properties listed on the MLS are seen by all the local Realtors for that MLS board who are looking for properties for their clients.

There are many companies across the United States that are either marketing companies that connect sellers with brokers to offer this MLS only service, or direct real estate Brokers who offer this service. Make sure the company you are signing up with lets you know which one they are. Both can be solid options for getting your home listed, but you will want to know who to communicate with once you sign up.

What do you typically get when you use the MLS ONLY (LIMITED) service from a real estate Broker?

  • Listing on the multiple listing service
    • Packages will vary from company to company
  • Your contact information in the listing to be contacted directly
    • The Brokers info will ALWAYS be in the listing since it is the only way to be placed on the MLS – they are not doing this to hijack your listing or buyer calls
  • Marketing on 3rd party sites like Zillow, Realtor and others.
    • Sites will vary depending on the MLS board and region
  • Showing Time or similar app.
    • This app is used to schedule and maintain showings on your home
  • Changes to the MLS
    • Price
    • Status
    • Open House

As a For Sale by Owner on the MLS, you will not have the same control as a full-service Realtor. 3rd party websites pull information from the MLS and your information may not pull with it. Realtors do not use Zillow and other 3rd party websites and cannot control them directly – they are updated and changed through the MLS. Even sites like REALTOR.com sound like they should be controlled by the listing company, but they too pull from the MLS.

MLS only listings typically do not get:

  • Someone to review and negotiate offers
  • Handle the process once under contract to get to closing
  • Review inspections and appraisals
  • Review closing docs

Some of the MLS only companies will offer Al a Carte services for those needing a little more help during the sale. Pricing will vary depending on the company.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.