All posts by Tomie Raines Housing News

Understanding Real Estate Agency

Real estate agency is a legally binding relationship between real estate agents and their clients during the buying and selling process. Each state has its own rules regarding the licensing and duties of real estate professionals, as well as how they’re allowed to work with consumers.

First, there are two levels of licensure—broker and agent. Brokers can own their own agencies and work independently, while agents must work under a broker’s supervision.  When you hire an agent, you’re really hiring the broker.

Because brokers and agents can represent either or both parties to a real estate transaction, agency relationships must be disclosed to both the seller and the homebuyer. In most states, dual agency isn’t permitted, but a broker may assign another agent in the firm to represent one of the parties as a designated agent with limited fiduciary obligations.

In some regions, new industry rules or existing state laws may require homebuyers to sign temporary or long-term representation contracts with a buyer’s agent before they can begin touring homes. The contents of these agreements vary depending on the location of the property and other factors; consult with a local broker or sales professional for more specifics.

What Are the Advantages of ADUs?

Accessory dwelling units (ADUs) are small stand-alone or attached homes built on lots occupied by larger single-family homes. Also known as granny flats, ADUs can allow aging parents to live close to family or give adult children a chance to save money to launch their lives. They can also be rented to small households or individuals for additional income.

ADUs can expand density in already-built neighborhoods replete with utilities, streets, schools, hospitals, etc., and there are those who resist ADUs for short-term rentals, due to more noise, traffic, people moving in and out, and, possibly, lower home values if ADUs don’t integrate well esthetically within the neighborhood. Fortunately, the opposite has proven true—ADUs can improve home values by as much as 35% in some areas.

Instead of restricting ADUs, a better idea is to improve zoning which limits the size (400 sq. ft. to 1,000 sq. ft.) and placement of units on a property. Other provisions can include design standards, minimum lot sizes, limits on the number of occupants, and off-street parking for vehicles.

Lansing Area Home Prices Up 8.8%

Third quarter 2024 sales statistics showed that the average sales price of Lansing area homes increased 8.8% from $240,458 at the end of the third quarter in 2023 to a new high of 261,618. This represents an average home value improvement of $21,160.

The fact that there were 71 fewer sales so far in 2024 (-1.7%) represents a lower number of homes being offered for sale with established homeowners reluctance to give up a 3.5% mortgage in order to enter into a now 6.44% mortgage on a different home.

The 8.8% increase in home value indicates strong buyer enthusiasm by those moving into the Lansing area and those able to adjust to higher mortgage rates. First time home buyers have been hit hard with the increased interest rates that require budgeting changes and higher down payments. Local lenders and the State of Michigan’s MSHDA program have offered relief with mortgage incentives that accommodate lower income buyers.

Third Quarter 2024 Sales Statistics

Snapshot of current Lansing area sales entering into the Spring selling season:
Lansing Area Market View –October 31, 2024
 786 – 
currently listed homes for sale in the five county greater Lansing area.
 244 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
 298 – homes listed as Pending. (Have completed inspections and will soon close.)
 4590 – homes that have closed since January 1, 2024. 

How to Sell Your Home This Holiday Season

If you really need to sell your home, you don’t have to wait until after the holidays. While there are fewer homebuyers, those actively searching are often committed to making a swift move due to reasons such as lease endings, job relocations, or military transfers.

You can make your home stand out in several ways:

Price it right. A lower price will excite buyers, but only accept a fair offer.  

Clean and declutter. For a few hundred dollars, a cleaning crew will make your home look spotless. Pack away anything you don’t need in moving boxes and store them in a seldom-used room.

Keep holiday decor simple. String lights and evergreen branches. Skip the big tree and place a small one on a tabletop instead. Bake cookies and serve cinnamon cider for showings.

Prioritize the exterior. Make sure leaves are picked up, snow is shoveled, and walkways are safely de-iced.

Let someone else host dinners and parties. You can still enjoy holiday festivities without doing all the cooking and planning yourself. Friends and relatives will understand.

When is it Worth it to Refinance Your Mortgage?

Refinancing your mortgage is worth it if you get a lower interest rate, a shorter term, or a smaller monthly payment. It’s usually beneficial if you can lower your mortgage interest rate by one percentage point. For a $400,000 loan, reducing the rate from 6.5% to 5.5% saves $257 per month, nearly 20% of the payment. With $8,000 in closing costs, you’ll need to keep the loan for 2.6 years to break even.

Avoiding Closing Costs. You can ask your lender about a no-closing-cost refinance, where you pay a slightly higher interest rate, but avoid upfront costs. This strategy allows you to sell your home anytime without penalty. Alternatively, you can roll closing costs into your new loan, ideal if you plan to stay for several years. You’ll pay more interest, but it can be cheaper than a higher-rate, no-closing-cost loan.

You can also replace an adjustable-rate mortgage with a fixed 30-year term, or switch a 30-year loan to a 20- or 15-year term. Principal payments will be higher, but the interest rate will be lower.

 Prepare Your Outdoor Spaces for Fall and Winter

Late October to mid-November is the perfect time to plant, weed, prune, and mulch, so your yard looks nicer and your plants will be protected during the winter.

  1. Trim trees of dead branches for your own and neighbors’ safety. November-March is an ideal time to prune trees to prevent branches from blowing against the house.
  2. Get rid of leggy shrubs and plant new ones. Plant new shade trees with leaves that change color.
  3. Clean out flower beds and re-mulch with a layer of “wood chips, tree bark, leaves or other organic material.”
  4. October-November is the ideal time to plant bulbs before the ground freezes. You can also plant pansies, ornamental kale, ornamental cabbage, and other cool-season annuals.
  5. Pull weeds from the lawn after a rain so they’ll be easier to pull out by the roots. They’ll be less likely to reappear in the spring.

20 things that don’t add to your property value

Make your home as unique as you want it, but if you are considering selling in the not to far future or are already on your way to listing, staying away from these items might pay off when your offers start rolling in.

  1. DIY Home Improvements – while they may save you money, if not done professionally, it will be obvious to a prospective buyer, which might cost you in property value more than you invested in improvements.
  2. Garage Conversion – When it comes to home buying, buyers care about their garage space and size, you cutting into that with a garage conversion that might not match the rest of the house might be something to consider before taking the plunge.
  3. Solar Panels – If you decide to lease solar panels instead of buying, keep in mind, that future home buyers might not want to take on that responsibility.
  4. Quirky Wallpaper – it may look cute, and you might think it adds character but with quirky wallpaper, the odds of others not holding them as fondly as you do are very high. Consider investing in temporary wallpaper instead and removing it before selling if you have your heart set on it.
  5. Custom Luxury Upgrades– They may be just perfect for you, but that’s just the thing, they probably won’t be for others, and the more custom you go, the likelihood the cost will go up for replacing the upgrades. Make sure you think through these decisions.
  6. Wine Cellars– With so maybe individuals who don’t drink, or hate wine, or are simply committed beer drinkers, wine cellars take up a lot of square footage. They are expensive and difficult to renovate into a different space.
  7. Remodeled basements and attics –If you are looking to add on a bedroom, using this space, there is a lot to factor in. There are ceiling height, closet, and emergency exit requirements that can end up racking up quite a cost so if you are thinking of doing this make sure you do your research and the math beforehand.
  8. An oversized home addition –If you expand the home too far, it will start to look unplanned and not give the added appeal you may be thinking it will have.
  9. New windows – If these are old windows we’re talking about, then they may add to your property value, but you need to check your local market to see if houses with new windows are going off the market faster than ones that haven’t made the upgrade, especially with windows being such a large investment.
  10. Swimming pools – Swimming pools often scare aware new family buyers who have little ones around to worry about, while they may seem fun, keep in mind your target buyer before installing.
  11. Lavish lighting fixtures– These can go wrong in so many ways, they can go out of style fast, dates themselves and your home, and aggressively tell other people your style and how much it’s not theirs.
  12. Too much wallpaper – Once again, it’s hard to envision a space of your own, in a room with a distinct look because of the wallpaper. Solid color walls give homebuyers more room for imagination.
  13. Textures on the wall and ceiling– Textured walls can go in and out of style, people who want this in their home will make the investment to do it themselves but for others who don’t want them, they may be discouraged by the mess of having them removed.
  14. Overbuilding for the neighborhood – A house that doesn’t match the neighborhood, can stand out and make people feel it’s out of place.
  15. Inconsistent high-end upgrades – This creates more work for the buyers to make the home more cohesive and it can sometimes give the impression that your home upgrades weren’t thought out.
  16. Invisible improvements– If it’s not something you need to be done and not something homebuyers would see or ask about, it likely will be a good deed unrecognized, save your wallet the stress.
  17. Quirky tiling – It is pretty hard to work with tiling if it is already setting the tone of the room all on its own. Try picking tiling that can mess well with many different design tastes, homebuyers often are interested in ripping up and replacing tile right after purchase.
  18. Too much carpeting– Carpet can age fast, wear down and get messy. It may make sense in some rooms like the bedroom but with the market changing, committing to most of the rooms with carpet is a big no-no, especially in the bathroom! Not that we should have to say this.
  19. Bright or bold paint colors – If new buyers cannot imagine themselves in your home because you have left so many traces of your design style that they might not agree with, they are going to be less likely to see it as their dream home.
  20. Large Gardens – Gardens are amazing, but depending on the property price range, large gardens can be expensive and time-consuming to maintain, and not easy to get rid of if the new owners don’t share your green thumb.

How to Prevent Carbon MonoxidePoisoning in Your Home

With fall and winter approaching, it’s essential to have your home’s heating systems inspected and serviced, according to the Consumer Product Safety Commission. A trained technician can check chimneys, central heat, gas heaters, heat pumps, electric heaters, and more to ensure they function properly and don’t produce dangerous carbon monoxide (CO). They can also install CO detectors throughout the house to ensure occupant safety.

Carbon monoxide is odorless and colorless, making it undetectable without alarms. CO poisoning symptoms can be mild or severe and are often mistaken for the flu. Low-level exposure can cause headaches, fatigue, shortness of breath, nausea, and dizziness. High-level exposure can lead to confusion, vomiting, loss of coordination, unconsciousness, and even death.

To prevent CO poisoning, the CPSC and Environmental Protection Agency recommend:

  • Installing interconnected CO alarms that all sound together.
  • Never using portable generators indoors; keep them at least 20 feet away from the home.
  • Not using cooking appliances for heat.
  • Opening the fireplace damper before and after use.
  • Avoiding barbeque grills in semi-enclosed spaces like garages.

Are Mortgage Interest Rates Going Down?

Homebuyers saw a turning point in interest rates beginning in June 2024. The Federal Reserve decided not to raise overnight borrowing rates, keeping them at 5.25%-5.50%. This is a sign that inflation is moving closer to the Fed’s 2% target. However, the Fed anticipates only one rate cut by year-end, which could impact the housing market.

Mortgage rates have decreased to their lowest levels since March 2023 but remain around 7% for the 30-year fixed mortgage. This rate is typically available only to those with excellent credit and a 20% down payment, which might explain why housing sales are 10% below mid-2023 levels.

Most economists expect rates to drop slightly by the end of 2024. Fannie Mae predicts an average rate of 7%, while the Mortgage Bankers Association, Realtor.com, and Wells Fargo forecast a drop to 6.5%. The difference between 7% and 6.5% is $122 per month on a $400,000 mortgage.

Even with fewer sales… home values increase

Second quarter 2024 sales statistics, ending June 30th, showed that the average sales price of Lansing area homes increased 10.9% from $235,475 at the end of the second quarter of 2023 to $261,087. This represents an average home value improvement of $25,612.

The fact that there were 131 fewer sales so far in 2024 (-4.8%) represents a lower number of homes being offered for sale with established homeowners reluctance to give up a 3.5% mortgage in order to enter into a now 6.78% mortgage on a different home.

The increase in home value indicates strong buyer enthusiasm by those moving into the Lansing area and those able to adjust to higher mortgage rates. First time home buyers have been hit hard with the increased interest rates and home insurance that require budgeting changes and higher down payments. Local lenders and the State of Michigan’s MSHDA program have offered relief with mortgage incentives that accommodate lower income buyers.

First Quarter 2024 Sales Statistics

Snapshot of current Lansing area sales entering into the Spring selling season:
Lansing Area Market View –August 1, 2024
634 – 
currently listed homes for sale in the five county greater Lansing area.
 285 – homes with accepted offers. (Awaiting inspections and/or appraisal.)
 345 – homes listed as Pending. (Have completed inspections and will soon close.)
 3012 – homes that have closed since January 1, 2024. 

Current Mortgage interest rates 
  30-year fixed – 6.77% ($6.49 per $1000)
  15-year fixed – 6.44% ($8.47 per $1000)