Mitten Realty Group

Scott Fader & Gary Brincat — Top Producers — Oakland 
(this was an article in the Real Producers of Oakland County, Michigan magazine)                                       

 

Committed to Clients, Agents and the Community

 

By Jane K. Asher, Ph.D.

 

For Scott Fader and Gary Brincat, real estate is more than a business opportunity that feeds their families: It’s a venture of love fueled by their passion for the industry and commitment to their clients, agents and the community. Through Mitten Realty Group, LLC, Co-Owners Scott and Gary have leveraged their combined 40 years of real estate experience in buying, renting, flipping and selling homes —  as well as their extensive training in contract negotiations — to build a thriving veteran-owned business and one of Michigan’s 2019 top-25 firms founded on the simple principle that there is always time to help someone else succeed.

 

“We don’t keep score, and we help each other whenever possible,” Gary said. “We answer our agents’ calls 24/7 and make sure that our agents have access to us, no matter what day or time — this allows them to have success with their buyers or sellers”

 

“We don’t just claim to provide training; we actually provide great individual and group training,” Scott said. “We also minimize monthly fees and costs.”

 

Another way that Scott and Gary distinguish their business and actualize their commitment to others is through their ongoing efforts to help veterans, law enforcement, firefighters and other first responders. As honorary members of the Detroit Police Lieutenants and Sergeants Association (DPLSA), Scott and Gary have sponsored the DPLSA Honors Ball — an event that recognizes fallen officers —  as well as golf outings to fundraise for Detroit police. Mitten Realty Group also partners with a local non-profit that fundraises for local and national charities through real estate, in addition to reducing commissions or returning 33% of their commissions back to first responders and military members following the purchase or sale of a home.

 

“Beyond being a veteran-owned business, what motivates us is that so many people put their lives on the line, sacrificing time, family and themselves for others. We like to make sure these people know they are appreciated,” said Scott.

 

Before becoming a REALTOR®, Scott worked with his father’s CPA firm, which handled accounting for investors and real estate agents. He then was presented with an investment opportunity and earned his real estate license in 2003. In 2008, when Scott was 35 years old, he took a hiatus from real estate to join the army where he was deployed to Afghanistan. He then went on to earn his broker’s license in 2018. 

 

Gary has spent 20 years buying, flipping and investing in real estate, and he also served as vice president of sales for a multinational marketing company and a multinational software company. Then about three years ago, Gary decided to leave the corporate world and become a REALTOR®, and that’s when he teamed up with Scott to build Mitten Realty Group.

 

Scott and Gary, both of whom were multi-million dollar producers in 2019 and are on track to increase production in 2020, are well versed in all aspects of the business, but Scott gravitates toward marketing and working with buyers while Gary enjoys working with sellers. Right now, they are focused on growing their team with individuals who share their passion for real estate and dedication to helping others, which they say can be challenging at times because they are looking to work with people who look beyond the profit. They shared that one of their goals is to create a “long-term culture and environment where people look forward to coming to work each day.” They are also grateful for all of their agents. “We are like a family,” Scott said. “Without our agents, we would not be growing as we are.”

 

When Scott isn’t with his work family, he enjoys spending time with Sara — his wife of 20 years — and their son Diego who they adopted from Guatemala in 2006. The Faders travel to Disney World several times a year, and Scott says they are “Disney addicts.” Scott, who regularly takes online classes for both business and personal growth, also says that he is “addicted to education” and loves reading and watching biographies.

 

Gary and his wife Romiana — who was born in Bulgaria — met in France and like to travel. They have two children and four grandchildren. Their daughter Nelly is a commercial property manager, and their son William, who is FAA licensed to fly drones,  is an agent and photographer at Mitten Realty Group. Gary is a 7th degree black belt and owns two martial arts schools. He also developed a two-credit hour continuing education real estate safety class, trains police in self-defense, and enjoys business, mystery and puzzle-solving books.

 

Scott and Gary agree that success is measured on an individual, team and company basis, and they both strive to succeed in all three areas. They also believe that success will come to those who work at it. “Putting in the time, working through the ups and the downs and being able to see mistakes as opportunities will lead you to the paths you want and the goals you seek,” Gary said. “We all run into issues with deals, clients, mortgage companies and title companies —there are a lot of moving parts — but we know each time we encounter an issue, we learn from it and are more likely to be prepared for the next transaction.”

 

For Gary, the most rewarding aspect of his business is helping someone achieve something they didn’t think was possible; for Scott, it’s helping veterans and first responders. Collectively, they care a great deal about their clients, agents and community. “Without our clients, agents and community, Mitten Realty Group would not be here,” they said. 

Contact Mitten Realty Group at 248-294-7850 or info@mittenrealtygroup.com

Real Estate Listing Myths 

 

Large Agencies Sell Homes Faster – False

There is no Data that shows that Large agencies sell homes any faster than smaller agencies, both provide the same information to Agents representing qualified buyers.

 

Large Agencies have more buyers – False

Less than 5% of all homes sales were purchased through the company which listed the home.  This is a misconception held over from before Real Estate hit the Internet.

 

Real Estate Teams are more productive sellers – False

Real Estate teams are very common today.  Fact most do not work as a team, they are simply groups of realtors who work under a common “Associate” Broker within an office, they do not work in the traditional definition of a “TEAM” to buy or sell homes.

 

Real Estate agencies will not show discounted/flat fee listings – False

Buyer Agents don’t know if the listing side is discounted, the only commission information which is displayed in the listing, is for the buyer agent.  If the seller is offering a commission to the buy side to sell their home, realtors will gladly bring qualified buyers to see the home, because they know they will be paid. 

 

Discounted Commission listings receive inferior service – False

A full-service listing requires the discount listing agent to provide the same full service that any other Full Fee (6%) realtor provides, such as: Arrange Appointments, Accept/Present Offers, Advise on Offers, Assist with counter offers, Negotiate for seller.

 

Discounted Commission Real Estate Offices cannot survive – False

Companies that manage expenses and keep overhead low, can significantly reduce commissions and still be profitable.  Large Real Estate companies are burdened with high overhead, such as Expensive Rent, office staff, and utilities, and therefore must charge higher commissions to pay the bills and keep the doors open, they rely on you to pay their expenses and bills.

 

Zillow is a Home Buying Site – False

Zillow is a marketing site, less than 5% of the viewers of homes on Zillow are qualified buyers, approximately 80% of the homes you see listed on Zillow were initiated by an MLS listing and were automatically pushed out to Zillow.

 

If you have a question about buying or selling your home, please reach out to Mitten Realty Group at 248-294-7850 or via email at info@mittenrealtygroup.com

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group 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.

 

 

Pre-Qualification vs Pre-Approval

When you are selling your home For Sale by Owner or even with an agent, you need to understand what kind of approval or well, not approval is provided with the offer. Many people get pre-qualified and pre-approval mixed up and they are entirely different as to how secure they are with their financing. The mortgage industry continues to provide relaxed letters of qualification or approval for clients who may or may not be able to close on the house they choose.

We will look at qualifications and approvals a bit deeper.

Pre-Qualified

Getting pre-qualified involves supplying a bank or lender with their overall financial picture, including debt, income, and assets. The lender reviews everything and gives an estimate of how much the borrower can expect to receive. Pre-qualification can be done over the phone or online, and there is usually no cost involved.

Pre-qualification is quick, usually taking just one to three days to get a pre-qualification letter. Keep in mind that loan pre-qualification does not include an analysis of credit reports or an in-depth look at the borrower’s ability to purchase a home.

The pre-qualification has NOTHING reviewed in terms of documents – bank statements, W-2, 1099, tax returns, investment accounts or the credit. The potential borrower is verbally providing an idea of who they are credit wise and financially.

A pre-qualified buyer does not carry the same weight as a pre-approved buyer, who has been more thoroughly investigated. As a Realtor, I tend to stay away from pre-qualified letters for offers and request that the borrower go back and get pre-approved.

Pre-Approved

Getting pre-approved may take a few extra steps, but it is a better way to go to ensure a borrower can close a deal (or at least fairly good chance to close).

The borrower must complete an official mortgage application to get pre-approved, as well as supply the lender with all the necessary documentation to perform an extensive credit and financial background check. The lender will then offer pre-approval up to a specified amount.

Lenders will provide a conditional commitment in writing for an exact loan amount, allowing borrowers to look for homes at or below that price level.

This puts borrowers at an advantage when dealing with a seller because they are one step closer to getting an actual mortgage.

 

When a borrower provides the PRE-APPROVED letter from the lender, it gives the seller a warmer feeling that the deal will happen. As a Realtor I prefer a pre-approval with an offer over the pre-qualified letter.

 

Remember there are still conditions to be met on the mortgage side, even with a pre-approved letter. You should always call the lender and have a brief and to the point discussion about the pre-approval letter. Find out if there is anything major lacking from the file that could cause the loan to pause or be denied at later date – make sure they have reviewed credit, all documents and ask if they owe the lender anything.

 

DO NOT BE AFRAID TO ASK QUESTIONS TO THE LENDER OR BUYERS AGENT. IT IS YOUR HOUSE THAT IS BEING SOLD.

 

This information comes from a Realtor and not a lender. This is just for informational purposes giving you a better understanding. We are not lenders or a mortgage company.

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in Michigan (Ohio and Florida by 2021), please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group 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.

 

 

 

Real Estate Calculations for Investors

There is more to understanding investment real estate than the home itself. There are decisions that will need to be made before you purchase the property. You will need to know certain calculations so that you can make the right decision. One decision you will need to make is, are you holding the property to be rented out or are you going to rehab it and flip the property.

Remember, your profit is usually determined when you buy the home, not when it sells. This means if you buy the property for the right price, you will have the profit margins you are wanting.

Using a Realtor, you can get help with some of the information you will need to complete the formulas or double check the numbers. Websites like Zillow and other public sites that offer FREE VALUATION can provide inaccurate information.

Gross Scheduled Income

This real estate formula lets you know how much income your property will generate if all units within it are rented and if there are no defaults in rent payments. This can be a useful measure to compare with your actual income.

Talk with your Realtor and get some rent comps for the area. Many investors guess the rents or place what they think they will be asking. Rental comps are as important as sales comps. You want to be realistic in your calculations. If you get more than what you expected…GREAT!

Gross Scheduled Income = Rental Income + Lost Rental Income from Vacant Units

Gross Operating Income

This figure reflects the gross operating income in addition to all other sources of income from your rental property. This can include revenue from parking spaces, laundry, public vending machines, or others.

Gross Operating Income = (GSI – Lost Rental Income from Vacant Units) + Other Income

Net Operating Income

To use the net operating income formula, you first need to figure out your gross operating income. Once you have that figure, you subtract your operating expenses- things like insurance and maintenance costs. You should note, however, that things like investment property depreciation and interest payments do not factor into operating costs. 

Net Operating Income = Gross Operating Income – Total Operating Expenses

Capitalization Rate

The cap rate is one of the most important real estate formulas. The cap rate formula compares an investment property’s net operating income with its market value, allowing investors to quickly compare properties to see which one is most worth it.

Cap Rate = Net Operating Income / Market Value of Property

Cash on Cash Return

Figuring out your cash on cash return is crucial in real estate investing. It is a widely popular real estate formula since it allows investors to compare investments and evaluate the most profitable one based on the terms of financing. A spreadsheet is a good way to see the side by side comparison between properties that are similar. By setting up the spreadsheet with formulas, you can quick input the basic numbers and see which one is the best property for your investment.

To use the cash on cash return formula, you simply divide your net operating income by your total cash investment. Typically, your total cash investment will include the down payment, closing costs, renovation costs, and any other upfront fees you paid to acquire the investment property.

Cash on Cash Return = Net Operating Income / Total Cash Investment

Equity Build-Up Rate

Smart real estate investments do not always come in the form of immediate income. Some properties are great investments due to their potential to build equity, therefore becoming more valuable assets in the future. This simple real estate formula can help in measuring these gains.

Consulting with your Realtor is also a good way to see how quickly an area is growing in value.

Equity Build-Up Rate = Mortgage Principal Paid (Year 1) / Initial Cash Invested (Year 1)

Price to Rent Ratio 

This figure shows you how much rent you will be receiving, versus the price at which your property was purchased. This can be useful when comparing residential real estate investments. Like other calculations, a spreadsheet with formulas can help make quicker decisions.

Price to Rent Ratio = Purchase Price of Property / Annual Rental Revenue

Price Per Square Foot

Along the same lines, the price per square foot real estate formula can be useful when comparing investments. Savvy investors can use this calculation to evaluate if a rental property is overpriced before it is purchased. Your Realtor can help you evaluate this more in depth by pulling both rental and sales comps, which list out the price per square foot (as-is, not post-rehab).

Price Per Square Foot = Market Value of Property / Property Square Footage

Return on Investment

The return on investment formula allows you to see how much of your initial investment you can recoup annually.

Return on Investment = Annual Returns / Cost of Investment

Cash Flow From Operations

Successful real estate investments will involve more money coming in than going out. You need to subtract your capital expenditures (roughly defined as large expenses that do not reoccur) from your net operating income to figure out your cash flow from operations.

Cash Flow From Operations = Net Operating Income – Capital Expenditures

Cash Flow After Financing

Considering that most real estate investors have borrowed money in order to make their investment, this cash flow formula can provide a better idea of what your cash flow is like.

Cash Flow After Financing = Cash Flow From Operations – Financing Costs

Occupancy Rate

This figure reflects the time that an investment property is rented out over a period. Your occupancy rate is one of the most important indicators of your success, and a low occupancy rate can let you know that action is needed from your end.

Low occupancy can occur when properties are in need of repair. People tend to look for a replacement place to live if a landlord is not keeping the place livable or did not complete some repairs required previously. Landlords can “promise” to fix things to get people to move it, in turn causing them to move out as fast.

Occupancy Rate = Number of Days Occupied / Total Number of Days in One Year

Break Even Ratio

This figure is often used to evaluate risk when making a real estate investment. Too high of a figure when using this real estate formula can indicate that it will be an uphill battle to break even with an investment property and recoup debts.

Break Even Ratio = (Debt Servicing Costs + Operating Expenses) / Gross Operating Income

Gross Rent Multiplier

The gross rent multiplier real estate formula allows investors to figure out the market value of a rental property. This is especially useful when selling a rental property, as it allows you to set the right price the first time.

You will want to compare notes with a Realtor. This calculation can help set the value based on the numbers, but it is always good to have a second pair of eyes.

Gross Rent Multiplier = Market Value / Gross Scheduled Income

Debt Service Coverage Ratio

This real estate formula can be used to figure out the current cash flow you have available to recoup the debt which financed your investment.

Debt Service Coverage Ratio = Net Operating Income – Annual Debt Service

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in Michigan (Ohio and Florida in 2021), please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group 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.

What is a Real Estate Appraisal? And more….

 

Real estate appraisal, property valuation or land valuation is the process of developing an opinion of value, for real property (usually market value). Real estate transactions often require appraisals because they occur infrequently and every property is unique (especially their condition, a key factor in valuation), unlike corporate stocks, which are traded daily and are identical. The location also plays a key role in valuation. However, since property cannot change location, it is often the upgrades or improvements to the home that can change its value. Appraisal reports form the basis for mortgage loans, settling estates and divorces, taxation, and so on. Sometimes an appraisal report is used to establish a sale price for a property.

If you have bought or sold real estate – your own personal residence, investment, or commercial property, you have probably dealt with the appraisal process. Besides the inspection, it is the part of the transaction that keeps you biting your nails. As the seller or selling agent, even with the most up to date information, appraisals can come in with unexpected values.

Sellers and listing agents should do their homework and have comps ready in case the appraisal comes back with a number that is lower than the list or sales price. You can submit these comps to the appraisal company to fight the appraisal. The more homework you must share, the better the chances you have to get them to adjust price. Although in the years I have been doing real estate, I have a better chance at winning the lottery, than getting them to adjust their report.

Buyers cannot chose the appraisal company or the appraiser they use (I will not say that this is 100% of the time, but in most cases where a loan is involved, the buyer will be hands off and should remain hands off). Buyers and their agents should also do their homework to make sure the offer they are submitting matches the value of homes in the area. Renegotiating the deal after the appraisal can be a struggle once the seller has a value from the offer in their head. Even through it was offered, the bank will not accept something lower and most of the time the buyer is not willing to come to the table with more money than the home is currently worth.

An appraisal is a safety net for the bank and the buyer. The bank needs to protect its loan with a piece of real estate at a specific loan to value.

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in  Michigan, please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group 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.

 

Establishing your Home’s Value

As a For Sale by Owner, how are you establishing the sale price of your home? Are you using Zillow? Listening to Uncle Joe? What process are you using to determine the value your home?

Establishing the sales price of your home is especially important to getting your home sold. There are many FREE online tools and websites that offer “guestimates” on value, but many times they are not correct for “your” specific market. Your home cannot be randomly compared to other homes sold within a certain area. There are many factors that play into establishing home values that cannot be grouped together and averaged.

Realtors and appraisers use methodical processes and neighborhood specific data to come to a listing price valuation (real estate professional) or lending/Mortgage value (appraiser). Both Realtors and appraisers have access to up to date, active, pending, and closed data that can help them select  comparable homes in the area and analyze the differences between them to come up with an accurate listing price.

In today’s market, buyers have full access to the homes for sale, and over pricing your home could lead to no or low number of showings, extended days on market, and continued holding costs.  High Days on market can then produce offers that are “low-balled” since they see that you have been on the market for a while. Yes, days on market can negatively affect the value of the offers, Realtors know high days on market is an indication to come in low.

So how do you get a good listing price for your home as a For Sale by Owner? I would suggest you call a Realtor or Broker. Pay them to run a report for you or do a full Comparative Market Analysis or Broker Price Opinion (Realtors do not do “Appraisals”). This could run you as little as $100 to as much as $300, but it is worth it. You are saving about 3% by not having a listing agent, so pay a little to help make sure you have the right price point for your home in the market you are in.

Also, just because you recently updated your home, does not mean the full value of the improvements  will be returned in actual home value, many upgrades you perform on a home increase the desirability, but not the value. Desirability is not a bad thing, it may differentiate you from the home down the street, which is also for sale.  This will become very apparent if you sell to a buyer who is getting a mortgage, the mortgage companies’ appraiser (paid for by the buyer) is representing the bank, not you or even the buyer.  Appraisals are sometimes waived if the buyer is a strong buyer (20% or more down) or the if the buyer is a cash buyer, there is no appraisal at all.

For Sale by Owner can be a formidable task and there are many more moving pieces than expected. It can be frustrating and exciting at the same time. You are trying to save YOUR hard-earned Homes Equity and that is GREAT, but do not hesitate to use a Proven Professional when needed to help or to take over the sale.

Be especially careful about hiring Family members or friends to sell your home, your home is one of your largest assets, go with a proven professional not a part time agent.

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in  Michigan, please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group 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.

 

Why Do I Need a Title Company?

A title company is more than just a place to close your property. They are the research company for the buyers, sellers or both in a transaction. We will talk about title companies in the general aspect, as each state can be a little different when it comes to how your property is closed and who is part of the process. You will want to call a local title company or real estate lawyer to find out how your state works. You can also call Inked Title, LLC at 248-617-0004 or e-mail them at info@inkedtitle.com and their staff can find out what the process for your state on real estate closings and title.

WHAT IS TITLE?

In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership.

HOW DO YOU KNOW THE OWNER IS THE OWNER?

To find out who owns the bundle of rights and ownership the title company will do a title search. A title search is an examination of public records to determine and confirm a property’s legal ownership and find out what claims or liens are on the property. A clean title is required for any real estate transaction to go through properly.

The way to look at title is like a credit report. The cleaner the better. If the credit report is bad or has bad information it can cause issues, just like clouded title. It is always a good idea to make sure when you sell or when you buy, the title to the property is ready to be conveyed.

As the title company is reviewing who owns the property, they will also be checking on the status of the property taxes, any special assessments attached to the property, any liens someone has placed on the property, outstanding mortgages, HOA liens or if there is an HOA, so that they can get a full idea of what will be required to be paid off in the closing and what information they may need to collect from the parties involved.

When research is complete, the title company provides a report called a “title abstract.” You should get a copy of this before you close on the home to review. This document is not your title insurance policy. That is a separate document you’ll get from your agent.

WHAT IS A TITLE INSURANCE POLICY?

Title insurance is a form of indemnity insurance that protects lenders and homebuyers from financial loss sustained from defects in a title to a property. The most common type of title insurance is lender’s title insurance, which the borrower purchases to protect the lender. The other type is owner’s title insurance, which is often paid for by the seller to protect the buyer’s equity in the property (Again, this differs state by state).

CLOSING:

Once all the title documents are set and the lender and title company have compared and approved all the numbers, the title company will help in the process of closing the home (once again, who closes and who is involved will vary from state to state). The closing will also vary on if the home is a cash deal or one with a lender involved. The closer will go through all the docs that they have prepared, and the lender has provided to give you a full understanding of what you are signing and why. They will also go back over the numbers within the documents to make sure they are the same as you have reviewed and approved with your lender.

The closing table is fun and stressful. You will want to review as much of the information before closing. Most title companies will provide a digital link to all the documents for review well enough in advance to review. ASK ALL THE QUESTIONS YOU WANT AT THE CLOSING!!!! Many people SIGN SIGN SIGN and then have questions after closing when it is too late. Take your time at the closing, get all your questions answered and leave excited, not worried.

FUNDING:

The title company also assists in the funding of the transaction. Money from the lender and the buyer are provided to the title company who verifies all the money and then disperses to all the parties who are due money – and there are many in a real estate deal.

 

A title company is a valuable resource. They are more than the people who sign documents. They are the companies that ensure your property is free to transfer and both the buyer and seller are secure of any issues with title through the insurance. 

If you are thinking of buying or selling real estate and would like to talk further about title company needs, please call Gary Brincat or Scott Fader at 248-617-0004 or email them at info@inkedtitle.com

Thank you,

Scott Fader and Gary Brincat
Inked Title, LLC

Inked Title is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers of real estate with Mitten Realty Group (www.MittenRealtyGroup.com or 248-294-7850) and owners of Inked Title. They have been working in real estate as brokers, Realtors, investors, property managers and real estate and title 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.

 

For Sale by Owner and the Buyers Agent

Being a For Sale by Owner or FSBO, you will most likely still be dealing with a buyer’s agent. Many times, these buyer’s agent will seem as though they are there to help you, but THEY DO NOT REPRESENT YOU – THEY REPRESENT THE BUYER.

When you are selling a property or business on your own, be aware of the overly helpful buyer’s agent who has NO AGENCY AGREEMENT with you. They will present the offers on their forms and make all sorts of suggestions which will “HELP THE PROCESS ALONG” – most likely in their clients’ favor.

Read the purchase agreements all the way through and look for some of the following items:

  • OTHER ITEMS SECTION:
    • This is a section in almost all purchase agreements where custom requests are done, such as:
      • Seller to Pay XXX in Concessions
      • Seller to make all repairs from inspection
      • No EMD
      • EMD to be returned to buyer under all circumstances
    • Property Description Section:
      • Lists Appliances
      • Does it list other items you did not want to include
    • Taxes – make sure you are only paying for taxes on the days you are responsible.
    • Repairs – some purchase agreements have a section for inspection and municipal repairs and who pays them.

 

The buyer’s agent may also want to suggest you work with their title company. If your state allows, choose to do a split closing where you have a title company separate from theirs. Some states the seller picks the title company and other states the buyer does. There are also some states where an attorney is involved in all closings. You may want to reach out to a title company in your area to find out how your state does closings – you can call Inked Title who works nationally and someone can help provide information at 248-617-0004 or email info@inkedtitle.com

Do not feel pressured to use any services offered by the buyer’s agent.

(title company, home warranty, repair company, etc.)

 

Selling your home on your own has many moving pieces. Stay in control of your deal and stay in contact with the people you choose to provide services. A lawyer is always a good idea or a transaction coordinator to help review documents and get you to the closing with the greatest of ease.

A transaction coordinator is a licensed real estate professional who will charge a small fee or percentage of the sales price (much lower than the full service Realtor) to review docs, may help negotiate, and handle the process from offer to close to you getting paid.

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in  Michigan, please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group 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 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 any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in Michigan (Ohio and Florida by 2021), please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group 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 any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in Michigan (Ohio and Florida by 2021), please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group 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.